Preliminary Proxy Statement Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) Definitive Proxy Statement Definitive Additional Materials Soliciting Material Pursuant to §240.14a-12 20, 2023 Important Notice Regarding the Availability of Our Proxy Materials for DONEGAL GROUP INC. Total revenues Net income (loss) Net income (loss) per diluted Class A share Net income (loss) per Class B share reference in this proxy statement for our 2022. annual meetings. In addition, the deadline for a stockholder to provide notice under SEC Rule 14a-19, the SEC’s universal proxy rule, of the stockholder’s intent to solicit proxies in support of candidates submitted under our certificate of incorporation and by-laws is February 20, 2024. Further, any stockholder who, in accordance with and subject to the provisions of Rule 14a-8 of the rules of the SEC and other applicable rules of the SEC, wishes to submit a proposal for inclusion in our proxy statement for our 2024 annual meeting of stockholders must deliver such proposal and an appropriate supporting statement not later than November 18, 2023. of stockholder business we will conduct at our Item of Business Approval, on a non-binding advisory basis, of the compensation of our Determination of the frequency on which we submit to our stockholders the approval, on a non-binding advisory basis, of the compensation of our named executive officers authority. We will count the shares for which you have withheld authority to vote for the election of Class Named Executive Officers and our outstanding shares of Class B common stock, voting together as a single class, present in person or by proxy and entitled to vote on the proposal at our 2023 Annual Meeting. Because Donegal Mutual owns 71% of the combined voting power of our outstanding Class A common stock and our outstanding Class B common stock and because Donegal Mutual will vote all of its shares at our 2023 Annual Meeting to approve the determination to submit to our stockholders the approval, on a non-binding advisory basis, of the compensation of our named executive officers once every three years, our stockholders will approve at our 2023 Annual Meeting our proposal to submit to our stockholders the approval, on a non-binding advisory basis, of the compensation of our named executive officers once every three years. 2023 2023. Voting Options Vote Required Vote by telephone – use any touch-tone telephone to vote your proxy 24 hours a day, 7 days a week by dialing 1-800-690-6903. Have your proxy card available when you call. submitting to our corporate secretary a notice of revocation of your proxy by telephone, via the Internet or by mail at Donegal Group Inc., P.O. Box 302, Marietta, PA 17547; exploring opportunities to acquire property and casualty insurance companies Name and Address of Beneficial Owner Donegal Mutual Insurance Company 1195 River Road Marietta, PA 17547 Dimensional Fund Advisors LP(1) Donald H. Nikolaus(2) Name of Individual or Identity of Group(1) Directors: Scott A. Berlucchi Dennis J. Bixenman Kevin G. Burke Jack L. Hess Barry C. Huber David C. King Kevin M. Kraft, Sr. Jon M. Mahan S. Trezevant Moore, Jr. Annette B. Szady Richard D. Wampler, II Named Executive Officers: Jeffrey D. Miller Richard G. Kelley Sanjay Pandey Daniel J. Wagner All directors and executive officers as a group (22 persons) Mr. Wagner basis. 2022. given market and to expand the Donegal Insurance Group’s ability to service an entire personal lines or commercial lines account. Distinctions within the products Donegal Mutual and our insurance subsidiaries offer generally relate to specific risk profiles within similar classes of business, such as preferred tier products versus standard tier products. Donegal Mutual and we do not allocate all of the standard risk gradients to one company. As a result, the underwriting results of the business the individual companies write directly will vary. producing more uniform and stable underwriting results for the Donegal Insurance Group than any of the individual member companies could achieve without the relationships between Donegal Mutual and our insurance subsidiaries we describe in this proxy statement. addition, Donegal Mutual has a 100% quota-share reinsurance agreement with Southern Mutual Insurance Company, or Southern Mutual, and Donegal Mutual places its assumed business from Southern Mutual into the underwriting pool. Atlantic States has an 80% share of the results of the pool, and Donegal Mutual has a 20% share of the results of the pool. The intent of the pooling agreement is to produce more uniform and stable underwriting results from year to year for each pool participant than they would experience individually and to spread the risk of loss between the participants based on each participant’s relative amount of surplus and relative access to capital. Each participant in the pool has at its disposal the capacity of the entire pool, rather than being limited to policy exposures of a size commensurate with its own capital and surplus. The business Atlantic States derives from the underwriting pool represents a significant percentage of our total consolidated revenues. The underwriting pool did not include the business Donegal Mutual conducts in four Southwestern states for policies effective through December 31, 2020. 2021. premiums. The intent of any changes is to achieve relative parity between Donegal Mutual, on the one hand, and us or one or more of our insurance subsidiaries, on the other hand, over a period of several years. These agreements are on-going in nature and will continue in effect throughout 2024. All of our directors attended our 2022 annual meeting of stockholders. Number of Meetings Held in 2020: Number of Meetings Attended in 2020 by Members of the Committees: Kevin G. Burke Jack L. Hess Barry C. Huber Kevin M. Kraft, Sr. Jon M. Mahan S. Trezevant Moore, Jr. Richard D. Wampler, II consulting with and advising our management on our general business, operational, administrative and legal affairs; the consideration of candidates nominated by stockholders other than Donegal Mutual to stand for election to our board of directors; 2022. Total revenues Net income Class A common stock price Class B common stock price we describe below. Publicly available information is no longer available concerning EMC Insurance Group Inc. as of 2019 and concerning State Auto Financial Corporation as of 2022. long-term cash incentive bonus plan of approximately $380,000 to our named executive officers in respect of that three-year period. Name of Named Executive Officer Sanjay Pandey Key Factors Purpose Compensation committee determines funding level on a formula basis tied to business plan objectives of the Donegal Insurance Group and operating return on equity objectives for us Type of Compensation Amount Form of Payment Under our equity incentive plan for directors, each of our directors and each director of Donegal Mutual who is not also one of our directors receives an annual restricted stock award of 500 shares of our Class A common stock. We grant the award to each director as of the first business day of each year, provided the director served as a member of our board of directors or as a member of the board of directors of Donegal Mutual during any portion of the preceding year. Donegal Mutual reimburses us for the cost of the restricted stock awards we grant to those directors of Donegal Mutual who do not also serve as members of our board of directors. 2023. Name Scott A. Berlucchi Dennis J. Bixenman Jack L. Hess Barry C. Huber David C. King Kevin M. Kraft, Sr. Jon M. Mahan S. Trezevant Moore, Jr. Annette B. Szady Richard D. Wampler, II Name Number of Securities Underlying Unexercised Option Scott A. Berlucchi Dennis J. Bixenman Jack L. Hess Barry C. Huber David C. King Kevin M. Kraft, Sr. Name Number of Securities Underlying Unexercised Option Jon M. Mahan S. Trezevant Moore, Jr. Annette B. Szady Richard D. Wampler, II meetings of our board of directors, meetings of committees of our board of directors and meetings of our stockholders upon presentation of appropriate vouchers for such expenses. executive officers, to remain with us for the long term. We have utilized the following elements of our compensation programs to promote the creation of long-term stockholder value without creating conditions that could lead to the taking of excessive risk by our executive officers: Potential Payments to Our Named Executive Officers upon Termination or a Change-of-Control “Change-of-Control,” as defined in the employment agreements we have entered into with each of our named executive officers, includes the occurrence of one of the types of transaction we describe below: any amounts payable under any of the benefit plans Donegal Mutual or we maintain in accordance with the terms of such plans; the employment of each named executive officer terminated on December 31, Name Event Kevin G. Burke Voluntary Termination Involuntary-for-Cause Termination Involuntary Termination Change-in-Control Jeffrey D. Miller Voluntary Termination Involuntary-for-Cause Termination Involuntary Termination Change-in-Control Richard G. Kelley Voluntary Termination Involuntary-for-Cause Termination Involuntary Termination Change-in-Control Sanjay Pandey Voluntary Termination Involuntary-for-Cause Termination Involuntary Termination Change-in-Control Daniel J. Wagner Voluntary Termination Involuntary-for-Cause Termination Involuntary Termination Change-in-Control Performance Measure Commercial Lines Premium Growth Personal Lines Premium Growth Adjusted Statutory Combined Ratio Operating Return on Equity 2022: Percentage of Base Salary Threshold 40.0% Our named executive officers earned cash bonuses only with respect to the achievement of the performance objectives for commercial lines premium growth and personal line premium growth for 2022. The amounts of the cash bonuses are set forth under the Annual Cash Bonus column under “Summary Compensation Table.” 2019 in consideration of the implementation of the new long-term executive incentive plan. Name and Principal Position Kevin G. Burke, President and Chief Executive Officer Jeffrey D. Miller, Executive Vice President and Chief Financial Officer Sanjay Pandey, Senior Vice President and Chief Information Officer Richard G. Kelley, Senior Vice President Daniel J. Wagner, Senior Vice President and Treasurer Name Kevin G. Burke Jeffrey D. Miller Richard G. Kelley Sanjay Pandey Daniel J. Wagner $14.09. we otherwise provide in an individual option or employment agreement, unvested options do not automatically accelerate in the event we enter into a business combination or we sell all or substantially all of our assets. The vesting of stock options accelerates upon death or permanent disability of the holder of the options. In the event of disability, stock options are exercisable within the earlier of three years from the date of termination of employment due to disability or the original expiration date of the option. In the event of death, options must be exercised within the earlier of three years from the date of death or the original expiration date of the option. Name Kevin G. Burke Jeffrey D. Miller Richard G. Kelley Sanjay Pandey Name Daniel J. Wagner Name Kevin G. Burke Jeffrey D. Miller Richard G. Kelley Sanjay Pandey Daniel J. Wagner 2023. 2023. with respect to our annual total compensation in 2022. of Donegal Group Inc. and Donegal Mutual Insurance Company Plan category Equity compensation plans approved by securityholders Equity compensation plans not approved by securityholders Total 2022: Name Dennis J. Bixenman Kevin M. Kraft, Sr. Jon M. Mahan Richard D. Wampler, II Name Scott A. Berlucchi Barry C. Huber S. Trezevant Moore, Jr. Name Kevin G. Burke Jack L. Hess David C. King Annette B. Szady is an affiliate of Promontory MortgagePath, which Mr. Moore joined in December 2016. From October 2014 to December 2016, Mr. Moore was an executive vice president of FirstKey Mortgage, LLC, a subsidiary of Cerberus. Mr. Moore served as a managing director in the securities unit of the Royal Bank of Scotland from October 2012 to October 2014. From March 2010 until October 2012, Mr. Moore served as senior vice president, Strategic Investment Group, of The Federal Home Loan Mortgage Corporation. We believe the experience of Mr. Moore in mortgage securities and financial businesses amply qualifies him to serve as a member of our board of directors. 2023. the compensation of our named executive officers in accordance with the requirements of Section 14A of the Exchange Act. We describe the compensation of our named executive officers under “Executive Compensation Discussion and Analysis” elsewhere in this proxy statement. At our 2023 Annual Meeting, we will ask our stockholders to vote to approve, on a non-binding advisory basis, the compensation of our named executive officers as we disclose such compensation in accordance with the compensation disclosure rules of the SEC under the caption “Executive Compensation Discussion and Analysis,” the summary compensation table and the narrative disclosures that accompany the summary compensation table appearing elsewhere in this proxy statement. Because Donegal Mutual owns 71% of the combined voting power of our outstanding Class A common stock and our outstanding Class B common stock and because Donegal Mutual has advised us it will vote stockholders the approval, on a non-binding advisory basis, of the compensation of our named executive officers at our annual meeting of stockholders in 2026. 2023 2023. 2023. significant accounting and auditing matters, including consultation with KPMG LLP’s national office, as well as KPMG LLP’s reputation for integrity and competence in auditing and accounting. Our audit committee also approves all auditing services and permitted non-audit services, including the fees and terms for such services, to be performed for us by our independent registered public accounting firm, subject to the de minimis exceptions for non-audit services described in the Exchange Act. Our audit committee delegates to our audit committee chairman pre-approval authority for non-audit services up to $25,000 subject to subsequent approval by our audit committee at its next scheduled meeting. 2022. of Donegal Group Inc. Section 2.3 of our by-laws provides that if a stockholder wishes to present at our 18, 2023. In addition, the deadline for a stockholder to provide notice to our corporate secretary under SEC Rule 14a-19, the SEC’s universal proxy rule, of the stockholder’s intent to solicit proxies in support of candidates submitted under our certificate of incorporation and by-laws is February 20, 2024. the name and address of the proponent; and If a bank, broker, nominee or other holder of record holds your shares, please contact your bank, broker, nominee or other holder of record directly.Filed by the Registrant ☒ Filed by a Party other than the Registrant ☐Filed by the Registrant ☒ Filed by a Party other than the Registrant ☐ ☐ ☐ ☒ ☐ ☐ ☒ required.required☐ Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.(1) Title of each class of securities to which the transaction applies:(2) Aggregate number of securities to which the transaction applies:(3) Per unit price or other underlying value of the transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):(4) Proposed maximum aggregate value of the transaction:(5) Total fee paid:☐ materials.materials☐ Check box if any part of the fee is offset as providedRule 0-11(a)(2)Rules 14a6(i)(1) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.0-11(1) Amount Previously Paid:(2) Form, Schedule or Registration Statement No.:(3) Filing Party:(4) Date Filed:
15, 202120202022 Annual Report to stockholders (our “2020“2022 Annual Report”). The themeaccompanying proxy statement, together with the enclosed form of our 2020 Annual Reportproxy card, is “pulling together and moving forward.” As we outline in our annual letter to stockholders, Donegal’s management, employees and network of professional independent agents are pulling together like never before and moving forward to execute our strategic plan and fulfill our mission to be “there when it matters most” for our policyholders.The events of 2020 have confirmed our core belief that exceptional service and accessibilityfirst being mailed to our agents and customers drives positive business results. Our ability to maintain our highly responsive service levels was a key underlying force that contributed to our solid commercial premium growth during the year. We were pleased that a continuation of improved underwriting results and investment income during 2020 led to a 9.3 percent increase in book value per share to $17.13 at December 31, 2020, compared to $15.67 at December 31, 2019. In addition, our dividend yield continues to rank highly among our public insurance company peers.We are focusedstockholders on several primary strategies, including achieving sustained excellent financial performance, strategically modernizing our operations and processes to transform our business, capitalizing on opportunities to grow profitably and delivering a superior experience to our agents and customers.Due to the ongoing health risks associated with large public gatherings, weor about March 17, 2023.20212023 annual meeting of stockholders (our “2021“2023 Annual Meeting”) as a “virtual meeting” on Thursday, April 15, 2021 20, 2023 at 10:00 a.m., Eastern time. Stockholders will not be able to attend the meeting in person. You will be able to attend our 20212023 Annual Meeting, vote and submit questions during our 20212023 Annual Meeting via live webcast only at www.virtualshareholdermeeting.com/DGICA2021DGICA2023. In order to participate, vote and submit questions in our 20212023 Annual Meeting, you will need to have your 16-digit control number that is included on the proxy card we include with this notice of our 20212023 Annual Meeting and our proxy statement relating to our 20212023 Annual Meeting. Guests may participate in the webcast but will not have the ability to vote or ask questions during our 20212023 Annual Meeting.20212023 Annual Meeting, our stockholders will vote on the following items of stockholder business:BA directors, each for a term of three years and until the election of their respective successors and their respective successors take office;2021 employee stock purchase plan so that we may continue to offer an employee stock purchase plan followingnamed executive officers;expirationfrequency of our 2011 employee stock purchase plan;submission to our stockholders of the approval, on a non-binding advisory basis, of the compensation of our named executive officers; and2021.2023.That date wasThose dates were between November 18, 2022 and December 16, 202018, 2022 with respect to our 20212023 Annual Meeting and isare between November 18, 2023 and December 15, 202118, 2023 with respect to our 20222024 annual meeting of stockholders. No stockholder made another nomination or other proposal for consideration by our stockholders at our 20212023 Annual Meeting.20212023 as the record date for the determination of the holders of our Class A common stock and for the determination of the holders of our Class B common stock entitled to notice of, and to vote at, our 20212023 Annual Meeting. We include our 20202022 Annual Report with this notice of our 20212023 Annual Meeting and our proxy statement relating to our 20212023 Annual Meeting. You may vote at our 20212023 Annual Meeting by mail, by telephone or via the Internet as we describe on the enclosed proxy card that you may use to vote by proxy at our 20212023 Annual Meeting.The accompanying proxy statement, together with the enclosed form of proxy card, is first being mailed to our stockholders on or about March 15, 2021.
