SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. ___)
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material pursuant to Rule 14a-11(c) or Rule 14a-12
NCRIC Group, Inc.
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee
is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
[NCRIC Group, Inc. Letterhead]
November 23, 1999
Dear Stockholder:
On behalf of the Board of Directors of NCRIC Group, Inc., I cordially
invite you to attend the Annual Meeting of Stockholders to be held at The
Washington Monarch Hotel, 2401 M Street, N.W., Washington, D.C., on December 14,
1999, at 4:30 p.m. The attached Notice of Annual Meeting and Proxy Statement
describe the formal business to be transacted at the meeting. During the
meeting, I will report on the operations of NCRIC Group and its subsidiaries.
WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE SIGN AND
DATE THE ENCLOSED PROXY CARD AND RETURN IT IN THE ENCLOSED POSTAGE-PAID RETURN
ENVELOPE AS PROMPTLY AS POSSIBLE. This will not prevent you from voting in
person at the meeting, but will assure that your vote is counted if you are
unable to attend the meeting.
Sincerely,
/s/ R. Ray Pate, Jr.
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R. Ray Pate, Jr.
President
NCRIC Group, Inc.
1115 30th Street, N.W.
Washington, D.C. 20007
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON DECEMBER 14, 1999
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of NCRIC Group,
Inc. will be held at The Washington Monarch Hotel, 2401 M Street, N.W.,
Washington, D.C. on December 14, 1999, at 4:30 p.m. for the following purposes:
1. To elect three directors; and
2. To transact any other business as may properly come before the meeting and
any adjournments.
Stockholders of record at the close of business on November 17, 1999 are
entitled to vote at the meeting and any adjournments.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE SIGN AND DATE THE ENCLOSED
PROXY CARD AND RETURN IT IN THE ENCLOSED POSTAGE-PAID ENVELOPE AS PROMPTLY AS
POSSIBLE.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ William E. Burgess
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William E. Burgess
Secretary
Washington, D.C.
November 23, 1999
PROXY STATEMENT
of
NCRIC Group, Inc.
1115 30th Street, N.W.
Washington, D.C. 20007
ANNUAL MEETING OF STOCKHOLDERS
December 14, 1999
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of NCRIC Group, Inc. to be used at the Annual
Meeting of Stockholders of NCRIC Group, at The Washington Monarch Hotel, 2401 M
Street, N.W., Washington, D.C., December 14, 1999, at 4:30 p.m. local time. The
attached Notice of Annual Meeting of Stockholders and this Proxy Statement are
being first mailed to stockholders on or about November 23, 1999.
If the enclosed proxy card is properly signed and returned, your shares
will be voted on all matters that properly come before the meeting for a vote.
Your proxy may be revoked at any time prior to being voted by: (1) filing with
the secretary of NCRIC Group written notice of revocation, (2) submitting a duly
executed proxy card bearing a later date, or (3) attending the meeting and
giving the Secretary notice of your intention to vote in person.
VOTING SECURITIES AND PRINCIPAL HOLDERS
Stockholders of record as of the close of business on November 17, 1999 are
entitled to one vote for each share of common stock of NCRIC Group then held. As
of the record date, NCRIC Group had 3,742,855 shares of common stock
outstanding. The presence in person or by proxy of at least one-third of the
outstanding shares of common stock entitled to vote is necessary to constitute a
quorum at the meeting.
The proxy card being provided by the Board enables a stockholder to vote
for the election of the nominees proposed by the Board, or to withhold authority
to vote for one or more of the nominees being proposed. Directors are elected by
a plurality of votes of the shares present in person or represented by proxy at
a meeting and entitled to vote in the election of directors.
The following table sets forth, as of the record date, the only person
or group who, to the knowledge of NCRIC Group's management, owns more than 5% of
NCRIC Group's outstanding shares and the ownership of all executive officers and
directors of NCRIC Group as a group:
Amount and Nature
of Percent of Shares of
Beneficial Owners Beneficial Ownership Common Stock Outstanding
NCRIC, A Mutual Holding Company 2,220,000 (a) 59.3%
1115 30th Street, N.W.
Washington, D.C. 20007
All directors and executive 125,733 (b) 3.4%
officers of NCRIC Group as a group
(13 persons)
(a) The shares are held of record by NCRIC Holdings, Inc., a wholly owned
subsidiary of NCRIC, A Mutual Holding Company. The members of NCRIC, A
Mutual Holding Company are persons insured by NCRIC, Inc., a wholly owned
subsidiary of NCRIC Group, Inc.
