Edgar Filing: DONEGAL GROUP INC

As filed with the Securities and Exchange Commission on April 9, 2003

Registration No. 333-63102

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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

POST-EFFECTIVE
AMENDMENT NO. 2
TO
FORM S-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

DONEGAL GROUP INC.
-------------------------------------------------------
(Exact name of registrant as specified in its charter)

Delaware 23-2424711
------------------------------ -----------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)

1195 River Road
Marietta, Pennsylvania 17547
(888) 877-0600
------------------------------------------
(Address, including zip code, and telephone
number, including area code, of registrant's
principal executive offices)

Donald H. Nikolaus, President
Donegal Group Inc.
1195 River Road
Marietta, Pennsylvania 17547
(888) 877-0600
------------------------------------------
(Name, address, including zip code, and
telephone number, including area code,
of agent for service)

Copy to:
Kathleen M. Shay, Esquire
Duane Morris LLP
4200 One Liberty Place
Philadelphia, PA 19103-7396
(215) 979-1000

Approximate date of commencement of proposed sale to the public: As
soon as practicable after the effective date of this Registration Statement.

If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, check the following box. |X|

If the registrant elects to deliver its latest annual report to
security holders, or a complete and legible facsimile thereof, pursuant to Item
11(a)(1) of this Form, check the following box. |X|

If this Form is filed to register additional securities for an offering
pursuant to Section 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]

If this Form is a post-effective amendment filed pursuant to Section
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ]

If this Form is a post-effective amendment filed pursuant to Rule
462(d) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ]

If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]

THIS POST-EFFECTIVE AMENDMENT NO. 2 TO THE REGISTRATION STATEMENT SHALL
BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(c)
OF THE SECURITIES ACT OF 1933, MAY DETERMINE.

PROSPECTUS

DONEGAL GROUP INC.

2001 AGENCY STOCK PURCHASE PLAN

300,000 shares of Class A common stock

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Donegal Group is offering 300,000 shares of Class A common stock to
eligible insurance agencies under its 2001 Agency Stock Purchase Plan. Our Class
A common stock is listed for trading on the Nasdaq Stock Market under the symbol
"DGICA." On April 4, 2003, the last reported sale price of our Class A common
stock on the Nasdaq National Market System was $11.35 per share.

We will offer the shares of Class A common stock under the plan
directly to eligible agencies through our officers and will not use a broker or
a dealer. In addition, we will not pay commissions, discounts or any other
payments to any person for services in connection with the offer or sale of
shares of Class A common stock under the plan. We will pay all costs of
administering the plan. Participants will not incur brokerage commissions or
service charges for the purchase of shares under the plan. Donegal Group will
retain all proceeds from the sale of shares of Class A common stock under the
plan.

Donegal Group's principal executive offices are located at 1195 River
Road, Marietta, Pennsylvania 17547; telephone (888) 877-0600. A copy of our 2002
Annual Report to Stockholders accompanies this prospectus. You should retain
this prospectus for future reference.

SEE "RISK FACTORS" BEGINNING ON PAGE 2 FOR A DISCUSSION OF CERTAIN
FACTORS THAT YOU SHOULD CONSIDER BEFORE YOU INVEST IN OUR CLASS A COMMON STOCK.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

The date of this prospectus is April 9, 2003.

TABLE OF CONTENTS

Page

PROSPECTUS SUMMARY................................................................................................1

RISK FACTORS......................................................................................................2

DESCRIPTION OF THE 2001 AGENCY STOCK PURCHASE PLAN...............................................................11

Purpose and Advantages of the Plan...........................................................................11

Administration...............................................................................................11

Participation................................................................................................12

Costs and Expenses...........................................................................................13

Purchases....................................................................................................14

Shares; Certificates for Shares..............................................................................15

Withdrawal from the Plan.....................................................................................16

Other Information............................................................................................16

DESCRIPTION OF CAPITAL STOCK.....................................................................................18

General......................................................................................................18

Certain Charter and By-law Provisions; Delaware Anti-Takeover Provisions.....................................19

Limitation of Liability; Indemnification.....................................................................21

PLAN OF DISTRIBUTION.............................................................................................21

USE OF PROCEEDS..................................................................................................21

EXPERTS..........................................................................................................21

LEGAL OPINION....................................................................................................21

AVAILABLE INFORMATION............................................................................................22

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE..................................................................22

PROSPECTUS SUMMARY

This summary highlights some information from this prospectus. It may
not contain all of the information that is important to you. To understand this
offering fully, you should read the entire prospectus carefully, including the
risk factors.

We are an insurance holding company that offers property and casualty
insurance through our wholly owned subsidiaries and participates in a pooling
agreement with our affiliate, Donegal Mutual Insurance Company, known as the
Mutual Company. Our operations are interrelated with the operations of the
Mutual Company, and various reinsurance arrangements exist between our insurance
subsidiaries and the Mutual Company. In addition, the Mutual Company provides us
and some of our insurance subsidiaries with all of our personnel.

Donegal Group is authorized to issue 30,000,000 shares of Class A
common stock, 10,000,000 shares of Class B common stock and 2,000,000 shares of
preferred stock. The Mutual Company currently owns approximately 66% of our
Class A common stock and 62% of our Class B common stock.

The Class A common stock and the Class B common stock are identical,
except with respect to voting rights and the payment of dividends. Our
certificate of incorporation provides that the holders of shares of Class A
common stock are entitled to one-tenth of one vote per share held on any matter
to be voted on by our stockholders, and the holders of shares of Class B common
stock are entitled to one vote per share. Except as otherwise required under the
Delaware General Corporation Law or our certificate of incorporation, the
holders of Class A common stock and the holders of Class B common stock vote
together as a single class on all matters presented to our stockholders for a
vote.

Our certificate of incorporation also provides that each share of Class
A common stock outstanding at the time of the declaration of any cash dividend
or other distribution payable upon the shares of Class B common stock is
entitled to a cash dividend or distribution payable at the same time and to
stockholders of record on the same date in an amount at least 10% greater than
any cash dividend declared upon each share of Class B common stock. Each share
of Class A common stock and each share of Class B common stock are equal in
respect to dividends or other distributions payable in shares of capital stock,
except that the dividends or distributions may be made (1) in shares of Class A
common stock to the holders of Class A common stock and in shares of Class B
common stock to the holders of Class B common stock, (2) in shares of Class A
common stock to the holders of Class A common stock and to the holders of Class
B common stock or (3) in any other authorized class or series of capital stock
to the holders of Class A common stock and to the holders of Class B common
stock.

We are offering to eligible independent insurance agencies of our
subsidiaries and affiliated insurance companies, including the Mutual Company,
an opportunity to acquire a proprietary interest in us through the plan. We
adopted the plan to foster the common interests of us and our agencies in
achieving long-term profitable growth for the Donegal Group of companies.

We have reserved 300,000 shares of Class A common stock for sale to
eligible agencies under the plan for the five-year period ending March 31, 2007.
The purchase price for shares of Class A common stock purchased from us under
the plan will be 90% of the average closing prices of the Class A common stock
on the Nasdaq National Market System on the last ten trading days of each
applicable subscription period.

We will offer shares under the plan directly to eligible agencies
through our officers and will not use a broker or a dealer. In addition, we will
not pay commissions, discounts or any other payments to any person for services
in connection with the sale of shares of Class A common stock under the plan. We
will pay all costs of administering the plan. Participants will not incur
brokerage commissions or service charges for the purchase of shares under the
plan.

RISK FACTORS

YOU SHOULD CONSIDER CAREFULLY THE FACTORS SET FORTH BELOW, AS WELL AS
ALL OTHER INFORMATION CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS,
BEFORE YOU DECIDE TO PURCHASE SHARES OF CLASS A COMMON STOCK.

RISKS RELATING TO OUR PROPERTY AND CASUALTY BUSINESS

WE CONDUCT BUSINESS IN ONLY 14 STATES WITH A CONCENTRATION OF BUSINESS
IN MARYLAND, VIRGINIA AND, PARTICULARLY, PENNSYLVANIA. ANY SINGLE CATASTROPHE
OCCURRENCE OR OTHER CONDITION DISPROPORTIONATELY AFFECTING LOSSES IN THESE
STATES COULD ADVERSELY AFFECT OUR RESULTS OF OPERATIONS.

We conduct business in only 14 states primarily in the Mid-Atlantic and
Southeastern portions of the United States. A substantial portion of our
business is private passenger and commercial automobile, homeowners and workers'
compensation insurance in Maryland, Virginia and, particularly, Pennsylvania. As
a result, a single catastrophe occurrence, destructive weather pattern, general
economic trend, terrorist attack, regulatory development or other condition
disproportionately affecting one or more of the states in which we conduct
substantial business could materially adversely affect our results of
operations. Common catastrophe events include hurricanes, earthquakes,
tornadoes, wind and hail storms, fires and explosions. We and the Mutual Company
maintain reinsurance against catastrophic losses in excess of $3.0 million per
occurrence and our insurance subsidiaries maintain various catastrophe
reinsurance with the Mutual Company to minimize the liability of the insurance
subsidiaries in any one occurrence.

