Filed pursuant to Rules 424(b)(3) and 424(c)
Registration No. 333-63102
DONEGAL GROUP INC.
2001 AGENCY STOCK PURCHASE PLAN
PROSPECTUS SUPPLEMENT
TO PROSPECTUS DATED APRIL 12, 2002
On May 15, 2002, Donegal Group Inc. (the "Company") filed with the
Securities and Exchange Commission a Form 10-Q Quarterly Report for the quarter
ended March 31, 2002, a copy of which, without exhibits, is attached to this
Prospectus Supplement.
This Prospectus Supplement should be read in conjunction with the Company's
Prospectus dated April 12, 2002.
The date of this Prospectus Supplement is May 22, 2002.
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[x] Quarterly Report Pursuant to Section 13 of the Securities Exchange Act of
1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2002
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from _________________ to ___________________.
Commission File No. 0-15341
-------
DONEGAL GROUP INC.
------------------
(Exact name of registrant as specified in its charter)
DELAWARE 23-2424711
-------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1195 RIVER ROAD, P.O. BOX 302, MARIETTA, PA 17547-0302
------------------------------------------------------
(Address of principal executive offices, including zip code)
(717) 426-1931
--------------
(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X . No .
----- -----
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required by Sections 12, 13, or 15(d) of the Securities Exchange Act of
1934 subsequent to the distribution of securities under a plan confirmed by a
court. Yes . No .
----- -----
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date: 6,066,351 shares of Class A
Common Stock and 2,982,314 shares of Class B Common Stock, $0.01 par value,
outstanding on April 30, 2002.
Part 1. Financial Information
Item 1. Financial Statements.
DONEGAL GROUP INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
MARCH 31, 2002 DEC. 31, 2001
-------------- -------------
ASSETS (Unaudited)
------
Investments
Fixed maturities
Held to maturity, at amortized cost $ 83,419,732 $ 85,322,965
Available for sale, at market value 181,871,320 173,718,844
Equity securities, available for sale at market 18,123,670 17,517,346
Short-term investments, at cost, which
approximates market 24,018,948 24,074,200
------------- -------------
Total investments 307,433,670 300,633,355
Cash 3,316,649 4,075,288
Accrued investment income 3,602,959 3,765,076
Premiums receivable 25,722,734 24,143,531
Reinsurance receivable 69,198,183 67,853,174
Deferred policy acquisition costs 14,315,421 13,604,215
Federal income tax receivable -- 292,618
Deferred federal income taxes 8,272,412 7,474,730
Prepaid reinsurance premiums 23,138,184 29,593,467
Property and equipment, net 4,492,361 4,568,652
Accounts receivable - securities 480,244 50,023
Other 562,021 578,243
------------- -------------
Total assets $ 460,534,838 $ 456,632,372
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
LIABILITIES
Losses and loss expenses $ 185,985,000 $ 179,839,905
Unearned premiums 110,486,640 114,079,264
Accrued expenses 5,960,616 7,186,107
Reinsurance balances payable 671,106 839,156
Federal income taxes payable 971,472 --
Cash dividend declared to stockholders -- 869,877
Line of credit 27,600,000 27,600,000
Accounts payable - securities 2,500,000 --
Due to affiliate 2,686,594 4,015,074
Other 1,421,540 1,274,640
------------- -------------
Total liabilities 338,282,968 335,704,023
------------- -------------
STOCKHOLDERS' EQUITY
Preferred stock, $1.00 par value, authorized
2,000,000 shares; none issued
Class A common stock, $.01 par value, authorized
30,000,000 shares, issued 6,146,986 and 6,097,214
shares and outstanding 6,065,462 and 6,015,690 shares 61,470 60,972
Class B common stock, $.01 par value, authorized
10,000,000 shares, issued 3,022,632 and 3,021,965
shares and outstanding 2,981,870 and 2,981,203 shares 30,226 30,220
Additional paid-in capital 59,378,923 58,887,715
Accumulated other comprehensive income 1,534,676 2,861,765
Retained earnings 62,138,323 59,979,425
Treasury stock, at cost (891,748) (891,748)
------------- -------------
Total stockholders' equity 122,251,870 120,928,349
------------- -------------
Total liabilities and stockholders' equity $ 460,534,838 $ 456,632,372
============= =============
See accompanying notes to consolidated financial statements.
