SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
[ X ] Filed by the registrant
[ ] 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 ss. 240.14a-11(c) or ss. 240.14a-12
NCRIC Group, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
<PAGE>
NCRIC Group, Inc.
1115 30th Street, N.W.
Washington, D. C. 20007
(202) 969-1866
April 10, 2000
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders of NCRIC
Group, Inc. (the "Company"), which will be held at the Washington Monarch Hotel,
2401 M Street, N.W., Washington, D.C. at 6:00 p.m. (Eastern daylight time) on
Tuesday, May 9, 2000.
The enclosed Notice of Annual Meeting and Proxy Statement describe the formal
business to be transacted. During the meeting we will also report on the
operations of the Company and its subsidiaries. Directors and officers of the
Company will be present to respond to any questions that shareholders may have.
Also enclosed for your review is our Annual Report to Shareholders, which
contains detailed information concerning the activities and operating
performance of the Company.
The business to be conducted at the Annual Meeting consists of the election of
seven directors. The Board of Directors of the Company has determined that the
election of these directors is in the best interest of the Company and its
shareholders, and the Board of Directors unanimously recommends a vote "FOR" the
matter to be considered.
On behalf of the Board of Directors, we urge you to sign, date and return the
enclosed proxy card as soon as possible even if you currently plan to attend the
Annual Meeting. This will not prevent you from voting in person, but will assure
that your vote is counted if you are unable to attend the meeting.
Sincerely,
/s/ R. Ray Pate, Jr.
-------------------
R. Ray Pate, Jr.
President and Chief Executive Officer
<PAGE>
NCRIC Group, Inc.
1115 30th Street, N.W.
Washington, D.C. 20007
(202) 969-1866
NOTICE OF
2000 ANNUAL MEETING OF SHAREHOLDERS
To Be Held On May 9, 2000
Notice is hereby given that the Annual Meeting of Shareholders of NCRIC
Group, Inc. (the "Company") will be held at the Washington Monarch Hotel, 2401 M
Street, N.W., Washington, D.C., on Tuesday, May 9, 2000 at 6:00 p.m. (Eastern
daylight time).
A Proxy Card and a Proxy Statement for the Annual Meeting are enclosed.
The Annual Meeting is for the purpose of considering and acting upon:
1. The election of seven directors; and
such other matters as may properly come before the Annual Meeting, or any
adjournments thereof.
Any action may be taken on the foregoing proposals at the Annual
Meeting on the date specified above, or on any date or dates to which the Annual
Meeting may be adjourned. Shareholders of record at the close of business on
March 24, 2000, are the shareholders entitled to vote at the Annual Meeting, and
any adjournments thereof.
By Order of the Board of Directors
/s/William E. Burgess
---------------------
William E. Burgess
Secretary
Washington, D.C.
April 10, 2000
- --------------------------------------------------------------------------------
IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE EXPENSE OF
FURTHER REQUESTS FOR PROXIES TO ENSURE A QUORUM AT THE ANNUAL MEETING. A
SELF-ADDRESSED ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED
IF MAILED WITHIN THE UNITED STATES.
- --------------------------------------------------------------------------------
<PAGE>
NCRIC Group, Inc.
1115 30th Street, N.W.
Washington, D.C. 20007
(202) 969-1866
-------------------------------------
PROXY STATEMENT
-------------------------------------
ANNUAL MEETING OF SHAREHOLDERS
MAY 9, 2000
-------------------------------------
SOLICITATION AND VOTING OF PROXIES
This Proxy Statement is furnished in connection with the solicitation
of proxies on behalf of the Board of Directors of NCRIC Group, Inc. (the
"Company") to be used at the Annual Meeting of Shareholders of the Company (the
"Annual Meeting"), which will be held at the Washington Monarch Hotel, 2401 M
Street, N.W., Washington, D.C., on Tuesday, May 9, 2000, at 6:00 p.m. (Eastern
daylight time), and at all adjournments of the Annual Meeting. The accompanying
Notice of Annual Meeting of Shareholders and this Proxy Statement are first
being mailed to shareholders on or about April 10, 2000.
