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Section 1: S-8 (FORM S-8)

Form S-8

As filed with the Securities and Exchange Commission on August 9, 2019

Registration No. 333-                        

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM S-8

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

 

 

  Donegal Group Inc.  

(Exact name of registrant as specified in its charter)

 

 

 

            Delaware                   23-2424711    

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. employer

identification no.)

1195 River Road, Marietta, Pennsylvania       17547    
(Address of principal executive offices)   (Zip code)

Donegal Group Inc.

2019 Equity Incentive Plan for Employees

Donegal Group Inc.

2019 Equity Incentive Plan for Directors

(Full title of the plans)

Kevin G. Burke

President and Chief Executive Officer

Donegal Group Inc.

1195 River Road

        Marietta, Pennsylvania 17547        

(Name and address of agent for service)

                               (888) 877-0600                              

(Telephone number, including area code, of agent for service

 

 

Copies to:

John W. Kauffman, Esq.

Duane Morris LLP

30 South 17th Street

Philadelphia, PA 19103

(215) 979-1227


 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

 

Large accelerated filer      Accelerated filer  
Non-accelerated filer      Smaller reporting company  
     Emerging Growth Company  

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act.  ☐

 

 

CALCULATION OF REGISTRATION FEE

 

 

Title of securities

to be registered

 

Amount to be

registered(1)

 

Proposed

maximum

offering

price per share

 

Proposed maximum
aggregate

offering price(2)

  Amount of
registration fee

Class A common stock, $0.01 par value

  5,000,000 shares   (2)   $70,925,000   $8,596.11

 

 

(1)

These shares include 4,500,000 shares of Class A common stock (“Class A stock”) under the Donegal Group Inc. 2019 Equity Incentive Plan for Employees and 500,000 shares of Class A stock under the Donegal Group Inc. 2019 Equity Incentive Plan for Directors (collectively, the “Plans”). This registration statement shall also cover any additional shares of Class A stock that become issuable under the Plans by reason of any stock dividend, stock split, recapitalization or any other similar transaction effected without the receipt of consideration that results in an increase in the number of outstanding shares of Class A stock.

(2)

Pursuant to Rule 457(h), the maximum aggregate offering price was calculated by multiplying 5,000,000 shares by $14.185 per share, the average of the high and low sales prices of the Class A stock on August 7, 2019, which is a date within five business days prior to the filing of this registration statement, as reported on the NASDAQ Global Select Market.

 

 

 


PART II

INFORMATION REQUIRED IN REGISTRATION STATEMENT

 

Item 3.

Incorporation of Documents by Reference.

We incorporate by reference into this registration statement the following documents that we have previously filed with the Securities and Exchange Commission, or the SEC (File No. 0-15341):

 

   

Our annual report on Form 10-K for the fiscal year ended December 31, 2018;

 

   

Our quarterly reports on Form 10-Q for the quarters ended March 31, 2019 and June 30, 2019;

 

   

Our definitive proxy statement dated March 18, 2019 relating to our 2019 annual meeting of stockholders;

 

   

Our current report on Form 8-K that we filed on April 23, 2019; and

 

   

The description of our Class  A stock under our registration statement on Form 8-A we filed pursuant to Section 12 of the Securities Exchange Act of 1934, or the Exchange Act, including any amendment or report we filed with the SEC, for the purpose of updating this description.

We deem all documents that we file pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, after the date of this registration statement and until the completion of the offering under this registration statement incorporated by reference into this registration statement and as a part of this registration statement from the date of the filing of the document. We deem any statement contained in a document incorporated or that we deem is incorporated by reference into this registration statement as modified or superseded for purposes of this registration statement to the extent that a statement contained in this registration statement or in any other document we subsequently file with the SEC that also is or we deem is incorporated by reference into this registration statement conflicts with, negates, modifies or supersedes that statement. Any statement that we so modify or supersede will not constitute a part of this registration statement, except as modified or superseded.

 

Item 4.

Description of Securities.

We need not provide a response to this item because we registered the class of securities to which this registration statement relates under Section 12 of the Exchange Act.

 

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Item 5.

Interests of Named Experts and Counsel.

Duane Morris LLP, Philadelphia, Pennsylvania, has passed upon the validity of the issuance of the shares of Class A stock we offer pursuant to this registration statement. Frederick W. Dreher, of counsel to Duane Morris LLP, is a director of Donegal Mutual Insurance Company, or Donegal Mutual. Donegal Mutual owns approximately 43% of the outstanding shares of our Class A stock and approximately 84% of the outstanding shares of our Class B common stock and thereby controls the election of all of the members of our board of directors and any other matter we submit to a vote of our stockholders.