1
DONEGAL GROUP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
THREE MONTHS ENDED MARCH 31,
2002 2001
----- ----
REVENUES:
Net premiums earned $ 45,452,260 $ 40,040,902
Investment income, net of investment expenses 3,730,304 4,041,186
Realized investment gain 126,778 120,807
Lease income 194,962 200,691
Service charge income 529,742 388,440
------------ ------------
Total revenues 50,034,046 44,792,026
------------ ------------
EXPENSES:
Net losses and loss expenses 31,297,569 26,158,684
Amortization of deferred policy acquisition costs 7,385,000 6,503,000
Other underwriting expenses 7,112,250 6,505,029
Policy dividends 466,179 399,380
Interest 324,824 812,614
Other expenses 502,423 395,337
------------ ------------
Total expenses 47,088,245 40,774,044
------------ ------------
Income before income taxes 2,945,801 4,017,982
Income taxes 765,085 1,063,387
------------ ------------
Net income $ 2,180,716 $ 2,954,595
============ ============
Earnings per common share
Basic $ 0.24 $ 0.33
============ ============
Diluted $ 0.24 $ 0.33
============ ============
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
THREE MONTHS ENDED MARCH 31,
2002 2001
----- ----
Net income $ 2,180,716 $ 2,954,595
Other comprehensive income (loss), net of tax
Unrealized gains (losses) on securities:
Unrealized holding gain (loss) during
the period, net of income tax (1,243,416) 1,915,155
Reclassification adjustment, net of income tax (83,673) (79,733)
------------ ------------
Other comprehensive income (loss) ( 1,327,089) 1,835,422
------------ ------------
Comprehensive income $ 853,627 $ 4,790,017
============ ============
See accompanying notes to consolidated financial statements.
2
DONEGAL GROUP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(Unaudited)
FOR THE THREE MONTHS ENDED MARCH 31, 2002
Accumulated
Additional Other
Paid-In Comprehensive
Class A Shares Class B Shares Class A Amount Class B Amount Capital Income
-------------- -------------- -------------- -------------- ------- ------
Balance, December 31, 2001 6,097,214 3,021,965 $ 60,972 $ 30,220 $ 58,887,715 $ 2,861,765
Issuance of common stock 48,439 484 453,534
Net income
Cash dividends
Grant of employee options 20,057
Exercise of stock options 1,333 667 14 6 17,617
Other comprehensive loss (1,327,089)
------------------------------------------------------------------------------------------------------
Balance, March 31, 2002 6,146,986 3,022,632 $ 61,470 $ 30,226 $ 59,378,923 $ 1,534,676
======================================================================================================
Total
Retained Treasury Stockholders'
Earnings Stock Equity
-------- ----- ------
Balance, December 31, 2001 $ 59,979,425 $ (891,748) $ 120,928,349
Issuance of common stock 454,018
Net income 2,180,716 2,180,716
Cash dividends (1,761) (1,761)
Grant of employee options (20,057) --
Exercise of stock options 17,637
Other comprehensive loss (1,327,089)
-----------------------------------------------------
Balance, March 31, 2002 $ 62,138,323 $ (891,748) $ 122,251,870
=====================================================
See accompanying notes to consolidated financial statements.