Regardless of the number of shares of common stock owned, it is
important that shareholders be represented by proxy or be present in person at
the Annual Meeting. Shareholders are requested to vote by completing the
enclosed proxy card and returning it, signed and dated, in the enclosed
postage-paid envelope. Shareholders are urged to indicate the way they wish to
vote in the spaces provided on the proxy card. Proxies solicited by the Board of
Directors of the Company will be voted in accordance with the directions given
therein. Where no instructions are indicated, signed proxies will be voted "FOR"
the election of the nominees for director named in this Proxy Statement.
The Board of Directors knows of no additional matters that will be
presented for consideration at the Annual Meeting. Execution of a proxy,
however, confers on the designated proxyholders discretionary authority to vote
the shares in accordance with their best judgement on such other business, if
any, that may properly come before the Annual Meeting or any adjournments
thereof.
Shareholders who execute proxies in the form solicited hereby retain
the right to revoke them in the manner described below. Unless so revoked, the
shares represented by such proxies will be voted at the Annual Meeting and all
adjournments thereof. Proxies solicited on behalf of the Board of Directors of
the Company will be voted in accordance with the directions given thereon. Where
no instructions are indicated, executed proxies will be voted "FOR" the election
of the nominees set forth in this Proxy Statement.
<PAGE>
Proxies may be revoked at any time prior to exercise by sending written
notice of revocation to the Secretary of the Company, William E. Burgess, at the
address of the Company shown above, or by delivering to the Company a duly
executed proxy bearing a later date. The presence at the Annual Meeting of any
shareholder who had given a proxy shall not revoke such proxy unless the
shareholder delivers his or her ballot in person at the Annual Meeting or
delivers a written revocation to the Secretary of the Company prior to the
voting of such proxy. However, if you are a shareholder whose shares are not
registered in your own name, you will need appropriate documentation from your
record holder to vote personally at the Annual Meeting.
The cost of solicitation of proxies in the form enclosed herewith will
be borne by the Company. Proxies may also be solicited personally or by mail and
telephone by the Company's Directors, officers and regular employees, without
additional compensation therefor. The Company will also request persons, firms
and corporations holding shares in their names, or in the name of their
nominees, which are beneficially owned by others, to send proxy material to and
obtain proxies from such beneficial owners, and will reimburse such holders for
their reasonable expenses in doing so.
VOTING SECURITIES
Holders of record of the Company's common stock, par value $.01 per
share (the "Common Stock") as of the close of business on March 24, 2000 (the
"Record Date") are entitled to one vote for each share then held. As of the
Record Date, the Company had 3,742,855 shares of Common Stock issued and
outstanding. The presence, in person or by proxy, of one-third of the total
number of shares of Common Stock outstanding and entitled to vote is necessary
to constitute a quorum at this Annual Meeting. In the event there are not
sufficient votes for a quorum, or to approve or ratify any matter being
presented, at the time of this Annual Meeting, the Annual Meeting may be
adjourned in order to permit the further solicitation of proxies.
VOTING PROCEDURES AND METHOD OF COUNTING VOTES
As to the election of Directors, the proxy card being provided by the
Board of Directors enables a shareholder to vote FOR the election of the seven
nominees proposed by the Board, or to WITHHOLD AUTHORITY to vote for the
nominees being proposed. Under the Company's Bylaws, Directors are elected by a
plurality of the shares voted at the Annual Meeting, in person or by proxy,
without regard to either broker non-votes, or proxies as to which authority to
vote for the nominees being proposed is withheld. Proxies solicited hereby will
be returned to the Company, and will be tabulated by an inspector of election
designated by the Board.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
Persons and groups who beneficially own in excess of 5% of the Common
Stock are required to file certain reports with the Company and with the
Securities and Exchange Commission (the "SEC") regarding such ownership pursuant
to the Securities Exchange Act of 1934 (the "Exchange Act"). The following table
sets forth information regarding each person known to be the beneficial owner of
more than 5% of the Company's outstanding shares of Common Stock on the Record
Date.
2
<PAGE>
Amount of Shares
Owned and Nature Percent of Shares
Name and Address of of Beneficial of Common Stock
Beneficial Owner Ownership Outstanding
---------------- --------- -----------
NCRIC, A Mutual Holding Company 2,220,000(1) 59.3%
1115 30th Street, N.W.
