Donegal Group Announces Stockholder Approval of Revised Capital Structure, Commencement of Trading of Class A Common Stock and Class B Common Stock And Declaration of Dividends

Apr 19, 2001, 01:00 ET from Donegal Group Inc.

    MARIETTA, Pa., April 19 /PRNewswire/ -- Donegal Group Inc. (Nasdaq:   DGIC)
 today announced that its stockholders had approved the previously announced
 amendment to its Certificate of Incorporation whereby the Company's
 outstanding Common Stock would be reverse split one-for-three and reclassified
 as Class B Common Stock.  The amendment, which becomes effective as of the
 close of business on April 19, 2001, also authorizes the issuance of Class A
 Common Stock with one-tenth of a vote per share.  The Company has also
 previously announced the declaration of a dividend of two shares of Class A
 Common Stock for each share of Class B Common Stock held of record as of the
 close of business on April 19, 2001.  The effect of the reverse split and the
 stock dividend taken together is that the Company will have the same total
 number of shares outstanding after the reverse split and the stock dividend as
 it did before the reverse split and the stock dividend.  Therefore, there will
 be no change in the book value per share or historical earnings per share of
 the Class A Common Stock and the Class B Common Stock after the reverse split
 and the stock dividend compared to the Common Stock outstanding before the
 reverse split and the stock dividend as indicated in the attached table.
     We expect that, commencing with the opening of trading on April 20, 2001,
 the Class A Common Stock will trade on the Nasdaq National Market under the
 symbol DGICA and the Class B Common Stock will trade on the Nasdaq National
 Market under the symbol DGICB.  Holders of the Company's previously existing
 Common Stock will shortly receive written instructions and a letter of
 transmittal for the purpose of exchanging their certificates representing the
 previously existing Common Stock for certificates representing Class A Common
 Stock and Class B common Stock and, if applicable, a check for any fractional
 interest in a share of Class B Common Stock.
     The Company also announced the declaration of a quarterly dividend at the
 rate of $.10 per share on the Class A Common Stock and a quarterly dividend at
 the rate of $.09 per share on the Class B Common Stock.  Both dividends will
 be paid on May 30, 2001 to stockholders of record at the close of business on
 May 15, 2001.
     Donald H. Nikolaus, President of DGI, stated:  "We are pleased that our
 stockholders have approved our new capital structure.  We are confident that
 all of our stockholders will benefit from the additional flexibility provided
 by the new capital structure."
     All statements contained in this press release that are not historic facts
 are based on current expectations.  Such statements are forward-looking (as
 defined in the Private Securities Litigation Reform Act of 1995) in nature and
 involve a number of risks and uncertainties.  Actual events may vary
 materially.  The factors that could cause actual events to vary are described
 in the reports the Company files with the Securities and Exchange Commission.
 Undue reliance should not be placed on any such forward-looking statements.
     Donegal Group Inc. is a regional property-casualty insurance holding
 company doing business in 15 Mid-Atlantic and Southern states through its
 insurance subsidiaries.
 
     Outstanding Common Shares:
 
         Before Reverse Stock Split and Stock Dividend:
 
                                                 Book value per Common Share
              Shares                              Based on December 31, 2000
     Common   8,920,519                                    $12.75
 
 
     Outstanding Common Shares:
 
         After Reverse Stock Split and Stock Dividend:
 
                                                 Book value per Common Share
              Shares                              Based on December 31, 2000
     Class A  5,947,012                                    $12.75
     Class B  2,973,506                                    $12.75
     Total    8,920,518                                    $12.75
 
 

SOURCE Donegal Group Inc.
    MARIETTA, Pa., April 19 /PRNewswire/ -- Donegal Group Inc. (Nasdaq:   DGIC)
 today announced that its stockholders had approved the previously announced
 amendment to its Certificate of Incorporation whereby the Company's
 outstanding Common Stock would be reverse split one-for-three and reclassified
 as Class B Common Stock.  The amendment, which becomes effective as of the
 close of business on April 19, 2001, also authorizes the issuance of Class A
 Common Stock with one-tenth of a vote per share.  The Company has also
 previously announced the declaration of a dividend of two shares of Class A
 Common Stock for each share of Class B Common Stock held of record as of the
 close of business on April 19, 2001.  The effect of the reverse split and the
 stock dividend taken together is that the Company will have the same total
 number of shares outstanding after the reverse split and the stock dividend as
 it did before the reverse split and the stock dividend.  Therefore, there will
 be no change in the book value per share or historical earnings per share of
 the Class A Common Stock and the Class B Common Stock after the reverse split
 and the stock dividend compared to the Common Stock outstanding before the
 reverse split and the stock dividend as indicated in the attached table.
     We expect that, commencing with the opening of trading on April 20, 2001,
 the Class A Common Stock will trade on the Nasdaq National Market under the
 symbol DGICA and the Class B Common Stock will trade on the Nasdaq National
 Market under the symbol DGICB.  Holders of the Company's previously existing
 Common Stock will shortly receive written instructions and a letter of
 transmittal for the purpose of exchanging their certificates representing the
 previously existing Common Stock for certificates representing Class A Common
 Stock and Class B common Stock and, if applicable, a check for any fractional
 interest in a share of Class B Common Stock.
     The Company also announced the declaration of a quarterly dividend at the
 rate of $.10 per share on the Class A Common Stock and a quarterly dividend at
 the rate of $.09 per share on the Class B Common Stock.  Both dividends will
 be paid on May 30, 2001 to stockholders of record at the close of business on
 May 15, 2001.
     Donald H. Nikolaus, President of DGI, stated:  "We are pleased that our
 stockholders have approved our new capital structure.  We are confident that
 all of our stockholders will benefit from the additional flexibility provided
 by the new capital structure."
     All statements contained in this press release that are not historic facts
 are based on current expectations.  Such statements are forward-looking (as
 defined in the Private Securities Litigation Reform Act of 1995) in nature and
 involve a number of risks and uncertainties.  Actual events may vary
 materially.  The factors that could cause actual events to vary are described
 in the reports the Company files with the Securities and Exchange Commission.
 Undue reliance should not be placed on any such forward-looking statements.
     Donegal Group Inc. is a regional property-casualty insurance holding
 company doing business in 15 Mid-Atlantic and Southern states through its
 insurance subsidiaries.
 
     Outstanding Common Shares:
 
         Before Reverse Stock Split and Stock Dividend:
 
                                                 Book value per Common Share
              Shares                              Based on December 31, 2000
     Common   8,920,519                                    $12.75
 
 
     Outstanding Common Shares:
 
         After Reverse Stock Split and Stock Dividend:
 
                                                 Book value per Common Share
              Shares                              Based on December 31, 2000
     Class A  5,947,012                                    $12.75
     Class B  2,973,506                                    $12.75
     Total    8,920,518                                    $12.75
 
 SOURCE  Donegal Group Inc.