3
DONEGAL GROUP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
THREE MONTHS ENDED MARCH 31,
2002 2001
----- ----
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 2,180,716 $ 2,954,595
------------ ------------
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 280,731 301,873
Realized investment gain (126,778) (120,807)
Changes in assets and liabilities:
Losses and loss expenses 6,145,095 447,967
Unearned premiums (3,592,624) 954,412
Premiums receivable (1,579,203) (2,061,652)
Deferred policy acquisition costs (711,206) 98,524
Deferred income taxes (114,030) 32,535
Reinsurance receivable (1,345,009) (1,230,895)
Prepaid reinsurance premiums 6,455,283 (738,882)
Accrued investment income 162,117 (39,702)
Due to affiliate (1,328,480) 750,807
Reinsurance balances payable (168,050) (494,370)
Current income taxes 1,264,090 1,320,852
Other, net (1,062,366) (634,248)
------------ ------------
Net adjustments 4,279,570 (1,413,586)
------------ ------------
Net cash provided by operating activities 6,460,286 1,541,009
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of fixed maturities
Held to maturity (7,215,618) (8,450,000)
Available for sale (20,985,876) (14,808,595)
Purchase of equity securities, available for sale (1,312,500) (4,496,258)
Maturity of fixed maturities
Held to maturity 8,627,033 8,478,904
Available for sale 12,728,932 10,411,789
Sale of fixed maturities
Held to maturity 415,000 --
Available for sale 461,965 --
Sale of equity securities 514,021 2,989,473
Net purchase of property and equipment (107,151) (37,522)
Net sales of short-term investments 55,252 10,415,234
------------ ------------
Net cash provided by (used in) investing activities (6,818,942) 4,503,025
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash dividends paid (871,638) (798,937)
Issuance of common stock 471,655 370,072
Line of credit, net -- (3,000,000)
------------ ------------
Net cash used in financing activities (399,983) (3,428,865)
------------ ------------
Net increase (decrease) in cash (758,639) 2,615,169
Cash at beginning of period 4,075,288 5,182,988
------------ ------------
Cash at end of period $ 3,316,649 $ 7,798,157
============ ============
Cash paid during period - Interest $ 92,823 $ 1,442,784
Net cash paid (received) during period - Taxes $ 380,000 $ (290,000)
See accompanying notes to consolidated financial statements.
4
DONEGAL GROUP INC. AND SUBSIDIARIES
(UNAUDITED)
SUMMARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1 - ORGANIZATION
Donegal Group Inc. (the "Company") was organized as a regional insurance
holding company by Donegal Mutual Insurance Company (the "Mutual Company") on
August 26, 1986 and operates in the Mid-Atlantic and Southern states through its
wholly-owned stock insurance companies, Atlantic States Insurance Company
("Atlantic States"), Southern Heritage Insurance Company ("Southern Heritage"),
Southern Insurance Company of Virginia ("Southern") and Pioneer Insurance
Company - Ohio ("Pioneer - Ohio") (collectively "Insurance Subsidiaries"). The
Company has three operating segments: the investment function, the personal
lines of insurance and the commercial lines of insurance. Products offered in
the personal lines of insurance consist primarily of homeowners and private
passenger automobile policies. Products offered in the commercial lines of
insurance consist primarily of commercial automobile, commercial multiple peril
and workers' compensation policies. The Insurance Subsidiaries are subject to
regulation by Insurance Departments in those states in which they operate and
undergo periodic examinations by those departments. The Insurance Subsidiaries
are also subject to competition from other insurance companies in their
operating areas. Atlantic States participates in an inter-company pooling
arrangement with the Mutual Company and assumes 70% of the pooled business.
Prior to 2002 Southern ceded 50% of its business to the Mutual Company. At March
31, 2001, the Mutual Company held 63% of the outstanding common stock of the
Company.
On January 1, 2002, the Mutual Company and Southern terminated their quota
share agreement, under which Southern ceded 50% of its direct business, less
reinsurance, to the Mutual Company. As a result of this termination, the
Company's prepaid reinsurance premiums decreased $7,310,471, unearned premiums
decreased $5,117,330, and deferred policy acquisition costs increased $714,853.
The Mutual Company will transfer $1,478,288 in cash to the Company related to
this termination. The Company did not recognize a gain or loss on this
transaction.
During 2000, the Company acquired 45% of the outstanding stock of Donegal
Financial Services Corporation ("DFSC"), a bank holding company, for $3,042,000
in cash. The remaining 55% of the outstanding stock of DFSC is owned by the
Mutual Company.