(b) Includes shares held directly and by spouses or minor children and in trust
and other indirect ownership, as well as shares owned under NCRIC, Inc.'s
401(k) plan.
INFORMATION CONCERNING NOMINEES FOR DIRECTOR
AND DIRECTORS CONTINUING IN OFFICE
Election of Directors
The Board of Directors is divided into three classes, each of which
contains approximately one-third of the members of the Board. The directors are
elected by the stockholders of NCRIC Group for staggered three-year terms, or
until their successors are elected and qualified. The Board currently consists
of ten members. Three directors will be elected at the meeting to serve for a
three-year term or until their successors have been elected and qualified.
NCRIC Holdings, Inc. has indicated its intention to vote in favor of the
nominees named in this Proxy Statement. The vote of NCRIC Holdings, Inc. by
itself is sufficient to elect these nominees.
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It is intended that the persons named in the proxies solicited by the Board
will vote for the election of the named nominees. If a nominee is unable to
serve, the shares represented by valid proxies will be voted for the election of
such substitute as the Board may recommend.
The following table sets forth information concerning the nominees and the
directors continuing in office:
Shares of
Common Stock
Beneficially
Year First Current Term Owned as of
Name and Title Age Elected (a) to Expire November 1, 1999 (b) (c)
Board Nominees for Term to Expire in 2002
Vincent C. Burke, III 48 1998 1999 300
Director
Pamela W. Coleman, M.D. 43 1989 1999 6,751
Director
J. Paul McNamara 50 1998 1999 17,505
Director
Directors Continuing in Office
Leonard M. Glassman, M.D. 53 1993 2000 15,000
Director
R. Ray Pate, Jr. 39 1998 2000 23,101
President and Director
Raymond Scalettar, M.D. 70 1980 2000 3,572
Director
David M. Seitzman, M.D. 70 1980 2000 3,575
Director
Charles H. Epps, Jr., M.D. 69 1980 2001 3,000
Director
Leonard Parver, M.D. 55 1998 2001 7,142
Director
Nelson P. Trujillo, M.D. 61 1980 2001 28,570
Chair
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(a) Refers to the year the individual first became director of NCRIC Group, a
governor of National Capital Reciprocal Insurance Company or a director of
its attorney-in-fact.
(b) Includes shares of common stock held directly and by spouses or minor
children and in trust and other indirect ownership, as well as shares owned
under NCRIC, Inc.'s 401(k) plan.
(c) Each nominee and director owns less than 1% of the shares outstanding.
Biographical Information
Set forth below is certain information concerning the nominees and
directors of NCRIC Group. Except as noted, all nominees and directors have held
their present positions for at least five years.
Nelson P. Trujillo, M.D. was a governor and Chair of the Board of National
Capital Reciprocal Insurance Company from 1980 until its reorganization on
December 31, 1998. Dr. Trujillo is currently President of Metropolitan
Gastroenterology Group where he is a physician.
R. Ray Pate, Jr. was the Treasurer of National Capital Reciprocal Insurance
Company and President and Chief Executive Officer of National Capital
Underwriters, Inc., attorney-in-fact for National Capital Reciprocal Insurance
Company, from 1996 until the reorganization. From 1993 to 1995, Mr. Pate was
Vice President, Hospital Division of FPIC, Inc., a medical professional
liability insurance company.
Vincent C. Burke, III has been a partner with the firm of Furey, Doolan
& Abell, LLP since June 1, 1998. From April 1992 to May 1998, he was counsel to
the law firm of Reed Smith Shaw & McClay. Mr. Burke's practice is in the areas
of corporate, business, real estate and closely-held businesses. He practices in
the District of Columbia and Maryland.
Pamela W. Coleman, M.D. was a governor of National Capital Reciprocal
Insurance Company from 1989 until the reorganization. Dr. Coleman is a urologist
in private practice.
Charles H. Epps, Jr., M.D. was the Chair of the Board of Directors of
National Capital Underwriters, Inc. from 1980 until the reorganization.
Currently, he is Special Assistant to the President for Health Affairs and
Professor Emeritus, Orthopaedic Surgery at Howard University. Dr. Epps is past
Vice President for Health Affairs and Dean Emeritus of Howard University College
of Medicine. He has served as a delegate to the American Medical Association
House of Delegates and a member of the AMA Council on Ethical and Judicial
Affairs. In addition, he has been President of the American Orthopaedic
Association, a governor of the American College of Surgeons and a member of the
American Board of Orthopaedic Surgery.