President and Chief Executive Officer March 17, 2023 Marietta, Pennsylvania March 15, 2021Marietta, Pennsylvania15, 202120, 2023 Annual Meeting20212023 Annual Meeting, our proxy statement with respect to our 20212023 Annual Meeting and our 20202022 Annual Report. You may also view each of these documents on the Internet at www.proxyvote.com. No information on our website other than our notice of our 20212023 Annual Meeting, this proxy statement with respect to our 20212023 Annual Meeting and our 20202022 Annual Report constitutes a part of our proxy solicitation materials for our 20212023 Annual Meeting or part of our 20202022 Annual Report.20212023 Annual Meeting. Due to the ongoing health risks associated with large public gatherings, weWe will hold our 20212023 Annual Meeting as a “virtual meeting” on Thursday, April 15, 202120, 2023 at 10:00 a.m., Eastern time. You will be able to attend our 20212023 Annual Meeting, vote and submit questions during our 20212023 Annual Meeting via live webcast only at www.virtualshareholdermeeting.com/DGICA2021DGICA2023. In order to participate, vote and submit questions in our 20212023 Annual Meeting, you will need to have your 16-digit control number that is included on the proxy card we include with this notice of our 20212023 Annual Meeting and our proxy statement relating to our 20212023 Annual Meeting. Guests may participate in the webcast but will not have the ability to vote or ask questions during our 20212023 Annual Meeting.15, 2021,17, 2023, we commenced the mailing to our stockholders of record at the close of business on March 1, 20212023 of:20202022 Annual Report.20212023 Annual Meeting to our stockholders and making those materials available for our stockholders to view on the Internet. We will, upon request, reimburse brokers, nominees, fiduciaries, custodians and other record holders for their reasonable expenses in forwarding our proxy solicitation materials for our 20212023 Annual Meeting to the beneficial owners of our Class A common stock and to the beneficial owners of our Class B common stock for whom such persons serve as record holders. We may also solicit proxies from some stockholders in person, by mail, by e-mail or by telephone through our directors, officers and regular employees whom we do not employ specifically for proxy solicitation purposes and none of whom will receive any additional compensation for performing such services.2020,2022, our total revenues decreased 4.3%increased 3.9% compared to 2019,2021, with the decreaseincrease largely related to lowera 6.0% increase in net investment gains in 2020premiums earned for 2022 compared to 2019.2021. We had a net loss of $2.0 million and a net loss per Class A share of 6 cents for 2022, compared to net income of $52.8$25.3 million and net income per diluted Class A share of $1.8383 cents for 2020, compared to $47.2 million and net income per diluted Class A share of $1.67 for 2019.2021. The following table depicts our total revenues, net (loss) income, (loss), net (loss) income (loss) per diluted Class A share and net (loss) income (loss) per Class B share for the three years ended December 31, 2020, 20192022, 2021 and 2018.2020. For further information, we refer you to the financial statements we include in our 20202022 Annual Report. Year Ended December 31 2020 2019 2018 $777.8 million $812.5 million $771.8 million 52.8 million 47.2 million (32.8) million 1.83 1.67 (1.18) 1.65 1.51 (1.09) Year Ended December 31 2022 2021 2020 Total revenues $848.2 million $816.5 million $777.8 million Net (loss) income (2.0) million 25.3 million 52.8 million Net (loss) income per diluted Class A share (0.06 ) 0.83 1.83 Net (loss) income per Class B share (0.07 ) 0.74 1.65 “2021“2023 Annual Meeting” means our annual meeting of stockholders that we will hold virtually on April 15, 2021;20, 2023;“2020“2022 Annual Report” means our Annual Report to our stockholders for 2020;2022;CONTENTS Page (i) (i) (ii) 1 1214 1315 1315 1315 1517 1517 1517 1617 1618 1820 2021 2223 2324 2325 26 2427 2831 2831 2932 293032 3133 3133 3133 3234 3234 3638 4143 4245 4446 4749 4850 5052 5153 51(iii)53 5355 5355 5457 5758 5758 5758 5758 5859 60 5961 6062 6062 6869 70 7372 73 74 76 7877 79 79 Appendix A—Our 2021 Employee Stock Purchase Plan as we propose to adopt itA-120212023 Annual Meeting20202022 fiscal year. Our 20202022 fiscal year began20202022 and ended on December 31, 2020.20212023 Annual Meeting and any adjournment or postponement of our 20212023 Annual Meeting. We will hold our 20212023 Annual Meeting as a “virtual meeting” on Thursday, April 15, 202120, 2023 at 10:00 a.m., Eastern time. You will be able to attend our 20212023 Annual Meeting, vote and submit questions during our 20212023 Annual Meeting via live webcast only at www.virtualshareholdermeeting.com/DGICA2021DGICA2023.20212023 Annual Meeting?20212023 Annual Meeting, our stockholders will consider and act upon the threefour items of stockholder business we propose as follows:BA directors, each for a term of three years and until the election of their respective successors and their respective successors take office:Dennis J. Bixenman, M. Kraft, Sr., Jon M. MahanG. Burke, Jack L. Hess, David C. King and Richard D. Wampler, II;Annette B. Szady;The2021 employee stock purchase plan so that we may continue to offer an employee stock purchase plan following named executive officers;expirationdetermination of the frequency of our 2011 employee stock purchase plan;submission to our stockholders of the approval, on a non-binding advisory basis, of the compensation of our named executive officers; and2021.2023.Class B director at our 2021 Annual Meetingannual meetings or to propose any other item of stockholder business for stockholder consideration at our 2021 Annual Meeting.That dateThose dates in general isare not later than 90 days and not earlier than 120 days prior to the first anniversary of the mailing date of our proxy solicitation material for our prior year’s annual meeting of stockholders. After that date, a stockholder may no longer propose any candidate for election as a director at our next forthcoming annual meeting of stockholders and may no longer propose any other item of stockholder business for consideration and a vote by our stockholders at our next forthcoming annual meeting of stockholders. For our 20212023 Annual Meeting, that date wasthose dates were between November 18, 2022 and December 16, 2020.18, 2022. For our 20222024 annual meeting of stockholders, that-1-date isthose dates are between November 18, 2023 and December 15, 2021.18, 2023. The purpose of our advance notice by-laws is to ensure that we can include in our annual proxy statements, for the information of all of our stockholders, all of the actions we or others propose to present for consideration by our stockholders at our annual meetings of stockholders.BA director at our 20212023 Annual Meeting or proposed the transaction of any other item of stockholder business at our 20212023 Annual Meeting. Therefore, under applicable law and our by-laws, at our 20212023 Annual Meeting:BA director or validly propose any other item of stockholder business; andthreefour items of stockholder business we describe in this proxy statement and in our accompanying notice of our 20212023 Annual Meeting and procedural matters related to the conduct of our 20212023 Annual Meeting.amended and restated certificate of incorporation as currently in effect and our by-laws as currently in effect govern the conduct of business at our annual meetings of stockholders, our relationships with our stockholders and the relative rights, powers, duties and obligations of us and our stockholders, directors, nominees for directors, officers and employees.20212023 Annual Meeting?20212023 Annual Meeting voting together as a single class constitutes a quorum at our 20212023 Annual Meeting. Because Donegal Mutual owns approximately 71% of the combined voting power of our outstanding Class A common stock and our outstanding Class B common stock and all of Donegal Mutual’s shares will be present at our 20212023 Annual Meeting, a quorum will be present at our 20212023 Annual Meeting. Because a quorum will be present at our 20212023 Annual Meeting, our stockholders will have the legal power and authority to conduct the threefour items of stockholder business at our 20212023 Annual Meeting that we describe in our notice of our 20212023 Annual Meeting and in this proxy statement.20212023 Annual Meeting?20212023 Annual Meeting. Our board of directors has designated Kevin G. Burke, our president and chief executive officer, as the presiding officer of our 20212023 Annual Meeting. Mr. Burke will call our 20212023 Annual Meeting to order and will conduct the business of our 20212023 Annual Meeting, including voting upon the threefour items of stockholder business upon which our stockholders will vote at our 20212023 Annual Meeting. Mr. Burke, in his capacity as the presiding officer of our 20212023 Annual Meeting, will determine, in his discretion, the order of the items-2-20212023 Annual Meeting and the procedural manner in which we will conduct the business of our 20212023 Annual Meeting. If Mr. Burke is unavailable for any reason, our board of directors will designate a replacement as presiding officer of our 20212023 Annual Meeting.20212023 Annual Meeting. After our stockholders have voted on the threefour items of stockholder business we describe in this proxy statement, and the inspectors of election our board of directors has appointed have tallied the voting on those threefour items of stockholder business, Kevin G. Burke, our president and chief executive officer, and Jeffrey D. Miller, our executive vice president and chief financial officer, will then discuss our results of operations for 20202022 compared to 20192021 and our outlook for 2021.2023. After those remarks, the inspectors of election for our 20212023 Annual Meeting will announce the results of the voting on the threefour items of business on which our stockholders have voted at our 20212023 Annual Meeting. Then Messrs. Burke and Miller will, as they deem appropriate in their discretion under then prevailing circumstances, recognize stockholders who wish to ask pertinent questions or make comments.20212023 Annual Meeting?20212023 as the record date for the determination of the holders of our Class A common stock and the holders of our Class B common stock who are entitled to notice of, and to vote at, our 20212023 Annual Meeting. We refer to those eligible stockholders as “stockholders of record” in this proxy statement. Stockholders of record, including persons whom a stockholder of record duly and validly appoints as the proxy of such stockholder of record, may attend, and vote at, our 20212023 Annual Meeting.20212023 Annual Meeting has the right to cast one-tenth of a vote for each nominee for election as a Class BA director at our 20212023 Annual Meeting and for the other items of stockholder business we submit to a vote of our stockholders at our 20212023 Annual Meeting.20212023 Annual Meeting has the right to cast one vote for each nominee for election as a Class BA director at our 20212023 Annual Meeting and for the other items of stockholder business we submit to a vote of our stockholders at our 20212023 Annual Meeting.-3-2021,2023, the record date for our 20212023 Annual Meeting. If your name appears on that certified list of stockholders, you are a stockholder of record entitled to vote at our 20212023 Annual Meeting. For example, you are a stockholder of record if you received this proxy statement and the related materials for our 20212023 Annual Meeting directly from us through our mailing agent and not indirectly from another person who is the record holder of the shares you own beneficially, such as a bank, a brokerage firm or other fiduciary or representative.20212023 Annual Meeting, to examine, at our principal executive offices in Marietta, Pennsylvania, an alphabetical list of the holders of record for our 20212023 Annual Meeting of our Class A common stock and an alphabetical list of the holders of record for our 20212023 Annual Meeting of our Class B common stock. We will grant the request of a stockholder of record to make such an examination if:threefour items of stockholder business we will conduct at our 20212023 Annual Meeting.threefour items of stockholder business we will conduct at our 20212023 Annual Meeting, we will not permit that stockholder of record to examine the list of the record holders of our Class A common stock and the record holders of our Class B common stock.-4-20212023 Annual Meeting do we consider routine and which do we consider non-routine?threefour items of stockholder business at our 20212023 Annual Meeting. We consider these items routine or non-routine as we indicate in the table below: Routine Non-Routine Election of Class BA directors X 2021 employee stock purchase plan X X Ratification of the appointment by our audit committee of KPMG LLP to serve as our independent registered public accounting firm for the year ending December 31, 20212023 X 20212023 Annual Meeting?BA DirectorsBA directors are the only nominees eligible for election as Class BA directors at our 20212023 Annual Meeting and any adjournment or postponement of our 20212023 Annual Meeting. Our certificate of incorporation and our by-laws do not authorize cumulative voting in the election of our directors. As the DGCL permits and our by-laws provide, we utilize a plurality of the votes cast standard, and not a majority of the outstanding votes cast standard, in determining the election of our directors by our stockholders. Our certificate of incorporation provides that our shares of Class A common stock and our shares of Class B common stock vote together as a single class in the election of our directors. At our 20212023 Annual Meeting, our stockholders will elect as Class BA directors the four nominees for election as Class BA directors who receive the highest number of stockholder votes at our 20212023 Annual Meeting. The four persons elected as Class BA directors at our 20212023 Annual Meeting will serve for a term of three years and until the election of their respective successors and their respective successors take office.BA directors, the proxies we have named will not vote your shares for the election of the nominee or nominees as Class BA directors as to whom you have withheld-5-BA directors as present at our 20212023 Annual Meeting for the purpose of determining whether a quorum is present at our 20212023 Annual Meeting. Because Donegal Mutual will vote all of its shares for the election of the four nominees for Class BA directors we name in this proxy statement and Donegal Mutual-owned shares constitute approximately 71% of votes entitled to be cast at our 20212023 Annual Meeting, our stockholders will elect those Class BA nominees (Dennis J. Bixenman, Kevin M. Kraft, Sr., Jon M. Mahan(Kevin G. Burke, Jack L. Hess, David C. King and Richard D. Wampler, II)Annette B. Szady) at our 20212023 Annual Meeting to serve as Class BA directors for a term of three years and until the election of their respective successors and their respective successors take office.2021 Employee Stock Purchase Plan2021 employee stock purchase planproposal to approve, on a non-binding advisory basis, the compensation of our named executive officers requires the affirmative vote of the holders of a majority of the voting power of our outstanding shares of Class A common stock and our outstanding shares of Class B common stock, voting together as a single class, present includingin person or by proxy and eligibleentitled to vote on the proposal at our 20212023 Annual Meeting. Because Donegal Mutual will vote all of its DGI shares to approve our 2021 employee stock purchase planproposal to approve, on a non-binding advisory basis, the compensation of our named executive officers and the Donegal Mutual-owned shares constitute approximately 71% of the votes entitled to be cast at our 20212023 Annual Meeting, our stockholders will approve our 2021 employeeproposal to approve, on a non-binding advisory basis, the compensation of our named executive officers.purchase plan.202120212023 requires the affirmative vote of the holders of a majority of the voting power of our outstanding shares of Class A common stock and our outstanding shares of Class B common stock, voting together as a single class, present, including by proxy, and entitled to vote on the proposal at our 20212023 Annual Meeting. Because Donegal Mutual will vote all of its shares for ratification of the appointment by our audit committee of KPMG LLP to serve as our independent registered public accounting firm for 20212023 and the Donegal Mutual-owned shares constitute approximately 71% of the votes entitled to be cast at our 20212023 Annual Meeting, our stockholders will approve the ratification of the appointment by our audit committee of KPMG LLP to serve as our independent registered public accounting firm for 2021.20212023 Annual Meeting but will not affect the outcome of any matter we submit to a vote of our stockholders at our 20212023 Annual Meeting. The following table summarizes the threefour items of stockholder business our stockholders will vote upon at our 20212023 Annual Meeting and the voting options, vote required, effect of abstentions and effect of broker non-votes for each item.-6- Election of four Class BA directors Approval, on a non-binding advisory basis, of the compensation of our 2021 employee stock purchase plannamed executive officers the votes cast Determination of the frequency on which we submit to our stockholders the approval, on a non-binding advisory basis, of the compensation of our named executive officers “1 year,” “2 years,” “3 years” or “Abstain” Ratification of appointment of independent public accounting firm 2021,2023, we had outstanding:24,699,00520212023 Annual Meeting; and20212023 Annual Meeting.2,469,9002,716,311 votes on each matter we submit to a vote of our stockholders at our 20212023 Annual Meeting;20212023 Annual Meeting; and8,046,6758,293,086 votes on each matter we submit to a vote of our stockholders at our 20212023 Annual Meeting.