OUR BUSINESS AND RESULTS OF OPERATIONS WILL BE ADVERSELY AFFECTED IF
THE INDEPENDENT AGENTS THAT MARKET OUR PRODUCTS DO NOT MAINTAIN THEIR CURRENT
LEVELS OF PREMIUM WRITING, FAIL TO COMPLY WITH ESTABLISHED UNDERWRITING
GUIDELINES OR OTHERWISE IMPROPERLY MARKET OUR PRODUCTS.

We market our insurance products solely through a network of over 1,500
independent insurance agencies. As a result, we are wholly dependent upon these
agencies, each of which has the authority to bind us to insurance contracts. To
the extent that these agencies' marketing efforts cannot be maintained at their
current levels of volume and quality or they bind us to unacceptable insurance
risks, fail to comply with established underwriting guidelines or otherwise
improperly market our products, our results of operations and business will
suffer.

OUR BUSINESS MAY NOT CONTINUE TO GROW AND MAY BE MATERIALLY ADVERSELY
AFFECTED IF WE CANNOT RETAIN EXISTING, AND ATTRACT NEW, INDEPENDENT AGENCIES OR
IF INSURANCE CONSUMERS INCREASE USE OF OTHER INSURANCE DELIVERY SYSTEMS.

The continued growth of our business is partially dependent upon our
ability to retain existing, and attract new, independent agencies. The following
factors are among those that may cause the growth and retention in the number of
our independent agencies, and thereby our growth in revenue, to be slower than
it otherwise would have been:

o There is significant competition to attract independent agencies;

o Our process to select a new independent agency is intensive and
typically requires from two to six months;

o We have stringent criteria for new independent agencies and
require adherence by independent agencies to consistent
underwriting standards; and

o We may be required to reduce agents' commissions, bonuses and
other incentives, thereby reducing our attractiveness to agencies,
to compete with other insurance delivery systems.

We sell insurance solely through our network of independent agencies.
Many of our competitors sell insurance through a variety of delivery methods,
including independent agencies, captive agencies, the Internet and direct sales.
To the extent that business migrates to a delivery system other than independent
agencies because of changing consumer preferences, our business will be
adversely affected.

IF RATINGS FOR FINANCIAL STRENGTH ASSIGNED TO OUR INSURANCE
SUBSIDIARIES BY INDUSTRY RATING ORGANIZATIONS WERE SIGNIFICANTLY DOWNGRADED, THE
COMPETITIVE POSITION OF OUR INSURANCE SUBSIDIARIES WOULD BE ADVERSELY AFFECTED.

Ratings are a factor in establishing the competitive position of
insurance companies. Our insurance subsidiaries receive ratings from A.M. Best &
Company, Inc., which are industry-accepted measures of an insurance company's
financial strength and are specifically designed to provide an independent
opinion of an insurance company's financial health and ability to meet ongoing
obligations to policyholders.

WE COMPETE WITH MANY INSURERS THAT ARE FINANCIALLY STRONGER THAN US.

The property and casualty insurance industry is intensely competitive.
Competition is based on many factors, including the perceived financial strength
of the insurer, premiums charged, policy terms and conditions, policyholder
service, reputation and experience. We compete with many regional and national
property and casualty insurance companies, including direct sellers of insurance
products, insurers having their own agency organizations and other insurers
represented by independent agents. Many of these insurers are better capitalized
than us, have substantially greater financial, technical and operating resources
and have equal or higher ratings from A.M. Best Company.

The superior capitalization of many of our competitors enables them to
withstand lower profit margins and, therefore, to market their products more
aggressively, to take advantage more quickly of new marketing opportunities and
to offer lower premium rates. Moreover, if our competitors price their premiums
more aggressively and we meet their pricing, our profit margins and revenues may
be reduced and our ratios of claims and expenses to premiums may increase.

Our competition may become increasingly better capitalized in the
future as the traditional barriers between insurance companies and banks and
other financial institutions erode and as the property and casualty industry
continues to consolidate. Our ability to compete against our larger, better
capitalized competitors depends largely on our ability to provide superior
policyholder service and to maintain our historically strong relationships with
independent insurance agents, on whom we are entirely dependent to generate
premium volume.

There is no assurance that we will maintain our current competitive
position in the markets in which we operate, or that we will be able to expand
our operations into new markets. If we fail to do so, our business could be
materially adversely affected.

RISKS RELATING TO THE PROPERTY AND CASUALTY INSURANCE INDUSTRY

WE FACE SIGNIFICANT EXPOSURE TO TERRORISM.

Although we did not incur any losses as a result of the tragic World
Trade Center terrorist attack, that attack resulted in staggering losses for the
insurance industry and has caused uncertainty in the insurance and reinsurance
markets. Accordingly, the industry has been compelled to re-examine policy
language and to address the potential for future threats of terrorist events and
losses. Our personal and commercial property and casualty insurance policies
were not priced to cover the risk of terrorist attacks and losses such as those
suffered in the World Trade Center terrorist attack. Therefore, exposure to
terrorism exists under several lines, including personal lines and workers'
compensation, and, in most states, losses caused by an ensuing fire. The
recently enacted Terrorism Risk Insurance Act of 2002 established a program for
commercial property and casualty losses, including workers' compensation,
resulting from foreign acts of terrorism. The Terrorism Risk Insurance Act
requires commercial insurers to make terrorism coverage available and provides
limited federal protection above individual company retention levels, based upon
a percentage of direct earned premium, and above aggregate industry retention
levels that range from $10 billion in the first year to $15 billion in the third
year. The federal government will pay 90% of covered terrorism losses that
exceed retention levels. The Terrorism Risk Insurance Act is scheduled to expire
on December 31, 2005. Personal lines are not included under the protection of
the Terrorism Risk Insurance Act, and state regulators have not approved
exclusions for acts of terrorism in personal lines policies. We could incur
large unexpected losses if future terrorist attacks occur.

INCREASED LITIGATION AGAINST THE INDUSTRY, WILLINGNESS OF COURTS TO EXPAND
COVERED CAUSES OF LOSS, RISING JURY AWARDS, INCREASING MEDICAL COSTS AND THE
ESCALATION OF LOSS SEVERITY MAY CONTRIBUTE TO INCREASED COSTS AND TO THE
DETERIORATION OF OUR RESERVES.

Loss severity continues to increase, principally driven by larger court
judgments and increasing medical costs in recent years. In addition, many legal
actions and proceedings have been brought on behalf of classes of complainants,
which can increase the size of judgments. The propensity of policyholders to
litigate and the willingness of courts to expand causes of loss and the size of
awards may render loss reserves inadequate for current and future losses. Loss
reserves are liabilities established by insurers and reinsurers to reflect the
estimated cost of loss payments and the related loss adjustment expenses that
the insurer or reinsurer will ultimately be required to pay in respect of
insurance or reinsurance it has written.

We have exposure to mold claims for which there has recently been a
sharp increase in the industry generally. Sometimes referred to as "sick
building syndrome," tenants claiming to suffer illnesses caused by mold may seek
financial compensation from building owners. Businesses also may claim
loss-of-use business income interruption losses. Homeowners have also been
submitting claims based on mold that has occurred from water damage. Our
exposure to mold, to date, including known and expected claims, has been
insignificant.

CHANGES IN APPLICABLE INSURANCE LAWS, REGULATIONS OR CHANGES IN THE WAY
REGULATORS ADMINISTER THOSE LAWS OR REGULATIONS COULD MATERIALLY ADVERSELY
CHANGE OUR OPERATING ENVIRONMENT AND INCREASE OUR EXPOSURE TO LOSS OR PUT US AT
A COMPETITIVE DISADVANTAGE.

Property and casualty insurers are subject to extensive supervision in
the states in which they do business. This regulatory oversight includes, by way
of example, matters relating to licensing and examination, rate setting, market
conduct, policy forms, limitations on the nature and amount of certain
investments, claims practices, mandated participation in involuntary markets and
guaranty funds, reserve adequacy, insurer solvency, transactions between
affiliates, the amount of dividends that may be paid and restrictions on
underwriting standards. Such regulation and supervision are primarily for the
benefit and protection of policyholders and not for the benefit of stockholders.
For instance, we are subject to involuntary participation in specified markets
in various states in which we operate, and the rate levels we are permitted to
charge do not always correspond with the underlying costs associated with the
coverage issued.

The NAIC and state insurance regulators are re-examining existing laws
and regulations, specifically focusing on insurance company investments, issues
relating to the solvency of insurance companies, risk-based capital guidelines,
interpretations of existing laws and the development of new laws. Changes in
state laws and regulations, as well as changes in the way state regulators view
related party transactions in particular, could materially change our operating
environment and significantly increase the amount of loss to which we are
exposed after an insurance policy has been issued.

The state insurance regulatory framework recently has come under
increased federal scrutiny. Congress is considering legislation that would
create an optional federal charter for insurers. Federal chartering has the
potential to create an uneven playing field for insurers. Federally chartered
companies could be subject to different regulatory requirements than state

chartered insurers in areas such as market conduct oversight, solvency
regulation, guaranty fund participation and premium tax burdens. If this occurs,
federally chartered insurers may obtain a competitive advantage over state
licensed carriers. Federal chartering also raises the specter of a matrix of
regulation and costly duplicative, or conflicting, federal and state
requirements. Specific federal regulatory developments include the potential
repeal of the McCarran-Ferguson Act. The repeal of the McCarran-Ferguson Act and
its partial exemption for the insurance industry from federal antitrust laws
would make it extremely difficult for insurers to compile and share loss data,
develop standard policy forms and manuals and predict future loss costs. The
ability of the industry, under the exemption permitted in the McCarran-Ferguson
Act, to collect loss cost data and build a credible database as a means of
predicting future loss costs is an extremely important part of cost-based
pricing. If the ability to collect this data were removed, then the
predictability of future loss costs, and hence, the reliability of pricing would
be greatly undermined.