Washington, D.C. 20007
-------------------------------
(1) The shares are held by NCRIC Holdings, Inc. a wholly-owned subsidiary of
NCRIC, A Mutual Holding Company.
PROPOSAL 1--ELECTION OF DIRECTORS
Directors of the Company are generally elected to serve for a
three-year period or until their respective successors shall have been elected
and shall qualify. Seven directors will be elected at the Annual Meeting to
serve for a three-year period and until a successor has been elected and
qualified. The Board of Directors has nominated R. Ray Pate, Jr., Leonard M.
Glassman, M.D., Prudence P. Kline, M.D., Edward G. Koch, M.D., Raymond
Scalettar, M.D., David M. Seitzman, M.D., and Robert L. Simmons, M.D. to serve
as directors.
The table below sets forth certain information regarding the Company's
Board of Directors, including the terms of office of Board members. It is
intended that the proxies solicited on behalf of the Board of Directors will be
voted at the Annual Meeting for the election of the nominees identified below
(unless otherwise directed on the proxy card). If a nominee is unable to serve,
the shares represented by all such proxies will be voted for the election of
such substitute as the Board of Directors may recommend. At this time, the Board
of Directors knows of no reason why the nominees might be unable to serve, if
elected.
<TABLE>
<CAPTION>
Shares of
Positions Common Stock
Held in the Director Term to Beneficially Percent
Name Age(1) Company Since(2) Expire Owned (3) Of Class
----- ------ ------- -------- ------ --------- --------
NOMINEES
<S> <C> <C> <C> <C> <C> <C>
R. Ray Pate, Jr. 40 President, Chief 1998 2003 24,030 *
Executive Officer
and Director
Leonard M. Glassman 53 Director 1993 2003 15,000 *
Prudence P. Kline 48 Director 1995(4) 2002 1,500 *
Edward G. Koch 57 Director 1996(4) 2001 800 *
Raymond Scalettar 70 Director 1980 2003 3,572 *
David M. Seitzman 70 Director 1980 2003 3,575 *
Robert L. Simmons 67 Director 1984(4) 2003 7,000 *
</TABLE>
(footnotes on next page)
3
<PAGE>
<TABLE>
<CAPTION>
Shares of
Positions Common Stock
Held in the Director Term to Beneficially Percent
Name Age(1) Company Since(2) Expire Owned (3) Of Class
----- ------ ------- -------- ------ --------- --------
DIRECTORS CONTINUING IN OFFICE
<S> <C> <C> <C> <C> <C> <C>
Vincent C. Burke, III 48 Director 1998 2002 300 *
Pamela W. Coleman 43 Director 1989 2002 6,751 *
Luther W. Gray 59 Director 1984(4) 2001 3,571 *
J. Paul McNamara 50 Director 1998 2002 17,505 *
Leonard Parver 55 Director 1998 2001 7,142 *
Nelson P. Trujillo 61 Chairman of the Board 1980 2001 28,570 *
<CAPTION>
EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS
<S> <C> <C> <C> <C> <C> <C>
Stephen F. Fargis 40 Senior Vice President and n/a n/a 9,322 *
Chief Operating Officer
Rebecca B. Crunk 48 Senior Vice President and n/a n/a 5,460 *
Chief Financial Officer
William E. Burgess 44 Senior Vice President and n/a n/a 3,024 *
Secretary
All Directors and Executive
Officers as a Group (16 persons) 140,122 3.7%
</TABLE>
- -------------
* Less than 1%.
(1) As of December 31, 1999.
(2) Reflects the initial appointment as a director of NCRIC Group, Inc. or as a
governor of National Capital Reciprocal Insurance Company, or a director of
its attorney-in-fact, or its subsidiary Commonwealth Medical Liability
Insurance Company. Except as otherwise indicated, each nominee and
continuing director has served on the Board of Directors of the Company
since the reorganization of National Capital Reciprocal Insurance Company
and the formation of the Company in December 1998.
(3) 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 and ESOP.