-7-2021,2023, Donegal Mutual owned of record and beneficially 10,267,69211,578,470 shares, or approximately 41.6%42.6%, of our outstanding Class A common stock, and 4,654,3394,708,570 shares, or 83.5%84.4%, of our outstanding Class B common stock. Donegal Mutual therefore has the right to cast votes that constitute approximately 71% of the combined voting power at our 20212023 Annual Meeting on each matter we submit to a vote of our stockholders at our 20212023 Annual Meeting.20212023 Annual Meeting as follows:Dennis J. Bixenman, Kevin M. Kraft, Sr., Jon M. MahanG. Burke, Jack L. Hess, David C. King and Richard D. Wampler, IIAnnette B. Szady to serve as Class BA directors, each for a term of three years and until the election of their respective successors and their respective successors take office;2021 employee stock purchase plan;submission to our stockholders of the approval, on a non-binding advisory basis, of the compensation of our named executive officers once every three years; and2021.2023.20212023 Annual Meeting and because Donegal Mutual-owned shares constitute approximately 71% of votes entitled to be cast at our 20212023 Annual Meeting, we anticipate our stockholders will, at our 20212023 Annual Meeting:Dennis J. Bixenman, Kevin M. Kraft, Sr., Jon M. MahanG. Burke, Jack L. Hess, David C. King and Richard D. Wampler, IIAnnette B. Szady to serve as Class BA directors, each for a term of three years and until the election of their respective successors and their respective successors take office;2021 employee stock purchase plan;submission to our stockholders of the approval, on a non-binding advisory basis, of the compensation of our named executive officers once every three years; and2021.2023.20212023 Annual Meeting and vote during our 20212023 Annual Meeting webcast or by proxy on the items of stockholder business we submit to a vote of our stockholders at our 20212023 Annual Meeting.-8-20212023 Annual Meeting webcast – attend our 20212023 Annual Meeting live webcast at www.virtualshareholdermeeting.com/DGICA2021DGICA2023 and cast a vote by following the instructions provided in the webcast portal. Have your proxy card available when you access the webcast. Providing access virtually is especially important in light of the ongoing social distancing requirements necessitated by the COVID-19 pandemic.20212023 Annual Meeting.20212023 Annual Meeting by telephone or via the Internet is 11:59 p.m., local time, on April 14, 202119, 2023 for shares held directly and 11:59 p.m., local time, on April 12, 202117, 2023 for shares held in the 401(k) Plan of Donegal Mutual. The deadline for our receipt of proxies submitted by mail or by express delivery services for voting at our 20212023 Annual Meeting is 3:00 p.m., local time, on April 14, 2021.19, 2023. If you vote by proxy, the proxies our board of directors has appointed will vote your shares as you direct on any proxy card you return by mail, by telephone or via the Internet.2021,2023, which means that the list of our stockholders of record at the close of business on March 1, 20212023 our transfer agent prepared does not include your name but instead the name of the bank, broker or other fiduciary or representative who is the holder of record of your shares, you must either direct the holder of record of your shares to vote your shares on your behalf on the items of stockholder business upon which our stockholders will vote at our 20212023 Annual Meeting or you must obtain a form of proxy from your holder of record that you may then vote as if you were the holder of record. Your broker does not have the discretion to vote your shares for on:B directors orA directors;2021 employee stock purchase plan.-9-20212023 Annual Meeting. The stockholder ratification of the appointment by our audit committee of KPMG LLP to serve as our independent registered public accounting firm for our fiscal year ending December 31, 20212023 is a routine matter as to which your broker may exercise discretionary voting power.20212023 Annual Meeting and vote the shares you beneficially own during our 20212023 Annual Meeting live webcast, you must obtain a proxy from your holder of record that you may vote as if you were the holder of record and not direct your holder of record how to vote. Your holder of record is generally the bank, broker or other fiduciary or representative who holds your shares in its name on your behalf.20212023 Annual Meeting?•For the election of Dennis J. Bixenman, Kevin M. Kraft, Sr., Jon M. Mahan and Richard D. Wampler, II to serve as Class B directors, each for a term of three years and until the election of their respective successors and their respective successors take office;•For approval of our 2021 employee stock purchase plan; and•For ratification of the appointment by our audit committee of KPMG LLP to serve as our independent registered public accounting firm for our fiscal year ending December 31, 2021.•For the election of the four nominees for Class B directors we name in this proxy statement;•For approval of our 2021 employee stock purchase plan; and•For ratification of the appointment by our audit committee of KPMG LLP to serve as our independent registered public accounting firm for our fiscal year ending December 31, 2021.20212023 Annual Meeting?20212023 Annual Meeting. If you are a stockholder of record, you may revoke your proxy by timely:-10-20212023 Annual Meeting live webcast.20212023 Annual Meeting or voting your shares, please call Jeffrey D. Miller, our executive vice president and chief financial officer, at 1-800-877-06001‑800-877-0600 or e-mail Mr. Miller at jeffmiller@donegalgroup.com.20212023 Annual Meeting webcast?20212023 Annual Meeting webcast, please call the technical support telephone number that will be shown on the website we use for our 20212023 Annual Meeting.20212023 Annual Meeting?20212023 Annual Meeting. The inspector of election will tally final voting results after the taking of the vote at our 20212023 Annual Meeting. We will publish the final voting results in a Current Report on Form 8-K, which we are required to file with the SEC.-11-seeking to achieve underwriting profitabilityevaluatingand individual risks, based on historic resultsutilizing data analytics and predictive analytics,modeling tools to inform risk selection and pricing decisions, managing our exposure toproperty exposures in catastrophe-prone areas analyzing the cost and availability of external reinsurance as well as the levels at which we purchase external reinsurance for the member companies of the Donegal Insurance Group and evaluating claims history on a regular basis to analyze the adequacy of ourthe underwriting guidelines and product pricing;pursuing profitable growth by organic expansion within the traditional operating territoriespricing of our insurance subsidiaries; through developing, maintaining and expanding quality independent insurance agency representation;enhancingrepresentation and executing state-specific strategies for growth or reduction of premiums, agency distribution and enhanced profit generation over the resultsnext several years;operationspolicies for the independent agents of our insurance subsidiaries through expense reductions and the utilizationproviding a consistently responsive level of technology to increase operating efficiencyclaims service, underwriting and effective communications with our agents, policyholderscustomer support; and potential policyholders;providing responsive and friendly customer and agent service to enable our insurance subsidiaries to attract new policyholders and retain existing policyholders;maintaining premium rates that are sufficient to result in the underwriting profitability of our insurance subsidiaries over the long-term, while maintaining high levels of retention for their existing books of business, and, at the same time, enhancing their ability to write new business; andthatto augment the organic growth of our insurance subsidiaries in existing markets and expand our business into adjacent geographic regions.-12-2021. Class A Common Stock Class B Common Stock Shares
Beneficially
Owned Percent
Owned Shares
Beneficially
Owned Percent
Owned 10,267,692 41.6% 4,654,339 83.5%
6300 Bee Cave Road
Austin, TX 78746 1,764,077 7.1 — —
1195 River Road
Marietta, PA 17547 1,390,568 5.4 186,603 3.3 Class A Common Stock Class B Common Stock 11,578,470 42.6 % 4,708,570 84.4 % 1,766,769 6.5 — — 1,516,848 5.6 — — (1) 12, 2021.10, 2023. Dimensional Fund Advisors LP disclaims beneficial ownership of these shares.(2) Mr. Nikolaus holds stock options exercisable at March2021 or that become exercisable within 60 days after March 1, 2021 to purchase 854,500 shares of our Class A common stock. This total also includes 166,369 shares of our Class A common stock and 3,938 shares of our Class B common stock that a Nikolaus family foundation, of which Mr. Nikolaus is a trustee, owned at the close of business on March 1, 2021.2023.2021.2023. The total shares shown for each person includes shares the person owned jointly, in whole or in part, with the person’s spouse, or owned individually by the person’s spouse and shares purchasable upon the exercise of stock options that were exercisable as of March 1, 20212023 or that become exercisable within 60 days after March 1, 2021.2023. The ownership of each director and named executive officer is less than 1% unless the table below indicates otherwise.-13- Class A Common
Stock Class B Common Stock Shares
Beneficially
Owned Percent
Owned Shares
Beneficially
Owned Percent
Owned 62,331 — — — 49,655 — — — 362,767 1.4 % — — 107,007 — — — 31,067 — — — 500 — — — 66,936 — — — 62,988 — — — 79,655 — 1,000 — 500 — — — 64,102 — — — 389,168 1.6 584 — 228,380 — — — 245,262 — — — 328,996 1.3 166 — 3,033,757 11.1 1,750 — Class A Common Stock Class B Common Stock Name of Individual or Identity of Group(1) Directors: Scott A. Berlucchi 41,397 — — — Dennis J. Bixenman 40,655 — — — Kevin G. Burke 247,747 — — — Jack L. Hess 121,138 — — — Barry C. Huber 29,867 — — — David C. King 6,000 — — — Kevin M. Kraft, Sr. 45,936 — — — Jon M. Mahan 41,988 — — — S. Trezevant Moore, Jr. 58,655 — 1,000 — Annette B. Szady 6,000 — — — Richard D. Wampler, II 43,102 — — — Named Executive Officers: Jeffrey D. Miller 278,655 1.0 % 584 — Jeffery T. Hay 15,340 — — — Sanjay Pandey 235,233 — — — Daniel J. Wagner 292,785 1.1 166 — All directors and executive officers as a group (23 persons) 2,168,414 7.5 1,750 — (1) 20212023 to purchase 55,50033,500 shares of our Class A common stock with the exception of the following directors:Mr. Bixenman holds currently exercisable stock options to purchase 43,500 shares of our Class A common stock;354,000236,000 shares of our Class A common stock;23,70015,500 shares of our Class A common stock; anddo not hold any currently exercisable stock options.options to purchase 4,500 shares of our Class A common stock.20212023 to purchase shares of our Class A common stock included in the table above as follows:-14-- 223,000 shares; Mr. Hay - Mr. Miller— 341,00012,666 shares;- Mr. Kelley— 195,000205,000 shares;Mr. Pandey— 238,000 shares; and- — 248,000205,000 shares.20212023 to purchase 2,697,8671,786,999 shares of our Class A common stock.20202022 and written representations we received with respect to 20202022 from our directors and executive officers, we believe that during 20202022 all of our directors and executive officers filed all required Section 16(a) reports on a timely basis, except that William A. Folmar made a late filing of one Form 4 report reporting an option exercise and sale of 5,437 shares of our Class A common stock, Mr. Hess made a late filing of one Form 4 report reporting a purchase of 2,000 shares of our Class A common stock and Christina M. Hoffman made a late filing of one Form 4 report reporting a sale of 257 shares of our Class A common stock.2020,2022, A.M. Best Company reported that the Donegal Insurance Group ranked as the 8785th largest property and casualty insurance group in the United States based on its net premiums written in 2019.2021. A.M. Best Company has assigned its financial strength rating of A (Excellent) to the Donegal Insurance Group. The Donegal Insurance Group has received an A.M. Best financial strength rating of A (Excellent) for the last 2830 successive years.-15-41.6%42.6% of our outstanding Class A common stock and 83.5%84.4% of our outstanding Class B common stock. Donegal Mutual therefore currently has the right to cast votes that constitute approximately 71% of the combined voting power of our outstanding common stock.a total of $14.0 million inno dividends to us during 2020. These dividends are one2022. We received $19.3 million from the issuance of Class A common stock, primarily related to our stock-based compensation plans, in 2022. This stock issuance was the sourcesprimary source of the funds we utilized to pay quarterly cash dividends to our stockholders.stockholders in 2022. We paid $17.0$20.5 million in dividends to our stockholders in 2020,2022, of which Donegal Mutual received $8.3$9.8 million based on its ownership of shares of our Class A common stock and shares of our Class B common stock on the respective record dates for the dividends we paid during 2020.-16-20212023 and March 2021,2023, both our board of directors and Donegal Mutual’s board of directors reaffirmed their respective belief that the Donegal Mutual-DGI structure and the inter-company relationships between Donegal Mutual and DGI and its insurance subsidiaries we describe in this proxy statement continue to be appropriate for the respective businesses and operations of Donegal Mutual and of DGI and our insurance subsidiaries. Our board of directors reaffirmed in March 20212023 that preservation of the relationship between Donegal Mutual and us and our status as a public company of which Donegal Mutual owns approximately 71% of the combined voting power of our Class A common stock and our Class B common stock is in the collective best interests of the constituencies that we and Donegal Mutual serve, including:-17-have varioushad a catastrophic reinsurance agreement with Donegal Mutual in place during 2022. The agreement provided coverage under any one catastrophic occurrence above $2.0 million, with a combined retention of $5.0 million for a catastrophic occurrence involving a combination of those companies, up to the amount Donegal Mutual and our insurance subsidiaries retain under catastrophe reinsurance agreements with Donegal Mutual that are renewed annually.unaffiliated reinsurers. The coordinating committee reviews thesethis reinsurance agreementsagreement annually so as to achieve relative parity between Donegal Mutual and our insurance subsidiaries between the reinsurance premiums Donegal Mutual charges our insurance subsidiaries for the reinsurance and the losses Donegal Mutual incurs under the reinsurance it provides to our insurance subsidiaries over a period of several years. We believe thethis reinsurance arrangementsarrangement between Donegal Mutual and our insurance subsidiaries areis no less favorable to our insurance subsidiaries than the terms and conditions of reinsurance available to our insurance subsidiaries from independent reinsurers. These reinsurance agreements include the following reinsurance agreements:Donegal Mutual and Peninsula have a quota-shareThe parties renewed this reinsurance agreement under which Peninsula transfers to Donegal Mutual 100% ofon similar terms for 2023, except that the premiums and losses related to the workers’ compensation product line Peninsula writes in certain states. Peninsula offers-18-workers’ compensation insurance in those states in order to provide the Donegal Insurance Group with an additional pricing tier in those states where any one insurance company may offer only a single pricing tier for workers’ compensation insurance;Donegal Mutual and MICO maintain a quota-share reinsurance agreement that transfers 25% of MICO’s business to Donegal Mutual. Because of the reinsurance pooling agreement between Donegal Mutual and Atlantic States, we receive an 80% allocation of the MICO business Donegal Mutual reinsures; andDonegal Mutual has a catastrophic reinsurance agreement with each of Atlantic States, MICO, Peninsula, and Southern that provides coverage under any one catastrophic occurrence above $2.0$3.0 million, with a combined retention of $5.0$6.0 million for a catastrophic occurrence involving a combination of those companies, up to the amount Donegal Mutual and our insurance subsidiaries retain under catastrophe reinsurance agreements with unaffiliated reinsurers.directallocated costs of services Donegal Mutual provides on their behalf and a proportionate share of certain costs Donegal Mutual allocates to them based on their percentageproportion of the total netdirect premiums written of the Donegal Insurance Group and other metrics. Allocated expenses from Donegal Mutual allocates costs relatedfor services it provided to its developmentAtlantic States and maintenance of information technology systems over the estimated useful life of those systems (generally five years) and charges a proportionate share ofthose costs to our other insurance companies based on their percentage of the total net premiums written of the Donegal Insurance Group. Donegal Mutual’s charges for these servicessubsidiaries totaled $153.9$199.2 million in 2020,2022, compared to $134.1$186.6 million in 2019.In 2020,These new systems are intended to provide various benefits to the member companies of the Donegal Mutual placedInsurance Group, including streamlined workflows and business processes, service enhancements for their agents and policyholders, opportunities to implement new product models and innovative business solutions, greater utilization of data analytics and operational efficiencies. Our insurance subsidiaries began to issue workers’ compensation policies from the new systems following the first release ofin 2020 and began to issue personal lines policies from the new systems into servicefollowing the second release in 2021. In 2023 and over the next several years, Donegal Mutual expects to implement new systems for the remaining lines of business that the Donegal Insurance Group offers currently, including three commercial lines of business with enhanced straight-through-processing capabilities beginning in the first half of 2023. Donegal Mutual allocated $2.8$7.6 million and $5.1 million of related costs to our insurance subsidiaries.subsidiaries in 2022 and 2021, respectively. Donegal Mutual will allocate to our insurance subsidiaries their proportionate share of the remaining $19.2$25.7 million of its costs for the first releaseand second releases over the next fivefour years.20202022 Annual Report for further information about the inter-company transactions between Donegal Mutual and our insurance subsidiaries.