EXHIBIT 2
PLAN OF CONVERSION AND REORGANIZATION
OF
NCRIC, A MUTUAL HOLDING COMPANY
PREAMBLE
WHEREAS, in 1998 the National Capital Reciprocal Insurance Company
reorganized to form NCRIC, A Mutual Holding Company (the "MHC") as a District of
Columbia mutual insurance holding company under the District of Columbia
Reciprocal Insurance Company Act of 1998, D.C. Act 12-301 (the "MHC
Reorganization"); and
WHEREAS, effective upon the MHC Reorganization, the National Capital
Reciprocal Insurance Company changed its name to NCRIC, Inc. and became the
wholly owned subsidiary of NCRIC Group, Inc. ("NCRIC Group"); and
WHEREAS, immediately following the MHC Reorganization, the MHC acquired
100% of the issued and outstanding capital stock of NCRIC Holdings, Inc.
("Holdings"), which in turn acquired 100% of the issued and outstanding capital
stock of NCRIC Group; and
WHEREAS, in July 1999 NCRIC Group offered for sale shares of its common
stock in a subscription offering, on a priority basis to NCRIC, Inc.
policyholders who were members of the MHC, and thereafter to members of the
public (the "Initial Public Offering"); and
WHEREAS, as a result of the Initial Public Offering, Holdings owns
approximately 60% of the issued and outstanding shares of common stock of NCRIC
Group; and
WHEREAS, as a result of the Initial Public Offering, the common stock
of NCRIC Group is registered with the Securities and Exchange Commission ("SEC")
pursuant to the Securities Exchange Act of 1934 (the "Exchange Act") and is
publicly traded over the counter through the Nasdaq Small Cap Market System; and
WHEREAS, the MHC proposes to convert to stock form (the "Conversion")
in accordance with this Plan of Conversion and Reorganization and the laws of
the District of Columbia, including Chapters 7 and 9 of Title 31 of the District
of Columbia Code; and
WHEREAS, pursuant to this Plan of Conversion and Reorganization, (i)
the MHC and Holdings will each be merged into NCRIC Group, with NCRIC Group
being the surviving entity in each merger, (ii) a new Delaware corporation,
NCRIC Group, Inc., will be established as a successor to NCRIC Group (the
District of Columbia corporation) (iii) the shares of common stock of NCRIC
Group owned by Holdings will be offered for sale with priority purchase rights
given to the policy holders of NCRIC, Inc. who are members of the MHC, and (iv)
existing shareholders of NCRIC Group other than Holdings (the "Minority
Stockholders") will receive shares of NCRIC Group based on an exchange ratio
that will result in the Minority Stockholders owning in the aggregate the same
percentage of the outstanding shares of NCRIC Group Company Common Stock
immediately upon completion of the Conversion as the percentage of
NCRIC Group common stock owned by them in the aggregate immediately prior to the
consummation of the Conversion; and
WHEREAS, every policy issued by NCRIC, Inc. that is in force on the
effective date of the Conversion shall continue as a policy of NCRIC, Inc. and
all contract rights of such policies shall be and remain; and
WHEREAS, the Conversion is designed to enhance NCRIC Group's strategic
and financial flexibility by furthering its access to capital markets, which
will facilitate the MHC's goal of serving physicians' needs by maintaining
NCRIC, Inc. as an effective and competitive insurer in the future; and
WHEREAS, the Board of Directors of the MHC believes that the Plan of
Conversion and Reorganization is fair and equitable to its policyholders and
that the interests of policyholders are fully and properly protected, and at a
meeting duly called and held on January 28, 2003 the Board of Directors voted to
approve the Conversion and adopt this Plan of Conversion and Reorganization;
WHEREAS, the Board of Directors has directed that this Plan of
Conversion and Reorganization be submitted to the Voting Members (as defined) of
the MHC for approval; and
WHEREAS, the Board of Directors of the MHC has directed that this Plan
of Conversion and Reorganization be submitted to the Commissioner of Insurance
and Securities for the District of Columbia (the "Commissioner") for approval.
NOW, THEREFORE, this Plan of Conversion and Reorganization is entered
into by the MHC.
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1. DEFINITIONS
As used in this Plan of Conversion and Reorganization, the following
words or phrases have the following meanings. The following definitions shall be
equally applicable to both the singular and plural forms of any of the terms
herein defined:
Acting in Concert - The term Acting in Concert means (i) knowing
participation in a joint activity or interdependent conscious parallel action
towards a common goal whether or not pursuant to an express agreement; or (ii) a
combination or pooling of voting or other interests in the securities of an
issuer for a common purpose pursuant to any contract, understanding,
relationship, agreement or other arrangement, whether written or otherwise. A
person or company which acts in concert with another person or company ("other
party") shall also be deemed to be acting in concert with any person or company
who is also acting in concert with that other party, except that any employee
stock benefit plan will not be deemed to be acting in concert with its trustee
or a person who serves in a similar capacity solely for the purpose of
determining whether stock held by the trustee and stock held by the plan will be
aggregated.
Adjusted Maximum - Has the meaning specified in Section 10 hereof.
Affiliate - Any person that controls, is controlled by, or is under
common control with another person.
Appraised Value Range - The range of the estimated consolidated pro
forma market value of NCRIC Group on a fully converted basis, which shall also
be equal to the estimated pro forma market value of the total number of shares
of Conversion Stock to be issued in the Conversion, as determined by the
Independent Appraiser prior to the Subscription Offering and as it may be
amended from time to time thereafter. The maximum and minimum of the Appraised
Value Range may vary as much as 15% above and 15% below, respectively, the
midpoint of the Appraised Value Range.
Associate - The term Associate when used to indicate a relationship
with any person, means (i) any corporation or organization (other than NCRIC
Group, Holdings, MHC, NCRIC, Inc. or a majority-owned subsidiary of NCRIC, Inc.)
of which such person is an officer or partner or is, directly or indirectly, the
beneficial owner of 10% or more of any class of equity securities, (ii) any
trust or other estate in which such person has a substantial beneficial interest
or as to which such person serves as trustee or in a similar fiduciary capacity
except that for the purposes of this Plan relating to subscriptions in the
offering, the term "Associate" does not include any Non-Tax-Qualified Employee
Stock Benefit Plan or any Tax-Qualified Employee Stock Benefit Plan in which a
person has a substantial beneficial interest or serves as a trustee or in a
similar fiduciary capacity, and except that, for purposes of aggregating total
shares that may be held by Officers and Directors the term "Associate" does not
include any Tax-Qualified Employee Stock Benefit Plan, and (iii) any relative or
spouse of such person, or any relative of such spouse, who has the same home as
such person or who is a Director or Officer of NCRIC Group, NCRIC, Inc. or any
parent or subsidiary.