IF CERTAIN STATE REGULATORS, LEGISLATORS AND SPECIAL INTEREST GROUPS ARE
SUCCESSFUL IN ATTEMPTS TO REDUCE, FREEZE OR SET RATES FOR INSURANCE POLICIES,
ESPECIALLY AUTOMOBILE POLICIES, AT LEVELS THAT DO NOT, IN OUR MANAGEMENT'S VIEW,
CORRESPOND WITH UNDERLYING COSTS, OUR RESULTS OF OPERATIONS WILL BE ADVERSELY
AFFECTED.

From time to time, the automobile insurance industry in particular has
been under pressure from certain state regulators, legislators and special
interest groups to reduce, freeze or set rates at levels that do not, in the
view of our management, correspond with underlying costs, including initiatives
to roll back automobile and other personal lines rates. This activity may in the
future adversely affect the profitability of our automobile insurance line of
business in various states because increasing costs of litigation and medical
treatment, combined with rising automobile repair costs, continue to increase
the costs of providing automobile insurance coverage. Adverse legislative and
regulatory activity constraining our ability to price automobile insurance
coverage adequately may occur in the future. The impact of the automobile
insurance regulatory environment on our results of operations in the future is
not predictable.

WE ARE SUBJECT TO ASSESSMENT, DEPENDING UPON OUR MARKET SHARE OF A GIVEN LINE OF
BUSINESS, TO ASSIST IN THE PAYMENT OF UNPAID CLAIMS AND RELATED COSTS OF
INSOLVENT INSURANCE COMPANIES; SUCH ASSESSMENTS COULD SIGNIFICANTLY AFFECT OUR
FINANCIAL CONDITION.

We are obligated to pay assessments under the guaranty fund laws of the
various states in which we are licensed. Generally, under these laws, an insurer
is subject to assessment, depending upon its market share of a given line of
business, to assist in the payment of unpaid claims and related costs of
insolvent insurance companies. The number and magnitude of future insurance
company failures in the states in which we do business cannot be predicted, but
resulting assessments could significantly affect our financial condition. We
believe that it is likely that we will receive an assessment in the next year
relating to the insolvency of The Pennsylvania Hospital Insurance Company
(PHICO), the amount of which cannot currently be estimated.

OUR PREMIUM RATES AND RESERVES MUST BE ESTABLISHED FROM FORECASTS OF THE
ULTIMATE COSTS EXPECTED TO ARISE FROM RISKS UNDERWRITTEN DURING THE POLICY
PERIOD; OUR PROFITABILITY COULD BE ADVERSELY AFFECTED TO THE EXTENT OUR PREMIUM
RATES OR RESERVES ARE TOO LOW.

One of the distinguishing features of the property and casualty
insurance industry in general is that its products are priced before its costs
are known, as premium rates are generally determined before losses are reported.
Accordingly, premium rates must be established from forecasts of the ultimate
costs expected to arise from risks underwritten during the policy period and may
not prove to be adequate. Further, property and casualty insurers establish
reserves for losses and loss adjustment expenses based upon estimates, and it is
possible that the ultimate liability will exceed these estimates because of the
future development of known losses, the existence of losses that have occurred
but are currently unreported and larger than historical settlements on pending
and unreported claims. The process of estimating reserves is inherently
judgmental and can be influenced by factors that are subject to variation. If
pricing or reserves established by us is not sufficient, our profitability may
be adversely impacted.

THE CYCLICAL NATURE OF THE PROPERTY AND CASUALTY INSURANCE INDUSTRY MAY REDUCE
OUR REVENUES AND PROFIT MARGINS.

The property and casualty insurance industry is highly cyclical, and
individual lines of business experience their own cycles within the overall
industry cycle. Premium rate levels are related to the availability of insurance
coverage, which varies according to the level of surplus in the industry. The
level of surplus in the industry varies with returns on invested capital and
regulatory barriers to withdrawal of surplus. Increases in surplus have
generally been accompanied by increased price competition among property and
casualty insurers. If we find it necessary to reduce premiums or limit premium
increases due to these competitive pressures on pricing, we may experience a
reduction in profit margins and revenues, an increase in our ratios of claims
and expenses to premiums and, therefore, lower profitability.

Volatile and unpredictable developments also offset significantly the
cyclical trends in the industry and the industry's profitability. These
developments include natural disasters (such as storms, earthquakes, hurricanes,
floods and fires), terrorism risks, fluctuations in interest rates and other
changes in the investment environment that affect the market prices of our
investments and the income from those investments, inflationary pressures that
affect the size of losses and judicial decisions that affect our liabilities.
The occurrence of these developments may adversely affect our business and
financial condition.

RISKS RELATING TO OUR RELATIONSHIP WITH THIRD PARTIES

THE REINSURANCE AGREEMENTS ON WHICH WE RELY DO NOT RELIEVE US FROM LIABILITY TO
POLICYHOLDERS.

We rely on reinsurance agreements to limit our maximum net loss from
large single risks or risks in concentrated areas, and to increase our capacity
to write insurance. Each reinsurance agreement satisfies all applicable
regulatory requirements. Reinsurance, however, does not relieve us from
liability to our policyholders. To the extent that a reinsurer may be unable to
pay losses for which it is liable under the terms of its reinsurance agreement
with us, we remain liable for such losses. However, in an effort to reduce the
risk of non-payment, we require all of

our reinsurers to have an A.M. Best rating of A- or better or, with respect to
foreign reinsurers, to have a financial condition that, in the opinion of our
management, is equivalent to a company with at least an A- rating. If our
reinsurers incur losses from their reinsurance arrangements with us, it is
probable that the reinsurance premiums payable by us in the future could
increase or that the reinsurance might not be renewed.

THE MUTUAL COMPANY IS OUR LARGEST SHAREHOLDER AND PROVIDES US WITH FACILITIES
AND SERVICES.

The Mutual Company currently owns approximately 66% of our outstanding
Class A common stock and approximately 62% of our outstanding Class B common
stock. Accordingly, the Mutual Company controls the election of members of our
Board of Directors. Although the Mutual Company could exercise its control in
ways that are contrary to the interests of our stockholders other than the
Mutual Company, we and the Mutual Company have established a Coordinating
Committee consisting of two outside directors from each company who do not also
serve as directors of the other company. Under our and the Mutual Company's
By-laws, any new agreement between us and the Mutual Company and any proposed
change in any existing agreement between us and the Mutual Company must first be
submitted for approval by our respective Boards of Directors and, if approved,
submitted to our Coordinating Committee for approval. The proposed new agreement
or change in an existing agreement will receive Coordinating Committee approval
only if both of our Coordinating Committee members conclude the new agreement or
change in an existing agreement is fair to us and our stockholders and if both
of the Mutual Company's Coordinating Committee members conclude the agreement or
change in an existing agreement is fair and equitable to the Mutual Company and
its policyholders. The decisions of the Coordinating Committee are binding on us
and the Mutual Company. The purpose of this provision is to protect the
interests of our stockholders and the interests of the policyholders of the
Mutual Company.

We are dependent upon the Mutual Company for the retention of agents
and the underwriting of insurance, the servicing of policyholder claims and all
other aspects of our operations. All of our officers are officers and employees
of the Mutual Company. The Mutual Company also provides all of the facilities
and data processing and administrative services required to conduct our
business, for which we pay a pro rata portion of the cost.

BECAUSE WE PARTICIPATE IN AN INSURANCE POOLING ARRANGEMENT WITH THE MUTUAL
COMPANY, OUR RESULTS OF OPERATIONS ARE DEPENDENT UPON THE FINANCIAL SUCCESS OF
THE MUTUAL COMPANY.

Our insurance subsidiary, Atlantic States, participates in an
intercompany pooling arrangement with the Mutual Company, under which the
parties share the premiums earned and underwriting results on substantially all
of the property and casualty insurance business written by both companies. Under
the terms of the intercompany pooling agreement, Atlantic States cedes all of
its insurance business to the Mutual Company and assumes from the Mutual Company
70% of the total pooled insurance business of the Mutual Company and Atlantic
States. The allocations of pool participation percentages between the Mutual
Company and Atlantic States are based on the pool participants' relative amounts
of capital and surplus, expectations of future relative amounts of capital and
surplus and our ability to raise capital for Atlantic States.

Because of the pooled business we assume, our insurance operations are
interrelated with the insurance operations of the Mutual Company and our results
of operations are dependent upon the financial success of the Mutual Company.
Although the underwriting pool is intended to produce a more uniform and stable
underwriting result from year to year for the participants in the pool than they
would experience individually and to spread the risk of loss among all the
participants, if the Mutual Company experiences unusually severe or frequent
losses or does not adequately price its premiums, our results of operations
could suffer. Our results of operations also may suffer if the Mutual Company
did not participate in the pooling arrangement because the pool participants
would then be limited to policy exposures of a size commensurate with their own
capital and surplus instead of having at their disposal the capacity of the
entire pool.