The Company has announced plans to streamline its corporate structure by
merging a number of its subsidiaries together. Delaware Atlantic Insurance
Company ("Delaware"), and Pioneer Insurance Company, New York, (Pioneer-New
York) previously wholly owned subsidiaries, were merged into Atlantic States on
August 1, 2001 and September 30, 2001, respectively. The mergers were accounted
for as statutory mergers and had no financial impact on the consolidated entity.
Pending regulatory approval, Southern Heritage will be merged into Southern
Insurance and Pioneer-Ohio will be merged into Atlantic States Insurance
Company. These mergers are not anticipated to have a material impact on the
Company.
Southern, Pioneer-Ohio and Southern Heritage (and Delaware and Pioneer-New
York prior to merging into Atlantic States) each have agreements with the Mutual
Company under which they cede, and then reassume back, 100% of their business
net of reinsurance. The primary purpose of the agreements is to provide these
subsidiaries with the same A. M. Best rating (currently "A") as the Mutual
Company, which these subsidiaries could not achieve without these contracts in
place. These agreements do not transfer insurance risk. While these subsidiaries
ceded and reassumed amounts received from policyholders of $20,541,417 and
$17,037,440 and claims of $7,559,925 and $5,615,685 under these agreements in
the three months ended March 31, 2002 and 2001, respectively, the amounts are
not reflected in the consolidated financial statements. The aggregate
liabilities ceded and reassumed under these agreements were $45,657,568 and
$36,494,487 at March 31, 2002 and December 31, 2001, respectively.
2 - BASIS OF PRESENTATION
The financial information for the interim period included herein is
unaudited; however, such information reflects all adjustments, consisting only
of normal recurring adjustments, which, in the opinion of management, are
necessary to a fair presentation of the financial position, results of
operations and cash flow for the interim period included herein. The results of
operations for the three months ended March 31, 2002, are not necessarily
indicative of results of operations to be expected for the twelve months ended
December 31, 2002.
5
These financial statements should be read in conjunction with the financial
statements and notes thereto contained in the Registrant's Annual Report on Form
10-K for the year ended December 31, 2001.
3 - EARNINGS PER SHARE
The computation of basic and diluted earnings per share is as follows:
WEIGHTED
AVERAGE EARNINGS
NET SHARES PER
INCOME OUTSTANDING SHARE
THREE MONTHS ENDED MARCH 31: ------ ----------- --------
2002
----
Basic $2,180,716 9,030,160 $ .24
Effect of stock options -- 94,365 --
---------- ---------- --------
Diluted $2,180,716 9,124,525 $ .24
---------- ---------- --------
2001
----
Basic $2,954,595 8,890,314 $ .33
Effect of stock options -- 98,433 --
---------- ---------- --------
Diluted $2,954,595 8,988,747 $ .33
---------- ---------- --------
The following options to purchase shares of common stock were not included
in the computation of diluted earnings per share because the exercise price of
the options was greater than the average market price:
FOR THE THREE MONTHS
ENDED MARCH 31,
2002 2001
---- ----
Number of Options 942,834 1,042,338
======= =========
4 - SEGMENT INFORMATION
The Company evaluates the performance of the personal lines and commercial
lines based upon underwriting results as determined under statutory accounting
practices (SAP), which is used by management to measure performance for the
total business of the Company. Financial data by segment is as follows:
THREE MONTHS ENDED MARCH 31
2002 2001
------------------------------------------------------------------------------
($ in thousands)
------------------------------------------------------------------------------
Revenues:
Premiums earned:
Commercial lines $16,494 $15,009
Personal lines 28,958 25,032
------------------------------------------------------------------------------
Total net premiums earned 45,452 40,041
------------------------------------------------------------------------------
Net investment income 3,730 4,041
Realized investment
Gain 127 121
Other 725 589
------------------------------------------------------------------------------
Total revenues $50,034 $44,792
==============================================================================
6
Income before income taxes:
Underwriting income (loss)
Commercial lines $ 1,130 $ 330
Personal lines (2,517) 160
------------------------------------------------------------------------------
SAP underwriting income (loss) (1,387) 490
GAAP adjustments 579 (15)
------------------------------------------------------------------------------
GAAP underwriting income (loss) (808) 475
Net investment income 3,730 4,041
Realized investment gain 127 121
Other (103) (619)
------------------------------------------------------------------------------
Income before income taxes $ 2,946 $ 4,018
==============================================================================
5 - INVESTMENTS
During the first quarter of 2002, the Company sold Halliburton Company
bonds that had been classified as held to maturity due to significant
deterioration in the issuer's credit worthiness. These bonds had an amortized
cost of $488,901, and the sale resulted in a realized loss of $73,901. There
were no other sales or transfers from the held to maturity portfolio.