Commissioner - Has the meaning specified in the Preamble.
Code - The Internal Revenue Code of 1986, as amended.
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CML - Commonwealth Medical Liability Insurance Company, a District of
Columbia stock insurance company that is a wholly owned subsidiary of NCRIC,
Inc.
Community Offering - The offer and issuance of Subscription Shares as
described in Section 8.
Control - (Including the terms "controlled by", "controlling" and
"under common control with") means the possession, directly or indirectly, of
the power to direct or cause the direction of the management or policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise.
Conversion - The conversion and reorganization of the MHC to stock form
pursuant to this Plan, and all steps incident or necessary thereto, including
the Offering and the Exchange Offering.
Conversion Stock - The Subscription Shares and the Exchange Shares.
Corporation Acts - Means the District of Columbia Corporation Acts,
Title 29, chapters 1-3, D.C. Code Ann. (1997).
Director - A member of the Board of Directors of NCRIC, Inc., NCRIC
Group or the MHC, as appropriate in the context.
DGCL - The Delaware General Corporation Law.
Effective Date - Has the meaning specified in Section 22.
Eligible Members - Each Member on the Eligibility Record Date for
purposes of determining subscription rights.
Eligibility Record Date - The date used for determining Eligible
Members of the MHC who will receive subscription rights to purchase Subscription
Shares, which date shall be the Voting Record Date for the Special Meeting of
Members, unless a different date is selected by the Board of NCRIC Group, and
which date shall be disclosed in the Prospectus.
Employees - All Persons who are employed by NCRIC, Inc., NCRIC Group,
the MHC or any of their subsidiaries.
Employee Plans - Any defined benefit plan or defined contribution plan,
such as an employee stock ownership plan, stock bonus plan, profit-sharing plan
or other plan, which, with its related trust, meets the requirements to be
"qualified" under Section 401 of the Internal Revenue Code, and any stock
benefit plan established by NCRIC Group which is not so qualified.
ESOP - The NCRIC Group, Inc. Employee Stock Ownership Plan and related
trust.
Exchange Offering - The offering and exchange of NCRIC Group Common
Stock to Minority Stockholders in exchange for Minority Shares.
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Exchange Ratio - The rate at which shares of Common Stock are exchanged
for Minority Shares upon consummation of the Conversion. The Exchange Ratio
shall be determined as of the closing of the Conversion and shall be the rate
that will result in the Minority Stockholders owning in the aggregate the same
percentage of the outstanding shares of NCRIC Group Common Stock immediately
upon completion of the Conversion as the percentage of NCRIC Group common stock
owned by them in the aggregate immediately prior to the consummation of the
Conversion.
Exchange Shares - The shares of NCRIC Group Common Stock issued to
Minority Stockholders in the Exchange Offering.
Holdings - Has the meaning specified in the Preamble.
Holding Company Merger - The merger of NCRIC Group, the District of
Columbia corporation, with and into NCRIC Group, the Delaware corporation, with
NCRIC Group, the Delaware corporation as the surviving entity.
Independent Appraiser - The appraiser retained by the MHC and NCRIC
Group to prepare an appraisal of the pro forma market value of the Conversion
Stock.
Initial Public Offering - Has the meaning specified in the Preamble.
Insurance Laws -Chapters 35 and 42 of Title 35 of the District of
Columbia Code, and any other provision of the District of Columbia Code
applicable to insurance companies.
Majority Ownership Interest - The percentage of common stock of NCRIC
Group owned by Holdings immediately prior to the completion of the Conversion.
Member - A Person who, by the records, and the Rules, Regulations and
Bylaws of the MHC, is deemed to be a member of the MHC by reason of being a
Policyholder of NCRIC, Inc.
Membership Interests - The interests of the Members of the MHC, prior
to the Effective Date, as specified under District of Columbia law and the
Rules, Regulations and Bylaws of the MHC.
MHC Merger - The merger of the MHC with and into NCRIC Group, with
NCRIC Group as the surviving entity, which shall occur immediately prior to
completion of the Conversion, as set forth in this Plan.
Mid-Tier Merger - The merger of Holdings with and into NCRIC Group,
with NCRIC Group as the surviving entity, which shall occur immediately prior to
the MHC merger and the completion of the Conversion, as set forth in this Plan.
Minority Ownership Interest - The percentage of the NCRIC Group's
common stock held by stockholders other than Holdings immediately prior to the
completion of the Conversion.
Minority Shares - Any outstanding common stock of NCRIC Group, or
shares of common stock of the NCRIC Group issuable upon the exercise of options
or grant of stock
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awards, held by persons other than Holdings, immediately prior to the completion
of the Conversion.
Minority Stockholder - Any owner of Minority Shares.
MHC - Has the meaning set forth in the Preamble.
NCRIC Group - Has the meaning specified in the Preamble. References to
NCRIC Group shall include, as appropriate in the context, the corporation
organized under the DGCL under the name NCRIC Group, Inc., which shall succeed
to NCRIC Group and issue shares in the Conversion.
NCRIC Group Common Stock - The common stock, par value $.01 per share,
of NCRIC Group.
NCRIC, Inc. - NCRIC, Inc., a District of Columbia stock insurance
company, and a wholly owned subsidiary of NCRIC Group.
Offering - The offering and issuance, pursuant to this Plan, of NCRIC
Group Common Stock in a Subscription Offering, Community Offering, Syndicated
Community Offering or Underwritten Public Offering, as the case may be. The term
"Offering" includes any shares of NCRIC Group Common Stock that are offered for
sale but not purchased in the Subscription Offering and Community Offering. The
term "Offering" does not include NCRIC Group Common Stock issued in the Exchange
Offering.
Offering Range - The range of the number of shares of NCRIC Group Stock
offered for sale in the Offering multiplied by the Subscription Price. The
Offering Range shall be equal to the Appraised Value Range multiplied by the
Majority Ownership Interest, divided by the Subscription Price.
Officer - An executive officer of NCRIC, Inc., NCRIC Group, or the MHC
as appropriate in the context, which includes the Chief Executive Officer,
President, Senior Vice Presidents, Executive Vice President in charge of
principal business functions, Secretary and Controller and any Person performing
functions similar to those performed by the foregoing persons.
Order Form - Any form (together with any cover letter and
acknowledgments) sent to any Eligible Member or Person containing among other
things a description of the alternatives available to such Person under the Plan
and by which any such Person may make elections regarding subscriptions for
Subscription Shares.