-19--20-20212023 in the ordinary course of our business and the business of our insurance subsidiaries and in the ordinary course of the business of Donegal Mutual.February 1, 2021,January 31, 2023, the coordinating committee met and determined that the proposed terms of these reinsurance agreements for 20202023 were fair and equitable to our insurance subsidiaries and our stockholders and fair and equitable to Donegal Mutual and its policyholders. Accordingly, the coordinating committee unanimously approved the continuation of the terms of such agreements and transactions, with non-material adjustments, through the next scheduled annual review during the first two months of 2022.2020.2022. Certain biographical information about Messrs. Huber and Wampler appears later in this proxy statement under the caption “Election of Directors.”2020.2022. Certain biographical information about Messrs. Brubaker and Greenya is as follows:63,65, has been a director of Donegal Mutual since 2016. Mr. Brubaker is a partner of Principled Strategies, a business consultancy in Lititz, Pennsylvania, since 2018. Mr. Brubaker served as chief executive officer of Blackford Ventures, LLC, a private equity and real estate investment firm in Lancaster, Pennsylvania, from 2015 to 2018. From 2006 through 2014, Mr. Brubaker served as a Pennsylvania State Senator. Mr. Brubaker beneficially owns 17,56521,013 shares of our Class A common stock and does not own beneficially any shares of our Class B common stock. As director compensation in 2020,2022, Donegal Mutual paid Mr. Brubaker cash fees of $81,000$91,000 and granted him a restricted stock award of 500 shares of our Class A common stock with a value at the time of issuance in January 20202022 of $7,410.$7,145. Mr. Brubaker received $500 in cash fees as compensation from Donegal Mutual for the meeting of the coordinating committee he attended as one of Donegal Mutual’s members on the coordinating committee during 20202022 and stock options to purchase 4,500 shares of our Class A common stock at an exercise price of $14.43$14.09 per share.76,78, has been a director of Donegal Mutual since 2006. Mr. Greenya served as Senior Vice President and Chief Underwriting Officer of Donegal Mutual and us from 2005 until his retirement in March 2020. Mr. Greenya served in various other positions for Donegal Mutual from 1971 to 2005. Mr. Greenya beneficially owns 304,715134,569 shares of our Class A common stock and owns 820 shares of our Class B common stock. As director compensation in 2020,2022, Donegal Mutual paid Mr. Greenya cash fees of $81,000$91,000 and granted him a restricted stock award of 500 shares of our Class A common stock with a value at the time of issuance in January 20202022 of $7,410.$7,145. Mr. Greenya received $500 in cash fees as compensation from Donegal Mutual for the meeting of the coordinating committee he attended as one of Donegal Mutual’s members on the coordinating committee during 20202022 and stock options to purchase 4,500 shares of our Class A common stock at an exercise price of $14.43$14.09 per share.-21-1213 of whom are also officers of DGI. The purpose of the risk management committee is to assess and monitor the major strategic, operational, regulatory, informational and external risks that affect the business the Donegal Insurance Group transacts and the internal and external resources of the Donegal Insurance Group for assessing and controlling such risks. The Donegal Insurance Group’s risk management committee meets quarterly, and annually evaluates its performance of its responsibilities. The risk management committee submits reports to our board of directors no less frequently than quarterly.us;us, including providing a relative ranking of the strategic, operational, regulatory, informational and external risks that affect the business the Donegal Insurance Group transacts; and-22-2021,2023, our board of directors has fixed the number of members of our board of directors at 11. Our board of directors consists of three classes, with the three-year terms of one of the classes expiring at three successive annual meetings and upon the taking of office by each member of the newly elected class of directors.-23-2020,2022, each of our directors attended 75% or more of the total number of meetings of our board of directors and of the meetings of the committees of our board of directors on which that director served.2020,2022, held in 20202022 and the attendance of the members of those committees at the meetings of the committees on which they served. Messrs. Berlucchi and Bixenman and Mrs. Szady did not serve as a member of any of the committees of our board of directors during 2020.2022. Mr. King serves as a member of the special committee which did not meet during 2020.-24- Our Board Committees Executive Audit Nominating Compensation 10 8 1 4 10 — — — 10 8 — 4 — 8 — — 10 — 1 4 — 8 1 — — — — 4 — 8 1 4 Our Board Committees Executive Audit Nominating Compensation Number of Meetings Held in 2022 12 8 1 3 Number of Meetings Attended in 2022 by Members of the Committees: Kevin G. Burke 12 — — — Jack L. Hess 12 8 1 3 Barry C. Huber — 8 — — Kevin M. Kraft, Sr. 12 — 1 3 Jon M. Mahan — 8 1 — S. Trezevant Moore, Jr. — — — 3 Richard D. Wampler, II — 8 1 3 -25-is a certified public accountanthas extensive accounting experience and each constitutes a designated financial expert member of our audit committee.-26-2020.-27-theour insurance subsidiaries because those transactions require the prior approval of our coordinating committee. See “The Relationship of Donegal Mutual and DGI - The Coordinating Committee” elsewhere in this proxy statement.financial services, including loans, brokerage, banking, insurance investment advisory or asset management services and other financial services we provide to a related person, if we provide the services in the ordinary course of business on substantially the same terms as those prevailing for comparable services we provide to unrelated persons and comply with applicable law, including the Sarbanes-Oxley Act of 2002 and Federal Reserve Board Regulation O.-28-Our Response to the COVID-19 PandemicAlong with our management, our board of directors quickly identified the unprecedented nature of the COVID-19 pandemic and its potential to impact the global economic environment, the industry in which we operate and the way that we conduct our business. In response to the quickly changing and high-impact nature of the COVID-19 pandemic, our board of directors has been actively monitoring and overseeing our management’s response to this crisis, which included transitioning of-29-approximately 90% of our employees to a remote working environment, a comprehensive review of our operations and personnel safety guidelines for essential employees working in our offices, strengthening our liquidity resources at the outset of the pandemic, proactive communications with our employees and independent agents to ensure continuity of our operations and customer service levels and deferral of payment due dates and other accommodations for our customers. Our management and the board of directors will continue to oversee our response and risk assessment relating to the COVID-19 pandemic and the changing nature of the business impacts in a manner that they believe is in the best interests of our stockholders, employees, independent agents and other stakeholders.9, 2021,17, 2023, there are no material proceedings to which any of our directors, executive officers, affiliates, owners of more than five percent of our Class A common stock and Class B common stock, or any associate of any of the foregoing (i) is a party adverse to us or any of our insurance subsidiaries or (ii) has a material interest adverse to us or any of our insurance subsidiaries.-30-20202022 compensation program for the following named executive officers:Richard G. Kelley,20192022 that set forth several primary strategies:strategies, including the following:Growing profitably in commercial lines;Improvingfinancial performance;Leveraging technologyoperations and processes to transform our business;Strategically modernizingbusiness in order to achieve operational excellenceagents and policyholders.Competing effectively to enhance our market position.2020.20202022 and 2019,2021, and the prices of our Class A common stock and our Class B common stock at December 31, 2020,2022, compared to the same data at December 31, 2019.2021. For further information, we refer you to the financial statements we include in our 20202022 Annual Report. At or For the Year Ended December 31, 2020 2019 Increase/
Decrease $ 777.8 million $ 812.5 million -4.3% 52.8 million 47.2 million 12.0 14.07 14.82 -5.1 11.81 12.75 -7.4 -31- At or For the Year Ended December 31, 2022 2021 Increase/ Decrease Total revenues $848.2 million $816.5 million 3.9 % Net (loss) income (2.0 million) 25.3 million NM Class A common stock price 14.20 14.29 -0.6 Class B common stock price 16.27 13.47 20.8 20202022 that averaged 6.2%4.2%, which our compensation committee considered reasonable based on publicly available information from our peer group and based on the fact that our named executive officers received no increases in their base salaries for 2019 due to our financial performance for 2018.considerconsidered our peer group.group at that time. The names of those insurance companies are: Cincinnati Financial Corporation, EMC Insurance Group Inc., The Hanover Insurance Group, Inc., Horace Mann Educators Corporation, RLI Corp., Selective Insurance Group, Inc., State Auto Financial Corporation and United Fire Group, Inc.20202022 consisted of threefour principal elements:underwriting profitachievement of certain performance objectives pursuant to our annual cash incentive bonus plan for our immediately preceding completed fiscal year;$1,811,000$684,000 to our named executive officers in respect of 2020,2022, compared to $1,245,000approximately $649,000 in respect of 2019. We attribute the increase primarily2021. Our named executive officers earned incentive bonuses for 2022 only with respect to the fact thatachievement of the performance objectives for the commercial lines direct premium growth and personal lines direct premium growth for the Donegal Insurance Group set forth in our cash incentive bonus plan. Our named executive officers received no incentive bonus related to our underwriting results for 2022.were substantially more favorable than2021 and 2022. We paid incentive bonuses under our underwriting results for 2019.17, 2020,15, 2022, we granted stock options to a number of employees of Donegal Mutual and our affiliates, including our named executive officers, and we also granted stock options to our directors and the directors of Donegal Mutual and our affiliates. We granted each of our directors, other than Mr. Burke, an option to purchase 4,500 shares of our Class A common stock exercisable for five years that vests in three equal annual cumulative installments commencing on July 1, 2021.2023. Each stock option is exercisable at a price of $14.43$14.09 per share, which price represented the closing price of our Class A common stock on the day before the date of grant.-32-2020:2022: Number of
Shares
PurchasableKevin G. Burke 27,000Jeffrey D. Miller 24,000 Richard G. Kelley 21,000 Sanjay Pandey 21,00018,000 18,000 Daniel J. Wagner 21,00018,000 -33- 20202022 ActionsBase Salary Cash increase for 20202022 of an average of 6.2%4.2% to reflect salary increases within our peer group ourthe commercial lines growth, personal lines growth and underwriting results for the yearCompensation committee reviews and recommends the allocation of the bonus pool amongDonegal Insurance Group and our named executive officers basedoperating return on performance against key business priorities and performance of their respective business units individual performance goalsFocuses entire organization on achieving key business objectives 20202022 under a formula based on our commercial lines growth, personal lines growth, underwriting results and operating return on equity for 2020-34-Annual Compensation Key Factors Purpose 2020 ActionsLong-Term Incentive Plan (Cash Incentive Award) We determined cash bonuses under a formula based on the average adjusted statutory combined ratio for the Donegal Insurance Group for the three-year period that included calendar years 2020, 2021 and 2022 Key Factors Purpose 2022 Actions Stock options that are exercisable for five years and vest in three equal annual installments Stock options granted in 20202022 that are exercisable for five years at $14.43$14.09 per share and vest in three equal annual installments commencing on July 1, 2021202320202022 compensation for our officers, including our named executive officers, is fair and reasonable. We implemented our compensation programs to balance risk and reward in our overall business strategy. Our compensation programs tie a significant percentage of the total compensation of our officers, including our named executive officers, directly to our objectiveobjectives of attaining an underwriting profit each year.achieving sustained excellent financial performance and capitalizing on opportunities to grow profitably. Accordingly, we base our annual incentive compensation awards on premium growth rates, underwriting results and our operating return on equity. Our long-term executive incentive plan is likewise focused on our underwriting results.profitability over an extended period of time. As a result, we believe our named executive officers evaluate carefully the risks we underwrite because a reduction inare incentivized to develop and implement strategies and action plans to grow our business and achieve sustained underwriting profitability would adversely affect the annual incentive bonus compensation of our named executive officers.profitability. Finally, our incentive compensation programs for our named executive officers do not guarantee compensation to our named executive officers.2018 when we had anour underwriting loss,results or operating return on equity for 2022, and our named executive officers will only realize a gain from the stock options we granted to them as compensation in 20202022 if the price of our Class A common stock increases above the exercise price of the options subsequently to the vesting date of the options.-35--36- Annual Retainer $ 87,03597,100 $ 80,00090,000 in cash and an annual restricted stock award of 500 shares of Class A common stock in 2021on the first business day of 2023 with an estimated value of $7,035$7,100 based on the closing price of our Class A common stock on December 31, 20202022 Additional retainer amount for each board meeting attended other than four regularin excess of five meetings per year $500 Cash Additional retainer amount for each compensation committee meeting and each executive committee meeting attended other than meetings of the audit committee, the coordinating committee and the special committee $300 Additional retainer amount for each coordinating committee meeting, each nominating committee meeting and each special committee meeting attended $500 Type of Compensation Amount Form of Payment $750 When we grant options to our executive officers, we also typically grant options to our directors that are exercisable for five years at the closing market price of our Class A common stock on the day before the date of grant and that vest in three equal annual cumulative installments Option to purchase 4,500 shares of our Class A common stock at $14.43$14.09 per share valued at $5,175$6,660 on the December 17, 202015, 2022 date of grant -37-17, 2020,15, 2022, we granted each of our directors, and each director of Donegal Mutual who was not also a member of our board of directors, a non-qualified stock option to purchase 4,500 shares of our Class A common stock at an exercise price of $14.43$14.09 per share. Each option is exercisable until December 17, 202515, 2027 and vests in three equal annual cumulative installments commencing on July 1, 2021.2020. Fees Earned
or Paid in Cash
($) Stock
Awards
($) Option
Awards
($) Total
($) 82,200 7,410 5,175 94,785 86,250 7,410 5,175 98,835 91,950 7,410 5,175 104,535 87,500 7,410 5,175 100,085 80,500 — 5,175 85,675 87,950 7,410 5,175 100,535 87,500 7,410 5,175 100,085 82,200 7,410 5,175 94,785 83,500 — 5,175 88,675 90,900 7,410 5,175 103,485 -38-Name Scott A. Berlucchi 98,600 7,145 6,660 112,405 Dennis J. Bixenman 101,700 7,145 6,660 115,505 Jack L. Hess 109,800 7,145 6,660 123,605 Barry C. Huber 96,500 7,145 6,660 110,305 David C. King 90,000 7,145 6,660 103,805 Kevin M. Kraft, Sr. 101,900 7,145 6,660 115,705 Jon M. Mahan 97,000 7,145 6,660 110,805 S. Trezevant Moore, Jr. 90,900 7,145 6,660 104,705 Annette B. Szady 93,500 7,145 6,660 107,305 Richard D. Wampler, II 99,600 7,145 6,660 113,405 2020,2022, excluding the awards our president and chief executive officer, Mr. Burke, held. We report those awards elsewhere in this proxy statement. Option Awards Stock Awards Option