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Leonard M. Glassman, M.D. was a Director of National Capital Underwriters,
Inc. from 1993 until the reorganization. Dr. Glassman is a physician with
Washington Radiology Associates, P.C. He is a past member of the Finance
Committee of the Medical Society of the District of Columbia and was Chief of
Radiology of Columbia Hospital for Women Medical Center from 1984 to 1999.
J. Paul McNamara has been President and Chief Operating Officer of
Sequoia National Bank/Sequoia BancShares, Inc. since 1988. From 1976 to 1988,
Mr. McNamara was employed by the National Bank of Washington in several senior
management positions.
Leonard Parver, M.D. is the Chair of the Board of Directors of NCRIC
MSO, Inc. and has practiced medicine in Washington, D.C. for the past 22 years.
Raymond Scalettar, M.D. was a Vice Chair of the Board of Directors of
National Capital Underwriters, Inc. from 1980 until the reorganization. He is a
founder of the Washington Internal Medicine Group, a health policy consultant, a
past trustee and Chair of the Board of Directors of the AMA, and a past
Commissioner and Senior Consultant to the Joint Commission on Accreditation of
Healthcare Organizations.
David M. Seitzman, M.D. was a member of the Board of Directors of
National Capital Underwriters, Inc. from 1980 until the reorganization. Dr.
Seitzman is now retired from the practice of medicine. He served on the boards
of Blue Cross and Blue Shield of the National Capital Area and the Medical
Society of the District of Columbia and served as President and co-founder of
the Center for Ambulatory Surgery, Inc. Since 1993, Dr. Seitzman has been a
trustee of portfolios of The 59 Wall Street Fund, Inc., which is advised by
Brown Brothers Harriman & Co., one of NCRIC Inc.'s investment advisors.
Meetings and Committees of the Board of Directors
The Board of Directors conducts its business through meetings of the
Board and through activities of its committees. During the year ended December
31, 1998, the Board of Governors of National Capital Reciprocal Insurance
Company held a total of five meetings. No director of NCRIC Group attended fewer
than 75% of the total meetings of the Board of Governors and committees on which
such director served during the year ended December 31, 1998.
The Board has an Audit Committee and a Compensation Committee. The
Board itself performs the functions of a nominating committee.
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The Audit Committee is comprised of Mr. Burke, Dr. Coleman and Dr.
Seitzman. This committee recommends the firm to be appointed as independent
accountants to audit financial statements, reviews the scope and results of the
audit with the independent accountants, reviews with management and the
independent accountants NCRIC Group's year-end audit and considers the adequacy
of NCRIC Group's internal accounting controls. The predecessor of this committee
met four times in 1998.
The Compensation Committee is comprised of Mr. Burke, Dr. Epps, Dr.
Seitzman, and Dr. Trujillo. This committee reviews, and makes recommendations to
the Board concerning, compensation and benefits policies and stock ownership
programs, as well as the compensation of the chief executive officer. The
committee administers the stock option plan and stock award plan. The
predecessor of this committee met three times during 1998.
DIRECTOR AND EXECUTIVE OFFICER COMPENSATION
Compensation of directors
NCRIC Group pays cash compensation to each of its non-employee
directors, other than the Chair, of $25,000 per year and pays its Chair $30,000
per year. Directors who are officers or employees of NCRIC Group receive no
compensation for serving as directors. All directors are reimbursed for
out-of-pocket expenses incurred in connection with attendance at any meeting of
NCRIC Group's board of directors or any committee.
Executive officer compensation
The following table sets forth information concerning compensation for
1998 for services rendered in all capacities awarded or paid by National Capital
Reciprocal Insurance Company or its attorney-in-fact to its chief executive
officer, the other named executive officers whose total salary and bonus equaled
or exceeded $100,000 during the year ended December 31, 1998 and Ms. Crunk whose
employment commenced in April 1998:
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Summary Compensation Table
Annual Compensation All Other
Names and Principal Position Salary Bonus Compensation
R. Ray Pate, Jr. $240,010 $75,000 $17,432
President and Chief Executive
Officer and Director
Stephen F. Fargis 151,440 37,500 14,716
Chief Operating Officer
Rebecca B. Crunk 84,135 31,250 406
Chief Financial Officer
William E. Burgess 109,981 27,500 11,082
Senior Vice President
The bonus column consists of payments made under a board of
directors-approved management incentive compensation plan. Incentive awards are
based on meeting various performance targets set by the board of directors. The
incentive awards were earned for 1998 and paid in January 1999.