Participant - Any Eligible Member, the Employee Plans, and officers,
directors and employees of NCRIC, Inc., CML and NCRIC Group.
Person - A Person means an individual, corporation, joint venture,
partnership, limited liability company, association, trust, unincorporated
entity, or any organization, government, or department or agency thereof. A
Person who is a Policyholder in more than one legal capacity shall be deemed to
be a separate Person in each such capacity.
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Plan - This Plan of Conversion and Reorganization of the MHC as it
exists on the date hereof and as it may hereafter be amended in accordance with
its terms.
Policy - Each insurance policy or insurance contract (other than any
reinsurance contract) that has been issued by NCRIC, Inc. and is in force as of
the relevant date.
Policyholder - A holder of a Policy as shown in NCRIC Inc.'s records.
The identity of a Policyholder shall be determined without giving effect to any
interest of any other Person in a Policy held by such Policyholder. The
Policyholder, as reflected in the records of and as determined in good faith by
NCRIC, Inc., shall conclusively be presumed to be a Policyholder and NCRIC, Inc.
shall not be required to examine or consider any other facts or circumstances.
Prospectus - The one or more documents used in offering the Conversion
Stock.
Public Hearing - The Public Hearing that may be held by the
Commissioner as specified in Section 2.
SEC - The Securities and Exchange Commission.
Special Meeting of Members - The special meeting of Members and any
adjournments thereof held to consider and vote upon this Plan. The Special
Meeting of Members shall be held not less than 10, and not more than 60, days
after notice of Special Meeting is mailed to Members.
Special Meeting of Stockholders - The special meeting of stockholders
of NCRIC Group and any adjournments thereof held to consider and vote upon the
Plan.
Subscription Offering - The offering of Subscription Shares to
Participants.
Subscription Price - The price per Subscription Share to be paid by
Participants and others in the Offering. The Subscription Price will be
determined by the Board of Directors of the NCRIC Group and fixed prior to the
commencement of the Subscription Offering.
Subscription Shares - The shares of NCRIC Group Common Stock offered
for sale in the Offering. Subscription Shares do not include shares of NCRIC
Group Common Stock issued in exchange for Minority Shares in the Exchange
Offering.
Syndicated Community Offering - The offering of Subscription Shares, at
the sole discretion of the NCRIC Group, following the Subscription and Community
Offerings through a syndicate of broker-dealers.
Stock Award Plan - The stock award plan established by NCRIC Group to
purchase Subscription Shares.
Underwritten Public Offering - The offering of NCRIC Group Common Stock
following or concurrently with the Subscription Offering and any Community or
Syndicated Community Offering by one or more Underwriters on a firm commitment
basis pursuant to Section 13.
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Underwriter - Any one or more investment banking firms that agrees in
connection with the Conversion to purchase from the NCRIC Group and sell to the
public in an Underwritten Public Offering shares of NCRIC Group Common Stock not
subscribed for in the Subscription Offering, the Community Offering or any
Syndicated Community Offering.
Voting Members - The Members as of the Voting Record Date for the
Special Meeting of Members.
Voting Record Date - The date fixed by the Directors for determining
eligibility to vote at the Special Meeting of Members and/or the Special Meeting
of Stockholders, which date shall not be less than 10 nor more than 50 days
before the date of special meeting.
2. PROCEDURES FOR CONVERSION
A. After approval of the Plan by the Board of Directors of NCRIC
Group and the Board of Directors of the MHC, this Plan together with all other
requisite material, including without limitation the independent appraisal, the
proxy statement and form of proxy to be distributed to the Voting Members, and
the proposed certificate of incorporation and bylaws of NCRIC Group that will
take effect upon completion of the Conversion, shall be submitted to the
Commissioner for approval. In accordance with the Insurance Laws, the
Commissioner may hold a public hearing ("Public Hearing"), notice of which shall
be provided to Members as required.
B. Promptly following approval by the Commissioner, the Plan will
be submitted to a vote of (i) Voting Members at the Special Meeting of Members,
and (ii) the Stockholders of the NCRIC Group at the Special Meeting of
Stockholders. The MHC will mail to all Voting Members, at their last known
address appearing on the records of MHC and NCRIC, Inc., a proxy statement
describing the Plan (which may be combined with the Prospectus), which will be
submitted to a vote of Voting Members at the Special Meeting of Members. The
mailing of the proxy statement to the Voting Members shall occur within 45 days
of the Commissioner's approval of the Plan. NCRIC Group also will mail to all
Participants a Prospectus and Order Form for the purchase of Subscription
Shares. In addition, all Voting Members will receive, or in the alternative if
the proxy statement includes a summary of the Plan, be given the opportunity to
request, a copy of the Plan as well as the proposed certificate of incorporation
and bylaws of NCRIC Group. Upon approval of the Plan by at least (i) a majority
of the total number of votes cast by Voting Members, (ii) two-thirds of the
outstanding common stock of the NCRIC Group, and (iii) a majority vote of
Minority Stockholders present in person or by proxy, the MHC, NCRIC, Inc. and
NCRIC Group will take all other necessary steps pursuant to applicable laws and
regulations to consummate the Conversion and Offering. The Conversion must be
completed within 24 months of the approval of the Plan by Voting Members, unless
a longer time period is permitted by governing laws and regulations.
C. The Conversion will be effected as follows, or in any other
manner that is consistent with the purposes of this Plan and the Insurance Laws
and approved by the Commissioner, including a merger of the MHC into the NCRIC
Group followed immediately by the Offering. The choice of which method to use to
effect the Conversion will be made by the Board of Directors of the MHC and
Group immediately prior to the closing of the Conversion.
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Each of the steps set forth below shall be deemed to occur in such order as is
necessary to consummate the Conversion pursuant to the Plan, the intent of the
Board of Directors of the MHC and the Board of Directors of NCRIC Group, and the
Insurance Laws. Approval of the Plan by Voting Members and stockholders of the
NCRIC Group also shall constitute approval of each of the transactions necessary
to implement the Plan.
(1) Holdings will merge with and into NCRIC Group (the
"Mid-Tier Merger") with NCRIC Group as the resulting
entity pursuant to the Agreement of Merger between
the Holdings and NCRIC Group. As a result of the
Mid-Tier Merger, the MHC will receive the shares of
NCRIC Group Common Stock held by Holdings and the
Holdings Common Stock held by MHC will be cancelled.
(2) Immediately after the Mid-Tier Merger, NCRIC Group
will merge with and into a Delaware Corporation that
is initially to be established as a subsidiary of
NCRIC Group, with the Delaware Corporation (which
shall also be referred to as "NCRIC Group
(Delaware)") as the surviving entity (the "Holding
Company Merger"), pursuant to an Agreement of Merger
between the companies. As a result of the Holding
Company Merger, MHC and public shareholders will
exchange their shares of NCRIC Group for shares of
NCRIC Group, the Delaware Corporation.