Exercise
Price
($) Option
Expiration
Date Number of
Shares or
Units of
Stock That
Have Not
Vested
(#) Market
Value of
Shares or
Units of
Stock That
Have Not
Vested
($) (#)
Exercisable (#)
Unexercisable 12,000 — 12.50 7/27/2021 500 7,035 8,500 — 14.50 12/20/2022 12,000 — 15.90 12/19/2023 8,000 — 15.80 12/18/2024 6,000 — 16.48 12/15/2021 4,500 — 17.60 12/21/2022 3,000 1,500 13.69 12/20/2023 1,500 3,000 14.98 12/19/2024 — 4,500 14.43 12/17/2025 8,500 — 14.50 12/20/2022 500 7,035 12,000 — 15.90 12/19/2023 8,000 — 15.80 12/18/2024 6,000 — 16.48 12/15/2021 4,500 — 17.60 12/21/2022 3,000 1,500 13.69 12/20/2023 1,500 3,000 14.98 12/19/2024 — 4,500 14.43 12/17/2025 12,000 — 12.50 7/27/2021 500 7,035 8,500 — 14.50 12/20/2022 12,000 — 15.90 12/19/2023 8,000 — 15.80 12/18/2024 6,000 — 16.48 12/15/2021 4,500 — 17.60 12/21/2022 3,000 1,500 13.69 12/20/2023 1,500 3,000 14.98 12/19/2024 — 4,500 14.43 12/17/2025 2,200 — 14.50 12/20/2022 500 7,035 4,000 — 15.90 12/19/2023 2,500 — 15.80 12/18/2024 6,000 — 16.48 12/15/2021 4,500 — 17.60 12/21/2022 3,000 1,500 13.69 12/20/2023 1,500 3,000 14.98 12/19/2024 — 4,500 14.43 12/17/2025 — 4,500 14.43 12/17/2025 — — 12,000 — 12.50 7/27/2021 500 7,035 8,500 — 14.50 12/20/2022 12,000 — 15.90 12/19/2023 -39- Option Awards Stock Awards Name Scott A. Berlucchi 12,000 — 15.90 12/19/2023 500 7,100 8,000 — 15.80 12/18/2024 4,500 — 13.69 12/20/2023 4,500 — 14.98 12/19/2024 3,000 1,500 14.43 12/17/2025 1,500 3,000 14.39 12/16/2026 — 4,500 14.09 12/15/2027 Dennis J. Bixenman 12,000 — 15.90 12/19/2023 500 7,100 8,000 — 15.80 12/18/2024 4,500 — 13.69 12/20/2023 4,500 — 14.98 12/19/2024 3,000 1,500 14.43 12/17/2025 1,500 3,000 14.39 12/16/2026 — 4,500 14.09 12/15/2027 Jack L. Hess 12,000 — 15.90 12/19/2023 500 7,100 8,000 — 15.80 12/18/2024 4,500 — 13.69 12/20/2023 4,500 — 14.98 12/19/2024 3,000 1,500 14.43 12/17/2025 1,500 3,000 14.39 12/16/2026 — 4,500 14.09 12/15/2027 Barry C. Huber 4,000 — 15.90 12/19/2023 500 7,100 2,500 — 15.80 12/18/2024 4,500 — 14.98 12/19/2024 3,000 1,500 14.43 12/17/2025 1,500 3,000 14.39 12/16/2026 — 4,500 14.09 12/15/2027 David C. King 3,000 1,500 14.43 12/17/2025 500 7,100 1,500 3,000 14.39 12/16/2026 — 4,500 14.09 12/15/2027 Option Awards Stock Awards Option
Exercise
Price
($) Option
Expiration
Date Number of
Shares or
Units of
Stock That
Have Not
Vested
(#) Market
Value of
Shares or
Units of
Stock That
Have Not
Vested
($) (#)
Exercisable (#)
Unexercisable 8,000 — 15.80 12/18/2024 6,000 — 16.48 12/15/2021 4,500 — 17.60 12/21/2022 3,000 1,500 13.69 12/20/2023 1,500 3,000 14.98 12/19/2024 — 4,500 14.43 12/17/2025 12,000 — 12.50 7/27/2021 500 7,035 8,500 — 14.50 12/20/2022 12,000 — 15.90 12/19/2023 8,000 — 15.80 12/18/2024 6,000 — 16.48 12/15/2021 4,500 — 17.60 12/21/2022 3,000 1,500 13.69 12/20/2023 1,500 3,000 14.98 12/19/2024 — 4,500 14.43 12/17/2025 12,000 — 12.50 7/27/2021 500 7,035 8,500 — 14.50 12/20/2022 12,000 — 15.90 12/19/2023 8,000 — 15.80 12/18/2024 6,000 — 16.48 12/15/2021 4,500 — 17.60 12/21/2022 3,000 1,500 13.69 12/20/2023 1,500 3,000 14.98 12/19/2024 — 4,500 14.43 12/17/2025 — 4,500 14.43 12/17/2025 — — 12,000 — 12.50 7/27/2021 500 7,035 8,500 — 14.50 12/20/2022 12,000 — 15.90 12/19/2023 8,000 — 15.80 12/18/2024 6,000 — 16.48 12/15/2021 4,500 — 17.60 12/21/2022 3,000 1,500 13.69 12/20/2023 1,500 3,000 14.98 12/19/2024 — 4,500 14.43 12/17/2025 Option Awards Stock Awards Name Kevin M. Kraft, Sr. 12,000 — 15.90 12/19/2023 500 7,100 8,000 — 15.80 12/18/2024 4,500 — 13.69 12/20/2023 4,500 — 14.98 12/19/2024 3,000 1,500 14.43 12/17/2025 1,500 3,000 14.39 12/16/2026 — 4,500 14.09 12/15/2027 Jon M. Mahan 12,000 — 15.90 12/19/2023 500 7,100 8,000 — 15.80 12/18/2024 4,500 — 13.69 12/20/2023 4,500 — 14.98 12/19/2024 3,000 1,500 14.43 12/17/2025 1,500 3,000 14.39 12/16/2026 — 4,500 14.09 12/15/2027 S. Trezevant Moore, Jr. 12,000 — 15.90 12/19/2023 500 7,100 8,000 — 15.80 12/18/2024 4,500 — 13.69 12/20/2023 4,500 — 14.98 12/19/2024 3,000 1,500 14.43 12/17/2025 1,500 3,000 14.39 12/16/2026 — 4,500 14.09 12/15/2027 Annette B. Szady 3,000 1,500 14.43 12/17/2025 500 7,100 1,500 3,000 14.39 12/16/2026 — 4,500 14.09 12/15/2027 Richard D. Wampler, II 12,000 — 15.90 12/19/2023 500 7,100 8,000 — 15.80 12/18/2024 4,500 — 13.69 12/20/2023 4,500 — 14.98 12/19/2024 3,000 1,500 14.43 12/17/2025 1,500 3,000 14.39 12/16/2026 — 4,500 14.09 12/15/2027 -40-1920 years or more.more or have extensive insurance industry experience.that resulted in significant improvement inincluding continued growth within our operating performance in 2020 compared to 2019commercial lines segment and 9.3% growth inwithin our book value per share at December 31, 2020 compared to December 31, 2019.personal lines segment following the successful launch of new products, during 2022.salary,salary;results-basedresults as a significant component of our bonus plans and our performance-based equity ownership programs createcreates incentives that result in the creation of long-term stockholder value as well as creating incentives for our executive officers, including our named-41-ourand operating return on equity and our growth in premiums written.equity. Our compensation committee sets limits on these bonus payments that encourage success without encouraging excessive risk-taking or short-term results.20202022 appropriately reflect the efforts of those named executive officers in each such officer’s primary areas of responsibility and provides our named executive officers with incentives designed to improve our financial and operating performance. Our compensation committee also evaluates the achievement by our named executive officers of our overall corporate objectives and the contribution of each of our named executive officers to those achievements.Agreements; Consulting AgreementOn October 1, 2020, bothAgreements with Our Named Executive Officers revised employment agreements with our named executive officers that superseded all prior such agreements.we describe below. Donegal Mutual and we have also entered into employment agreements containing generally similar provisions with our other executive officers.-42-Employment Agreements with Our Named Executive Officers(ending September 30, 2023 for Messrs. Pandey and Wagner, three years ending December 31, 2024 for Mr. Hay and forty-two months ending March 31, 2024 for Messrs. Burke and Miller),Miller, provided that the term of each employment agreement will automatically extend for one additional year following the initial term unless the named executive officer or the respective boards of directors of Donegal Mutual or us provide not less than 60 days advance notice that the employment agreement will expire at the end of the then-current term.death, indemnification and confidentiality.death.Consulting Agreement with Donald H. NikolausUpon the retirementDonegal Mutual and we have agreed to retain Mr. Nikolaus to provide consulting services to us and our respective boards of directors in connection with our general operations, our merger and acquisition activities, and such other projects and assignments as to which Mr. Nikolaus, Donegal Mutual and we mutually agree from time to time.Mr. Nikolaus’ status under the consulting agreement is that of an employee of Donegal Mutual.The consulting agreement provides that Mr. Nikolaus receives all employee benefits we provide to our senior executive officers and such benefits as become fully vested while Mr. Nikolaus remains an employee of Donegal Mutual.Under the consulting agreement, Donegal Mutual and we pay Mr. Nikolaus aggregate annual compensation of $600,000.The consulting agreement includes customary provisions relating to disability, indemnification, confidentiality and non-competition.The consulting agreement includes certain rights for Mr. Nikolaus to receive certain payments upon termination of the consulting agreement.Upon termination of his consulting agreement, Mr. Nikolaus also has the right to receive payments under a April 2014 supplemental executive retirement agreement with Donegal Mutual, under which we have no obligations.Change of Control-44--45-Mutual’sMutual's first regularly scheduled payroll date occurring after the date of the termination of the employment of that named executive officer;2020.2022. We also discuss below the basis upon which we calculated the payments and benefits. Except as we note below, these amounts are the incremental or enhanced amounts that a named executive officer would receive that are greater than those that we would have provided to employees generally under the same circumstances. The amounts we disclose below are estimates only and are based on various assumptions we discuss below. The actual amounts we would provide can be determined only at the time that an employment termination event occurs.20202022 under the terms of various plans and agreements unrelated to the employment agreements, regardless of a termination of employment;-46-20202022 due to each termination event, including termination within twelve months after a Change-of-Control, as the employment agreements contemplate; and$14.07$14.20 per share, the last reported price of our Class A common stock on the NASDAQ Global Market System on December 31, 2020.2022. Severance
Benefits
($) Stock
Options
($) Other
Benefits
($) Total
($) — 129,150 — 129,150 — 129,150 — 129,150 2,327,500 129,150 53,730 2,510,380 2,327,500 129,150 53,730 2,510,380 — 127,883 — 127,883 — 127,883 — 127,883 1,960,000 127,883 42,048 2,129,931 1,960,000 127,883 42,048 2,129,931 — 8,867 — 8,867 — 8,867 — 8,867 1,275,000 8,867 42,195 1,326,062 1,275,000 8,867 42,195 1,326,062 — 8,867 — 8,867 — 8,867 — 8,867 1,275,000 8,867 53,730 1,337,597 1,275,000 8,867 53,730 1,337,597 — 8,867 — 8,867 — 8,867 — 8,867 1,215,000 8,867 42,750 1,266,617 1,215,000 8,867 42,750 1,266,617 Name Event Kevin G. Burke — 22,950 — 22,950 Involuntary-for-Cause Termination — 22,950 — 22,950 Involuntary Termination 2,537,500 22,950 53,331 2,613,781 Change-in-Control 2,537,500 22,950 53,331 2,613,781 Jeffrey D. Miller — 20,400 — 20,400 Involuntary-for-Cause Termination — 20,400 — 20,400 Involuntary Termination 2,163,000 20,400 47,004 2,230,404 Change-in-Control 2,163,000 20,400 47,004 2,230,404 Jeffery T. Hay — 867 — 867 Involuntary-for-Cause Termination — 867 — 867 Involuntary Termination 1,326,000 867 59,694 1,386,561 Change-in-Control 1,326,000 867 59,694 1,386,561 Sanjay Pandey — 17,850 — 17,850 — 17,850 — 17,850 Involuntary Termination 1,404,000 17,850 53,331 1,475,181 Change-in-Control 1,404,000 17,850 53,331 1,475,181 Daniel J. Wagner — 17,850 — 17,850 Involuntary-for-Cause Termination — 17,850 — 17,850 Involuntary Termination 1,296,000 17,850 47,076 1,360,926 1,296,000 17,850 47,076 1,360,926 (1) -47-2020,2022, we had a cash incentive bonus plan for our executive officers, including our named executive officers. We determined the amount, if any, available for the award of these bonuses based on the achievement of financial performance objectives of the Donegal Insurance Group and us.20202022 and to provide a significant financial incentive for our executive officers to achieve those objectives.and weighting percentages and actual results for 2020: Performance Objectives Weighting Threshold Level 1 Level 2 Target Level 3 Level 4 Maximum 25% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0% 15% -3.0% -2.0% -1.0% — 1.0% 2.0% 3.0% 40% 100.0% 99.0% 98.0% 97.0% 96.0% 95.0% 94.0% 20% 7.5% 8.0% 8.5% 9.0% 9.5% 10.0% 10.5% Weighting Performance Objectives Threshold Level 1 Level 2 Target Level 3 Level 4 Maximum Commercial Lines Premium Growth 15 % 0.5 % 1.5 % 2.5 % 3.5 % 4.5 % 5.5 % 6.5 % 3.8 % Personal Lines Premium Growth 15 % -1.5 % -0.5 % 0.5 % 1.5 % 2.5 % 3.5 % 4.5 % 5.2 % Adjusted Statutory Combined Ratio 50 % 100.0 % 99.0 % 98.0 % 97.0 % 96.0 % 95.0 % 94.0 % 101.1 % Operating Return on Equity 20 % 7.5 % 8.0 % 8.5 % 9.0 % 9.5 % 10.0 % 10.5 % 1.2 % -48- Level 1 Level 2 Target Level 3 Level 4 Maximum 50.0 % 60.0 % 70.0 % 80.0 % 90.0 % 100.0 % Percentage of Base Salary Threshold Level 1 Level 2 Target Level 3 Level 4 Maximum 40.0% 50.0% 60.0% 70.0% 80.0% 90.0 100.0% 20212023 for our executive officers, including our named executive officers.-49-We will determine the amount, if any, available for the award of these bonuses based on the achievement of financial performance objectives of the Donegal Insurance Group and us over a three-year period that includes the calendar years of 2020, 2021 and 2022. The Compensation Committee reduced the stock option grants our named executive officers received in 2020, 2021 and 2022 compared to stock option grants they received in 2019.will useused the average adjusted statutory combined ratio for the Donegal Insurance Group, as we define in “Our Cash Incentive Bonus Plan for 2020 - Definition of Performance Measures,” for the three calendar years to determine the amount of performance-based cash bonuses under the long-term executive incentive plan for each named executive officer. Potential cash bonuses for each of our named executive officers rangeranged from zero to 85% of their base salary, payableas shown in the following table.Adjusted Statutory Performance Objectives Combined Ratio Under 94% 94-94.99% 95-95.99% 96-96.99% 97-97.99% 98-98.99% 99-99.99% Over 100% Percentage of Base Salary 85% 70% 60% 50% 40% 25% 15% None 2023.2023 based on the 99.2% average adjusted statutory combined ratio for the Donegal Insurance Group for the three-year period. Due to the commencement of his employment in January 2021, Mr. Hay earned a bonus in the prorated amount of 10% of his 2022 base salary. The amounts of the cash bonuses are set forth under the Long-Term Cash Bonus column under “Summary Compensation Table.”20222025 in order to receive a bonus under the long-term executive incentive plan.-50-2020, 20192022, 2021 and 20182020 for services rendered in all capacities to our chief executive officer, our chief financial officer and our three other most highly compensated executive officers. We refer to these officers, whom we name in the table below, as our named executive officers. We maintain employment agreements with all of our executive officers, including our named executive officers. We refer you to “Employment Agreements”Agreements with Our Named Executive Officers” elsewhere in this proxy statement for a description of those employment agreements. We do not provide any of our named executive officers with restricted stock awards, non-equity incentive plan compensation, deferred compensation or pension benefits, with the exception of two of our named executive officers who receive an annual restricted stock award of 500 shares of our Class A common stock as part of their compensation for serving as members of our board of directors or Donegal Mutual’s board of directors.-51-2020,2022, their salaries accounted for 53.0%64.1% of their total compensation in 20202022 and their performance-based compensation accounted for 38.7%25.4% of their total compensation in 2020. Year Salary($) Cash
Bonus
($)(1) Stock
Awards
($) Option
Awards
($)(2) All
Other
Compen-
sation
($)(3) Total
($) 2020 665,000 485,718 7,410 31,050 101,100 1,290,278 2019 630,000 250,000 6,823 51,750 95,800 1,034,373 2018 630,000 — 8,650 74,700 97,475 810,825 2020 560,000 408,846 — 27,600 97,600 1,094,046 2019 525,000 225,000 — 46,000 16,700 812,700 2018 525,000 — — 66,400 16,375 607,775 2020 425,000 310,173 — 24,150 17,100 776,423 2019 395,000 210,000 — 40,250 16,700 661,950 2018 395,000 — — 58,100 12,426 465,526 2020 425,000 310,173 — 24,150 17,100 776,423 2019 395,000 200,000 — 40,250 16,700 651,950 2018 395,000 — — 58,100 16,375 469,475 2020 405,000 296,019 — 24,150 17,100 742,269 2019 390,000 180,000 — 40,250 16,700 626,950 2018 390,000 — — 58,100 16,375 464,475 Year Salary($) Kevin G. Burke, 2022 725,000 184,728 108,663 7,145 35,520 119,375 1,180,431 President and Chief Executive Officer 2021 695,000 173,635 — 7,035 29,040 112,850 1,017,560 2020 665,000 485,718 — 7,410 31,050 101,100 1,290,278 Jeffrey D. Miller, 2022 618,000 157,443 92,614 7,145 31,080 108,575 1,014,857 Executive Vice President and Chief Financial Officer 2021 588,000 146,892 — 7,035 25,410 103,850 871,187 2020 Jeffery T. Hay, 2022 442,000 112,627 44,167 — 26,640 13,815 639,249 Senior Vice President(5) 2021 425,000 104,942 — — 21,780 113,125 664,847 Sanjay Pandey, 2022 468,000 119,252 70,148 — 26,640 18,075 702,115 Senior Vice President and Chief Information Officer 2021 450,000 112,404 — — 21,780 17,350 601,534 2020 Daniel J. Wagner 2022 432,000 110,101 64,765 — 26,640 18,034 651,540 Senior Vice President and Treasurer 2021 420,000 104,942 — — 21,780 17,350 564,072 2020 405,000 296,019 — — 24,150 17,100 742,269 (1) (2) (3) 20202022 Annual Report for information on the accounting treatment and calculation of the grant date fair value of these stock options.(3)(4)$84,000$101,300 and $80,500,$90,500, respectively, and a matching 401(k) plan contribution of $17,100$18,075 paid during 2020.2022. Mr. Burke serves on the our board of directors and the board of directors of Donegal Mutual. Mr. Miller serves on the board of directors of Donegal Mutual. In the case of Messrs. Kelley,Hay, Pandey and Wagner, the totals shown include arepresent matching 401(k) plan contribution of $17,100contributions paid during 2020.2022.-52-(5) 2020,2022, we granted non-qualified options to purchase shares of our Class A common stock at an exercise price of $14.43$14.09 per share to our named executive officers as set forth in the following table. At the close of business on the day before the date on which we granted the options, the closing market price per share of our Class A common stock was $14.43. Grant Date Number of