The all other compensation column consists of, in the case of Mr.
Pate, a contribution of $14,400 by National Capital Reciprocal Insurance Company
to Mr. Pate's Section 401(k) profit sharing plan account and $3,032 premium
payments for individual and group term life insurance policies; in the case of
Mr. Fargis, a $14,386 contribution by National Capital Reciprocal Insurance
Company to Mr. Fargis' Section 401(k) profit sharing plan account and a $330
premium payment for a group term life insurance policy; in the case of Mr.
Burgess, a $10,654 contribution by National Capital Reciprocal Insurance Company
to Mr. Burgess' Section 401(k) profit sharing plan account and a $428 premium
payment for a group term life insurance policy; and in the case of Ms. Crunk, a
premium payment for a group term life insurance policy.
Employment Agreements
R. Ray Pate, Jr. serves as the President and Chief Executive Officer of
NCRIC Group under an employment agreement dated October 1, 1997 among National
Capital Reciprocal Insurance Company, National Capital Underwriters, Inc. and
Mr. Pate. Mr. Pate's employment agreement became the obligation of NCRIC, Inc.
upon the merger of National Capital Underwriters, Inc. into NCRIC, Inc. in
connection with the reorganization. Under the terms of his employment agreement,
Mr. Pate is entitled to basic compensation of $240,000 per year and is
reimbursed for all reasonable and proper business expenses incurred by him in
the performance of his duties. The terms of the employment agreement also
provide that Mr. Pate is entitled to:
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o participate in any retirement and/or pension plans or health and
medical insurance plans offered to NCRIC, Inc.'s senior executives;
o receive an automobile allowance of $700 per month; and
o be covered by both term life insurance and disability insurance.
The term of the employment agreement is five years commencing October 1,
1997. NCRIC, Inc. may terminate the employment agreement for cause or without
cause, at any time. Any dispute as to whether NCRIC, Inc. had cause will be
determined by arbitration. If NCRIC, Inc. terminates Mr. Pate's employment
agreement without cause, Mr. Pate is entitled to receive, as severance pay, an
amount equal to two years' basic compensation at the base compensation in effect
on the date of the termination. The D.C. Commissioner of Insurance and
Securities' order approving the reorganization required Mr. Pate's employment
agreement to be amended to eliminate, for a two-year period, a provision which
deemed a change of control to be a termination without cause. Mr. Pate may
voluntarily terminate his employment provided that he gives twelve months' prior
notice of his voluntary termination or pays liquidated damages equal to the
amount of twelve months' basic compensation.
National Capital Underwriters, Inc. entered into an employment agreement
commencing December 1, 1997 with Stephen S. Fargis on substantially similar
terms except that Mr. Fargis' employment agreement terminates November 30, 2000,
provides for basic compensation of $150,000 per year and enables him to
voluntarily terminate his employment on three months' prior notice. Mr. Fargis'
employment agreement also became the obligation NCRIC, Inc. upon the merger of
National Capital Underwriters, Inc. into NCRIC, Inc. in connection with the
reorganization.
NCRIC, Inc. entered into an employment agreement commencing January 1,
1999 with Rebecca B. Crunk on substantially similar terms to Mr. Pate's, except
that Ms. Crunk's agreement terminates December 31, 2001, provides for basic
compensation of $135,000 per year and enables her to voluntarily terminate her
employment on three months' prior notice.
Loan for HealthCare Consulting acquisition
On January 4, 1999, Sequoia National Bank loaned $2.2 million to NCRIC
Group to partially finance the acquisition of HealthCare Consulting. J. Paul
McNamara is a Director of NCRIC, A Mutual Holding Company and NCRIC Group and is
President of Sequoia National Bank. The loan has been repaid.
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EXECUTIVE OFFICERS
The following table sets forth the ownership of NCRIC Group's outstanding
shares by NCRIC Group's executive officers, as well as their ages:
Shares of Common Stock
Name Age Beneficially Owned
As of November 1, 1999 (a)(b)
R. Ray Pate, Jr. 39 23,101
Stephen F. Fargis 40 9,100
Rebecca B. Crunk 48 5,259
William E. Burgess 44 2,858
(a) Includes shares held directly and by spouses or minor children
and in trust and other indirect ownership, as well as shares
owned under NCRIC, Inc.'s 401(k) plan.