(3) Immediately following the Holding Company Merger, the
MHC will merge with and into NCRIC Group (Delaware),
with NCRIC Group (Delaware) as the resulting entity
(the "MHC Merger") pursuant to the Agreement of
Merger between the MHC and NCRIC Group (Delaware). As
a result of the MHC Merger, shares of NCRIC Group
(Delaware) held by MHC will be cancelled. All
Membership Interests of the MHC Members will be
cancelled and Members will receive subscription
rights to purchase Subscription Shares in NCRIC Group
(Delaware) in accordance with the provisions of this
Plan.
(4) Immediately after the above mergers, NCRIC Group will
sell the Subscription Shares in the Offering.
D. As part of the Conversion, each of the Minority Shares shall
automatically, without further action of the holder thereof, be converted into
and become the right to receive new shares of NCRIC Group Common Stock based
upon the Exchange Ratio. Options to purchase shares of NCRIC Group common stock
which are outstanding immediately prior to the Effective Date shall be converted
into options to purchase shares of NCRIC Group Common Stock, with the number of
shares subject to the option and the exercise price per share to be adjusted
based upon the Exchange Ratio so that the aggregate exercise price remains
unchanged, and with the duration of the option remaining unchanged.
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E. NCRIC Group shall register the Conversion Stock with the SEC
and any appropriate state securities authorities. In addition, the NCRIC Group
shall prepare preliminary proxy materials as well as other applications and
information for review by the SEC in connection with the solicitation of
stockholder approval of the Plan.
F. All assets, rights, interests, privileges, powers, franchises
and property (real, personal and mixed) of the NCRIC Group prior to the
Effective Date shall continue without interruption in NCRIC Group by virtue of
the Holding Company Merger and the Conversion without any deed or other document
of transfer. NCRIC Group, without any order or action on the part of any court
or otherwise and without any documents of assumption or assignment, shall hold
and enjoy all of the properties, franchises and interests, including
appointments, powers, designations, nominations and all other rights and
interests as the agent or other fiduciary in the same manner and to the same
extent as such rights, franchises, and interests and powers were held or enjoyed
by the NCRIC Group prior to the Effective Date. NCRIC Group shall be responsible
for all of the liabilities, restrictions and duties of every kind and
description of the NCRIC Group immediately prior to the Effective Date,
including liabilities for all debts, obligations and contracts of the NCRIC
Group, matured or unmatured, whether accrued, absolute, contingent or otherwise
and whether or not reflected or reserved against on balance sheets, books or
accounts or records of the NCRIC Group.
G. The Certificate of Incorporation and Bylaws of NCRIC Group to
be effective upon consummation of the Conversion shall read in the form of
Exhibits A and B.
3. SALE OF SUBSCRIPTION SHARES
The Subscription Shares will be offered simultaneously in the
Subscription Offering to the Participants in the respective priorities set forth
in this Plan. The Subscription Offering may begin as early as the mailing of the
Proxy Statement for the Special Meeting of Members. Any shares of NCRIC Group
Common Stock for which subscriptions have not been received in the Subscription
Offering may be issued in the Community Offering. The Community Offering also
may begin prior to the Special Meeting of Members. The offer and sale of NCRIC
Group Common Stock prior to the Special Meeting of Members, however, is subject
to the approval of the Plan by Voting Members and stockholders of the NCRIC
Group.
If feasible, any shares of NCRIC Group Common Stock remaining after the
Subscription Offering, and the Community Offering should one be conducted, will
be sold in a Syndicated Community Offering or Underwritten Public Offering, or
in any manner that will achieve the widest distribution of NCRIC Group Common
Stock. The Syndicated Community Offering and/or Underwritten Public Offering may
be conducted in addition to, or instead of, a Community Offering. The issuance
of NCRIC Group Common Stock in any Subscription Offering and any Community
Offering will be consummated simultaneously on the date the sale of NCRIC Group
Common Stock in the Syndicated Community Offering or Underwritten Public
Offering is consummated and only if the required minimum number of shares of
NCRIC Group Common Stock has been issued. The Community Offering, and the
Syndicated Community Offering or Public Offering if any, shall be completed
within 45 days of the end of the Subscription Offering, unless extended by NCRIC
Group.
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4. PURCHASE PRICE AND NUMBER OF SUBSCRIPTION SHARES
The total number of shares (or a range thereof) of Conversion Stock to
be offered in the Conversion will be determined by the Board of Directors, of
NCRIC Group immediately prior to the commencement of the Subscription and
Community Offerings, and will be based on the Appraised Value Range and the
Subscription Price. The Offering Range will be equal to the Appraised Value
Range multiplied by the Majority Ownership Percentage. The estimated pro forma
consolidated market value of NCRIC Group will be subject to adjustment within
the Appraised Value Range if necessitated by market or financial conditions. The
number of shares of Conversion Stock issued in the Conversion will be equal to
the estimated pro forma consolidated market value of NCRIC Group, as may be
amended, divided by the Subscription Price, and the number of Subscription
Shares issued in the Offering will be equal to the product of (i) the estimated
pro forma consolidated market value of NCRIC Group, as may be amended, divided
by the Subscription Price, and (ii) the Majority Ownership Interest.
In the event that the Subscription Price multiplied by the number of
shares of Conversion Stock to be issued in the Conversion is below the minimum
of the Appraised Value Range, or materially above the maximum of the Appraised
Value Range, a resolicitation of purchasers may be required, provided that up to
a 15% increase above the maximum of the Appraised Value Range will not be deemed
material so as to require a resolicitation. Any resolicitation shall be effected
in such manner and within such time as NCRIC Group and the MHC shall establish,
if all required regulatory approvals are obtained.
Notwithstanding the foregoing, shares of Conversion Stock will not be
issued unless, prior to the consummation of the Conversion, the Independent
Appraiser confirms to NCRIC Group that, to the best knowledge of the Independent
Appraiser, nothing of a material nature has occurred which, taking into account
all relevant factors, would cause the Independent Appraiser to conclude that the
number of shares of Conversion Stock issued in the Conversion multiplied by the
Subscription Price is incompatible with its estimate of the aggregate
consolidated pro forma market value of NCRIC Group. If such confirmation is not
received, NCRIC Group may cancel the Offering, extend the Conversion and
establish a new Subscription Price and/or Appraised Value Range, extend, reopen
or hold a new Offering, or take such other action as the Commissioner may
permit.