 

Item 6.

Indemnification of Directors and Officers.

Section 145 of the Delaware General Corporation Law, the law of our state of incorporation, empowers a corporation, subject to certain limitations, to indemnify its officers and directors against expenses, including attorneys’ fees, judgments, fines and certain settlements, actually and reasonably incurred by them in any suit or proceeding to which they are parties as long as they acted in good faith and in a manner they reasonably believed to be in or not opposed to the best interests of the corporation, and with respect to a criminal action or proceeding, as long as they had no reasonable cause to believe their conduct to be unlawful. Our by-laws provide that we shall indemnify, to the fullest extent Delaware law permits, any person, including our directors and our officers, 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, his testator or his intestate is or was our director, officer or employee or served or serves any other enterprise at our request.

The by-laws of Donegal Mutual, which controls the votes of approximately 72% of our outstanding shares of stock, also provide that Donegal Mutual shall indemnify, to the fullest extent Pennsylvania law permits, any person, including Donegal Mutual’s directors or officers, 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, his testator or his intestate is or was our director, officer or employee or served or serves any other enterprise at our request.

Our by-laws provide that, to the fullest extent Delaware law permits, our directors shall not have any personal liability for monetary damages for any action taken or any failure to take any action.

The by-laws of Donegal Mutual provide that, to the fullest extent Pennsylvania law permits, Donegal Mutual’s directors shall not have any personal liability for monetary damages for any action taken or any failure to take any action.

 

Item 7.

Exemption from Registration Claimed.

Not applicable.

 

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Item 8.

Exhibits.

 

Exhibit No.

  

Description of Exhibit

  5.1    Opinion of Duane Morris LLP dated August 9, 2019 (filed herewith)
23.1    Consent of Independent Registered Public Accounting Firm (filed herewith).
23.2    Consent of Independent Registered Public Accounting Firm (filed herewith).
23.3    Consent of Duane Morris LLP (included in Exhibit 5.1)

 

Item 9.

Undertakings.

We hereby undertake:

(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 the 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 this 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 was 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 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and

(iii) 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 (i), (ii) and (iii) above do not apply if the information required to be included in a post-effective amendment by those clauses is contained in reports filed with or furnished to the SEC by us pursuant to Section 13 or Section 15(d) of the Exchange Act that are incorporated by reference in this registration statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of the registration statement.

 

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(b)    that for the purpose of determining any liability under the Securities Act of 1933, 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 offering 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.

We hereby further undertake that, for purposes of determining any liability under the Securities Act, each filing of our 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.

We hereby further undertake that, insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers and controlling persons pursuant to the foregoing provisions, or otherwise, we have 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 us of expenses incurred or paid by any of our directors, officers or controlling persons 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, we will, unless in the opinion of our counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by us is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

 

II-4


EXHIBIT INDEX

 

Exhibit No.

  

Description of Exhibit

  5.1    Opinion of Duane Morris LLP (filed herewith)
23.1    Consent of Independent Registered Public Accounting Firm (filed herewith).
23.2    Consent of Independent Registered Public Accounting Firm (filed herewith).
23.3    Consent of Duane Morris LLP (included in Exhibit 5.1)

 

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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 August 9, 2019.

 

DONEGAL GROUP INC.
By:    /s/ Kevin G. Burke
  Kevin G. Burke,
  President and Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.

 

Signature

  

Title

 

Date

  /s/ Kevin G. Burke

Kevin G. Burke

   President and Chief Executive Officer (principal executive officer)   August 9, 2019

  /s/ Jeffrey D. Miller

Jeffrey D. Miller

   Executive Vice President and Chief Financial Officer (principal financial and accounting officer)   August 9, 2019

  /s/ Scott A. Berlucchi

Scott A. Berlucchi

   Director   August 9, 2019

  /s/ Dennis J. Bixenman

Dennis J. Bixenman

   Director   August 9, 2019

  /s/ Robert S. Bolinger

Robert S. Bolinger

   Director   August 9, 2019

 

II-6


Signature

  

Title

 

Date

  /s/ Patricia A. Gilmartin

Patricia A. Gilmartin

   Director   August 9, 2019

  /s/ Jack L. Hess

Jack L. Hess

   Director   August 9, 2019

  /s/ Barry C. Huber

Barry C. Huber

   Director   August 9, 2019

  /s/ Kevin M. Kraft, Sr.