WE DEPEND ON DIVIDENDS FROM OUR SUBSIDIARIES FOR THE PAYMENT OF OPERATING
EXPENSES, DEBT SERVICE AND DIVIDENDS TO OUR STOCKHOLDERS.

As a holding company, we rely primarily on our subsidiaries for
dividends and other permitted payments to meet our obligations for corporate
expenses. Payment of dividends by our subsidiaries is subject to regulatory
restrictions and depends on the surplus of the subsidiaries. From time to time,
the NAIC and various state insurance regulators consider modifying the method of
determining the amount of dividends that may be paid by an insurance company
without prior regulatory approval.

OUR CHARTER DOCUMENTS, DELAWARE CORPORATE LAW AND PENNSYLVANIA INSURANCE LAW MAY
INHIBIT A TAKEOVER.

Certain provisions of our certificate of incorporation and by-laws and
Delaware and Pennsylvania law may discourage a future unsolicited takeover of
Donegal Group. These provisions could have the effect of discouraging certain
attempts to acquire us or remove current management, including current members
of our board of directors, even if some of our stockholders deemed these
attempts to be in their best interests.

Our certificate of incorporation authorizes us to issue two classes of
common stock, Class A common stock and Class B common stock. The holders of the
Class A common stock are entitled to one-tenth of one vote per share, while the
holders of the Class B common stock are entitled to one vote per share, on all
matters submitted to a vote of our stockholders. In addition, our certificate of
incorporation does not grant any holder of our stock the right to cumulate votes
in the election of directors. The Mutual Company currently owns approximately
66% of our Class A common stock and approximately 62% of our Class B common
stock and has effective voting control over us. This ownership by the Mutual
Company could avert or prevent a change in control of us unless the Mutual
Company, after consideration of all relevant factors including the interests of
our stockholders other than the Mutual Company, is in favor of such a change.

Our board of directors, without stockholder approval, has the authority
to issue preferred stock with voting and conversion rights that could adversely
affect the voting power of the Class A common stock. The issuance of preferred
stock could have the effect of delaying, averting or preventing a change in
control of us. No preferred stock has been issued, and our board of directors
does not intend to issue any preferred stock at the present time.

Our by-laws provide for a classified board of directors, consisting of
three classes as nearly equal in size as possible. The classification of our
board of directors could have the effect of making it more difficult for a third
party to acquire, or of discouraging a third party from acquiring, control of
us.

As a Delaware corporation we are subject to certain anti-takeover
provisions of Delaware law, including certain business combination transaction
prohibitions. In addition, we are subject to Pennsylvania insurance laws and
regulations that prohibit any person from acquiring a greater than 10% interest
in us without the prior approval of the Insurance Commissioner of the
Commonwealth of Pennsylvania. These provisions could make it more difficult for
a third party to gain control of us, deny stockholders the receipt of a premium
on their Class A common stock and have a depressive effect on the market price
of the Class A common stock.

CAUTIONARY NOTICE REGARDING FORWARD LOOKING STATEMENTS

Certain statements contained in, or incorporated by reference in, this
prospectus are forward-looking in nature. These statements can be identified by
the use of forward-looking words such as "believes," "expects," "may," "will,"
"should," "intends," "plans" or "anticipates," or the negative thereof or
comparable terminology, or by discussions of strategy. You are cautioned that
our business and operations are subject to a variety of risks and uncertainties
and, consequently, our actual results may materially differ from those projected
by any forward-looking statements. Certain of these risks and uncertainties are
discussed under the heading "Risk Factors."

DESCRIPTION OF THE 2001 AGENCY STOCK PURCHASE PLAN

We describe the provisions of the plan below, in question and answer
form. As used in the plan, the term "subsidiary and affiliated insurance
companies" means insurance companies that are our subsidiaries and the Mutual
Company. The plan was approved by our board of directors on March 8, 2001 and
was amended and restated on September 17, 2001 and December 20, 2001.

Purpose and Advantages of the Plan

1. What is the purpose of the plan?

The plan provides an eligible agency, as described in Question and
Answer 6, an opportunity to acquire a long-term proprietary interest in us
through the purchase of our Class A common stock at a discount from current
market prices. In offering the plan, we seek to foster the common interests of
Donegal Group and the eligible agencies in achieving long-term profitable growth
for us. Accordingly, we have created the plan for the purpose of facilitating
the purchase of and long-term investment in shares of our Class A common stock
by an eligible agency. We expect that an eligible agency that purchases shares
under the plan will hold these shares on a long-term basis, as the plan is not
intended to benefit an agency that demonstrates a pattern of immediate resale of
shares acquired. As discussed in Question and Answer 6 below regarding
eligibility, immediate resale of shares will be a factor in our determination
whether an otherwise eligible agency should remain eligible for continued
participation in the plan.

2. What are the advantages of the plan?

Under the plan, an eligible agency can utilize three convenient payment
methods for the purchase of our Class A common stock at a 10% discount from the
current market price. You will not pay any brokerage commissions or service
charges in connection with your purchase.

Administration

3. Who administers the plan for participants?

A committee consisting of three persons appointed from time to time by
our board of directors administers the plan. The committee may adopt rules and
regulations for carrying out the plan. The committee's interpretations or
constructions of the provisions of the plan are final and conclusive unless our
board of directors takes contrary action.

Our board of directors appointed Donald H. Nikolaus, Ralph G. Spontak
and Daniel J. Wagner to serve on the committee. We do not compensate members of
the committee for administering the plan. Donald H. Nikolaus is President, Chief
Executive Officer and a director of Donegal Group and the Mutual Company. Ralph
G. Spontak is Senior Vice President, Chief Financial Officer and Secretary of
Donegal Group and the Mutual Company. Mr. Spontak is also a director of the
Mutual Company. Daniel J. Wagner is Treasurer of Donegal Group and the Mutual
Company. The address and telephone number of each member of the committee is c/o
Donegal Group Inc., 1195 River Road, Marietta, PA 17547; telephone (888)
877-0600.

4. Where can I obtain additional information about the plan and its
administrators?

You can obtain additional information about the plan and its
administrators by contacting Ralph G. Spontak, our Senior Vice President, Chief
Financial Officer and Secretary, at (888) 877-0600.

5. What is the term of the plan?

The plan will be in effect from March 15, 2002 through March 31, 2007
unless our board of directors terminates the plan earlier. The board of
directors has the right to terminate the plan at any time without notice
provided that no participant's existing rights are adversely affected by the
termination. During the term of the plan there will be ten consecutive
semi-annual subscription periods. Each subscription period extends from April 1
through September 30 and from October 1 through March 31, respectively, until
the plan terminates on March 31, 2007.

PARTICIPATION

6. What agencies are eligible to participate?

An eligible agency is an independent insurance agency that brings value
to Donegal Group, the Mutual Company and our subsidiary and affiliated insurance
companies, directly or indirectly, as determined by us in our discretion, and
with which we seek a long-term relationship. Only eligible agencies may
participate in the plan. The eligibility criteria we will consider includes the
agency's volume of direct premiums written, the ability of the agency to
increase sales and grow the volume of direct premiums written, the historic loss
ratio of the agency's direct premiums written and whether the agency has been
placed on rehabilitation by us, meaning that we notify the agency of operational
deficiencies, or had its binding authority revoked. We may base eligibility on
agency segmentation class or any other factors that indicate value to the
companies, directly or indirectly, in our discretion.

We will periodically review an eligible agency's continued eligibility.
A pattern of immediate resale of shares acquired under the plan by an eligible
agency will be a factor in our determination whether an agency should remain
eligible for continued participation in the plan. Immediate resales would tend
to indicate that an agency is not seeking to share in the long-term profitable
growth of the companies. If Donegal Group determines to discontinue an agency's
participation in the plan, the agency will receive written notice from us that
its eligibility to participate in the plan has been discontinued. This notice
will be sent to the agency as promptly as possible, but in no event later than
two weeks after the end of the subscription period during which the decision was
made. A decision by us, in our discretion, to discontinue the eligibility of an
agency under the plan will be treated as an automatic withdrawal from the plan.
See Questions and Answers 24 and 25 below.

7. How may an eligible agency participate in the plan?

An eligible agency may enroll in the plan by completing and filing a
subscription agreement, as described in Question and Answer 8, with us. We will
send to each eligible agency a subscription agreement, a copy of this prospectus
and any prospectus supplements and

a copy of our most recent Annual Report to Stockholders prior to the beginning
of the first enrollment period following the agency's designation as an eligible
agency.

8. What does a subscription agreement provide?

A subscription agreement allows each eligible agency to decide and
identify the date on which the agency desires to become enrolled in the plan,
the amounts of contribution and the payment method(s) selected for purchases
under the plan. Eligible agencies that participated in our former Agency Stock
Purchase Plan may participate in the plan by checking the appropriate box on the
subscription agreement. Prior contribution amounts and payment method(s) will be
carried over from the former Agency Stock Purchase Plan unless new instructions
are given in the subscription agreement.