The NCRIC Group Common Stock to be issued in the Conversion shall be
fully paid and nonassessable. NCRIC Group may retain up to 50% of the proceeds
of the Offering.
5. SUBSCRIPTION RIGHTS OF MEMBERS (FIRST PRIORITY)
A. Each Eligible Member shall have a nontransferable subscription
right to purchase in the Subscription Offering 100,000 shares of NCRIC Group
Common Stock.
B. In the event that Eligible Members exercise subscription
rights for a number of Subscription Shares in excess of the total number of such
shares eligible for subscription, the Subscription Shares shall be allocated
among the subscribing Eligible Members so as to permit each subscribing Eligible
Member to purchase a number of shares sufficient to make his or her total
allocation of Subscription Shares equal to the lesser of 100 shares or the
number of shares
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for which such Eligible Member has subscribed. Any remaining shares will be
allocated among the subscribing Eligible Members whose subscriptions remain
unsatisfied sufficient to make his or her total allocation of Subscription
Shares equal to the lesser of 1,000 shares or the number of shares for which
such Eligible Member has subscribed. Any remaining shares will be allocated
among the subscribing Eligible Members whose subscriptions remain unsatisfied in
the proportion that the aggregate number of shares as to which the Eligible
Member's subscription remains unsatisfied bears to the aggregate number of
shares as to which all Eligible Members' subscriptions remain unsatisfied. If
the amount so allocated exceeds the amount subscribed for by any one or more
Eligible Members, the excess shall be reallocated (one or more times as
necessary) among those Eligible Members whose subscriptions are still not fully
satisfied on the same principle until all available shares have been allocated.
6. SUBSCRIPTION RIGHTS OF EMPLOYEE PLANS (SECOND PRIORITY)
The Employee Plans of NCRIC Group shall have subscription rights to
purchase in the aggregate up to 12% of the Subscription Shares issued in the
Offering. Consistent with applicable laws and regulations and practices and
policies, the Employee Plans may use funds contributed by or borrowed from NCRIC
Group or NCRIC, Inc. and/or borrowed from an independent financial institution
to exercise such subscription rights, and NCRIC Group and NCRIC, Inc. may make
scheduled discretionary contributions thereto. The Employee Plans shall not be
deemed to be Associates or Affiliates of or Persons Acting in Concert with any
Director or Officer of NCRIC Group or NCRIC, Inc.
7. SUBSCRIPTION RIGHTS OF DIRECTORS, OFFICERS AND EMPLOYEES (THIRD
PRIORITY)
Each Officer, Director and Employee of NCRIC Group and NCRIC, Inc., who
is not an Eligible Member, shall have a nontransferable subscription right to
purchase in the Subscription Offering 100,000 shares of NCRIC Group Common
Stock. In the event that the Officers, Directors and Employees of NCRIC Group
and NCRIC, Inc. exercise subscription rights for a number of Subscription Shares
in excess of the total number of such shares eligible for purchase, then shares
of common stock will be allocated in the proportion in which the number of
shares subscribed for by each person bears to the aggregate number of shares
subscribed by all Officers, Directors and Employees in the Section 7.
8. COMMUNITY OFFERING
Subject to the rights of persons exercising subscription rights in the
Subscription Offering, Conversion Stock may be offered for sale to the general
public through a Community Offering, with preference as to the purchase of
Conversion Stock given first to persons who are (i) policyholders of NCRIC, Inc.
but who are not Eligible Members, (ii) policyholders of CML, and (iii)
stockholders of NCRIC Group who are not Eligible Members. The Community
Offering, if any, may commence simultaneously with the Subscription Offering, or
may commence during or after the commencement of the Subscription Offering, as
the Board of Directors of NCRIC Group so determines. The right to subscribe for
shares of Conversion Stock in the Community Offering is subject to the right of
NCRIC Group to accept or reject such subscriptions in whole or in part in their
sole discretion. Conversion Stock being sold in the
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Community Offering will be offered and sold in a manner that will achieve the
widest distribution of the Conversion Stock. Shares for which subscriptions have
not been received may be issued for sale in the Community Offering through a
direct community marketing program which may use a broker, dealer, consultant or
investment banking firm experienced and expert in the sale of securities of
financial services companies, including insurance companies. Such entities may
be compensated on a fixed fee basis or on a commission basis, or a combination
thereof. Any Person may purchase up to 100,000 shares of NCRIC Group Common
Stock in the Community Offering, subject to the purchase limitations specified
in Section 10.
9. SYNDICATED COMMUNITY OFFERING/UNDERWRITTEN PUBLIC OFFERING
If feasible, the Board of Directors may determine to offer Subscription
Shares not issued in the Subscription Offering, in a Syndicated Community
Offering and/or through an Underwriter in an Underwritten Public Offering, all
subject to such terms, conditions and procedures as may be determined by NCRIC
Group, in a manner that will achieve the widest distribution of NCRIC Group
Common Stock, subject to the right of NCRIC Group to accept or reject in whole
or in part any subscriptions in the Syndicated Community Offering. In the case
of an Underwritten Public Offering, Subscription Shares will be sold to an
Underwriter for resale in an Underwritten Public Offering. The price to be paid
by the Underwriter for Subscription Shares will be equal to the aggregate price
at which such shares were offered in the Subscription Offering, less the amount
of an underwriting discount, which will be negotiated by NCRIC Group and the
Underwriter. In the Syndicated Community Offering and/or Underwritten Public
Offering, any Person may purchase up to 100,000 shares of NCRIC Group Common
Stock, subject to the purchase limitations specified in Section 10.
Provided that the Subscription Offering has begun, NCRIC Group may
begin the Syndicated Community Offering or Underwritten Public Offering at any
time, provided that the completion of the offer and sale of NCRIC Group Common
Stock will be conditioned upon the approval of the Plan by Voting Members. If
the Syndicated Community Offering or Underwritten Public Offering does not begin
pursuant to the provisions of the preceding sentence, such offering will begin
as soon as practicable following the date upon which the Subscription and
Community Offerings terminate. The provisions of Section 10 shall not be
applicable to sales to Underwriters in an Underwritten Public Offering for
purposes of such an offering, but shall be applicable to the sales by the
Underwriters to the public.
If for any reason a Syndicated Community Offering or an Underwritten
Public Offering of shares of NCRIC Group Common Stock not sold in the
Subscription and Community Offerings cannot be effected, or in the event that
any insignificant residue of shares of NCRIC Group Common Stock is not sold in
the Subscription and Community Offerings or in the Syndicated Community or
Underwritten Public Offering, if possible, NCRIC Group will make other
arrangements for the disposition of unsubscribed shares aggregating at least the
minimum of the Offering Range. Such other purchase arrangements will be subject
to receipt of any required approval of the Commissioner.