Securities
Underlying
Options(#) Exercise or Base
Price of Option
Awards($) Grant Date
Fair Value of
Option
Awards($) 12/17/2020 27,000 14.43 31,050 12/17/2020 24,000 14.43 27,600 12/17/2020 21,000 14.43 24,150 12/17/2020 21,000 14.43 24,150 12/17/2020 21,000 14.43 24,150 Name Grant Date Kevin G. Burke 12/15/2022 24,000 14.09 35,520 Jeffrey D. Miller 12/15/2022 21,000 14.09 31,080 Jeffery T. Hay 12/15/2022 18,000 14.09 26,640 Sanjay Pandey 12/15/2022 18,000 14.09 26,640 Daniel J. Wagner 12/15/2022 18,000 14.09 26,640 2020,2022, we had reserved 2,708,7001,211,752 shares of our Class A common stock for future grants under our equity incentive plan for employees and 338,500191,000 shares of our Class A common stock for future grants under our equity incentive plan for directors. If any shares we have reserved for issuance upon the exercise of an option are not issued for any reason, we may again grant options to purchase those shares.-53-2020.2022. The first fourtwo options listed for each named executive officer other than Mr. Hay represent options with a ten-year term and the remaining options listed for each named executive represent options with a five-year term.-54- Option Awards Stock Awards Name Kevin G. Burke 75,000 — 15.90 12/19/2023 500 7,100 45,000 — 15.80 12/18/2024 45,000 — 13.69 12/20/2023 45,000 — 14.98 12/19/2024 18,000 9,000 14.43 12/17/2025 8,000 16,000 14.39 12/16/2026 — 24,000 14.09 12/15/2027 Jeffrey D. Miller 75,000 — 15.90 12/19/2023 500 7,100 45,000 — 15.80 12/18/2024 40,000 — 13.69 12/20/2023 40,000 — 14.98 12/19/2024 16,000 8,000 14.43 12/17/2025 7,000 14,000 14.39 12/16/2026 — 21,000 14.09 12/15/2027 Jeffery T. Hay 6,666 3,334 14.07 1/4/2026 — — 6,000 12,000 14.39 12/16/2026 — 18,000 14.09 12/15/2027 Sanjay Pandey 75,000 — 15.90 12/19/2023 — — 40,000 — 15.80 12/18/2024 35,000 — 13.69 12/20/2023 35,000 — 14.98 12/19/2024 14,000 7,000 14.43 12/17/2025 6,000 12,000 14.39 12/16/2026 — 18,000 14.09 12/15/2027 Daniel J. Wagner 75,000 — 15.90 12/19/2023 — — 40,000 — 15.80 12/18/2024 35,000 — 13.69 12/20/2023 35,000 — 14.98 12/19/2024 14,000 7,000 14.43 12/17/2025 6,000 12,000 14.39 12/16/2026 — 18,000 14.09 12/15/2027 Option Awards Stock Awards Number of Securities
Underlying
Unexercised Options Option
Exercise
Price
($) Option
Expiration
Date Number of
Shares or
Units of
Stock That
Have Not
Vested
(#) Market
Value of
Shares or
Units of
Stock That
Have Not
Vested
($) (#)
Exercisable (#)
Unexercisable 75,000 — 12.50 7/27/2021 500 7,035 45,000 — 14.50 12/20/2022 75,000 — 15.90 12/19/2023 45,000 — 15.80 12/18/2024 45,000 — 16.48 12/15/2021 24,000 — 17.60 12/21/2022 30,000 15,000 13.69 12/20/2023 15,000 30,000 14.98 12/19/2024 — 27,000 14.43 12/17/2025 75,000 — 12.50 7/27/2021 — — 45,000 — 14.50 12/20/2022 75,000 — 15.90 12/19/2023 45,000 — 15.80 12/18/2024 40,000 — 16.48 12/15/2021 21,000 — 17.60 12/21/2022 26,667 13,333 13.69 12/20/2023 13,333 26,667 14.98 12/19/2024 — 24,000 14.43 12/17/2025 30,000 — 14.50 12/20/2022 — — 50,000 — 15.90 12/19/2023 35,000 — 15.80 12/18/2024 30,000 — 16.48 12/15/2021 15,000 — 17.60 12/21/2022 23,333 11,667 13.69 12/20/2023 11,667 23,333 14.98 12/19/2024 — 21,000 14.43 12/17/2025 35,000 — 14.50 12/20/2022 — — 75,000 — 15.90 12/19/2023 40,000 — 15.80 12/18/2024 35,000 — 16.48 12/15/2021 18,000 — 17.60 12/21/2022 23,333 11,667 13.69 12/20/2023 11,667 23,333 14.98 12/19/2024 — 21,000 14.43 12/17/2025 -55- Option Awards Stock Awards Number of Securities
Underlying
Unexercised Options Option
Exercise
Price
($) Option
Expiration
Date Number of
Shares or
Units of
Stock That
Have Not
Vested
(#) Market
Value of
Shares or
Units of
Stock That
Have Not
Vested
($) (#)
Exercisable (#)
Unexercisable 45,000 — 14.50 12/20/2022 — — 75,000 — 15.90 12/19/2023 40,000 — 15.80 12/18/2024 35,000 — 16.48 12/15/2021 18,000 — 17.60 12/21/2022 23,333 11,667 13.69 12/20/2023 11,667 23,333 14.98 12/19/2024 — 21,000 14.43 12/17/2025 -56-20202022 and the values realized upon exercise and vesting: Option Exercises and Stock Vested Option Awards Stock Awards Number of
Shares
Acquired on
Exercise
(#) Value Realized
on Exercise
($) Number of
Shares
Acquired on
Vesting
(#) Value Realized
on Vesting
($)(1) 55,000 63,470 500 7,410 50,000 57,700 — — 35,000 20,300 — — 56,667 82,887 — — 120,000 227,310 — — Option Exercises and Stock Vested Option Awards Stock Awards Name Kevin G. Burke 45,000 23,850 500 7,145 Jeffrey D. Miller 45,000 40,590 500 7,145 Jeffery T. Hay — — — — Sanjay Pandey 35,000 41,243 — — Daniel J. Wagner 45,000 41,049 — — (1) 2018, 20192020, 2021 or 2020,2022, and we contemplate none for 2021.2018, 20192020, 2021 or 2020,2022, and we contemplate no such plans for 2021.-57-as, at our request, as a director or officer of another entity. Insofar as indemnification for liabilities arising under the federal securities laws may be permitted to our officers and directors pursuant to the foregoing provisions, we understand that, in the opinion of the SEC, such indemnification is against public policy as expressed in such laws and is unenforceable.2020.2022. For 2020,2022, the median of the annual total compensation of all of our employees, excluding the compensation of our chief executive officer, was $79,426,$75,544 and the annual total compensation of our chief executive officer in 20202022 was $1,181,768.$1,053,911. Thus, the ratio of the annual total compensation of our chief executive officer in 20202022 to the median of the annual total compensation in 20202022 of all of our other employees was 14.914.0 to 1.total cash compensation (base salary, incentive pay and stock option awards) in 20202022 of all of our employees whom we employed on December 31, 2020,2022, the last day of our 20202022 payroll year, excluding our chief executive officer. We included all employees, whether employed on a full-time basis or a part-time basis on that date. We did not make any assumptions, adjustments or estimates-58-2020.2022. In computing our median annual employee compensation, we used the same methodology we use for determining the compensation of our named executive officers set forth in the 20202022 Summary Compensation Table included elsewhere in this proxy statement. We did not annualize the compensation of any full-time employees whom we did not employ for all of 2020. Value of Initial Fixed $100 Investment Based On: Year 2022 1,180,431 1,256,456 751,940 805,762 109.16 102.08 (1,959,405 ) 103.3 2021 1,017,560 1,044,160 677,148 695,284 104.91 105.60 25,254,174 101.0 2020 1,290,278 1,281,678 847,290 840,466 98.98 90.33 52,815,252 96.0 4, 2021.3, 2023. The compensation committees reviewed and discussed the compensation discussion and analysis that appears in this proxy statement under the caption “Executive Compensation Discussion and Analysis.”2020.2022. Our compensation committee then reviewed the individual performance of our named executive officers.20202022 for filing with the SEC.March 4, 20213, 2023-59-2020: Number of Class A
shares to be issued
upon exercise of
outstanding options Weighted-average
exercise price of
outstanding options Number of Class A
shares remaining
available for future
issuance under equity
compensation plans
(excluding securities
reflected in column (a)) (a) (b) (c) 9,694,352 $ 15.24 3,047,200 — — — 9,694,352 $ 15.24 3,047,200 Plan category (a) (b) (c) Equity compensation plans approved by securityholders 6,382,179 $ 14.94 1,402,752 Equity compensation plans not approved by securityholders — — — Total 6,382,179 $ 14.94 1,402,752 20212023 Annual Meeting.-60-16, 202021, 2022 our board of directors appointed a nominating committee consisting of Jack L. Hess, Kevin M. Kraft, Sr., Jon M. Mahan and Richard D. Wampler, II. Neither Mr. Hess, Mr. Kraft, Mr. Mahan nor Mr. Wampler is an officer or employee of Donegal Mutual or us or a beneficial owner of a 10% or greater interest in our Class A common stock or a 10% or greater interest in our Class B common stock.-61-2020.2022. The number of Donegal Mutual directors who also serve on our board of directors will remain at six of 11 directors following our 20212023 Annual Meeting. It is our intent and the intent of Donegal Mutual to maintain that number of Donegal Mutual directors who also serve on our board of directors as constitutes a majority of our board of directors as long as Donegal Mutual continues to own more than a majority of the aggregate voting power of our two outstanding classes of common stock.26, 202124, 2023 to evaluate the performance and qualifications of the four incumbent Class BA members of our board of directors whose terms will expire upon the election of their successors at our 20212023 Annual Meeting and the taking of office by their successors. After considering the performance during their past service on our board of directors and qualifications of the four incumbent Class BA members of our board of directors, our nominating committee nominated the four incumbent Class BA members named below for reelection to a new term as Class BA directors. On March 4, 2021,3, 2023, our board of directors met and accepted the report of our nominating committee and approved the nomination by our nominating committee of the four nominees for election as Class BA directors at our 20212023 Annual Meeting.-62-BA Directors at Our 20212023 Annual MeetingBA directors expire at our 20212023 Annual Meeting and upon the election and taking of office by their successors. The current three-year terms of our Class CB directors next expire at our 20222024 annual meeting of stockholders and upon the election and taking of office by their successors, and the current three-year terms of our Class AC directors next expire at our 20232025 annual meeting of stockholders and upon the election and taking of office by their successors. We believe our nominees for election as Class BA directors possess the experience and qualifications to provide sound guidance and oversight to our senior executive management.BA directors at our 20212023 Annual Meeting. Unless you have marked your proxy card to the contrary, we have instructed the proxies named on your proxy card to vote for the election of the four nominees for Class BA directors we name in this proxy statement.BA director becomes unavailable for any reason, our board of directors will designate a substitute nominee. Our board of directors believes each nominee will be able to serve if elected. A majority of our board of directors may fill any vacancy that occurs in our board of directors for any reason until the expiration of the term of the class of directors in which the vacancy has occurred. directors and our Class A directors who will continue in office after our 20212023 Annual Meeting until the expiration of their respective terms and the election and taking of office of their respective successors, together with certain information regarding them, are as follows:Class B Directors Age Director
Since Year Term
Will Expire* 74 2018 2024 68 2009 2024 51 2007 2024 79 2005 2024 Class A Directors Age Kevin G. Burke 57 2016 2026 Jack L. Hess 75 2011 2026 David C. King 59 2020 2026 Annette B. Szady 62 2020 2026 * 20212023 Annual Meeting-63-CB Directors and Our Class AC Directors Who Will Continue as Directors After Our 20212023 Annual MeetingClass C Directors Age Director
Since Year Term
Will Expire 63 2013 2022 69 2015 2022 67 2008 2022 Class A Directors Age Director
Since Year Term
Will Expire 55 2016 2023 73 2011 2023 57 2020 2023 60 2020 2023 Class B Directors Age Dennis J. Bixenman 76 2018 2024 Kevin M. Kraft, Sr. 70 2009 2024 Jon M. Mahan 53 2007 2024 Richard D. Wampler, II 81 2005 2024 Class C Directors Age Scott A. Berlucchi 65 2013 2025 Barry C. Huber 71 2015 2025 S. Trezevant Moore, Jr. 69 2008 2025 BA directors we name above.-64--65- is a certified public accountant and served as a principal of the accounting firm of Brown Schultz Sheridan & Fritz from 1998 to 2005. For 28 prior years, Mr. Wampler was a partner in the accounting firm of KPMG LLP. His practice focused on property and casualty insurance companies. We believe Mr. Wampler’s background and financial expertise qualifies Mr. Wampler to serve on our board of directors and assist us in our analysis of statutory accounting principles as well as generally accepted accounting principles and in analyzing and maintaining internal controls over financial reporting. a variety of inter-company agreements providing for, among other things, the pooling of Atlantic States’ underwriting results with those of Donegal Mutual, reinsurance and expense-sharing. See “The Relationship of Donegal Mutual and DGI” elsewhere in this proxy statement. After the election of the nominees for Class BA director we name in this proxy statement, six of our 11 directors will continue to serve as directors of Donegal Mutual. We believe our board membership appropriately represents our public stockholders, who collectively owned approximately 29% of the aggregate voting power of our outstanding shares of our Class A common stock and our outstanding shares of our Class B common stock at March 1, 2021,2023, and Donegal Mutual, which owned approximately 71% of the aggregate voting power of our outstanding shares of our Class A common stock and our outstanding shares of our Class B common stock at March 1, 2021.20212023 Annual Meeting our four nominees to serve as Class BA directors for a term of three years and until the election of their respective successors and their respective successors take office.-66-BA directors for a term of three years and until the election of their respective successors and their respective successors take office.-67-2021 EMPLOYEE STOCK PURCHASE PLANDescriptionNAMED EXECUTIVE OFFICERSOur 2021 Employee Stock Purchase Planadopted our 2021 Employee Stock Purchase Plan, or our 2021 Purchase Plan, on March 4 2021, subject to stockholder approvaldetermines the compensation of our 2021 Purchase Plan atnamed executive officers in accordance with our annual meetingoverall compensation philosophy of stockholders and“results-based pay.” We have designed the listing on NASDAQcomponents of the sharescompensation of our named executive officers to reward the achievement of our short-term and long-term business objectives with an emphasis on our underwriting profitability. The compensation committee of our board of directors recognizes the fulfillment of our objectives by our individual named executive officers through:stock reserved for issuance pursuant to our 2021 Purchase Plan. The purposestock.2021 Purchase Plan is to provide eligible employees of Donegal Mutual, which serves ascompensation program in the employer of record for all employees who perform services for our respective subsidiaries“Executive Compensation Discussion and affiliates, with an opportunity to acquire or to increase their proprietary interestAnalysis” section elsewhere in us by providing those employees with a convenient opportunity to purchase sharesthis proxy statement.Class A common stock at a discount from market prices prevailing atstockholders to approve the time of purchase. We believe our 2021 Purchase Plan meets the requirements of Section 423 of the Code.We have reserved 500,000 sharescompensation of our Class A common stock for issuance under our 2021 Purchase Plan. Our 2021 Purchase Plan provides for appropriate adjustments in the event that we effect a stock split, a stock dividend, share combination or spin-off and certain other types of transactions we specify in our 2021 Purchase Plan, including mergers, consolidations, reorganizations and reclassifications. We will list on NASDAQ our shares of Class A common stock reserved for issuance under our 2021 Purchase Plan.Subject to stockholder approval of our 2021 Purchase Plan at our annual meeting and the listing of our shares of our Class A common stock we have reserved for issuance under our 2021 Purchase Plan, we will discontinue our 2011 Employee Stock Purchase Plan, or our Prior Purchase Plan, and will not issue any additional shares of our Class A common Stock under our Prior Purchase Plan after the completion of the current subscription period that ends on June 30, 2021.A committee of threenamed executive officers or the purchase plan committee, will administer our 2021 Purchase Plan. Our board of directors will appoint the members of the purchase plan committee. The purchase plan committee has the authority to amend our 2021 Purchase Plan rules and regulations from time to time for the purpose of operating our 2021 Purchase Plan. Any interpretation or construction by the purchase plan committee with respect to our 2021 Purchase Plan will be final and conclusive as to all participants absent contrary action by our board of directors. Any interpretation or construction of our 2021 Purchase Plan by our board of directors will be final and conclusive as to all participants in our 2021 Purchase Plan.