Gregory M. Shepard Voluntarily Withdraws Form A Applications - Blasts Donegal
Group's Board and CEO Don Nikolaus
BRADENTON, Fla., Feb. 17, 2014
BRADENTON, Fla., Feb. 17, 2014 /PRNewswire/ --(NASDAQ: "DGICA" and "DGICB") –
Mr. Shepard announced today that he is voluntarily withdrawing his Form A
applications to increase his holdings in Donegal Group Inc. ("Donegal"), as
filed with the insurance departments of Pennsylvania, Iowa, Virginia,
Wisconsin, Michigan, and Maryland. Mr. Shepard stated: "The focus of the
insurance departments is to have people and entities in control positions who
are committed to increasing surplus and protecting policyholders. My focus is
rather on shareholder value, although I believe that an increase in
shareholder value leads to a stronger company and greater protection for the
policyholders." Mr. Shepard thanks the insurance departments for their time,
attention, and professionalism.
Mr. Shepard continued: "I want Donegal and its shareholders to know that I am
not going away. I will continue to fight for shareholder value and to call
out, in my opinion, the egregious compensation and stock option grants, and
overall lack of performance, of Don Nikolaus, Donegal's CEO and Chairman, who
is also the CEO and Chairman of Donegal's parent, Donegal Mutual Insurance
Company, which owns approximately 66% of Donegal's voting power, according to
Donegal's 10-Q filed on November 7, 2013."
"My intent now is to hold discussions with property and casualty mutual
insurance companies, professional activists, hedge funds, and others to
determine ways to persuade Nikolaus' cronies on the Donegal Board of Directors
to do the right thing and maximize value for the shareholders, not just for
Don Nikolaus and other insiders. In my opinion, Donegal's Board of Directors
has failed miserably to meet its fiduciary duties and is one of the worst
Boards in corporate America. I intend to hold them to account."
Mr. Shepard notes that the closing price of Donegal's Class A stock was $18.84
on February 13, 2007, while seven years later the closing price for the Class
A stock was $14.78 on February 13, 2014. This represents a decline of
approximately 21.5% over a seven-year period. There are 20,681,588 Class A
shares outstanding and 5,576,775 Class B shares outstanding as of November 1,
2013, according to Donegal's 10-Q filed on November 7, 2013. Mr. Shepard also
notes that Donegal's Compensation Committee granted an additional 175,000
Class A stock options to Don Nikolaus, according to Nikolaus' Form 4 filed
with the SEC on December 23, 2013, apparently as his reward for Donegal's
miserable stock price performance.
This press release is neither an offer to purchase nor a solicitation of an
offer to sell shares of Donegal. In addition, this press release is not
intended to, and does not, constitute (1) a solicitation of a proxy, consent,
or authorization for or with respect to the annual meeting or any special
meeting of Donegal's shareholders, or (2) a solicitation of a consent or
authorization in the absence of any such meeting.
SOURCE Gregory M. Shepard
Contact: D.F. King & Co., Inc., +1-212-269-5550
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