(4) The initial appointment of Drs. Kline, Koch and Simmons to the Board of
Directors of the Company is effective as of this Annual Meeting. Dr. Gray
was appointed to the Board of the Company in 2000 to fill the unexpired
term of a retiring director.
Directors
The principal occupation during the past five years of each director
and executive officer of the Company is set forth below. All directors have held
their present positions for five years unless otherwise stated.
<PAGE>
Nelson P. Trujillo, M.D. was a governor and Chairman 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.
4
<PAGE>
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.
Luther W. Gray, Jr., M.D. was a governor of National Capital Reciprocal
Insurance Company from 1984 until the reorganization. He was a member of the
executive committee of the board and is Chair of the underwriting committee. Dr.
Gray is a physician and general surgeon with Luther W. Gray, Jr., M.D., PC and
is Chair of the Department of Surgery at Sibley Memorial Hospital.
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. Dr. Glassman is currently the Chairman of the Board of Directors of NCRIC,
Inc.
Prudence P. Kline, M.D. was a Director of National Capital
Underwriters, Inc. from 1995 until the reorganization. Dr. Kline is a physician
in private practice in Washington, D.C. since 1986 and is a Director of NCRIC,
Inc. since the reorganization.
Edward G. Koch, M.D. has served as a Director of Commonwealth Medical
Liability Insurance Company since 1996. Dr. Koch is an OB/GYN physician in
private practice in Arlington, Virginia and Washington, D.C. Since 1997, he has
been President of the Arlington County Medical Society Foundation.
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 Chairman 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 Vice Chairman 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
5
<PAGE>
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 until January 1, 2000.
Robert L. Simmons, M.D. was a member of the Board of Directors of
National Capital Underwriters, Inc. from 1984 until the reorganization. Dr.
Simmons is Vice President of Medical Affairs at Providence Hospital in
Washington, D.C. and is a thoracic and cardiovascular surgeon. Dr. Simmons is
currently a director of NCRIC, Inc.
Executive Officers Who Are Not Directors
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 the 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 Comp any.
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.
Committees and Meetings of the Board of Directors
The business of the Company is conducted through regular and special
meetings of the Board of Directors and its committees. The Board of Directors of
the Company met thirteen times during 1999. No director attended fewer than 75%
of the total meetings held by the Board of Directors and the committees on which
such director served.
The Board of Directors has an Audit Committee and a Compensation
Committee. The Board of Directors performs and functions as the Nominating
Committee.
The Audit Committee is comprised of Directors Burke, Coleman and
Seitzman. The Audit Committee recommends the firm to be appointed as independent
accountants to audit the financial statements, reviews the scope and results of
the audit with the independent accountants, reviews with management and the
independent accountants the Company's year-end audit, and considers the
6
<PAGE>
adequacy of the Company's internal accounting controls. The Audit Committee met
six times in 1999.
The Compensation Committee is comprised of Directors Burke, Seitzman
and Trujillo. The Compensation Committee reviews and makes recommendations to
the Board of Directors concerning compensation, benefit policies and stock
ownership programs, as well as the compensation of the chief executive officer.
The Compensation Committee administers the stock option plan and the stock award
plan. The Compensation Committee met three times during 1999.
While the Board will consider nominees recommended by the shareholders,
it has not actively solicited recommendations from shareholders. Nominations by
shareholders must comply with certain procedural and informational requirements
set forth in the Company's Bylaws. See "Advance Notice of Business to be
Conducted at an Annual Meeting."
Director Compensation
The Company pays cash compensation to each of its non-employee
directors, other than the Chairman, of $25,000 per year. The Chairman of the
Board of Directors receives $30,000 per year. Directors who are officers or
employees of the Company receive no cash compensation for serving as directors.
All directors are reimbursed for out-of-pocket expenses in connection with
attendance at any meeting of the Company's Board or any committee. During 1999,
directors received option grants under the NCRIC, Inc. Stock Option Plan. Six
directors (Messrs. Burke and McNamara, and Drs. Coleman, Gray, Scalettar and
Seitzman) were each granted an option to purchase 1,850 shares of common stock.