Kevin M. Kraft, Sr.

   Director   August 9, 2019

  /s/ Jon M. Mahan

Jon M. Mahan

   Director   August 9, 2019

  /s/ S. Trezevant Moore, Jr.

S. Trezevant Moore, Jr.

   Director   August 9, 2019

  /s/ Richard D. Wampler, II

Richard D. Wampler, II

   Director   August 9, 2019

 

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Section 2: EX-5.1 (EX-5.1)

EX-5.1

NEW YORK

LONDON

SINGAPORE

PHILADELPHIA

CHICAGO

WASHINGTON,

DC

SAN FRANCISCO

SILICON VALLEY

SAN DIEGO

LOS ANGELES

TAIWAN

BOSTON

HOUSTON

AUSTIN

HANOI

HO CHI MINH

CITY

  

LOGO

 

FIRM and AFFILIATE OFFICES

 

www.duanemorris.com

  

SHANGHAI

ATLANTA

BALTIMORE

WILMINGTON

MIAMI

BOCA RATON

PITTSBURGH

NEWARK

LAS VEGAS

CHERRY HILL

LAKE TAHOE

MYANMAR

OMAN

A GCC REPRESENTATIVE OFFICE

OF DUANE MORRIS

 

ALLIANCES IN MEXICO

AND SRI LANKA

Exhibit 5.1

August 9, 2019

Board of Directors

Donegal Group Inc.

1195 River Road

Marietta, Pennsylvania 17547

 

  Re:

Donegal Group Inc. (the “Company”)

Registration Statement on Form S-8

5,000,000 Shares of Class A Common Stock        

Ladies and Gentlemen:

We have acted as counsel to the Company in connection with the preparation and filing with the Securities and Exchange Commission under the Securities Act of 1933, as amended, of a registration statement on Form S-8 (the “Registration Statement”) relating to the offer and sale by the Company of up to 5,000,000 shares (the “Shares”) of Class A common stock, $.01 par value, of the Company. The Shares consist of up to 4,500,000 shares the Company may issue under its 2019 Equity Incentive Plan for Employees and up to 500,000 shares the Company may issue under its 2019 Equity Incentive Plan for Directors (collectively, the “Plans”).

As counsel to the Company, we have supervised all corporate proceedings in connection with the preparation and filing of the Registration Statement. We have also examined the Company’s certificate of incorporation and by-laws, as amended to date, its corporate minutes and other proceedings and its records relating to the authorization, sale and issuance of the Shares and the adoption of the Plans, and such other documents and matters of law as we have deemed necessary or appropriate in order to render this opinion.

Based upon the foregoing, we are of the opinion that the issuance of the Shares pursuant to the terms of the Plans against receipt by the Company of the consideration for the Shares in accordance with the Plans will result in the Shares being legally issued, fully paid and non-assessable.


Board of Directors

Donegal Group Inc.

Page 2

August 9, 2019

 

The foregoing opinion is limited to the laws of the State of Delaware, and we do not express any opinion herein concerning any other law. We hereby consent to the use of this opinion as an exhibit to the Registration Statement and to any and all references to our firm in the Registration Statement.

 

Sincerely,
/s/ Duane Morris LLP
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Section 3: EX-23.1 (EX-23.1)

EX-23.1

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

To the Board of Directors

Donegal Group Inc.:

We consent to the use of our reports dated March 14, 2019, with respect to the consolidated balance sheets of Donegal Group, Inc. and subsidiaries as of December 31, 2018 and 2017, the related consolidated statements of (loss) income and comprehensive (loss) income, stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2018, and the related notes and financial statement schedule (collectively, the “consolidated financial statements”), and the effectiveness of internal control over financial reporting as of December 31, 2018, incorporated herein by reference.

/s/ KPMG LLP

Philadelphia, Pennsylvania

August 9, 2019

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Section 4: EX-23.2 (EX-23.2)

EX-23.2

Exhibit 23.2

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Donegal Group Inc.

Marietta, Pennsylvania

We hereby consent to the incorporation by reference in this Registration Statement of our report dated March 7, 2019, relating to the consolidated financial statements of Donegal Financial Services Corporation appearing as a schedule in the Annual Report on Form 10-K of Donegal Group Inc. for the year ended December 31, 2018.

/s/ BDO USA, LLP

Philadelphia, Pennsylvania

August 9, 2019

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