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10. LIMITATION ON PURCHASES
The following limitations shall apply to all purchases and issuances of
shares of Conversion Stock:
A. The maximum number of shares of NCRIC Group Common Stock which
may be subscribed for or purchased in all categories in the Offering by any
Person or Participant together with any Associate or group of Persons Acting in
Concert shall not exceed 100,000 shares of NCRIC Group Common Stock, except that
the ESOP may purchase up to 8%, and the Stock Award Plan may purchase up to 4%,
of NCRIC Group Common Stock issued in the Offering.
B. The maximum number of shares of NCRIC Group Common Stock which
may be issued to or purchased in all categories of the Offering by Officers and
Directors and their Associates in the aggregate shall not exceed 25% of the
shares of NCRIC Group Common Stock issued in the Conversion.
C. A minimum of 100 shares of NCRIC Group Common Stock must be
purchased by each Person purchasing shares in the Offering to the extent those
shares are available.
D. The maximum number of shares of NCRIC Group Common Stock that
may be subscribed for or purchased in the Offering by any Person or Participant
together with any Associate or group of Persons Acting in Concert, combined with
Exchange Shares received by any such Person or Participant together with any
Associate or group of Persons Acting in Concert, shall not exceed 5% of the
shares of NCRIC Group Common Stock issued and outstanding at the completion of
the Conversion, except that this limitation shall not apply to the Employee
Plans.
If the number of shares of NCRIC Group Common Stock otherwise allocable
pursuant to Sections 5 through 9, inclusive, to any Person or that Person's
Associates would be in excess of the maximum number of shares permitted as set
forth above, the number of shares of NCRIC Group Common Stock allocated to each
such person shall be reduced to the lowest limitation applicable to that Person,
and then the number of shares allocated to each group consisting of a Person and
that Person's Associates shall be reduced so that the aggregate allocation to
that Person and his or her Associates complies with the above limits.
Depending upon market or financial conditions, the Board of Directors
of NCRIC Group, with the receipt of any required approvals of the Commissioner
and without further approval of Voting Members, may decrease or increase the
purchase limitations in this Plan. If NCRIC Group increases the maximum purchase
limitations, NCRIC Group is only required to resolicit Persons who subscribed
for the maximum purchase amount in the Subscription Offering and may, in the
sole discretion of NCRIC Group resolicit certain other large subscribers.
Requests to purchase additional shares of the Conversion Stock in the event that
the purchase limitation is so increased will be determined by the Board of
Directors of NCRIC Group in its sole discretion.
In the event of an increase in the total number of shares offered in
the Subscription Offering due to an increase in the maximum of the Offering
Range of up to 15% (the "Adjusted Maximum"), the additional shares will be used
to fill the orders from the Employee Plans and the
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Officers, Directors and Employees of NCRIC Group and NCRIC, Inc., and then will
be allocated in accordance with the priorities set forth in this Plan.
For purposes of this Section 10, the Directors of NCRIC Group, MHC,
Holdings, NCRIC, Inc. and their affiliate and subsidiaries shall not be deemed
to be Associates or a group affiliated with each other or otherwise Acting in
Concert solely as a result of their being Directors of such entities.
Each Person purchasing NCRIC Group Common Stock in the Conversion shall
be deemed to confirm that such purchase does not conflict with the above
purchase limitations contained in this Plan.
11. PAYMENT FOR SUBSCRIPTION SHARES
All payments for NCRIC Group Common Stock subscribed for in the
Subscription Offering and Community Offering must be delivered in full to NCRIC
Group, together with a properly completed and executed Order Form, on or prior
to the expiration date of the Offering; provided, however, that if the Employee
Plans subscribe for shares in the Subscription Offering, such plans will not be
required to pay for the shares at the time they subscribe but rather may pay for
such shares of NCRIC Group Common Stock subscribed for by such plans at the
Subscription Price upon consummation of the Conversion.
Payment for NCRIC Group Common Stock subscribed for shall be made by
check, money order or bank draft and shall be placed in escrow with a commercial
bank pursuant to an escrow agreement. If for any reason the Conversion is not
consummated, all payments made by subscribers in the Subscription and Community
Offerings will be refunded to them with any interest that has been earned
pursuant to the escrow agreement.
12. MANNER OF EXERCISING SUBSCRIPTION RIGHTS THROUGH ORDER FORMS
As soon as practicable after the Prospectus prepared by NCRIC Group has
been declared effective by the SEC, Order Forms will be distributed to the
Participants at their last known addresses appearing on the records of NCRIC
Group for the purpose of subscribing for shares of NCRIC Group Common Stock in
the Subscription Offering and will be made available for use by those Persons to
whom a Prospectus is delivered. Notwithstanding the foregoing, NCRIC Group may
elect to send Order Forms only to those Persons who request them after receipt
of such notice in a form approved by the Commissioner and which is adequate to
apprise the such persons of the pendency of the Subscription Offering. Such
notice may be included with the proxy statement for the Special Meeting of
Members and also may be included in the notice of the pendency of the Conversion
and the Special Meeting of Members sent to all Eligible Members in accordance
with Insurance Laws and policy of the Commissioner.
Each Order Form will be preceded or accompanied by a Prospectus
describing NCRIC Group and the Offering. Each Order Form will contain, among
other things, the following:
A. A specified date by which all Order Forms must be received by
NCRIC Group, which date shall be not less than twenty 20, nor more than 45 days,
following the date on which
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the Order Forms are mailed by NCRIC Group, and which date will constitute the
termination of the Subscription Offering unless extended;
B. The Subscription Price per share for shares of NCRIC Group
Common Stock to be sold in the Offering;
C. A description of the minimum and maximum number of
Subscription Shares which may be subscribed for pursuant to the exercise of
subscription rights or otherwise purchased in the Subscription and Community
Offering;
D. Instructions as to how the recipient of the Order Form is to
indicate thereon the number of Subscription Shares for which such person elects
to subscribe and the available alternative methods of payment therefor;
E. An acknowledgment that the recipient of the Order Form has
received a final copy of the Prospectus prior to execution of the Order Form;
F. A statement to the effect that all subscription rights are
nontransferable, will be void at the end of the Subscription Offering, and can
only be exercised by delivering to NCRIC Group within the subscription period
such properly completed and executed Order Form, together with payment in the
full amount of the aggregate purchase price as specified in the Order Form for
the shares of NCRIC Group Common Stock for which the recipient elects to
subscribe in the Subscription Offering; and
G. A statement to the effect that the executed Order Form, once
received by NCRIC Group, may not be modified or amended by the subscriber
without the consent of NCRIC Group.