-68-All of the full-time employees of Donegal Mutual who have completed one month of employment prior to the beginning of an enrollment period under our 2021 Purchase Plan will be eligible to participate in our 2021 Purchase Plan. An employee who is otherwise eligible to purchase shares of our Class A common stock under our 2021 Purchase Plan may not do so, however, if exercising a right to purchase shares of our Class A common stock under our 2021 Purchase Plan would either (i) cause the employee to own shares of our Class A common stock that possesses 5% or more of the total combined voting power or value of all of our outstanding Class A common stock or (ii) cause the employee to have purchase rights under all of our stock purchase plans that accrue at a rate that exceeds $25,000 of the fair market value of our Class A common stock for each calendar year in which such right is outstanding. Separation from employment for any reason will constitute an automatic withdrawal from further participation in our 2021 Purchase Plan.Our 2021 Purchase Plan provides for semi-annual subscription periods. The subscription periods extend from January 1 through June 30 and from July 1 through December 31, respectively, beginning on July 1, 2021 and ending on June 30, 2031. We will treat employees enrolled in our Prior Purchase Plan as of June 30, 2021 as automatically enrolled for participation in our 2021 Purchase Plan. Thereafter, enrollment for participation in our 2021 Purchase Plan will occur during the 30 calendar days preceding each subscription period.Payroll deduction is the only payment method available for the purchase of Class A common stock under our 2021 Purchase Plan. Employees may invest a maximum of 10% of their base pay towards the purchase of our Class A common stock in any subscription period. At a minimum, an employee who wishes to participate in our 2021 Purchase Plan must authorize a payroll deduction that would be sufficient to enable such employees to purchase at least ten shares of our Class A common stock during any subscription period.We will hold amounts we receive under our 2021 Purchase Plan during each subscription period in a plan account we will maintain for each participant. At the end of each subscription period, we will divide the amount contained in each employee’s plan account by the subscription price for the applicable subscription period, and we will then credit the plan account of the employee with the resulting number of whole shares purchased. The subscription price for any subscription period will be equal to the lesser of 85% of our Class A common stock as reported on NASDAQ on the last trading day before the first day of the enrollment period with respect to such subscription period or 85% of the closing price of our Class A common stock as reported on NASDAQ on the last trading day of such subscription period.An employee may not assign any of the employee’s rights under our 2021 Purchase Plan, except by will or by the laws of descent and distribution. During an employee’s lifetime, only the employee may exercise the employee’s subscription rights under our 2021 Purchase Plan.-69-Upon the termination of an employee’s employment or an employee’s withdrawal from our 2021 Purchase Plan, we will refund to the employee the amount of any cash credited to the employee’s 2021 Purchase Plan account without interest. Withdrawal from our 2021 Purchase Plan by one of our executive officers who is subject to Section 16 of the Exchange Act, except for withdrawal because of the termination of the executive officer, will become effective only at the end of a subscription period. Once an employee has withdrawn from our 2021 Purchase Plan, Donegal Mutual will make no further payroll deduction with respect to that employee. An employee’s withdrawal from our 2021 Purchase Plan during one subscription period does not restrict that employee’s right to participate in our 2021 Purchase Plan during any subsequent subscription period under our 2021 Purchase Plan. A retiring employee or the beneficiary of a participating employee upon the death of that employee may elect to purchase the appropriate number of whole shares of our Class A common stock using the date of retirement or death as if it were the last day of a subscription period.-70-Amendment and TerminationOur 2021 Purchase Plan will remain in effect until June 30, 2031 or until the 500,000 shares of our Class A common stock we have reserved for purchase under our 2021 Purchase Plan have been purchased.non-binding advisory vote. Our board of directors has the right to terminate our 2021 Purchase Plan at any time without prior notice, provided, however, that any such termination shall not adversely affect an employee’s rights under our 2021 Purchase Plan. Withoutultimate responsibility for determining the approvalcompensation of our stockholders, we may not amend our 2021 Purchase Plan to:increasenamed executive officers. Our board of directors and the total number of sharescompensation committee of our Class A common stock subjectboard of directors will review the results of the voting on the proposal to our 2021 Purchase Plan;increase materiallyapprove, on a non-binding advisory basis, the benefits accruing to participants under our 2021 Purchase Plan;change the formula by which we determine the price applicable to the purchase of sharescompensation of our Class A common stock under our 2021 Purchase Plan; orchange the eligibility of employees for participationnamed executive officers in our 2021 Purchase Plan.Federal Income Tax ConsequencesWe intend that our 2021 Purchase Plan qualify under the provisions of Section 423 of the Code. Based upon the advice of counsel, we believe the normal operationconnection with their ongoing evaluation of our 2021 Purchase Plan should generally have, under the Code and its associated regulations, all as in effect on the datecompensation program.an amount equal to the difference between the fair market value of the shares on the date of grant and 85% of such value on such date; oran amount equal to the difference between the fair market value of the shares at the time of disposition and the amount the employee paid for the employee’s shares of our Class A common stock under our 2021 Purchase Plan.Any additional gain will constitute long-term capital gain assuming the employee holds the shares of our Class A common stock the employee purchased under our 2021 Purchase Plan as capital assets. If an employee receives long-term capital gains treatment from the sale of shares of our Class A common stock the employee purchased pursuant to our 2021 Purchase Plan, we will not have any deduction for federal income tax purposes as a result of that sale.If a participant in our 2021 Purchase Plan disposes of shares of our Class A common stock purchased pursuant to our 2021 Purchase Plan within two years after the date of the grant or within one year of the purchase of shares of our Class A common stock pursuant to our 2021 Purchase Plan, any gain of the sale of those shares will, under the provisions of the Code as currently in effect, be taxed as ordinary income to the extent of the difference of the purchase prices of the shares under our 2021 Purchase Plan and the fair market value of the shares on the date the participant purchased the shares, and we will be entitled to a federal income tax deduction equal to the amount of such gain. Any additional gain the participant realizes will constitute long-term or short-term capital gain, depending on whether the participant has held the shares he or she purchased for more or less than one year from the participant’s date of purchase.Under current law, any gain a participant realized, other than long-term capital gain, will be taxed at a maximum federal income tax rate of 37%. Long-term capital gain is currently taxable at a maximum federal income tax rate of 20%.The foregoing discussion is only a summary of certain of the federal income tax consequences relating to our 2021 Purchase Plan as in effect on the date of this proxy statement.forto approve, on a non-binding advisory basis, the approvalcompensation of our 2021 Purchase Plan,named executive officers, our stockholders will approve, on a non-binding advisory basis, the compensation of our named executive officers at our 20212023 Annual MeetingMeeting.2021 Purchase Plan.2021 Purchase Plan.-72-20212021.2023. Although our by-laws do not require that we submit our audit committee’s appointment of KPMG LLP to our stockholders for ratification, we do so as a matter of appropriate corporate governance.20212023 Annual Meeting and will respond to appropriate questions. The KPMG LLP representatives will also be able to make a statement during our 20212023 Annual Meeting if any of them determines to do so.2021,2023, our stockholders will approve at our 20212023 Annual Meeting the ratification of our audit committee’s appointment of KPMG LLP to serve as our independent registered public accounting firm for our fiscal year ending December 31, 2021.2021.20212023 if our audit committee determines that such a change would be in our best interests and in the best interests of our stockholders.-73-20192021 and 20202022 and considered whether KPMG LLP’s performance of any non-audit services was incompatible with the independence of KPMG LLP.20192021 and 2020,2022, the reviews of our consolidated financial statements in our Form 10-Q quarterly reports during those years and the services KPMG LLP performed in connection with filings of registration statements and offerings. The fees for such audit services we paid or expect to pay KPMG LLP for our fiscal years ended December 31, 20192021 and 2022 were $980,000 and $1,080,000, respectively. The following information relates to additional fees we paid KPMG LLP for services during our fiscal years ended December 31, 2021 and 2022:were $900,0002021 and $895,000, respectively.•Audit-Related Fees. We did not pay KPMG LLP any audit-related fees during our fiscal year ended December 31, 2020. During our fiscal year ended December 31, 2019, we paid KPMG LLP audit-related fees of $25,000 in connection with agreed-upon procedures KPMG LLP performed in assisting us and the Michigan Catastrophic Claims Association (the “MCCA”) in evaluating the compliance of MICO with annual assessment reporting requirements for the MCCA’s fiscal years ended June 30, 2017, 2018 and 2019.•Tax Fees. We paid KPMG LLP $0 and $12,000 in tax fees during our fiscal years ended December 31, 2019 and 2020, respectively.•All Other Fees. We did not pay KPMG LLP any fees for other services during our fiscal years ended December 31, 2019 or 2020.-74-2020.2022. Our audit committee schedules its meetings in order to have sufficient time to devote appropriate attention to all of its responsibilities. When it deems it appropriate, our audit committee holds meetings with our independent registered public accounting firm and with our internal auditors in executive sessions at which our senior executive officers are not present.2020,2022, our senior executive officers advised our audit committee that we had prepared each of these financial statements in accordance with GAAP, and our senior executive officers and representatives of our independent registered public accounting firm reviewed significant accounting and disclosure issues with our audit committee.-75-20202022 with our management and with KPMG LLP. Our audit committee also discussed with KPMG LLP the matters the PCAOB Auditing Standard No. 1301 requires regarding “Communication with Audit Committees.” Our audit committee has received the written disclosures and the letter from KPMG LLP that the applicable provisions of the PCAOB require regarding communications by independent registered public accounting firms with audit committees concerning independence and has discussed with KPMG LLP its independence. Our audit committee also discussed with KPMG LLP changes in audit procedures that were necessary due to the COVID-19 pandemic.20202022 in our 20202022 Annual Report on Form 10-K for filing with the SEC.March 3, 2023 March 4, 202120222024 annual meeting of stockholders must deliver such proposal and an appropriate supporting statement in writing to our corporate secretary, Sheri O. Smith, at our principal executive offices at 1195 River Road, P.O. Box 302, Marietta, Pennsylvania 17547, not later than November 15, 2021.18, 2023. The e-mail address of Ms. Smith is sherismith@donegalgroup.com.-76-20222024 annual meeting of stockholders either nominations of persons as candidates for election to the class of our board of directors whose terms expire in 20222024 upon the election and taking of office by their successors or an item of business for stockholder action other than pursuant to Rule 14a-8 of the rules of the SEC, the stockholder must comply with the provisions relating to stockholder proposals in our by-laws and other applicable SEC regulations. We summarize these by-law provisions below. We must receive written notice of any such proposal that includes all of the information our by-laws require, to the attention of our corporate secretary, Sheri O. Smith, at our principal executive offices at 1195 River Road, P.O. Box 302, Marietta, Pennsylvania 17547, during the period that begins on November 15, 202118, 2023 and that ends on December 15, 2021.20222024 annual meeting of stockholders, the written proposal must set forth:20222024 annual meeting of stockholders;-77-20222024 annual meeting of stockholders. A written proposal relating to stockholder approval of any item of stockholder business other than a nomination for election as a director must include information regarding the matter the stockholder proposes for stockholder action equivalent to the information required under the rules of the SEC if the proponent were to solicit proxies for consideration by our stockholders and approval of the proposed action at a meeting of our stockholders.20222024 annual meeting of stockholders, we will only transact such business as shall have been brought before our 20222024 annual meeting of stockholders in accordance with the procedures our by-law provisions establish, as we summarize those procedures in this proxy statement or pursuant to SEC Rule 14a-8. The presiding officer of our 20222024 annual meeting of stockholders will have the discretion to determine if a nomination or another item of stockholder business has been proposed in accordance with the procedures we set forth in our by-laws and summarize in this proxy statement. Only stockholder proposals submitted in accordance with the by-law provisions we previously summarize in this proxy statement or pursuant to SEC Rule 14a-8 will be eligible for presentation at our 20222024 annual meeting of stockholders, and we will not consider any matter at our 20222024 annual meeting of stockholders not submitted in accordance with the procedures we describe in this proxy statement.505000, Louisville, Kentucky 40233.43006, Providence, Rhode Island 02940-3006. Computershare Trust Company, N.A. will respond to your request within 30 days.-78-“Non-Management“Non-Management Directors” as a group. Please send your communication to our corporate secretary, Sheri O. Smith, at our principal executive offices at 1195 River Road, P.O. Box 302, Marietta, Pennsylvania 17547 or by e-mail to sherismith@donegalgroup.com with a request that our corporate secretary promptly forward all such communications to the addressee or addressees set forth in the communication. However, we reserve the right not to forward to board members any abusive, threatening or otherwise inappropriate materials.20212023 Annual Meeting other than the threefour matters we have described in the accompanying notice of annual meeting and in this proxy statement. However, if any stockholder properly presents such a matter in accordance with our advance notice by-laws and applicable law, we will vote the proxies we receive from our stockholders, in accordance with the recommendation of our board of directors or, in the absence of such a recommendation, in accordance with the judgment of the persons named as proxies in our form of proxy card. March 15, 202117, 2023 -79-