9. When may an eligible agency enroll in the plan?

If an eligible agency chooses the direct bill commission payment
method, as explained in Question and Answer 15, enrollment in the plan may occur
only during the enrollment period preceding each subscription period, which is
from the 15th through the 31st day of March and from the 15th through the 30th
day of September of each year. An eligible agency that desires to subscribe for
the purchase of Class A common stock through withholding from direct bill
commissions must return a duly executed and completed subscription agreement
during the applicable enrollment period. Once enrolled in the direct bill
commission payment method, an eligible agency's participation in the plan
continues for each succeeding subscription period until the agency ceases to be
an eligible agency or withdraws from enrollment in the plan.

If an eligible agency chooses the lump-sum payment method, as explained
in Question and Answer 17, an eligible agency may enroll by submitting a
supplemental subscription agreement to us and making a lump-sum payment by the
last day of the applicable subscription period, September 30 or March 31.

If an eligible agency chooses the contingent commission payment method,
as explained in Question and Answer 18, an eligible agency may enroll by
submitting a subscription agreement during the enrollment period immediately
preceding each October 1 through March 31 subscription period.

10. May an eligible agency transfer its subscription rights to another
person or agency?

No. An eligible agency may not assign its subscription payments or
rights to subscribe to any other person, and any such attempted assignment is
void, except for permitted designations as described in Question and Answer 23.

COSTS AND EXPENSES

11. Are there any expenses to participants in connection with purchases under
the plan?

No. Eligible agencies are not obligated to pay any brokerage
commissions or other charges with respect to the purchase of Class A common
stock under the plan.

PURCHASES

12. How many shares are available to be purchased under the plan?

Our board of directors reserved 300,000 shares of our Class A common
stock for sale under the plan.

13. What is the price of shares of Class A common stock purchased under the
plan?

The subscription price for each share of Class A common stock purchased
under the plan is 90% of the average of the closing prices of the Class A common
stock on the Nasdaq National Market System on the last ten trading days of the
applicable subscription period.

14. How may an eligible agency pay for shares purchased under the plan?

An eligible agency can pay for shares purchased under the plan by means
of three payment methods: direct bill commission deduction, lump-sum payment or
contingent commission deduction.

15. What is the direct bill commission payment method?

Under the direct bill commission payment method, an eligible agency may
elect to purchase Class A common stock under the plan through deductions from
its monthly direct bill commission payment by designating that a minimum of 1%
and up to a maximum of 10% of the eligible agency's monthly direct bill
commission payments be withheld from the eligible agency's direct bill
commission payments. Direct bill commission payments are subject to the total
subscription limit under all payment methods of $12,000 per subscription period.
"Direct bill commission payments" means those commissions that are earned and
actually available for payment in a monthly period to an eligible agency for
personal and commercial direct bill policies after all offsetting debits and
credits are applied, as determined solely from our records.

16. May an eligible agency that chooses the direct bill commission payment
method change the method or amount of contribution made or withheld
under the plan?

Yes. An eligible agency choosing the direct bill commission payment
method may change the rate of contribution by filing a new subscription
agreement with us during the enrollment period for the next subscription period.
This change will become effective during the next subscription period.

17. What is the lump-sum payment method?

Under the lump-sum payment method, an eligible agency may, by September
30 and March 31 of each subscription period, elect to make lump-sum cash
payments for the purchase of Class A common stock under the plan. Lump-sum cash
payments may not be less than $1,000 per subscription period and are subject to
the total subscription limit under all methods of $12,000 per subscription
period.

18. What is the contingent commission payment method?

An eligible agency may designate a percentage of the contingent
commission payable to it under the terms of the applicable agency contingency
plan (or its equivalent) to be withheld for the purchase of Class A common stock
under the plan during the enrollment period immediately preceding the October 1
through March 31 subscription period. Contingent commission payments are subject
to the total subscription limit under all payment methods of $12,000 per
subscription period.

19. Are there limitations on the amount of contributions or purchases that
can be made?

Yes. Each eligible agency's total contributions for purchases from all
payment methods (described in Questions and Answers 15, 17 and 18 above) may not
exceed $12,000 during each subscription period. At the close of each
subscription period, we will total each agency's contributions from all payment
methods. If at any time throughout a subscription period, an eligible agency's
total payments exceed the $12,000 maximum amount and the agency so requests, we
will return the excess amount without interest to the agency within a reasonable
period. Any amount not returned will be applied to the purchase of Class A
common stock during the next subscription period without reducing the $12,000
limitation applicable to that subscription period.

20. How are purchases made under the plan?

We will maintain on our books a plan account for each enrolled eligible
agency. All contributions made by an eligible agency through deductions from an
eligible agency's direct bill commission payments and contingent commission
withholding and lump-sum payments during a subscription period, up to $12,000,
are held in a separate bank account maintained by us until the shares purchased
under the plan are issued to the eligible agency. At the end of each
subscription period, the amount credited to each eligible agency's plan account
will be divided by the subscription price for the subscription period, and the
eligible agency's plan account will be credited with the number of whole shares
that results. Any amount remaining in the plan account will be carried forward
to the next subscription period without reducing the $12,000 limitation
applicable to that subscription period or, if requested by the eligible agency,
returned to the eligible agency. If the number of shares subscribed for during
any subscription period exceeds the number of shares available for sale under
the plan, the remaining available shares will be allocated among the
participating eligible agencies in proportion to their total plan account
balances, without regard to any amount carried forward from a previous
subscription period.

SHARES; CERTIFICATES FOR SHARES

21. May an eligible agency transfer, pledge, hypothecate or assign shares
credited to the agency's plan account?

An eligible agency may not transfer, pledge, hypothecate or assign its
subscription rights under the plan or shares credited to its plan account,
except for permitted designations as described in Question and Answer 23.

22. Are stock certificates issued for shares of Class A common stock
purchased?

We will issue and deliver to each eligible agency stock certificates
for the shares it has purchased under the plan within a reasonable time after
purchase, but in no event later than two weeks after the end of the subscription
period during which the shares were purchased.

23. In whose name are accounts maintained and certificates registered when
issued?

Accounts in the plan will be maintained in the name of the eligible
agency. Consequently, certificates when issued for full shares will be
registered in the same name. An eligible agency may, upon written request to us,
(a) designate that shares be issued to a shareholder, partner, other principal
or other licensed employee of an eligible agency or (b) designate that any
retirement plan maintained by or for the benefit of an eligible agency or a
shareholder, partner, other principal or other licensed employee of the eligible
agency may purchase shares instead of the eligible agency through lump-sum
payments made by the designee. These permitted designations are subject to the
maximum amount limitation of $12,000, compliance with all laws that apply,
including the Employee Retirement Income Security Act of 1974, payment by the
eligible agency or its designee of any required transfer taxes and satisfaction
of our usual requirements for recognition of a transfer of our Class A common
stock.

WITHDRAWAL FROM THE PLAN

24. How and when may an eligible agency withdraw from the plan?

An enrolled eligible agency may withdraw from the plan at any time by
notifying us in writing, signed on behalf of the eligible agency by an
authorized representative. We will treat a termination of agency status for any
reason as an automatic withdrawal. If an agency withdraws from the plan, that
agency may not resubscribe until after the next full subscription period has
elapsed, and then only if we have redesignated the agency an eligible agency.

25. What happens to any shares held in and amounts credited to an eligible
agency's plan account at the time of withdrawal?

Promptly after the time of withdrawal or termination of an agency's
eligibility, but in no event later than two weeks after the end of the
subscription period during which the withdrawal or termination occurred, we will
issue certificates representing the whole shares held under the plan in the name
of the agency, and will refund any amount credited to an eligible agency's plan
account at the time of withdrawal to the participant in cash without interest.

OTHER INFORMATION

26. What happens if Donegal Group declares a stock split or stock dividend
or changes or exchanges its Class A common stock for shares of stock or
other securities of its own or another corporation?

Our committee will make appropriate adjustments in the total number and
kind of shares that are reserved for sale under the plan if our outstanding
shares of Class A common stock are

increased or decreased or changed into or exchanged for a different number or
kind of shares or other securities of Donegal Group, or of another corporation,
by reason of reorganization, merger, consolidation, recapitalization,
reclassification, stock split-up, stock dividend (either in shares of our Class
A common stock or of another class of our stock), spin-off or combination of
shares.

27. What are the federal income tax consequences of an eligible agency's
participation in the plan?

At the time of purchase, and where an eligible agency purchases shares
of Class A common stock in its own name, the eligible agency will be treated as
having received ordinary income in an amount equal to the difference between the
subscription price paid and the then fair market value of the Class A common
stock acquired. At the end of each calendar year, we will mail to each
participating agency a Form 1099 reflecting the amount of ordinary income earned
under the plan. We will be entitled to a tax deduction at the same time in a
corresponding amount. The participating agency's basis in the Class A common
stock purchased under the plan will be equal to the purchase price plus the
amount of ordinary income recognized.

When an agency disposes of shares of Class A common stock purchased
under the plan, any amount received in excess of the value of the shares of
Class A common stock on which the agency was previously taxed will be treated as
a long-term or short-term capital gain, depending upon the holding period of the
shares. If the amount received is less than that value, the loss will be treated
as a long-term or short-term capital loss, depending upon the holding period of
the shares (which begins on the day after each share is acquired).