7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
-------------
RESULTS OF OPERATIONS - THREE MONTHS ENDED MARCH 31, 2002
TO THREE MONTHS ENDED MARCH 31, 2001
------------------------------------
Total revenues for the three months ended March 31, 2002 were $50,034,046,
which were $5,242,020, or 11.7%, greater than the same period in 2001. Net
premiums earned increased to $45,452,260, an increase of $5,411,358, or 13.5%,
over the first quarter of 2001. Direct premiums written of the combined pool of
Atlantic States and Donegal Mutual increased $6,743,369, or 14.9%. A 5.9%
increase in the direct premiums written of Southern, a 44.6% increase in the
direct premiums written of Pioneer-Ohio and a 16.5% increase in the direct
premiums written of Southern Heritage accounted for the majority of the
increase. The Company reported net realized investment gains of $126,778 in the
first quarter of 2002 compared to a gain of $120,807 for the same period of
2001. The realized gain in 2002 was net of realized losses of $60,078 which
resulted from changes in the market value of securities that were determined to
be other then temporary. The realized gain in 2001 resulted from the normal
turnover of the Company's portfolio. Investment income was $3,730,304, a
decrease of $310,882, or 7.7%, from the first quarter of 2001. An increase in
average invested assets from $288.3 million in the first quarter of 2001 to
$304.0 million in the first quarter of 2002 offset by a decrease in the
annualized average return on investments from 5.6% in the first quarter of 2001
to 4.9% in the first quarter of 2002 accounted for the change.
The GAAP combined ratio of insurance operations in the first quarter of
2002 was 101.8% compared to 98.8% for the same period in 2001. The GAAP combined
ratio is the sum of the ratios of incurred losses and loss adjusting expenses to
premiums earned (loss ratio), policyholders' dividends to premiums earned
(dividend ratio), and underwriting expenses to premiums earned (expense ratio).
The Company's loss ratio in the first quarter of 2002 was 68.9% compared to
65.3% in the first quarter of 2001. The increase in loss ratio was due to higher
losses in personal lines. The Company's expense ratio for the first quarter of
2002 was 31.9% compared to 32.5% for the first quarter of 2001. The dividend
ratio remained unchanged at 1.0%.
Federal income taxes for the first quarter of 2002 represented 26.0% of the
income before income taxes compared to 26.5% for the same period of 2001. These
rates vary from the expected rate of 34% primarily due to the effect of
tax-exempt investment income.
LIQUIDITY AND CAPITAL RESOURCES
-------------------------------
The Company generates sufficient funds from its operations and maintains a
high degree of liquidity in its investment portfolio. The primary source of
funds to meet the demands of claim settlements and operating expenses are
premium collections, investment earnings and maturing investments. The Company
had no significant commitments for capital expenditures as of March 31, 2002.
In investing funds made available from operations, the Company maintains
securities maturities consistent with its projected cash needs for the payment
of claims and expenses. The Company maintains a portion of its investment
portfolio in relatively short-term and highly liquid assets to ensure the
availability of funds.
As of March 31, 2002, pursuant to a credit agreement dated December 29,
1995, and amended as of July 27, 1998, with Fleet National Bank of Connecticut,
(the "Bank") the Company had unsecured borrowings of $27.6 million. Per the
terms of the credit agreement, the Company may borrow up to $32 million at
interest rates equal to the bank's then current prime rate or the then current
London interbank Eurodollar bank rate plus 1.70%. At March 31, 2002, the
interest rates on the outstanding balances were 3.6625% on an outstanding
eurodollar balance of $12.6 million and 3.6375% on an outstanding eurodollar
rate balance of $15.0 million. In addition, the Company pays a non-use fee at a
rate of 3/10 of 1% per annum on the average daily unused portion of the Bank's
commitment. On each July 27, commencing July 27, 2001, the credit line is
reduced by $8 million. Any outstanding loan in excess of the remaining credit
line, after such reduction, will then be payable.
