AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 3, 2002.
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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Donegal Group Inc.
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(Exact name of registrant as specified in its charter)
Delaware 23-2424711
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1195 River Road
Marietta, Pennsylvania 17547
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(Address of Principal Executive Offices) (Zip Code)
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Donegal Mutual Insurance Company 401(k) Plan
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(Full title of the plan)
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Donald H. Nikolaus
President and Chief Executive Officer
Donegal Group Inc.
1195 River Road
Marietta, Pennsylvania 17547
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(Name and address of agent for service)
(717) 426-1931
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(Telephone number, including area code,
of agent for service)
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Copy to:
Kathleen M. Shay, Esquire
Duane Morris LLP
One Liberty Place
Philadelphia, Pennsylvania 19103-7396
(215) 979-1000
CALCULATION OF REGISTRATION FEE
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Proposed Proposed
Title of securities Amount to be maximum offering maximum aggregate Amount of
to be registered registered(1) price per share(2) offering price(2) registration fee
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Class A common stock, par 200,000 shares $11.37 $2,274,000 $210
value $.01 per share
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(1) In addition, pursuant to Rule 416(c) under the Securities Act of 1933, this
registration statement (the "Registration Statement") also covers an
indeterminate amount of interests to be offered or sold pursuant to the
Donegal Mutual Insurance Company 401(k) Plan (the "Plan").
(2) Pursuant to paragraph (h) of Rule 457, the proposed maximum offering price
per share and the proposed maximum aggregate offering price have been
computed on the basis of $11.37 per share, the average of the high and low
sales prices of the Class A common stock of the Company on the Nasdaq
National Market on May 24, 2002.
INTRODUCTORY STATEMENT PURSUANT TO GENERAL INSTRUCTION E TO FORM S-8
The shares of Class A common stock of Donegal Group Inc. (the "Company")
being registered hereunder are reserved for offer and sale under the Donegal
Mutual Insurance Company 401(k) Plan (the "Plan"). On December 29, 1999, the
Company registered 300,000 shares of the previously authorized common stock of
the Company and an indeterminate number of interests under the Plan for offer
and sale under the Plan on Form S-8, Registration Statement No. 333-93785, under
the Securities Act of 1933, as amended (the "Securities Act"). On January 7,
2000, the Company registered an additional 300,000 shares of the previously
authorized common stock of the Company and an indeterminate number of interests
under the Plan for offer and sale under the Plan on Form S-8, Registration
Statement No. 333-94301, under the Securities Act.
Effective as of April 19, 2001, the Company: (a) effected a one-for-three
reverse stock split of its previously authorized common stock and redesignated
that common stock as Class B common stock; and (b) declared a dividend of two
shares of Class A common stock payable on each share of Class B common stock
outstanding at the time. As a result of the reverse split and stock dividend:
(a) the number and class of shares deemed registered under Registration
Statement No. 333-93785 is 100,000 shares of Class B common stock, and the
number and class deemed registered under Registration Statement No. 333-94301 is
100,000 shares of Class B common stock; and (b) all assets thereafter invested
under the Plan in shares of the Company's capital stock are being invested in
shares of Class A common stock.
The Company intends to file post-effective amendments to those prior two
registration statements to deregister any shares of Class B common stock that
will no longer be used for the investment of assets under the Plan. Pursuant to
General Instruction E to Form S-8, with respect to the registration of
additional securities hereunder for offer and sale under the Plan, the contents
of the Company's Registration Statement No. 333-93785 and Registration Statement
No. 333-94301 are incorporated herein by reference.
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PART II
INFORMATION REQUIRED IN REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following material is incorporated herein by reference:
(a) The Form 10-K Annual Report for the year ended December 31, 2001, as
filed by the Company with the Securities and Exchange Commission on March 28,
2002.
(b) The Form 10-Q Quarterly Report for the quarter ended March 31, 2002, as
filed by the Company with the Commission on May 15, 2002.
(c) The Form 11-K Annual Report for the year ended December 31, 2000, as
filed by the Plan with the Commission on April 26, 2002.
(d) The description of the Company's Class A common stock set forth in the
Company's Post-Effective Amendment to Form 8-A/A Registration Statement filed by
the Company with the Commission under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), on April 12, 2001.
All reports or other documents filed pursuant to Sections 13(a), 13(c), 14
and 15(d) of the Exchange Act subsequent to the date of this Registration
Statement, in each case filed by the Company prior to the filing of a
post-effective amendment that indicates that all securities offered have been
sold or that deregisters all securities then remaining unsold, shall be deemed
to be incorporated by reference in this Registration Statement and to be a part
hereof from the date of filing of such reports and documents. Any statement
contained in a document incorporated or deemed to be incorporated herein by
reference shall be deemed to be modified or superseded for the purposes of this
Registration Statement to the extent that a statement contained herein or in any
other subsequently filed document, which also is or is deemed to be incorporated
herein by reference, modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES.