You are strongly advised to consult with a tax advisor to determine the
tax consequences of a given transaction, particularly if a taxpayer other than
you has been designated by you to become a participant in the plan.

28. May the plan be changed or discontinued?

Yes. Our board of directors has the right to amend, modify or terminate
the plan at any time without notice if your existing rights are not adversely
affected as a result of the amendment, modification or termination.

29. How may eligible agencies sell shares of Class A common stock purchased
under the plan?

As discussed in Question and Answer 22, we will issue and deliver to
eligible agencies the stock certificates for the shares purchased under the plan
after the end of the subscription period during which the shares were purchased.
Participants will have the sole discretion as to whether or when to sell their
shares and may transfer or dispose of them at any time without restriction after
receipt of their stock certificates. An agency may choose to sell shares through
the broker of his or her choice.

DESCRIPTION OF CAPITAL STOCK

GENERAL

Our authorized Class A common stock consists of 30,000,000 shares. As
of March 31, 2003, 6,241,615 shares of our Class A common stock were
outstanding. We also have authorized 10,000,000 shares of Class B common stock,
of which 2,988,757 shares were outstanding on March 31, 2003, and 2,000,000
shares of preferred stock issuable from time to time in separate series upon
resolution of our board of directors, none of which are outstanding. Except as
otherwise required by the Delaware General Corporation Law, known as the DGCL,
or as otherwise provided in our certificate of incorporation with respect to
dividends and voting rights, each share of Class A common stock and each share
of Class B common stock have identical powers, preferences and limitations.

Our certificate of incorporation provides that the holders of shares of
Class A common stock are entitled to one-tenth of one vote per share held on any
matter to be voted on by our stockholders, and the holders of shares of Class B
common stock are entitled to one vote per share. Except as otherwise required
under the DGCL or our certificate of incorporation, the holders of Class A
common stock and the holders of Class B common stock vote together as a single
class on all matters presented to our stockholders for a vote.

At any election of directors, the nominees receiving the highest number
of votes cast by the holders of the Class A common stock and the Class B common
stock for the number of directors to be elected will be elected as directors.

Under the DGCL and our certificate of incorporation, the affirmative
vote of the holders of a majority of the Class A common stock and the Class B
common stock, voting as a single class, is sufficient to amend our certificate
of incorporation, to authorize additional shares of capital stock of any class,
to approve any merger or consolidation of us with or into any other entity or
the sale of all or substantially all of our assets or to approve our
dissolution.

Under the DGCL, the holders of shares of Class A common stock are
entitled to vote as a separate class on any proposal to change the par value of
the Class A common stock or to alter or change the rights, preferences and
limitations of the Class A common stock in a way that would affect the holders
of shares of Class A common stock adversely. Similarly, the holders of shares of
Class B common stock are entitled to vote as a separate class on any proposal to
change the par value of the Class B common stock or to alter or change the
rights, preferences and limitations of the Class B common stock in a way that
would affect the holders of shares of Class B common stock adversely. In
addition, under the DGCL, the number of authorized shares of Class A common
stock or Class B common stock may be increased or decreased, but not below the
number of shares then outstanding, by the affirmative vote of the holders of a
majority of the respective class of common stock voting as a separate class.

Our certificate of incorporation provides that each share of Class A
common stock outstanding at the time of the declaration of any cash dividend or
other distribution payable upon the shares of Class B common stock is entitled
to a cash dividend or distribution payable at the same time and to stockholders
of record on the same date in an amount at least 10% greater than

any cash dividend declared upon each share of Class B common stock. Each share
of Class A common stock and each share of Class B common stock are equal in
respect to dividends or other distributions payable in shares of capital stock,
except that the dividends or distributions may be made (1) in shares of Class A
common stock to the holders of Class A common stock and in shares of Class B
common stock to the holders of Class B common stock, (2) in shares of Class A
common stock to the holders of Class A common stock and to the holders of Class
B common stock or (3) in any other authorized class or series of capital stock
to the holders of Class A common stock and to the holders of Class B common
stock.

There are no redemption or sinking fund provisions applicable to the
Class A common stock or to the Class B common stock. All the shares of Class A
common stock offered by us pursuant to this prospectus, when issued and paid
for, will be fully paid and non-assessable.

Each holder of Class A common stock and each holder of Class B common
stock is entitled to receive the same per share consideration in a merger or
consolidation of us into another entity except that, if the consideration paid
to our stockholders consists in whole or in part of shares of another entity,
the shares of the other entity issued to the holders of our Class B common stock
may have greater voting rights than the shares of the other entity issued to the
holders of our Class A common stock.

Neither the Class A common stock nor the Class B common stock is
convertible into another class of common stock or any other security of Donegal
Group.

The transfer agent and registrar for our Class A common stock is
EquiServe.

CERTAIN CHARTER AND BY-LAW PROVISIONS; DELAWARE ANTI-TAKEOVER
PROVISIONS

Our certificate of incorporation, by-laws and the DGCL contain certain
provisions that may enhance the likelihood of continuity and stability in the
composition of our board of directors and may discourage a future unsolicited
takeover of Donegal Group. These provisions could have the effect of
discouraging certain attempts to acquire us or remove current management,
including current members of our board of directors, even if some of our
stockholders deemed these attempts to be in their best interests.

preventing a change in control of us. No preferred stock has been issued, and
our board of directors does not intend to issue any preferred stock at the
present time.

Our by-laws provide for a classified board of directors consisting of
three classes as nearly equal in size as possible. The classification of our
board of directors could have the effect of making it more difficult for a third
party to acquire, or of discouraging a third party from acquiring, control of
us.

We are a Delaware corporation that is subject to certain anti-takeover
provisions of the DGCL. The business combination provisions contained in Section
203 of the DGCL defines an interested stockholder of a corporation as any person
that (1) owns, directly or indirectly, or has the right to acquire, 15% or more
of the outstanding voting stock of the corporation or (2) is an affiliate or
associate of the corporation and was the owner of 15% or more of the outstanding
voting stock of the corporation at any time within the three-year period
immediately prior to the date on which it is sought to be determined whether the
person is an interested stockholder; and the affiliates and the associates of
the person. Under Section 203, a Delaware corporation may not engage in any
business combination with any interested stockholder for a period of three years
following the date the stockholder became an interested stockholder, unless (1)
prior to that date the board of directors of the corporation approved either the
business combination or the transaction which resulted in the stockholder
becoming an interested stockholder, (2) upon consummation of the transaction
which resulted in the stockholder becoming an interested stockholder, the
interested stockholder owned at least 85% of the voting stock of the corporation
outstanding at the time the transaction commenced (excluding, for determining
the number of shares outstanding, (a) shares owned by persons who are directors
and officers and (b) employee stock plans, in certain instances) or (3) on or
after that date the business combination is approved by the board of directors
and authorized at an annual or special meeting of stockholders by at least
66-2/3% of the outstanding voting stock that is not owned by the interested
stockholder.

The restrictions imposed by Section 203 will not apply to a corporation
if the corporation, by the action of its stockholders holding a majority of the
outstanding stock, adopts an amendment to its certificate of incorporation or
by-laws expressly electing not to be governed by Section 203. The amendment will
not be effective until 12 months after adoption and will not apply to any
business combination between the corporation and any person who became an
interested stockholder of the corporation on or prior to the adoption of the
amendment.

We have not elected to opt out of Section 203, and the restrictions
imposed by Section 203 apply to us. Section 203 could, under certain
circumstances, make it more difficult for a third party to gain control of us,
deny stockholders the receipt of a premium on their Class A common stock and
have a depressive effect on the market price of the Class A common stock.

In addition, we are subject to Pennsylvania insurance laws and
regulations that prohibit any person from acquiring a greater than 10% interest
in us without the prior approval of the Insurance Commissioner of the
Commonwealth of Pennsylvania. These provisions could make it more difficult for
a third party to gain control of us, deny stockholders the receipt of a premium
on their Class A common stock and have a depressive effect on the market price
of the Class A common stock.

LIMITATION OF LIABILITY; INDEMNIFICATION

As permitted by the DGCL, Article 6 of our certificate of incorporation
provides that our directors will not be personally liable to us or our
stockholders for monetary damages for breach of fiduciary duty as a director,
except for liability (1) for any breach of the director's duty of loyalty to us
or our stockholders, (2) acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (3) under Section 174 of
the DGCL, relating to prohibited dividends, distributions and repurchases or
redemptions of stock or (4) for any transaction from which the director derives
an improper personal benefit.

Article 5 of our by-laws includes provisions for indemnification of our
directors and officers to the fullest extent permitted by the DGCL as now in
effect or as in effect at a later date. Insofar as indemnification for
liabilities arising under the federal securities laws may be permitted to
directors, officers and persons controlling us under these provisions, we have
been informed that in the opinion of the SEC this indemnification is against
public policy as expressed in federal securities laws and is unenforceable.

PLAN OF DISTRIBUTION

We have reserved 300,000 shares of Class A common stock for sale to
eligible agencies under the plan for the five-year period ending March 31, 2007.
We will offer the shares of Class A common stock under the plan directly to
eligible agencies through our officers and will not use a broker or a dealer. In
addition, we will not pay commissions, discounts or any other payments to any
person for services in connection with the offer or sale of shares of Class A
common stock under the plan. We will pay all costs of administering the plan.
Participants will not incur brokerage commissions or service charges for the
purchase of shares under the plan.

