Attached files
| file | filename |
|---|---|
| EX-23 - EX-23 - DONEGAL GROUP INC | w81976exv23.htm |
| EX-21 - EX-21 - DONEGAL GROUP INC | w81976exv21.htm |
| EX-13 - EX-13 - DONEGAL GROUP INC | w81976exv13.htm |
| EX-32.2 - EX-32.2 - DONEGAL GROUP INC | w81976exv32w2.htm |
| EX-31.1 - EX-31.1 - DONEGAL GROUP INC | w81976exv31w1.htm |
| EX-31.2 - EX-31.2 - DONEGAL GROUP INC | w81976exv31w2.htm |
| EX-32.1 - EX-32.1 - DONEGAL GROUP INC | w81976exv32w1.htm |
| EX-10.OO - EX-10.OO - DONEGAL GROUP INC | w81976exv10woo.htm |
| EX-10.QQ - EX-10.QQ - DONEGAL GROUP INC | w81976exv10wqq.htm |
| EX-10.RR - EX-10.RR - DONEGAL GROUP INC | w81976exv10wrr.htm |
| EX-10.TT - EX-10.TT - DONEGAL GROUP INC | w81976exv10wtt.htm |
| EX-10.NN - EX-10.NN - DONEGAL GROUP INC | w81976exv10wnn.htm |
| EX-10.MM - EX-10.MM - DONEGAL GROUP INC | w81976exv10wmm.htm |
| EX-10.PP - EX-10.PP - DONEGAL GROUP INC | w81976exv10wpp.htm |
| 10-K - FORM 10-K - DONEGAL GROUP INC | w81976e10vk.htm |
Exhibit (10)(SS)
DONEGAL GROUP INC.
2011 AGENCY STOCK PURCHASE PLAN
1. Purpose.
Donegal Group Inc. (the “Company”) established this 2011 Agency Stock Purchase Plan (this
“Plan”) for the benefit of eligible independent insurance agencies of the Company and Donegal
Mutual Insurance Company (“Donegal Mutual”) and their respective subsidiaries, any insurance
company that the Company or Donegal Mutual owns 50% or more of such company’s stock or any company
from which the Company or Donegal Mutual assumes 100% quota share reinsurance (collectively, the
“Companies”). This Plan provides an Eligible Agency, as defined in Section 2, an opportunity to
acquire a long-term proprietary interest in the Company through the purchase of the Company’s Class
A common stock (the “Class A common stock”) at a discount from current market prices. In offering
this Plan, the Company seeks to foster the common interests of the Company and Eligible Agencies in
achieving long-term profitable growth for the Company. Accordingly, the Company has created this
Plan to facilitate the purchase and long-term investment in shares of the Class A common stock by
Eligible Agencies.
2. Eligible Agencies.
An Eligible Agency is an agency that, the Company determines, in its discretion, brings value
to the Companies and with which the Companies seek a long-term relationship. The Company will
consider the following criteria to determine eligibility:
| (i) | the agency’s premium volume; | ||
| (ii) | the potential growth of such premium volume; | ||
| (iii) | the profitability of the agency’s business; and | ||
| (iv) | whether the Company has placed the agency on rehabilitation or revoked the agency’s binding authority. |
The Company, in its discretion, may base eligibility on agency segmentation class or any other
factors that indicate value, directly or indirectly, to the Companies. The Company will conduct
periodic reviews to determine the continued eligibility of each Eligible Agency. A pattern of
immediate resale of the Class A common stock acquired under this Plan by an Eligible Agency will be
a factor in the Company’s determination whether an agency should remain eligible for continued
participation in this Plan
because immediate resales would tend to indicate that an Eligible Agency is not seeking to share in
the long-term profitable growth of the Companies. The Company will treat its decision, in its
discretion, to discontinue the eligibility of an agency under this Plan, as an automatic withdrawal
from this Plan. See Section 9 below.
3. Methods of Payment and Amount of Contribution.
An Eligible Agency will have three methods of payment, pursuant to subsections (a), (b) and
(c) of this Section 3, through which it may purchase shares of the Class A common stock under this
Plan. Subject to the provisions of Section 11(b), an Eligible Agency may elect any of the payment
methods individually or in combination. In each Subscription Period, as defined in Section 4, an
Eligible Agency may contribute an aggregate maximum of $12,000 toward the purchase of Class A
common stock under all payment methods combined (the “Maximum Amount”), subject to the limitations
set forth below:
(a) An Eligible Agency may elect to purchase Class A common stock through deductions from its
monthly direct bill commission payments. Under this method, an Eligible Agency will direct the
Company to withhold no less than 1% and no more than 10% of the Eligible Agency’s direct bill
commission payments from the Eligible Agency’s direct bill commission payments; provided, however,
that the Company will withhold no more than $12,000 from direct bill commission payments during
each Subscription Period. Direct bill commission payments will mean the commissions earned and
that are actually available for payment in a monthly period to an Eligible Agency for personal and
commercial direct bill policies after all offsetting debits and credits are applied, as determined
solely from the Company’s records.
