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PARRIS N. GLENDENING, Governor
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Ch. 101
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(B) SUBJECT TO THE PROVISIONS OF THIS SECTION AND IN ACCORDANCE
WITH A PLAN OF REORGANIZATION APPROVED BY THE COMMISSIONER, A MUTUAL
INSURER MAY:
(1) REORGANIZE AS A STOCK INSURER; AND
(2) ESTABLISH A MUTUAL INSURANCE HOLDING COMPANY.
(C) A PLAN OF REORGANIZATION SHALL PROVIDE THAT:
(1) ALL OF THE INITIAL SHARES OF CAPITAL STOCK OF THE
REORGANIZED STOCK INSURER SHALL BE ISSUED TO THE MUTUAL INSURANCE
HOLDING COMPANY.
(2) THE MUTUAL INSURANCE HOLDING COMPANY SHALL OWN A
MAJORITY OF:
(I) THE VOTING SHARES OF THE CAPITAL STOCK OF THE
REORGANIZED STOCK INSURER; AND
(II) THE TOTAL MARKET VALUE OF ALL OUTSTANDING SHARES OF
THE CAPITAL STOCK OF THE REORGANIZED STOCK INSURER.
(3) THE CLASS OF CAPITAL STOCK OWNED BY THE MUTUAL INSURANCE
HOLDING COMPANY SHALL HAVE DIVIDEND RIGHTS NO LESS FAVORABLE THAN THE
DIVIDEND RIGHTS OF ANY OTHER CLASS OF STOCK OF THE REORGANIZED STOCK
INSURER, UNLESS:
(I) AT LEAST TWO-THIRDS OF THE BOARD OF DIRECTORS OF THE
MUTUAL INSURANCE HOLDING COMPANY DETERMINES THAT SUCH A
REQUIREMENT IS NOT IN THE BEST INTERESTS OF THE MEMBERS; AND
(II) THE DETERMINATION OF THE BOARD OF DIRECTORS IS
APPROVED BY THE COMMISSIONER.
(4) IN AN INITIAL PUBLIC OFFERING OR INITIAL PRIVATE EQUITY
PLACEMENT OF STOCK, EACH ELIGIBLE MEMBER OF THE MUTUAL INSURANCE
HOLDING COMPANY SHALL RECEIVE, WITHOUT PAYMENT, NONTRANSFERABLE
SUBSCRIPTION RIGHTS TO PURCHASE STOCK, UNLESS:
(I) AT LEAST TWO-THIRDS OF THE BOARD OF DIRECTORS OF THE
MUTUAL INSURANCE HOLDING COMPANY DETERMINES THAT A SUBSCRIPTION
RIGHTS OFFERING IS NOT IN THE BEST INTERESTS OF THE MEMBERS; AND
(II) THE DETERMINATION OF THE BOARD OF DIRECTORS IS
APPROVED BY THE COMMISSIONER
(5) (I) THE FOLLOWING INDIVIDUALS MAY NOT ACQUIRE, BY STOCK
OPTION OR ANY OTHER MANNER, THE LEGAL OR BENEFICIAL OWNERSHIP OF ANY
CLASS OF STOCK OF THE REORGANIZED STOCK INSURER FOR 6 MONTHS FROM THE
DATE OF AN INITIAL PUBLIC OFFERING OR INITIAL PRIVATE EQUITY PLACEMENT:
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- 711 -
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