USE OF PROCEEDS

No minimum amount of proceeds is required to be received by Donegal
Group in this offering. Donegal Group will retain all proceeds from the sale of
the shares of Class A common stock under the plan. We intend to use the proceeds
from sales of these shares for general corporate purposes, including making
investments in and advances to our subsidiaries.

EXPERTS

The consolidated financial statements and schedules of Donegal Group as
of December 31, 2002 and 2001, and for each of the years in the three-year
period ended December 31, 2002, have been incorporated by reference in this
prospectus and in the registration statement in reliance upon the reports of
KPMG LLP, independent accountants, incorporated by reference in this prospectus,
and upon the authority of said firm as experts in accounting and auditing.

LEGAL OPINION

The validity of the issuance of the shares of Class A common stock
offered with this prospectus will be passed upon for us by Duane Morris LLP,
Philadelphia, Pennsylvania. As of April 1, 2003, attorneys of Duane Morris LLP
who have recently provided substantive legal services beneficially owned 13,500
shares of our outstanding Class A common stock, and 5,854

shares of our outstanding Class B common stock, of which 5,926 shares represent
shares of Class A common stock purchasable under currently exercisable stock
options and 2,963 shares represent shares of Class B common stock purchasable
under currently exercisable stock options. In addition, Frederick W. Dreher, a
partner of Duane Morris LLP, is a director of the Mutual Company and is one of
its members on the coordinating committee. The Mutual Company is a holder of
approximately 66% of our Class A common stock and approximately 62% of our Class
B common stock.

AVAILABLE INFORMATION

We file annual, quarterly and current reports, proxy statements and
other information with the SEC. You may read and copy any reports, statements or
other information we file at the SEC's public reference room at 450 Fifth
Street, N.W., Washington, DC 20549. Please call the SEC at 1-800-SEC-0330 for
further information on the operation of the public reference room. Our filings
with the SEC are also available to the public from commercial document retrieval
services and at the worldwide web site maintained by the SEC at
"http://www.sec.gov."

We filed with the SEC in Washington, D.C. a registration statement on
Form S-2 under the Securities Act with respect to the securities covered by this
prospectus. As permitted by the rules and regulations of the SEC, this
prospectus does not contain all of the information set forth in the registration
statement. For further information with respect to Donegal Group and the
securities covered by this prospectus, reference is made to the registration
statement, including the exhibits filed or incorporated in the registration
statement. Statements contained in this prospectus concerning the provisions of
documents filed with, or incorporated by reference in, the registration
statement as exhibits are necessarily summaries of those documents and each
statement is qualified in its entirety by reference to the copy of the
applicable documents filed with the SEC. Copies of the registration statement
and its exhibits are on file at the offices of the SEC and may be obtained upon
payment of the prescribed fee or may be examined without charge at the public
reference room of the SEC described above or at the worldwide web site
maintained by the SEC described above.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

We incorporate the following documents in this prospectus by reference:

(a) Our Annual Report on Form 10-K for the year ended December 31,
2002, as filed with the SEC on March 28, 2003;

(b) Certain portions of our 2002 Annual Report to Stockholders,
consisting of pages 1, 10 through 29 and the information under
the caption "Market Information" on page 30, included as an
exhibit to our Annual Report on Form 10-K for the year ended
December 31, 2002, which was filed with the SEC on March 28,
2003. The remaining portions of our 2002 Annual Report to
Stockholders are not incorporated by reference and are not
part of this registration statement.

Any statement incorporated in this prospectus shall be deemed to be
modified or superseded for purposes of this prospectus to the extent that a
statement contained in this prospectus or in any other subsequently filed
document which also is or is deemed to be

incorporated by reference in this prospectus modifies or supersedes such
statement and any statement contained in this prospectus shall be deemed to be
modified or superseded for all purposes to the extent that a statement contained
in any subsequently filed document that is deemed to be incorporated by
reference modifies or supersedes such statement.

All documents filed by us pursuant to Section 13(a), 13(c), 14 or 15(d)
of the Exchange Act after the date of this prospectus and prior to the filing of
a post-effective amendment that indicates that all securities offered have been
sold or that deregisters all securities then remaining unsold, shall be deemed
to be incorporated by reference in this prospectus and to be a part hereof from
the date of filing of such documents.

We will provide without charge to each person, including any beneficial
owner, to whom this prospectus is delivered, on request, a copy of any or all
documents incorporated by reference in this prospectus, other than exhibits to
those documents unless the exhibits are specifically incorporated by reference.
Requests should be directed to:

Ralph G. Spontak
Senior Vice President and Chief Financial Officer
Donegal Group Inc.
1195 River Road
Marietta, PA 17547
(888) 877-0600

DONEGAL GROUP INC.

2001 AGENCY STOCK PURCHASE PLAN

300,000
Shares of
Class A common stock

----------

PROSPECTUS

----------

DATED APRIL 9, 2003

YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH
DIFFERENT INFORMATION.

WE DO NOT CLAIM THE ACCURACY OF THE INFORMATION IN THIS PROSPECTUS AS
OF ANY DATE OTHER THAN THE DATE STATED ON THE COVER PAGE OF THE PROSPECTUS.

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 14.

This item is hereby incorporated by reference to Item 14 of Amendment
No. 5 to Registrant's Form S-2 Registration Statement No. 333-63102 filed
February 5, 2002.

ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

This item is hereby incorporated by reference to Item 15 of Amendment
No. 5 to Registrant's Form S-2 Registration Statement No. 333-63102 filed
February 5, 2002.

ITEM 16. EXHIBITS.

MANAGEMENT CONTRACTS AND COMPENSATORY PLANS OR ARRANGEMENTS
-----------------------------------------------------------
10.1 Donegal Group Inc. Amended and Restated 1996 Equity Incentive Plan. (c)
10.2 Donegal Group Inc. 2001 Equity Incentive Plan for Employees. (d)
10.3 Donegal Group Inc. 2001 Equity Incentive Plan for Directors. (d)
10.4 Donegal Group Inc. 2001 Employee Stock Purchase Plan, as amended. (e)
10.5 Donegal Group Inc. Amended and Restated 2001 Agency Stock Purchase Plan. (f)
10.6 Donegal Mutual Insurance Company 401(k) Plan. (g)
10.7 Amendment No. 1 effective January 1, 2000 to Donegal Mutual Insurance (g)
Company 401(k) Plan.
10.8 Amendment No. 2 effective January 6, 2000 to Donegal Mutual Insurance (h)
Company 401(k) Plan.
10.9 Amendment No. 3 effective July 23, 2001 to Donegal Mutual Insurance Company (h)
401(k) Plan.
10.10 Amendment No. 4 effective January 1, 2002 to Donegal Mutual Insurance (h)
Company 401(k) Plan.

II-1

10.11 Amendment No. 5 effective December 31, 2001 to Donegal Mutual Insurance (h)
Company 401(k) Plan.
10.12 Amendment No. 6 effective July 1, 2002 to Donegal Mutual Insurance Company (i)
401(k) Plan.
10.13 Donegal Mutual Insurance Company Executive Restoration Plan. (j)

OTHER MATERIAL CONTRACTS
------------------------
10.14 Tax Sharing Agreement dated September 29, 1986 between Donegal Group Inc. (k)
and Atlantic States Insurance Company.
10.15 Services Allocation Agreement dated September 29, 1986 between Donegal (k)
Mutual Insurance Company, Donegal Group Inc. and Atlantic States Insurance
Company.
10.16 Proportional Reinsurance Agreement dated September 29, 1986 between Donegal (k)
Mutual Insurance Company and Atlantic States Insurance Company.
10.17 Amendment dated October 1, 1988 to Proportional Reinsurance Agreement (l)
between Donegal Mutual Insurance Company and Atlantic States Insurance
Company.
10.18 Multi-Line Excess of Loss Reinsurance Agreement effective January 1, 2002 (i)
among Donegal Mutual Insurance Company, Dorinco Reinsurance Company and Erie
Insurance Group.
10.19 Amendment dated July 16, 1992 to Proportional Reinsurance Agreement between (m)
Donegal Mutual Insurance Company and Atlantic States Insurance Company.
10.20 Amendment dated as of December 21, 1995 to Proportional Reinsurance (n)
Agreement between Donegal Mutual Insurance Company and Atlantic States
Insurance Company.
10.21 Reinsurance and Retrocession Agreement dated May 21, 1996 between Donegal (j)
Mutual Insurance Company and Southern Insurance Company of Virginia.
10.22 Amended and Restated Credit Agreement dated as of July 27, 1998 among (o)
Donegal Group Inc., the banks and other financial institutions from time to
time party thereto and Fleet National Bank, as agent.
10.23 First Amendment and Waiver to the Amended and Restated Credit Agreement (g)
dated as of December 31, 1999.
10.24 Amendment dated as of April 20, 2000 to Proportional Reinsurance Agreement (p)
between Donegal Mutual Insurance Company and Atlantic States Insurance
Company.

