You are cordially invited to attend a special meeting (the “Special

advisors. He also indicated that Harleysville believed that discussions between Harleysville andCompany B had terminated in early August.On August 31, 2011, the Boards met, Fox Rothschild LLP was engaged to represent the Company,and Ballard Spahr LLP was engaged to represent Harleysville Mutual in the proposed transaction withNationwide Mutual.By letter dated September 1, 2011, Company B’s Chief Executive Officer acknowledged receipt ofMr. Browne’s letter of August 30, 2011. Company B’s Chief Executive Officer’s letter provided furtherdetail as to why the approach outlined in his August 26 letter would fairly compensate all importantHarleysville constituencies, including that Company B would:• affiliate with Harleysville Mutual and buy out the public stockholders of the Company for aprice of $42 per share;• convert Harleysville Mutual to a stock insurance company and provide Harleysville Mutual’smembers with a special dividend of $250 million (which Harleysville calculated to beapproximately $1,244 per policy based on the approximately 201,000 policies of HarleysvilleMutual as of November 23, 2011), coupled with member rights in Company B’s holdingcompany;• be flexible as to the timing and sequencing of the affiliation, buyout and conversion transactions;• offer Mr. Browne and Harleysville’s senior management a transition and retention compensationprogram with a value of approximately $25 million;• maintain Harleysville operations as a strong brand within Company B’s regional companiesgroup;• maintain a real presence within Pennsylvania and in other significant Harleysville locations; and• establish ‘‘The Harleysville Mutual Foundation’’ with initial funding of $5 million to support andenhance the surrounding communities.The letter went on to state that the aggregate consideration proposed by Company B and payableto the Company’s public stockholders and Harleysville Mutual’s members would exceed $800 million,which would surpass the consideration to be paid to the Company’s public stockholders pursuant to theother proposal, assuming a per share price of $60.00, by approximately $50 million.Because of the restrictions imposed on Harleysville under the exclusivity agreement withNationwide Mutual, Harleysville did not discuss the letter with any representative of Company B orprovide any Harleysville-related information to Company B. Both the August 26, 2011 letter,characterized as ‘‘initial thoughts’’ of Company B’s Chief Executive Officer, and the September 1, 2011letter were provided to Harleysville without provision of any due diligence information by Harleysvilleto Company B, were not binding on either Company B or Harleysville, were preliminary indications ofinterest that could not be responded to by Harleysville, and were not negotiated.On September 2, 2011, in accordance with the provisions of the exclusivity agreement withNationwide Mutual, Harleysville sent a letter to Nationwide Mutual notifying Nationwide Mutual ofHarleysville’s receipt of the letter dated September 1, 2011 from Company B without revealing theidentity of Company B or the specific terms contained in Company B’s letter.Because of the prior relationship between Harleysville and Credit Suisse, in addition to continuingto be advised by Credit Suisse, Harleysville Mutual’s board of directors determined to retain theinvestment banking firm of Griffin Financial Group, LLC (‘‘Griffin’’) as an additional financial advisorto advise Harleysville Mutual’s board of directors with respect to the proposed merger, including, ifrequested by Harleysville Mutual’s Board, to provide a fairness opinion with respect to the ParentMerger, as well as to assist Harleysville Mutual in performing a due diligence review of Nationwide33