Two directors (Drs. Glassman and Parver) were each granted an option to purchase
5,550 shares of common stock. Dr. Trujillo was granted an option to purchase
8,880 shares of common stock. The exercise price of all shares underlying the
options granted is the fair market value of the common stock on the date of
grant.
7
<PAGE>
Executive Compensation
The following table sets forth information as to annual, long term and
other compensation for services in all capacities to the President and Chief
Executive Officer for the years ended December 31, 1999 and 1998 and the other
executive officers (collectively referred to as "Named Executive Officers") who
earned over $100,000 in salary and bonuses during 1999.
<TABLE>
<CAPTION>
Summary Compensation Table
Long-Term
Compensation
Annual Compensation(1) Awards
--------------------------------------- ----------------------
Other Restricted
Annual Stock Options/ All Other
Name and Principal Fiscal Compensation Award SARs Compensation
Position Year(2) Salary($) Bonus($) ($) ($) (#) ($)
-------- ------- --------- -------- --- --- --- ---
<S> <C> <C> <C> <C> <C> <C> <C>
R. Ray Pate, Jr.,
President and Chief 1999 $240,000 $90,000 - - 13,320 $22,410
Executive Officer 1998 240,010 75,000 - - - 17,432
Stephen F. Fargis, 1999 $150,000 $42,000 - - 9,250 $21,253
Chief Operating Officer 1998 151,440 37,500 - - - 14,716
Rebecca B. Crunk, 1999 $135,000 $40,500 - - 7,400 $21,339
Chief Financial Officer 1998 84,135 31,250 - - - 406
William E. Burgess, 1999 $120,000 $28,600 - - 7,400 $18,579
Senior Vice President 1998 109,981 27,500 - - - 11,082
</TABLE>
- -------------------
(1) Summary Compensation information is excluded for the year ended December
31, 1997 because the Company was not a public company during such period.
(2) For the fiscal years ended December 31.
Employment Agreements. R. Ray Pate, Jr. serves as the President and
Chief Executive Officer of the Company 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:
(1) participate in any retirement and/or pension plans or health and medical
insurance plans offered to NCRIC, Inc.'s senior executives;
(2) receive an automobile allowance of $700 per month; and
8
<PAGE>
(3) 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. 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 of 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
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.
Stock Benefit Plans. The Company has established a stock option plan
and a stock award plan which provides discretionary awards to its directors,
officers and key employees.
Set forth in the table that follows is information relating to options
granted under the stock option plan to the Named Executive Officers during 1999.
<TABLE>
<CAPTION>
OPTION GRANTS IN LAST FISCAL YEAR
Individual Grants
- -----------------------------------------------------------------------------------------------------------------------
Percent of Total
Options Granted
to Employees in Exercise or Expiration Grant Date Present
Name Options Granted FY 1999 Base Price Date Value (1)
---- --------------- ------- ---------- ---- ---------
<S> <C> <C> <C> <C> <C> <C>
R. Ray Pate, Jr. 13,320 35.6% $7.00 7/29/09 $52,214
Stephen F. Fargis 9,250 24.8% $7.00 7/29/09 $36,260
William E. Burgess 7,400 19.8% $7.00 7/29/09 $29,008
Rebecca B. Crunk 7,400 19.8% $7.00 7/29/09 $29,008
</TABLE>
- ---------
(1) The grant date present value was derived using the Black-Scholes option
pricing model with the following assumptions: volatility ranging from
.489% to .843%; risk free rate of return of 5.29%; dividend yield of
0%; and a ten year option life.
9
<PAGE>
Set forth below is certain information concerning options outstanding
to the Named Executive Officers at December 31, 1999. No options were exercised
by the Named Executive Officers during 1999.
<TABLE>
<CAPTION>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES
- ------------------------------------------------------------------------------------------------------------------------
Number of Value of Unexercised In-
Options at The-Money Options at
Year-End Year-End(1)
Shares Acquired Value Exercisable/Unexercisable Exercisable/Unexercisable
Name Upon Exercise Realized (#) ($)
---- ------------- -------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
R. Ray Pate, Jr. 0 $-- 0/13,320 $0/$23,210
Stephen F. Fargis 0 $-- 0/9,250 $0/$16,188
William E. Burgess 0 $-- 0/7,400 $0/$12,950
Rebecca B. Crunk 0 $-- 0/7,400 $0/$12,950
</TABLE>
- -----------
(1) Equals the difference between the aggregate exercise price of such
options and the aggregate fair market value of the shares of Common
Stock that would be received upon exercise, assuming such exercise
occurred on December 31, 1999, at which date the last trade price of
the Common Stock as quoted on the Nasdaq SmallCap Market was $8.75.
