SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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|Item 5.02.|| |
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
(e) Material Compensatory Plan, Contract or Arrangement
On December 17, 2020, the board of directors (the “Board”) of Donegal Group Inc. (the “Company”) and the Compensation Committee of the Board unanimously approved a new Annual Executive Incentive Plan, which provides the terms of bonus opportunities to be granted to the Company’s executive officers, including the Company’s President and Chief Executive Officer and other named executive officers.
Under the Annual Executive Incentive Plan, each of the Company’s named executive officers will be eligible to receive a bonus if the Donegal Insurance Group, which consists of Donegal Mutual Insurance Company (“Donegal Mutual”) and the insurance subsidiaries of the Company and Donegal Mutual, achieves target commercial lines premium growth, personal lines premium growth and statutory combined ratio objectives, and if the Company achieves a target operating return on equity objective, for the fiscal year 2021. The Annual Executive Incentive Plan specifies performance objectives and weightings with respect to annual bonuses that will be payable, if and to the extent earned, for each metric in 2021. For each performance measure, bonus achievement is calculated by multiplying the percentage weighting for the performance measure by a percentage of salary ranging from 40% to a maximum of 100% that corresponds to achievement of performance objectives for the performance measure. The percentage weightings for the performance measures total 100%. Under the terms of the Annual Executive Incentive Plan, the joint Compensation Committee of the Board and the Donegal Mutual board of directors (the “Joint Compensation Committee“) may pay a discretionary bonus to a participant in such amount as the Joint Compensation Committee determines to be appropriate and in the best interests of Donegal Mutual and the Company.
The purpose of the Annual Executive Incentive Plan is to (i) promote the interests of the Company and its stockholders by motivating and rewarding achievement of certain financial objectives and (ii) enable the Company to retain skilled executives by providing attractive performance-based compensation opportunities.
The Joint Compensation Committee retains the discretion to adjust the amount of any bonus to be paid under the Annual Executive Incentive Plan, regardless of whether or the extent to which any of the objective criteria are achieved. Additional information with respect to the compensation arrangements for the Company’s named executive officers, including salary increases, annual bonus awards and stock option grants will be set forth in the Company’s Proxy Statement for its 2021 Annual Meeting of Stockholders.
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
|DONEGAL GROUP INC.|
Jeffrey D. Miller, Executive Vice
President and Chief Financial Officer
Date: December 21, 2020