Notwithstanding the above, NCRIC Group reserves the right in its sole
discretion to accept or reject orders received on photocopied or facsimilied
order forms.
13. UNDELIVERED, DEFECTIVE OR LATE ORDER FORM; INSUFFICIENT PAYMENT
In the event Order Forms (a) are not delivered and are returned, or
notice of nondelivery is given, to NCRIC Group by the United States Postal
Service, (b) are not received back by NCRIC Group after the expiration date
specified thereon, (c) are defectively filled out or executed, or (d) are not
accompanied by the full required payment, unless waived by NCRIC Group, for the
shares of NCRIC Group Common Stock subscribed for, the subscription rights of
the Person to whom such rights have been granted will lapse as though such
Person failed to return the completed Order Form within the time period
specified thereon; provided, however, that NCRIC Group may, but will not be
required to, waive any immaterial irregularity on any Order Form or require the
submission of corrected Order Forms or the remittance of full payment for
subscribed shares by such date as NCRIC Group may specify. The interpretation of
NCRIC Group of terms and conditions of this Plan and of the Order Forms will be
final, subject to the authority of the Commissioner.
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14. RESIDENTS OF FOREIGN COUNTRIES AND CERTAIN STATES
NCRIC Group will make reasonable efforts to comply with the securities
laws of all States in the United States in which Persons entitled to subscribe
for shares of NCRIC Group Common Stock pursuant to this Plan reside. However, no
such Person will be issued subscription rights or be permitted to purchase
shares of NCRIC Group Common Stock in the Subscription Offering if such Person
resides in a foreign country; or in a State of the United States with respect to
which all of the following apply: (A) a small number of Persons otherwise
eligible to subscribe for shares under the Plan reside in such state; (B) the
issuance of subscription rights or the offer or sale of shares of NCRIC Group
Common Stock to such Persons would require NCRIC Group under the securities laws
of such state, to register as a broker, dealer, salesman or agent or to register
or otherwise qualify its securities for sale in such state; and (C) such
registration or qualification would be impracticable for reasons of cost or
otherwise.
15. NCRIC, INC. POLICYHOLDERS
On and after the Effective Date, every Policy issued by NCRIC, Inc.
that is in force on the Effective Date shall continue as a Policy of NCRIC, Inc.
and all policy and contract rights of all such Policies shall be and remain as
they existed prior to the Effective Date, except that as a result of the
Conversion, the membership interests in the MHC associated with a Policy shall
be extinguished and no membership interest shall thereafter be conferred as a
result of the existence or issuance of a Policy issued by NCRIC, Inc.
16. RESTRICTIONS ON RESALE OR SUBSEQUENT DISPOSITION
A. All Subscription Shares purchased by Directors or Officers of
NCRIC Group in the Offering shall be subject to the restriction that, except as
provided in this Section or as may be approved by the Commissioner, no interest
in such shares may be sold or otherwise disposed of for value for a period of
one year following the date of purchase in the Offering.
B. The restriction on disposition of Subscription Shares set
forth above in this Section shall not apply to the following:
(1) Any exchange of such shares in connection with a
merger or acquisition involving NCRIC Group; and
(2) Any disposition of such shares following the death of
the person to whom such shares were initially sold
under the terms of the Plan.
C. With respect to all Subscription Shares subject to
restrictions on resale or subsequent disposition, each of the following
provisions shall apply:
(1) Each certificate representing shares restricted by
this section shall bear a legend prominently stamped
on its face giving notice of the restriction;
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(2) Instructions shall be issued to the stock transfer
agent for NCRIC Group not to recognize or effect any
transfer of any certificate or record of ownership of
any such shares in violation of the restriction on
transfer; and
(3) Any shares of capital stock of NCRIC Group issued
with respect to a stock dividend, stock split, or
otherwise with respect to ownership of outstanding
Subscription Shares subject to the restriction on
transfer hereunder shall be subject to the same
restriction as is applicable to such Conversion
Stock.
17. REQUIREMENTS FOR STOCK PURCHASES BY DIRECTORS AND OFFICERS FOLLOWING
THE CONVERSION
For a period of three years following the Conversion, no Officer,
Director or their Associates shall purchase, without the prior written approval
of the Commissioner, any outstanding shares of NCRIC Group Common Stock except
from a broker-dealer registered with the SEC. This provision shall not apply to
negotiated transactions involving more than 1% of the outstanding shares of
NCRIC Group Common Stock, the exercise of any options pursuant to a stock option
plan or purchases of NCRIC Group Common Stock made by or held by any Employee
Plan of NCRIC Group or NCRIC, Inc. which may be attributable to any Officer or
Director. As used herein, the term "negotiated transaction" means a transaction
in which the securities are offered and the terms and arrangements relating to
any sale are arrived at through direct communications between the seller or any
person acting on its behalf and the purchaser or his investment representative.
The term "investment representative" shall mean a professional investment
advisor acting as agent for the purchaser and independent of the seller and not
acting on behalf of the seller in connection with the transaction.
18. TAX RULINGS OR OPINIONS
Consummation of the Conversion is expressly conditioned upon prior
receipt by the MHC and NCRIC Group of either a ruling, or an opinion of counsel,
or a letter of advice from their tax advisor, with respect to applicable federal
and state tax laws, to the effect that consummation of the transactions
contemplated by the Conversion and this Plan will not result in a taxable
reorganization under the provisions of the applicable codes or otherwise result
in any adverse tax consequences to the MHC, the NCRIC Group, or NCRIC Inc., or
the Eligible Members receiving subscription rights before or after the
Conversion, except in each case to the extent, if any, that subscription rights
are deemed to have value on the date such rights are issued.
19. STOCK BENEFIT PLANS
A. NCRIC Group is authorized to adopt Employee Plans in
connection with the Conversion, including without limitation, the Stock Award
Plan. Existing Employee Plans, such as the ESOP, as well as any newly created
Employee Plans may purchase shares of NCRIC Group Common Stock in the Offering,
to the extent permitted by the terms of such benefit plans and this Plan.
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B. NCRIC Group is authorized to adopt a stock option plan that
may reserve for issuance, pursuant to the exercise of options to be granted to
officers, directors and employees of NCRIC Group and its affiliates, a number of
shares of NCRIC Group Common Stock in an amount up to 10% of the shares issued
in the Offering, which options may be granted effective upon completion of the
Conversion or thereafter.
