Reverse Stock Split for Holders of Conversion Shares

Topic: Conversion Stock -- Reverse Stock Split

Q: I received a letter informing me that NORCAL Insurance Company will be effecting a reverse stock split for holders of conversion shares. What does this mean, and do I need to do anything?
A: The NORCAL Insurance Company Board of Directors has approved an amendment to the Amended and Restated Articles of Incorporation that provides for a reverse stock split pursuant to which every four thousand (4,000) shares of the outstanding Common Stock will be converted into, and exchanged for, one (1) share of common stock of the Company, par value $2,160.00 per share (the “New Common Stock”). No fractional shares of New Common Stock will be issued. Shareholders who own fewer than four thousand (4,000) shares of Common Stock will receive cash in lieu of a fractional share of New Common Stock at the rate of $204,560 per share of New Common Stock. The amount to be paid for the fractional shares of New Common Stock is equal to the amount that PRA Professional offered to pay for the shares of Common Stock issued to Eligible Members of the Company pursuant to the Plan of Conversion of the Company that was effective on May 5, 2021.

Q: Do I need to do anything in order to receive payment for a fractional share?
A: Shareholders will not be required to take any action to effect the exchange of their shares of Common Stock for cash in lieu of fractional shares of New Common Stock. Shareholders who have not already provided a W-9 to Computershare should do so to avoid taxes being withheld from consideration.

Q: What is the effective date of the reverse stock split?
A: The Amendment effecting the reverse split will not be effective until a Certificate of Amendment is filed with the Secretary of State of California. The filing of the Certificate of Amendment is conditioned upon, among other conditions, the issuance of a Securities Permit by the California Insurance Commissioner in accordance with Section 820 et seq. of the California Insurance Code. The Company has applied for a Securities Permit for the issuance of the shares of New Common Stock , and the application is currently under review by the Commissioner.

Q: How will fractional shares be paid?
A: Payment for fractional shares of New Common Stock will be mailed to the record owners of Common Stock. Checks will be mailed to the address appearing in the stockholder list maintained by Computershare. Any shareholder who desires to transfer shares of Common Stock or to change the mailing address should contact Computershare prior to the effective date of the Amendment in one of the following ways:

Please note that the shares of Common Stock are subject to restrictions on transfer and that any transfer of the shares must comply with the transfer restriction.

Q: Who can I call if I have questions about the reverse stock split?
A: If you have any questions once the reverse stock split is effective, please contact the Exchange Agent, Computershare, by telephone at 800-546-5141. Please note, this telephone number for questions is different from the telephone noted above for transfer of share or changes in mailing address.

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