No answer to this item is required because the class of securities to be
offered is registered under Section 12 of the Exchange Act.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
The validity of the issuance of the shares of Class A common stock
registered under this Registration Statement will be passed upon for the Company
by Duane Morris LLP, Philadelphia, Pennsylvania. As of March 28, 2002, attorneys
at Duane Morris LLP who have
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recently provided substantive legal services for the Company beneficially owned
16,961 shares of the Company's outstanding Class A common stock, and 7,884
shares of the Company's outstanding Class B common stock, of which 5,926 shares
represent shares of Class A common stock purchasable under currently exercisable
stock options and 2,963 shares represent shares of Class B common stock
purchasable under currently exercisable stock options. In addition, Frederick W.
Dreher, a partner of Duane Morris LLP, is a director of Donegal Mutual Insurance
Company (the "Mutual Company") and is one of the members on the coordinating
committee of the boards of directors of the Company and the Mutual Company. The
Mutual Company is a holder of approximately 63.5% of the Company's Class A
common stock and 62.1% of the Company's Class B common stock.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the General Corporation Law of the State of Delaware
empowers a Delaware corporation to indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the corporation) by reason of the
fact that such person is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by such person in connection with such action, suit or proceeding if
such person acted in good faith and in a manner such person reasonably believed
to be in or not opposed to the best interests of the corporation, and, with
respect to any criminal action or proceeding, had no reasonable cause to believe
such person's conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction, or upon plea of nolo
contendere or its equivalent, does not, of itself, create a presumption that the
person did not act in good faith and in a manner which such person reasonably
believed to be in or not opposed to the best interests of the corporation, and,
with respect to any criminal action or proceeding, had reasonable cause to
believe that such person's conduct was unlawful.
In the case of an action or suit by or in the right of the corporation to
procure a judgment in its favor, Section 145 empowers a corporation to indemnify
any person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by reason of the fact that such
person is or was acting in any of the capacities set forth above against
expenses (including attorneys' fees) actually and reasonably incurred by such
person in connection with the defense or settlement of such action or suit if
such person acted in good faith and in a manner such person reasonably believed
to be in or not opposed to the best interests of the corporation, except that
indemnification is not permitted in respect of any claim, issue or matter as to
which such person is adjudged to be liable to the corporation unless and only to
the extent that the Court of Chancery or the court in which such action or suit
was brought determines upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which the Court of
Chancery or such other court deems proper.
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Section 145 further provides that a Delaware corporation is required to
indemnify a director, officer, employee or agent against expenses (including
attorneys' fees) actually and reasonably incurred by such person in connection
with any action, suit or proceeding or in defense of any claim, issue or matter
therein as to which such person has been successful on the merits or otherwise;
that indemnification provided for by Section 145 shall not be deemed exclusive
of any other rights to which the indemnified party may be entitled; that
indemnification provided for by Section 145 shall, unless otherwise provided
when authorized or ratified, continue as to a person who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of such
person's heirs, executors and administrators and empowers the corporation to
purchase and maintain insurance on behalf of a director or officer against any
liability asserted against such person and incurred by such person in any such
capacity or arising out of such person's status as such whether or not the
corporation would have the power to indemnify such person against such liability
under Section 145. A Delaware corporation may provide indemnification only as
authorized in the specific case upon a determination that indemnification of the
director, officer, employee or agent is proper in the circumstances because such
person has met the applicable standard of conduct. Such determination is to be
made (i) by the board of directors by a majority vote of a quorum consisting of
directors who were not party to such action, suit or proceeding, or (ii) if such
a quorum is not obtainable, or, even if obtainable, a quorum of disinterested
directors so directs, by independent legal counsel in a written opinion or (iii)
by the stockholders.
Article Five of the Company's By-laws provides for indemnification of
directors and officers of the Company to the fullest extent permitted by the
General Corporation Law of the State of Delaware, as presently or hereafter in
effect. The By-laws of Donegal Mutual Insurance Company also provide that the
Mutual Company shall indemnify to the full extent authorized by law any director
or officer of Donegal Mutual Insurance Company who is made, or threatened to be
made, a party to any action or proceeding, whether criminal, civil,
administrative or investigative, by reason of the fact that he is or was serving
as a director, officer or employee of the Company at the request of the Mutual
Company.
The Company provides liability insurance for directors and officers for
certain losses arising from claims or charges made against them while acting in
their capacities as directors or officers of the Company up to an aggregate of
$5,000,000 inclusive of defense costs, expenses and charges.
In addition, as permitted by the General Corporation Law of the State of
Delaware, Article Six of the Company's Certificate of Incorporation provides
that no director of the Company shall incur personal liability to the Company or
its stockholders for monetary damages for breach of such person's fiduciary duty
as a director; provided, however, that the provision does not eliminate or limit
the liability of a director for (i) any breach of the director's duty of loyalty
to the Company or its stockholders; (ii) acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law; (iii) the
unlawful payment of dividends or unlawful purchase or redemption of stock under
Section 174 of the General Corporation Law of the State of Delaware or (iv) any
transaction from which the director derived an improper personal benefit.