II-2

10.25 Lease Agreement dated as of September 1, 2000 between Donegal Mutual (d)
Insurance Company and Province Bank FSB.
10.26 Aggregate Excess of Loss Reinsurance Agreement dated as of January 1, 2001 (d)
between Donegal Mutual Insurance Company and Atlantic States Insurance
Company (as successor-in-interest to Pioneer Insurance Company).
13 2002 Annual Report to Stockholders. (i)
23.1 Consent of Independent Auditors. Filed
herewith
23.2 Consent of Duane Morris LLP (included in its opinion incorporated by
reference in Exhibit 5.1).
24 Powers of attorney. (b)

(a) Such exhibit is hereby incorporated by reference to the like-described
exhibit in Amendment No. 4 to Registrant's Form S-2 Registration
Statement No. 333-63102 filed December 21, 2001.
(b) Such exhibit is hereby incorporated by reference to the like-described
exhibit in Registrant's Form S-2 Registration Statement No. 333-63102
filed on June 15, 2001.
(c) Such exhibit is hereby incorporated by reference to the like-described
exhibit in Registrant's Form 10-K Report for the year ended December
31, 1998.
(d) Such exhibit is hereby incorporated by reference to the like-described
exhibit in Registrant's Form 10-K Report for the year ended December
31, 2000.
(e) Such exhibit is hereby incorporated by reference to the like-described
exhibit in Registrant's Form S-8 Registration Statement No. 333-62974
filed June 14, 2001.
(f) Such exhibit is hereby incorporated by reference to the like-described
exhibit in Registrant's Form S-2 Registration Statement No. 333-63102
declared effective February 8, 2002.
(g) Such exhibit is hereby incorporated by reference to the like-described
exhibit in Registrant's Form 10-K Report for the year ended December
31, 1999.
(h) Such exhibit is hereby incorporated by reference to the like-described
exhibit in Registrant's Form 10-K Report for the year ended December
31, 2001.
(i) Such exhibit is hereby incorporated by reference to the like-described
exhibit in Registrant's Form 10-K Report for the year ended December
31, 2002.

II-3

(j) Such exhibit is hereby incorporated by reference to the like-described
exhibit in Registrant's Form 10-K Report for the year ended December
31, 1996.
(k) Such exhibit is hereby incorporated by reference to the like-described
exhibit in Registrant's Form S-1 Registration Statement No. 33-8533
declared effective October 29, 1986.
(l) Such exhibit is hereby incorporated by reference to the like-described
exhibit in Registrant's Form 10-K Report for the year ended December
31, 1988.
(m) Such exhibit is hereby incorporated by reference to the like-described
exhibit in Registrant's Form 10-K Report for the year ended December
31, 1992.
(n) Such exhibit is hereby incorporated by reference to the like-described
exhibit in Registrant's Form 8-K Report dated December 21, 1995.
(o) Such exhibit is hereby incorporated by reference to the like-described
exhibit in Registrant's Form 8-K Report dated November 17, 1998.
(p) Such exhibit is hereby incorporated by reference to the like-described
exhibit in Registrant's Form 8-K Report dated May 31, 2000.

ITEM 17. UNDERTAKINGS.

This item is hereby incorporated by reference to Item 17 of Amendment
No. 5 to Registrant's Form S-2 Registration Statement No. 333-63102 filed
February 5, 2002.

II-4

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-2 and has duly caused this Post-Effective
Amendment to Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in Marietta, Pennsylvania, on April
9, 2003.

DONEGAL GROUP INC.

By: /s/ Donald H. Nikolaus
-----------------------------
Donald H. Nikolaus, President

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

Signature Title Date

/s/ Donald H. Nikolaus
_______________________________ President, Chief Executive Officer April 9, 2003
Donald H. Nikolaus and a Director
(principal executive officer)

/s/ Ralph G. Spontak
_______________________________ Senior Vice President, Chief April 9, 2003
Ralph G. Spontak Financial Officer and Secretary
(principal financial and
accounting officer)

* Director April 9, 2003
-------------------------------
Patricia A. Gilmartin

* Director April 9, 2003
-------------------------------
Philip H. Glatfelter, II

* Director April 9, 2003
-------------------------------
R. Richard Sherbahn

* Director April 9, 2003
-------------------------------
Robert S. Bolinger

II-5

Signature Title Date

Director April , 2003
-------------------------------
John J. Lyons

By:/s/ Ralph G. Spontak
----------------------------------------
Ralph G. Spontak, as attorney-in-fact

*Signed pursuant to power of attorney

II-6

EXHIBIT INDEX

(Pursuant to Item 601 of Regulation S-K)

EXHIBIT NUMBER DESCRIPTION OF EXHIBITS REFERENCE
------------------------------------------ ---------
4.1 Form of Subscription Agreement Under the Donegal Group Inc. 2001 Agency (a)
Stock Purchase Plan.
5.1 Opinion of Duane Morris LLP.
(b)
MANAGEMENT CONTRACTS AND COMPENSATORY PLANS OR ARRANGEMENTS
-----------------------------------------------------------
10.1 Donegal Group Inc. Amended and Restated 1996 Equity Incentive Plan. (c)
10.2 Donegal Group Inc. 2001 Equity Incentive Plan for Employees. (d)
10.3 Donegal Group Inc. 2001 Equity Incentive Plan for Directors. (d)
10.4 Donegal Group Inc. 2001 Employee Stock Purchase Plan, as amended. (e)
10.5 Donegal Group Inc. Amended and Restated 2001 Agency Stock Purchase Plan. (f)
10.6 Donegal Mutual Insurance Company 401(k) Plan. (g)
10.7 Amendment No. 1 effective January 1, 2000 to Donegal Mutual Insurance (g)
Company 401(k) Plan.
10.8 Amendment No. 2 effective January 6, 2000 to Donegal Mutual Insurance (h)
Company 401(k) Plan.
10.9 Amendment No. 3 effective July 23, 2001 to Donegal Mutual Insurance Company (h)
401(k) Plan.
10.10 Amendment No. 4 effective January 1, 2002 to Donegal Mutual Insurance (h)
Company 401(k) Plan.
10.11 Amendment No. 5 effective December 31, 2001 to Donegal Mutual Insurance (h)
Company 401(k) Plan.
10.12 Amendment No. 6 effective July 1, 2002 to Donegal Mutual Insurance Company (i)
401(k) Plan.
10.13 Donegal Mutual Insurance Company Executive Restoration Plan. (j)

OTHER MATERIAL CONTRACTS

10.14 Tax Sharing Agreement dated September 29, 1986 between Donegal Group Inc. (k)
and Atlantic States Insurance Company.
10.15 Services Allocation Agreement dated September 29, 1986 between Donegal (k)
Mutual Insurance Company, Donegal Group Inc. and Atlantic States Insurance
Company.
10.16 Proportional Reinsurance Agreement dated September 29, 1986 between Donegal (k)
Mutual Insurance Company and Atlantic States Insurance Company.
10.17 Amendment dated October 1, 1988 to Proportional Reinsurance Agreement (l)
between Donegal Mutual Insurance Company and Atlantic States Insurance
Company.
10.18 Multi-Line Excess of Loss Reinsurance Agreement effective January 1, 2002 (i)
among Donegal Mutual Insurance Company, Dorinco Reinsurance Company and Erie
Insurance Group.
10.19 Amendment dated July 16, 1992 to Proportional Reinsurance Agreement between (m)
Donegal Mutual Insurance Company and Atlantic States Insurance Company.
10.20 Amendment dated as of December 21, 1995 to Proportional Reinsurance (n)
Agreement between Donegal Mutual Insurance Company and Atlantic States
Insurance Company.
10.21 Reinsurance and Retrocession Agreement dated May 21, 1996 between Donegal (j)
Mutual Insurance Company and Southern Insurance Company of Virginia.
10.22 Amended and Restated Credit Agreement dated as of July 27, 1998 among (o)
Donegal Group Inc., the banks and other financial institutions from time to
time party thereto and Fleet National Bank, as agent.
10.23 First Amendment and Waiver to the Amended and Restated Credit Agreement (g)
dated as of December 31, 1999.
10.24 Amendment dated as of April 20, 2000 to Proportional Reinsurance Agreement (p)
between Donegal Mutual Insurance Company and Atlantic States Insurance
Company.
10.25 Lease Agreement dated as of September 1, 2000 between Donegal Mutual (d)
Insurance Company and Province Bank FSB.
10.26 Aggregate Excess of Loss Reinsurance Agreement dated as of January 1, 2001 (d)
between Donegal Mutual Insurance Company and Atlantic States Insurance
Company (as successor-in-interest to Pioneer Insurance Company).
13 2002 Annual Report to Stockholders. (i)

23.1 Consent of Independent Auditors. Filed herewith
23.2 Consent of Duane Morris LLP (included in its opinion incorporated by
reference in Exhibit 5.1).
24 Powers of attorney. (b)

-------------------

(m) Such exhibit is hereby incorporated by reference to the like-described
exhibit in Registrant's Form 10-K Report for the year ended December
31, 1992.
(n) Such exhibit is hereby incorporated by reference to the like-described
exhibit in Registrant's Form 8-K Report dated December 21, 1995.
(o) Such exhibit is hereby incorporated by reference to the like-described
exhibit in Registrant's Form 8-K Report dated November 17, 1998.
(p) Such exhibit is hereby incorporated by reference to the like-described
exhibit in Registrant's Form 8-K Report dated May 31, 2000.