(b) An Eligible Agency may elect to purchase Class A common stock during each July 1 through
December 31 Subscription Period through a deduction from the contingent commission, if any, payable
to the Eligible Agency under the applicable agency contingent plan or its equivalent. Under this
method, an Eligible Agency will direct the Company to withhold a percentage of the contingent
commission subject to the Maximum Amount.
(c) An Eligible Agency may elect to purchase Class A common stock through lump-sum payments to
the Company. Under this method, the Eligible Agency will pay to the Company a dollar amount in a
lump sum by the last day of the applicable
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Subscription Period. The amount of the lump sum payment may not be less than $1,000 nor more
than the Maximum Amount.
At the end of each Subscription Period, the Company will total each Eligible Agency’s direct
bill commission payments, if any, and add such total to all lump-sum and contingent commission
payments, if any, made by such agency. If at any time during a Subscription Period an Eligible
Agency’s total payments exceed the Maximum Amount for that Subscription Period then, upon the
Eligible Agency’s request, the Company will return such excess amount to the Eligible Agency
without interest within a reasonable period. The Company will apply any such amount not returned
to the Eligible Agency to the purchase of Class A common stock during the next Subscription Period
without reducing the Maximum Amount applicable to such Subscription Period.
4. Duration of This Plan and Subscription Periods.
This Plan is effective as of July 1, 2011 through and including June 30, 2016. During its
term, this Plan will have ten semi-annual “Subscription Periods.” Each Subscription Period will
extend from July 1 through December 31 or from January 1 through June 30 of each year, with the
first Subscription Period beginning on July 1, 2011.
5. Enrollment and Enrollment Periods.
“Enrollment Periods” are in effect from June 15 through June 30 and from December 15 through
December 31 of each year commencing with June 15, 2011. The Company will send an Eligible Agency a
Subscription Agreement prior to the beginning of the first Enrollment Period following such
agency’s designation as an Eligible Agency.
| (a) | An Eligible Agency that desires to subscribe for the purchase of Class A common stock through withholding from direct bill commissions must return a duly executed and completed Subscription Agreement during the first applicable Enrollment Period. |
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| (b) | An Eligible Agency that wishes to make lump-sum purchases during a Subscription Period will remit each lump-sum payment to the Company with a supplemental Subscription Agreement by the last day of the applicable Subscription Period. | ||
| (c) | An Eligible Agency that wishes to make a purchase during a Subscription Period through designation of a portion of its contingent commission under the agency contingent plan will file a Subscription Agreement during the Enrollment Period applicable to that Subscription Period. |
Once enrolled, an Eligible Agency will continue to participate in this Plan for each
succeeding Subscription Period until it ceases to be an Eligible Agency or chooses to withdraw from
this Plan pursuant to Section 9. If an Eligible Agency desires to change its rate of contribution,
it may do so effective for the next Subscription Period by filing a new Subscription Agreement
during the Enrollment Period for the next Subscription Period.
6. Number of Shares To Be Offered.
The total number of shares available under this Plan is 300,000 shares of the Class A common
stock. In the event all 300,000 shares of the Class A common stock are purchased prior to the
expiration of this Plan, the Company may terminate this Plan in accordance with Section 13.
7. Subscription Price.
The “Subscription Price” for each share of Class A common stock will be equal to 90% of the
average of the closing prices of the Class A common stock on the Nasdaq Global Select Market for
the last ten trading days of the applicable Subscription Period.
