District of Columbia Code Division V. Local Business Affairs § 31-907. Optional provisions in a plan of conversion.

(1) The plan may provide that the directors and officers of the mutual company shall receive, without payment, nontransferable subscription rights to purchase capital stock of the converted stock company or the stock of another corporation that is participating in the conversion plan as provided in § 31-906(e). Those subscription rights shall be allocated among the directors and officers by a fair and equitable formula.

(2) The total number of shares that may be purchased under subsection (a)(1) of this section may not exceed 85% of the total number of shares to be issued in the case of a mutual company with total assets of less than $50 million, or 25% of the total shares to be issued in the case of a mutual company with total assets or more than $500 million. For mutual companies with total assets between $50 million and $500 million, the total number of shares that may be purchased shall be interpolated.

(3) Stock purchased by a director or officer under subsection (a)(1) of this section shall not be sold within one year following the effective date of the conversion.

(4) The plan may also provide that a director or officer or person acting in concert with a director or officer of the mutual company may not acquire any capital stock of the converted stock company for 3 years after the effective date of the plan, except through a broker or dealer, without the permission of the Commissioner. That provision may not apply to prohibit the directors and officers from purchasing stock through subscription rights received in the plan under subsection (a)(1) of this section.