Transactions With Certain Related Persons
On January 4, 1999, Sequoia National Bank loaned $2.2 million to the
Company to partially finance the acquisition of HealthCare Consulting. J. Paul
McNamara is a Director of the Company and is President of Sequoia National Bank.
The loan has been repaid.
INDEPENDENT AUDITORS
The Company's independent auditors for the year ended December 31, 1999
were Deloitte & Touche LLP. A representative of Deloitte & Touche LLP will
attend the Annual Meeting and will be given the opportunity to make a statement
if they desire to do so and will be available to respond to appropriate
questions from shareholders present at the Annual Meeting.
ADVANCE NOTICE OF BUSINESS TO BE CONDUCTED
AT AN ANNUAL MEETING
The Bylaws of the Company provide an advance notice procedure for
certain business, or nominations to the Board of Directors, to be brought before
an annual meeting. In order for a shareholder to properly bring business before
an annual meeting, or to propose a nominee to the Board, the shareholder must
give written notice to the Secretary of the Company not less than ninety (90)
days before the date of the proxy statement relating to the prior year's annual
meeting. The notice must include the shareholder's name, record address, and
number of shares owned by the shareholder, describe briefly the proposed
business, the reasons for bringing the business before the annual meeting, and
any material interest of the shareholder in the proposed business. In the case
of nominations to the Board,
10
<PAGE>
certain information regarding the nominee must be provided. Nothing in this
paragraph shall be deemed to require the Company to include in its proxy
statement and proxy relating to an annual meeting any shareholder proposal which
does not meet all of the requirements for inclusion established by the SEC in
effect at the time such proposal is received. Accordingly, in accordance with
the foregoing, advance written notice of business or nominations to the Board of
Directors to be brought before the 2001 Annual Meeting of Shareholders must be
given to the Company no later than January 10, 2001. If notice is received after
January 10, 2001, it will be considered untimely, and the Company will not be
required to present the matter at the shareholders meeting.
SHAREHOLDER PROPOSALS
In order to be eligible for inclusion in the Company's proxy material
for next year's Annual Meeting of Shareholders, any shareholder proposal to take
action at such meeting must be received at the Company's office,1115 30th
Street, N.W., Washington, D.C. 20007, no later than December 11, 2000. Nothing
in this paragraph shall be deemed to require the Company to include in its proxy
statement and proxy relating to an annual meeting any shareholder proposal which
does not meet all of the requirements for inclusion established by the SEC.
BY ORDER OF THE BOARD OF DIRECTORS
/s/William E. Burgess
---------------------
William E. Burgess
Secretary
Washington, D.C.
April 10, 2000
<PAGE>
REVOCABLE PROXY
NCRIC Group, Inc.
[ X ] PLEASE MARK VOTES
AS IN THIS EXAMPLE
Annual Meeting of Stockholders
MAY 9, 2000
The undersigned appoints R. Ray Pate, Jr. and Nelson P. 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 May 9, 2000, at 6:00 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):
R. Ray Pate, Jr., Leonard M. Glassman, M.D., Prudence P. Kline, M.D., Edward G.
Koch, M.D., Raymond Scalettar, M.D., David M. Seitzman, M.D., Robert L. Simmons,
M.D.
With- For All
For hold Except
[ ] [ ] [ ]
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.
- --------------------------------------------------------------------------------
PLEASE CHECK BOX IF YOU PLAN TO
ATTEND THE MEETING. [ ]
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.
_________________________________________
Date
_________________________________________
Stockholder sign above
_________________________________________
Co-holder (if any) sign above
<PAGE>
Detach above card, sign, date and mail in postage paid envelope provided.
NCRIC Group, Inc.
PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY CARD
PROMPTLY IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