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ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
No answer to this item is required because no restricted securities are to
be reoffered or resold pursuant to this Registration Statement.
ITEM 8. EXHIBITS.
The Company hereby undertakes that it will submit or has submitted the Plan
and any amendment thereto to the Internal Revenue Service (the "IRS") in a
timely manner and has made or will make all changes required by the IRS in order
to qualify the Plan.
(4) Donegal Mutual Insurance Company 401(k) Plan, as amended.
(5) Opinion of Duane Morris LLP.
(23.1) Consent of KPMG LLP.
(23.2) Consent of McKonly & Asbury LLP
(23.3) Consent of Duane Morris LLP (included with its opinion filed as
Exhibit 5).
(24) Power of Attorney (included on the signature pages hereto).
ITEM 9. UNDERTAKINGS.
The Company hereby undertakes:
(a) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) To reflect in any prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the Registration
Statement. Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would not
exceed that which is registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration Fee"
table in the effective Registration Statement;
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(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or any
material change to such information in the Registration Statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) of this Item 9
do not apply if the registration statement is on Form S-3, Form S-8 or Form F-3,
and the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed with or furnished to the
Commission by the Company pursuant to Section 13 or Section 15(d) of the
Exchange Act that are incorporated by reference in the Registration Statement.
(b) That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offer
thereof; and
(c) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
The Company hereby further undertakes that, for purposes of determining any
liability under the Securities Act, each filing of the Company's annual report
pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and, where
applicable, each filing of an employee benefit plan's annual report pursuant to
Section 15(d) of the Exchange Act) that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
The Company hereby further undertakes that, insofar as indemnification for
liabilities arising under the Securities Act may be permitted to directors,
officers and controlling persons of the Company, the Company has been advised
that in the opinion of the Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other than
the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the Company in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the Company will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Marietta, Pennsylvania on May 31, 2002.
DONEGAL GROUP INC.
By:/s/ Donald H. Nikolaus
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Donald H. Nikolaus, President and
Chief Executive Officer
Know all men by these presents, that each person whose signature appears
below constitutes and appoints Donald H. Nikolaus and Ralph G. Spontak, and each
or either of them, as such person's true and lawful attorneys-in-fact and
agents, with full power of substitution, for such person, and in such person's
name, place and stead, in any and all capacities to sign any or all amendments
or post-effective amendments to this Registration Statement, and to file the
same, with all exhibits thereto and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as such person might or could do
in person, hereby ratifying and confirming all that said attorneys-in-fact and
agents, or any of them or their substitutes, may lawfully do or cause to be done
by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons in
the capacities and on the date indicated.
Signature Title Date
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/s/ Donald H. Nikolaus President, Chief Executive May 31, 2002
-------------------------------------------- Officer and a Director
Donald H. Nikolaus (principal executive officer)
/s/ Ralph G. Spontak Senior Vice President, Chief May 31, 2002
-------------------------------------------- Financial Officer and
Ralph G. Spontak Secretary (principal financial
and accounting officer)
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/s/ Philip H. Glatfelter, II Chairman of the Board and a May 31, 2002
-------------------------------------------- Director
Philip H. Glatfelter, II
/s/ Patricia A. Gilmartin Director May 31, 2002
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Patricia A. Gilmartin
/s/ C. Edwin Ireland Director May 31, 2002
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C. Edwin Ireland
/s/ R. Richard Sherbahn Director May 31, 2002
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R. Richard Sherbahn
Director May , 2002
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Thomas J. Finley, Jr.
/s/ Robert S. Bolinger Director May 31, 2002
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Robert S. Bolinger
Director May , 2002
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John J. Lyons
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THE PLAN. Pursuant to the requirements of the Securities Act of 1933, the
administrator of the Plan has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in Marietta,
Pennsylvania on May 31, 2002.
DONEGAL MUTUAL
INSURANCE COMPANY 401(k) PLAN
By:/s/ Donald H. Nikolaus
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Donald H. Nikolaus, Trustee
By:/s/ Ralph G. Spontak
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Ralph G. Spontak, Trustee
By:/s/ Daniel J. Wagner
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Daniel J. Wagner, Trustee
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EXHIBIT INDEX
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Exhibit No. Exhibit Description
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(4) Donegal Mutual Insurance Company 401(k) Plan, as amended.
(5) Opinion of Duane Morris LLP.
(23.1) Consent of KPMG LLP.
(23.2) Consent of McKonly & Asbury LLP.
(23.3) Consent of Duane Morris LLP (included with its opinion filed
as Exhibit 5).
(24) Power of Attorney (included on the signature pages hereto).