purchase right under this Plan is outstanding. For this purpose, a right to purchase Class A common stock accrues when such right first becomes exercisable during the calendar year, but the rate of accrual for any calendar year may in no event exceed $25,000 of the fair market value of Class A common stock subject to the right, and the number of shares of Class A common stock under one right may not be carried over to any other right.(d) Notwithstanding other provisions in this Plan to the contrary, any officer of the Company who is subject to Section 16 of the Securities Exchange Act of 1934 (the “Exchange Act”) with respect to his or her ownership of shares of Class A common stock (a “Section 16 officer”) will be subject to the restrictions and conditions set forth in Sections 7(b) and 9 of this Plan.Section 3. Duration of Plan and Subscription Periods.This Plan is effective as of July 1, 2021 through and including June 30, 2031. During the term of this Plan, this Plan will have 20 semi-annual “Subscription Periods.” Each Subscription Period will extend from July 1 through December 31 or from January 1 through June 30, respectively, with the first Subscription Period beginning on July 1, 2021 and the last Subscription Period ending on June 30, 2031.Section 4. Enrollment and Enrollment Period.Enrollment for participation in this Plan will take place during the “Enrollment Period” that precedes each Subscription Period. Enrollment Periods are in effect from June 1 through June 30 and from December 1 through December 31 of each year. In addition, the Company will deem each individual who participates in the Company’s 2011 Employee Stock Purchase Plan and who is an Eligible Employee as of May 31, 2021 as automatically enrolled in this Plan effective as of the first Subscription Period. Except as provided regarding automatic enrollment in this Plan as of the first Subscription Period, any person who is an Eligible Employee and who would like to participate in this Plan should file a subscription agreement during an Enrollment Period, and that eligible employee’s participation in this Plan will then commence as of the commencement of the next Subscription Period. Once enrolled, an Eligible Employee will continue to participate in this Plan for each succeeding Subscription Period until such Eligible Employee terminates his or her participation, the Eligible Employee ceases to be an Eligible Employee or elects to withdraw from this Plan, this Plan expires or the Company terminates this Plan. An Eligible Employee who desires to change his or her rate of contribution may do so effective as of the beginning of the next Subscription Period by submitting a properly completed and executed enrollment form to the Company during the Enrollment Period for the next Subscription Period. An Eligible Employee who is not a Section 16 officer may also change his or her rate of contribution during a Subscription Period only pursuant to Section 7(b) of this Plan.Section 5. Total Number of Shares Available.The total number of shares available under this Plan is 500,000 shares of Class A common stock. Such Class A common stock may be authorized and unissued shares or previously issued shares that the Company reacquired. In the event the total number of shares available for purchase under this Plan have been purchased prior to the expiration of this Plan, the Company may terminate this Plan in accordance with Section 13 of this Plan.Section 6. Subscription Price.The “Subscription Price” for each share of Class A common stock subscribed for purchase under this Plan during each Subscription Period will be the lesser of (i) 85% of the fair market value of such share as determined as of the last trading day before the first day of the Enrollment Period with respect to such Subscription Period or (ii) 85% of the fair market value of such share as determined on the last trading day of such Subscription Period. The fair market value of a share will be the closing price the NASDAQ Stock Market reports for the applicable date.Section 7. Amount of Contribution and Method of Payment.(a) An Eligible Employee must pay the Subscription Price through a payroll deduction. The maximum payroll deduction may not be more than 10% of an Eligible Employee’s Base Pay, as defined in Section 7(c) of this Plan. An Eligible Employee must authorize a minimum payroll deduction, based on such employee’s Base Pay at the time of such authorization, that will enable such employee to accumulate by the end of the Subscription Period an amount sufficient to purchase at least ten shares of Class A common stock. An Eligible Employee may not make separate cash deposits toward the payment of the Subscription Price.(b) An Eligible Employee who is not a Section 16 officer may at any time during a Subscription Period reduce the amount the Eligible Employee previously authorized Donegal Mutual to deduct from his or her Base Pay, provided the reduction conforms with the minimum payroll deduction set forth in Section 7(a) of this Plan. To do so, an Eligible Employee should forward to Donegal Mutual a properly completed and executed written notice setting forth the requested reduction in his or her payroll deduction. The change in payroll deduction will become effective on a prospective basis as soon as practicable after Donegal Mutual receives the change notice. An Eligible Employee may change his or her payroll deduction under this Section 7(b), by forwarding to Donegal Mutual a properly completed and executed written notice setting forth such reduction in his or her payroll deduction only once during any Subscription Period. Any such reduction will remain in effect for subsequent Subscription Periods, subject to compliance with Section 7(a) of this Plan, until such Eligible Employee terminates his or her participation in this Plan, the Eligible Employee ceases to be an Eligible Employee, this Plan expires or the Company terminates this Plan. A Section 16 officer may not change his or her rate of contribution during a Subscription Period.(c) “Base Pay” means the straight-time earnings or regular salary paid to an Eligible Employee. Base Pay will not include overtime, bonuses or other items that the committee administering this Plan pursuant to Section 14 of this Plan does not consider to be regular compensation. Payroll deductions will commence with the first paycheck issued during the Subscription Period and, except as set forth in Sections 9 and 10, will continue with each paycheck throughout the entire Subscription Period, except for pay periods for which the Eligible Employee receives no compensation (i.e., uncompensated personal leave, leave of absence, etc.).Section 8. Purchase of Shares.The Company will maintain a “Plan Account” on its books for recordkeeping purposes only in the name of each Eligible Employee who authorized a payroll deduction (a “participant”). At the close of each pay period, the Company will credit the amount deducted from the participant’s Base Pay to the participant’s Plan Account. The Company will pay no interest on any Plan Account balance in any circumstance. As of the last day of each Subscription Period, the Company will divide the amount then in the participant’s Plan Account by the Subscription Price for such Subscription Period as determined pursuant to Section 6, and credit the participant’s Plan Account with the number of whole shares that results. The Company will not credit fractional shares under this Plan. The Company will issue anddeliver share certificates to each participant within a reasonable time thereafter. The Company will carry forward any amount remaining in a participant’s Plan Account to the next Subscription Period. However, any amount the Company carries forward pursuant to this Section 8 will not reduce the amount a participant may contribute pursuant to Section 7 of this Plan during the next Subscription Period. If a participant does not accumulate sufficient funds in his or her Plan Account to purchase at least ten shares of Class A common stock during a Subscription Period, the Company will deem such participant to have withdrawn from this Plan pursuant to Section 9 of this Plan.If the number of shares subscribed for purchase during any Subscription Period exceeds the number of shares available for purchase under this Plan, the Company will allocate the remaining shares available for purchase among all participants in proportion to their Plan Account balances, exclusive of any amounts carried forward pursuant to the preceding paragraph. If the number of shares that would be credited to any participant’s Plan Account in either or both of the Subscription Periods occurring during any calendar year exceeds the limit specified in Section 2(c) of this Plan, the Company will credit the participant’s Plan Account with the maximum number of shares permissible, and refund the remaining amounts to the participant in cash without interest thereon.Section 9. Withdrawal from This Plan.A participant, other than a Section 16 officer, may withdraw from this Plan at any time by giving a properly completed and executed written notice of withdrawal to the Company. As soon as practicable following the Company’s receipt of a notice of withdrawal, the Company will refund the amount credited to the participant’s Plan Account in cash without interest thereon. Donegal Mutual will make no further payroll deductions with respect to such participant except in accordance with an authorization for a new payroll deduction filed during a subsequent Enrollment Period in accordance with Section 4 of this Plan. A participant’s withdrawal will not affect the participant’s eligibility to participate during any succeeding Subscription Period. A withdrawal by a Section 16 officer, other than a withdrawal under Section 10 of this Plan, will not become effective until the Subscription Period that commences after the date the Company receives written notice of such withdrawal.Section 10. Separation from Employment.The Company will treat separation from employment for any reason, including death, disability or retirement, as defined in this Section 10, as an automatic withdrawal pursuant to Section 9 of this Plan. However, at the election of a participant who retires, or in the event of a participant’s death at the election of the participant’s beneficiary, any cash balance in such participant’s Plan Account may be used to purchase the appropriate number of whole shares of Class A common stock at a Subscription Price determined in accordance with Section 6 of this Plan using the date of the participant’s retirement or death as though it was the last day of the Subscription Period. The Company will refund in cash any cash balance in the Plan Account after such purchase to the participant, or in the event of the participant’s death to the participant’s beneficiary without interest thereon. As used in this Section 10, “retirement” means a termination of employment by reason of a participant’s retirement at or after the participant’s earliest permissible retirement date pursuant to and in accordance with his or her employer’s regular retirement plan or practice.Section 11. Assignment and Transfer Prohibited.No participant may assign, pledge, hypothecate or otherwise dispose of his or her subscription or rights to subscribe under this Plan to any other person, and any attempted assignment, pledge, hypothecation or disposition will be void. However, a participant may acquire shares of Class A common stock subscribed to under this Plan in the names of the participant and another person jointly with the right of survivorship upon appropriate written notice to the Company. No subscription or right to subscribe granted to a participant under this Plan will be transferable by the participant otherwise than by will or by the laws of descent and distribution, and such subscription rights will be exercisable only by the participant during the participant’s lifetime.Section 12. Adjustment of and Changes in Class A Common Stock.In the event that the outstanding shares of Class A common stock of the Company 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, stock dividend, either in shares of 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.Section 13. Amendment or Termination of This Plan.The Board of Directors of the Company (the “Board”) 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 and provided further that, without the approval of the stockholders of the Company in accordance with applicable law and regulations, no such amendment will increase the benefits accruing to participants under this Plan, increase the total number of shares subject to this Plan, change the formula by which the price at which the shares will be sold is determined, or change the class of employees eligible to participate in this Plan.Section 14. Administration.A committee of three executive officers of the Company the Board appoints from time to time will administer this Plan. The committee may from time to time adopt rules and regulations for carrying out this Plan. Any interpretation or construction of any provision of this Plan by the committee will be final and conclusive on all persons absent contrary action by the Board. Any interpretation or construction of any provision of this Plan by the Board will be final and conclusive on all persons.Section 15. Designation of Beneficiary.A participant may file a written designation of a beneficiary who is to receive any cash credited to the participant under this Plan in the event of such participant’s death prior to the delivery to the participant of such cash. A participant may change such designation of a beneficiary at any time upon written notice to the Company. Upon the death of a participant and upon the committee’s receipt of proof of the participant’s death and of the identity and existence of a beneficiary validly designated by the participant under this Plan, the Company will deliver such cash to such beneficiary. In the event of the death of a participant and in the absence of a beneficiary validly designated under this Plan who is living at the time of such participant’s death, the Company will deliver such cash to the executor or administrator of the estate of the participant, or if, to the knowledge of the Company, the participant has not appointed such executor or administrator, the Company, in its sole discretion, may deliver such cash to the spouse or to any one or more dependents or relatives of the participant, or if no spouse, dependent, or relative is known to the Company, then to such other person as the Company may designate. No designated beneficiary will, prior to the death of the participant by whom the beneficiary has been designated, acquire any interest in the shares or cash credited to the participant under this Plan.Section 16. Employees’ Rights.Nothing contained in this Plan will prevent the Company or Donegal Mutual from terminating any employee’s employment. No employee will have any rights as a stockholder of the Company by reason of participation in this Plan unless and until the Company has issued and delivered certificates to the participant representing shares of Class A common stock for which the participant has subscribed.Section 17. Use of Funds.The Company may use all payroll deductions it receives or holds under this Plan for any corporate purpose, and the Company will not be obligated to segregate such payroll deductions. Any account established for a participant will be for recordkeeping purposes only.Section 18. Government Regulations.The Company’s obligation to sell and deliver Class A common stock under this Plan is subject to any prior approval or compliance that may be required to be obtained or made from or with any governmental or regulatory authority in connection with the authorization, issuance or sale of such Class A common stock.Section 19. 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.Section 20. 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.Section 21. Compliance with Rule 16b-3.To the extent that Rule 16b-3 under the Exchange Act applies to purchases made under this Plan, it is the Company’s intent that this Plan comply in all respects with the requirements of Rule 16b-3, that the Company interpret any ambiguities or inconsistencies in the construction of this Plan to give effect to such intention and that if this Plan will not so comply, whether on the date of adoption or by reason of any later amendment to or interpretation of Rule 16b-3, the provisions of this Plan will be deemed to be automatically amended so as to bring them into full compliance with such rule.Section 22. Approval of Stockholders.Prior to June 30, 2021, the Company will submit this Plan to its stockholders for approval in accordance with applicable law and regulations. Subscriptions for the purchase of shares under this Plan will be subject to the condition that the stockholders of the Company approve this Plan prior to such date in the manner contemplated by Section 423(b)(2) of the Code. If the Company’s stockholders do notapprove this Plan prior to such date, this Plan will terminate, all subscriptions under this Plan will be terminated and be of no further force or effect and the Company shall promptly refund in cash, without interest, of all sums previously deducted from their compensation pursuant to this Plan.
DONEGAL GROUP INC. ATTN: JEFFREY D. MILLER 1195 RIVER RD, P.O. BOX 302 MARIETTA, PA 17547 BY INTERNET Before The Meeting - Go to www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information. Vote by 11:59 p.m. Eastern Time on April 14, 2021 for shares held directly and by 11:59 p.m. Eastern Time on April 12, 2021 for shares held in a Plan. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. During The Meeting - Go to www.virtualshareholdermeeting.com/DGICA2021 You may attend the meeting via the Internet and vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions. VOTE BY PHONE—1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions. Vote by 11:59 p.m. Eastern Time on April 14, 2021 for shares held directly and by 11:59 p.m. Eastern Time on April 12, 2021 for shares held in a Plan. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. The deadline for our receipt of proxies submitted by mail or by express delivery services for voting at our 2021 Annual Meeting is 3:00 p.m., local time, on April 14, 2021. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: D38267-P49285 [GRAPHIC APPEARS HERE]KEEP THIS PORTION FOR YOUR RECORDS THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. [GRAPHIC APPEARS HERE][GRAPHIC APPEARS HERE][GRAPHIC APPEARS HERE][GRAPHIC APPEARS HERE][GRAPHIC APPEARS HERE]DETACH AND RETURN THIS PORTION ONLY DONEGAL GROUP INC. For Withhold For All To withhold authority to vote for any individual The Board of Directors recommends you vote FOR the following nominees for Class B Directors: All All Except nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below. 1. Election of Directors Nominees: 01) Dennis J. Bixenman 02) Kevin M. Kraft, Sr. 03) Jon M. Mahan 04) Richard D. Wampler, II The Board of Directors recommends you vote FOR proposals 2 and 3. 2. Approve our 2021 employee stock purchase plan. 3. Ratification of the appointment of KPMG LLP as our independent registered public accounting firm for 2021. For Against Abstain NOTE: In their discretion, our proxies are authorized to vote upon such other business as may properly come before our annual meeting and any adjournment or postponement thereof. Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com D38268-P49285 DONEGAL GROUP INC. Annual Meeting of Stockholders April 15, 2021 10:00 AM This proxy is solicited by the Board of Directors The undersigned hereby appoints Daniel J. Wagner and V. Anthony Viozzi, and each or either of them, proxies of the undersigned, with full power of substitution, to vote all of the shares of Class A common stock and Class B common stock of Donegal Group Inc. (the “Company”) that the undersigned may be entitled to vote at the Annual Meeting of Stockholders of the Company to be held virtually at www.virtualshareholdermeeting.com/DGICA2021 on April 15, 2021 at 10:00 a.m., Eastern Time, and at any adjournment or postponement thereof, as set forth on the reverse side of this proxy card. You are encouraged to specify your choices by marking the appropriate boxes, SEE REVERSE SIDE, but you need not mark any boxes if you wish to vote in accordance with our Board of Directors’ recommendations. Continued and to be signed on reverse side