8
The Company's principal source of cash with which to pay stockholder
dividends is dividends from Atlantic States, Southern, Pioneer - Ohio and
Southern Heritage which are required by law to maintain certain minimum surplus
on a statutory basis and are subject to regulations under which payment of
dividends from statutory surplus is restricted and may require prior approval of
their domiciliary insurance regulatory authorities. Atlantic States, Southern,
Pioneer - Ohio and Southern Heritage are subject to Risk Based Capital (RBC)
requirements. At December 31, 2001, each of the Companies' capital was
substantially above the RBC requirements. In 2002 amounts available for
distribution as dividends to Donegal Group without prior approval of the
insurance regulatory authorities are $8,612,490 from Atlantic States, $1,086,348
from Southern, $552,447 from Pioneer - Ohio and $3,514,487 from Southern
Heritage.
CREDIT RISK
-----------
The Company provides property and liability coverages through its
subsidiaries' independent agency systems located throughout its operating area.
The majority of this business is billed directly to the insured although a
portion of Donegal Group's commercial business is billed through its agents who
are extended credit in the normal course of business.
The Company's subsidiaries have reinsurance agreements in place with the
Mutual Company and with a number of other major authorized reinsurers.
IMPACT OF INFLATION
-------------------
Property and casualty insurance premiums are established before the amount
of losses and loss settlement expenses, or the extent to which inflation may
impact such expenses, are known. Consequently, the Company attempts, in
establishing rates, to anticipate the potential impact of inflation.
9
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS. (NONE)
------ -----------------
ITEM 2. CHANGES IN SECURITIES. (NONE)
------ ---------------------
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
------ -------------------------------
QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
---------------------------------------------------------
The Company's market risk generally represents the risk of gain or
loss that may result from the potential change in the fair value of the
Company's investment portfolio as a result of fluctuations in prices and
interest rates and, to a lesser extent, its debt obligations. The Company
attempts to manage its interest rate risk by maintaining an appropriate
relationship between the average duration of the investment portfolio and the
approximate duration of its liabilities, i.e., policy claims and debt
obligations.
The Company has maintained approximately the same duration of its
investment portfolio to its liabilities from December 31, 2001 to March 31,
2002. In addition, the Company has maintained approximately the same investment
mix during this period.
There have been no material changes to the Company's quantitative or
qualitative market risk exposure from December 31, 2001 through March 31, 2002.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
------ ----------------------------------------------------
Annual Stockholders meeting held April 18, 2002.
Directors elected at meeting:
Robert S. Bolinger
Votes for 3,191,615
Votes withheld 22,527
Patricia A. Gilmartin
Votes for 3,191,615
Votes withheld 22,527
Philip H. Glatfelter, II
Votes for 3,191,760
Votes withheld 22,382
Directors Continuing:
Thomas J. Finley, Jr.
C. Edwin Ireland
John J. Lyons
Donald H. Nikolaus
R. Richard Sherbahn
Election of KPMG LLP as Auditors for 2002:
Votes for 3,196,611
Against 16,565
Abstain 968
ITEM 5. OTHER INFORMATION.
------ ------------------
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
------ --------------------------------
(a) EX-27 Financial Data Schedule
(b) Reports on 8-K:
No reports on Form 8-K were filed by the Company during the
quarter ended March 31, 2002.
10
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
DONEGAL GROUP INC.
MAY 15, 2002 BY:/s/ Donald H. Nikolaus
------------------------------------------
Donald H. Nikolaus, President
and Chief Executive Officer
MAY 15, 2002 BY:/s/ Ralph G. Spontak
------------------------------------------
Ralph G. Spontak, Senior Vice President,
Chief Financial Officer and Secretary
11