C. As a result of the Conversion and approval of this Plan,
stockholders of NCRIC Group and Voting Members shall be deemed to have ratified
and approved all employee stock benefit plans established by NCRIC Group in
connection with the Conversion and disclosed in the Prospectus or Proxy
Statement and shall have agreed to issue or reserve for issuance NCRIC Group
Common Stock pursuant to the terms of such benefit plans. Upon consummation of
the Conversion, the NCRIC Group common stock held by existing Employee Benefit
Plans shall be converted into such number of shares of NCRIC Group Common Stock
based upon the Exchange Ratio. Also upon consummation of the Conversion, all
rights outstanding under all stock option plans shall become rights for shares
of NCRIC Group Common Stock, with each such right being for a number of shares
of NCRIC Group Common Stock based upon the Exchange Ratio and the number of
shares of NCRIC Group common stock that were available thereunder immediately
prior to consummation of the Conversion, with the price adjusted to reflect the
Exchange Ratio but with no change in any other term or condition of such right.
20. RESTRICTIONS ON ACQUISITION OF NCRIC GROUP
A. For a period of five years from the date of consummation of
the Conversion, no person individually or in concert with others, other than a
tax-qualified Employee Plan, shall directly or indirectly offer to acquire or
acquire the beneficial ownership of more than 5% of any class of an equity
security of NCRIC Group without the prior written consent of the Commissioner.
B. The Certificate of Incorporation of NCRIC Group may contain a
provision stipulating that for a period of five years from the date of
consummation of the Conversion, any person who beneficially owns in excess of 5%
of NCRIC Group Common stock issued and outstanding in violation of A above shall
not be entitled or permitted to any vote with respect to any shares held in
excess of 5%, nor shall such shares be counted as voting stock in connection
with any matter submitted to stockholders.
C. For the purposes of this section:
(1) The term "person" includes an individual, a firm, a
corporation or other entity;
(2) The term "offer" includes every offer to buy or
acquire, solicitation of an offer to sell, tender
offer for, or request or invitation for tenders of, a
security or interest in a security for value;
(3) The term "acquire" includes every type of
acquisition, whether effected by purchase, exchange,
operation of law or otherwise; and
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(4) The term "security" includes non-transferable
subscription rights issued pursuant to a plan of
conversion as well as a "security" as defined in 15
U.S.C. Section 8c(a)(10).
21. CERTIFICATE OF INCORPORATION AND BYLAWS
By voting to adopt this Plan, Voting Members will be voting to adopt
the Certificate of Incorporation and Bylaws for NCRIC Group attached as Exhibits
A and B to this Plan.
22. CONSUMMATION OF CONVERSION AND EFFECTIVE DATE
The Effective Date of the Conversion (the "Effective Date") shall be
the date upon which the Holding Company Merger shall be effective under the
DGCL. The Effective Date shall occur after all requisite regulatory,
policyholder and stockholder approvals have been obtained, and sufficient
subscriptions and orders for Subscription Shares have been received. The Closing
of the sale of all shares of NCRIC Group Common Stock sold in the Offering shall
occur simultaneously on the effective date of the Closing.
23. EXPENSES OF CONVERSION
The MHC, NCRIC, Inc. and NCRIC Group may retain and pay for the
services of legal, financial and other advisors to assist in connection with any
or all aspects of the Conversion, including the Offering, and such parties shall
use their best efforts to assure that such expenses shall be reasonable.
24. AMENDMENT OR TERMINATION OF PLAN
If deemed necessary or desirable, this Plan may be substantively
amended as a result of comments from the Commissioner or otherwise at any time
prior to solicitation of proxies from Voting Members and NCRIC Group
stockholders to vote on this Plan by the Board of Directors of the MHC, and at
any time thereafter by the Board of Directors of the MHC with the concurrence of
the Commissioner. Any amendment to this Plan made after approval by Voting
Members and NCRIC Group stockholders with the approval of the Commissioner shall
not necessitate further approval by Voting Members unless otherwise required by
the Commissioner. The Board of Directors of the MHC may terminate this Plan at
any time. No Person shall have any rights or claims against NCRIC Group, NCRIC,
Inc. or the MHC or their respective Board of Director based on abandonment of
this Plan of Conversion and Reorganization.
By adoption of the Plan, Voting Members of the MHC authorize the Board
of Directors of the MHC to amend or terminate the Plan under the circumstances
set forth in this Section.
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25. CONDITIONS TO CONVERSION
Consummation of the Conversion pursuant to this Plan is expressly
conditioned upon the following:
A. Prior receipt by the MHC and NCRIC Group of rulings of the
United States Internal Revenue Service and the state taxing authorities, or
opinions of counsel or tax advisers as described in herein;
B. The issuance of the Subscription Shares offered in the
Conversion; and
C. The completion of the Conversion within the time period
specified in Section 3 of this Plan.
26. INTERPRETATION
All interpretations of this Plan and application of its provisions to
particular circumstances by a majority of the Board of Directors of NCRIC Group
or the MHC shall be final, subject to the authority of the Commissioner.
27. MISCELLANEOUS
A. No Transfer or Exchange. The Reorganization shall not be
construed to result in any reinsurance or in any real or constructive issuance
or exchange of any insurance policy or contract or any other transfer of any
assets, rights or obligations of the MHC.
B. Directors and Officers. The directors and officers of NCRIC
Group immediately prior to the Effective Date shall continue as the directors
and officers of NCRIC Group following the Effective Date.
C. Compensation of Officers, Directors and Employees. No
director, officer or employee of the MHC shall receive any fee or any other
consideration, other than their us salary and compensation, fees, or
consideration as a Policyholder, in connection with this Plan.
D. Notices. If the MHC substantially complies in good faith with
the requirements of the Insurance Laws or the terms of this Plan with respect to
the giving of any required notice to Voting Members, its failure in any case to
give such notice to any person or persons entitled thereto shall not impair the
validity of the actions and proceedings taken hereunder with respect to the
Conversion or entitle such person to any injunctive or other equitable relief
with respect thereto.
E. Governing Law. The terms of this Plan of Conversion and
Reorganization shall be governed by construed in accordance with the laws of the
District of Columbia.
F. Headings. Headings contained in this Plan are for convenience
only, and shall not be considered in construing any of the provisions hereof.
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G. Preamble. The Preamble is a general expression of the concepts
of this Plan of Conversion and Reorganization. It is not, and shall not be
construed to be, a substantive part of this Plan of Conversion and
Reorganization except for definitions included therein.
IN WITNESS WHEREOF, NCRIC, A Mutual Holding Company, by authority of
its Board of Directors, has caused this Plan of Conversion and Reorganization to
be approved as of January 28, 2003.
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