(b) Each person owns less than 1% of the shares outstanding.
Biographical Information
Stephen S. Fargis was Senior Vice President - Business Development of
National Capital Reciprocal Insurance Company from November 1995 until the
reorganization. He is also Chief Operating Officer of NCRIC, Inc. From 1990 to
1995, he was Vice President of The Virginia Insurance Reciprocal.
Rebecca B. Crunk was Chief Financial Officer of National Capital
Reciprocal Insurance Company from April 1998 until the reorganization. Ms. Crunk
is a certified public accountant and is a member of the American Institute of
Certified Public Accountants. From 1995 to 1998, she was Vice President,
Treasurer and Controller of ReliaStar United Services Life Insurance Company.
From 1985 to 1995, she was Senior Vice President and Controller of United
Services Life Insurance Company.
William E. Burgess was Senior Vice President - Claims and Risk
Management of National Capital Reciprocal Insurance Company from August 1997
until the reorganization. From April 1997 to August 1997, he was Vice President
- - - Claims, Risk Management of National Capital Reciprocal Insurance Company and
from 1993 to April 1997, he was Vice President - Claims, Risk Management and
Underwriting of National Capital Reciprocal Insurance Company.
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STOCKHOLDER PROPOSALS
In order to be considered for inclusion in NCRIC Group's proxy statement
for the annual meeting of stockholders to be held in 2000, all stockholder
proposals must be submitted to the Secretary at NCRIC Group's offices at 1115
30th Street, N.W., Washington, D.C. 20007 on or before February 21, 2000.
GENERAL
The Board of Directors does not know of any other matters that are likely
to be brought before the meeting. If any other matters properly come before the
meeting or any adjournments, the persons named in the enclosed proxy card, or
their substitutes, will vote the proxies accordance with their judgment on such
matters.
If a stockholder submits a signed proxy card withholding authority to vote
for directors the shares represented will be included in determining the
presence of a quorum. Shares not voted by brokers but represented at the meeting
will also be counted in determining the presence of a quorum.
The cost of soliciting proxies will be borne by the NCRIC Group. NCRIC
Group will reimburse brokerage firms and other custodians, nominees and
fiduciaries for reasonable expenses incurred by them in sending proxy materials
to the beneficial owners of NCRIC Group common stock. In addition to
solicitations by mail, directors, officers and regular employees of NCRIC Group
may solicit proxies personally or by telegraph or telephone, without additional
compensation.
The Board of Directors of NCRIC Group has appointed Deloitte & Touche LLP
as independent accountants for 1999. A representative of Deloitte & Touche LLP
will be present at the meeting, will have the opportunity to make a statement if
desired and will be available to respond to appropriate questions.
November 23, 1999
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REVOCABLE PROXY
NCRIC Group, Inc.
[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE
Annual Meeting of Stockholders
December 14, 1999
The undersigned appoints R. Ray Pate, Jr. and Nelson R. Trujillo, M.D., and
each of them, with full powers of substitution, as proxies to vote all shares of
the undersigned in NCRIC Group, Inc. at the Annual Meeting of Stockholders to be
held on December 14, 1999, at 4:30 p.m. and at any and all adjournments, in the
manner set forth herein.
1. To elect as directors the nominees listed below (except as indicated to the
contrary below):
[ ] For [ ] Withhold [ ] For All Except
Pamela W. Coleman, M.D., J. Paul McNamara and Vincent C. Burke, III
INSTRUCTION: To withhold authority to vote for any individual nominee, mark "For
All Except" and write that nominee's name in the space provided below.
Such proxies are authorized to vote in their discretion on any other
business that may properly come before the meeting or any adjournments.
The Board of Directors recommends a vote "FOR" the above listed Nominees.
THIS SIGNED PROXY CARD WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE
SPECIFIED, THIS PROXY CARD WILL BE VOTED FOR THE NOMINEES LISTED.
Please sign exactly as your name appears on this proxy card. When signing as
attorney, executor, administrator, trustee or guardian, please give your full
title. If shares are held jointly, each holder should sign.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS.
I PLAN TO ATTEND THE MEETING. [ ]
________________________________________
Date
_________________________________________
Stockholder sign above
_________________________________________
Co-holder (if any) sign above
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Detach above card, date, sign and mail in postage-paid envelope provided.
NCRIC Group, Inc.
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| PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY CARD |
| PROMPTLY IN THE ENCLOSED POSTAGE-PAID ENVELOPE. |
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