8. Purchase of Shares.
The Company will maintain a “Plan Account” on behalf of each enrolled Eligible Agency. As of
the last day of each Subscription Period, the Company will credit the aggregate of (i) the amount
deducted from the Eligible Agency’s direct bill commission payments, (ii) the Eligible Agency’s
contingent commission withholdings and (iii) all of the Elgible Agency’s lump-sum payments, not to
exceed the Maximum Amount
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permitted pursuant to Section 3 of this Plan from all three payment methods, to the Eligible
Agency’s Plan Account. At such time, the Company will divide the amount then contained in the
Eligible Agency’s Plan Account by the Subscription Price for such Subscription Period and credit
each Plan Account with the number of whole shares that results. The Company will carry forward any
amount remaining in the Plan Account to the next Subscription Period or, at the option of the
Eligible Agency, return it to the Eligible Agency. Any amount so carried forward will not reduce
the Maximum Amount applicable to such succeeding Subscription Period. If the number of shares
subscribed for during any Subscription Period exceeds the number of shares available for sale under
this Plan, the Company will allocate the remaining shares among all Eligible Agencies in proportion
to their aggregate Plan Account balances, exclusive of any amounts carried forward as provided in
Section 3 and this Section 8 of this Plan. The Company will issue and deliver stock certificates
to each Eligible Agency with respect to the shares it has purchased under this Plan within a
reasonable time thereafter.
9. Withdrawal from This Plan.
An enrolled Eligible Agency may withdraw from this Plan at any time by giving written notice
of withdrawal signed by an authorized representative of the Eligible Agency to the Company.
Promptly after the time of withdrawal or the discontinuance of an Eligible Agency’s eligibility,
the Company will issue certificates representing any shares held under this Plan in the name of the
Eligible Agency and refund the amount of any cash credited to the Eligible Agency’s Plan Account
for the current Subscription Period without interest. If an Eligible Agency withdraws, such
Eligible Agency may not resubscribe until after the next full Subscription Period has elapsed, and
then only if the Company has redesignated such agency as an Eligible Agency.
10. Termination of Agency Status.
The Company will treat termination of agency status for any reason as an automatic withdrawal
from this Plan pursuant to Section 9.
11. Assignment and Issuance of Shares.
Except as expressly permitted by this Section 11, no Eligible Agency may assign its
subscription payments under this Plan or rights to subscribe under this Plan to any other person
(including its shareholders, partners or other principals), and any
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attempted assignment will be void. Neither an Eligible Agency’s rights under this Plan nor
shares held in an Eligible Agency’s Plan Account may be transferred, pledged, hypothecated or
assigned. All shares issued under this Plan will be titled in the name of the Eligible Agency;
provided, however, that an Eligible Agency may, upon written request to the Company: (a) designate
that the Company issue such shares to a shareholder, partner, other principal or other licensed
employee of such Eligible Agency, or (b) designate that any retirement plan maintained by or for
the benefit of such Eligible Agency or a shareholder, partner, other principal or other licensed
employee of such Eligible Agency may purchase shares in lieu of such Eligible Agency through
lump-sum payments made by the designee, subject to the $12,000 Maximum Amount limitation set forth
in Section 3, compliance with applicable laws, including the Employee Retirement Income Security
Act of 1974, as amended, and, if applicable, payment by the Eligible Agency or its designee of any
applicable transfer taxes and satisfaction of the Company’s usual requirements for recognition of a
transfer of Class A common stock.
12. Adjustment of and Changes in the Class A Common Stock.
In the event that the outstanding shares of the Class A common stock are hereafter increased
or decreased or changed into or exchanged for a different number or kind of shares or other
securities of the Company, or of another corporation, by reason of reorganization, merger,
consolidation, recapitalization, reclassification, stock split-up, stock dividend either in shares
of the Class A common stock or of another class of the Company’s stock, spin-off or combination of
shares, the Committee appointed pursuant to Section 14 of this Plan will make appropriate
adjustments in the aggregate number and kind of shares that are reserved for sale under this Plan.
13. Amendment or Discontinuance of This Plan.
The board of directors of the Company will have the right to amend, modify or terminate this
Plan at any time without notice provided that the amendment, modification or termination of this
Plan does not adversely affect any participant’s existing rights.
14. Administration.
A committee (the “Committee”) consisting of three persons the board of directors of the
Company has appointed from time to time will administer this Plan. The
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Committee may from time to time adopt rules and regulations for carrying out this Plan. Any
Committee interpretation or construction of any provision of this Plan will be final and conclusive
on all participants absent contrary action by the board of directors. Any board of directors
interpretation or construction of any provision of this Plan will be final and conclusive on all
participants.
15. Titles.
Titles are provided in this Plan for convenience only and are not to serve as a basis for
interpretation or construction of this Plan.
16. Applicable Law.
This Plan will be construed, administered and governed in all respects under the laws of the
Commonwealth of Pennsylvania and the United States of America.
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