AMENDMENT V TO PROPORTIONAL REINSURANCE AGREEMENT
EXHIBIT 10.1
THIS AMENDMENT V, dated as of February 11, 2008 (the “Amendment”) to the Proportional
Reinsurance Agreement (the “Agreement”) dated as of September 29, 1986, as previously amended on
October 1, 1988, July 16, 1992, December 21, 1995 and April 20, 2000, between DONEGAL MUTUAL
INSURANCE COMPANY, a mutual casualty insurance company organized and existing under the laws of the
Commonwealth of Pennsylvania (“Donegal Mutual”) and ATLANTIC STATES INSURANCE COMPANY, a stock
casualty insurance company incorporated and existing under the laws of the Commonwealth of
Pennsylvania (“Atlantic States”) and all of whose capital stock is owned by Donegal Group Inc., a
Delaware corporation (“DGI”).
W I T N E S S E T H:
WHEREAS, the Coordinating Committee of the Boards of Directors of Donegal Mutual and DGI has
determined that the Amendment is fair and equitable to Donegal Mutual and its policyholders and to
DGI and its stockholders;
WHEREAS, a committee comprised solely of independent members of the Board of Directors of
Donegal Mutual, with the advice of independent legal counsel, has determined that the Amendment is
fair to and in the best interests of Donegal Mutual and its policyholders and recommended that the
Board of Directors of Donegal Mutual approve the Amendment;
WHEREAS, a committee comprised solely of independent members of the Board of Directors of DGI,
with the advice of independent legal counsel, has determined that the Amendment is fair to and in
the best interests of DGI and its stockholders and recommended that the Board of Directors of DGI
cause the Board of Directors of Atlantic States to approve the Amendment;
WHEREAS, Donegal Mutual’s Board of Directors has received the opinion of ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ and
▇▇▇▇▇, Inc., an independent investment banking firm, to the effect that the Amendment is fair to
Donegal Mutual and its policyholders from a financial point of view; and
WHEREAS, the Boards of Directors of Donegal Mutual and Atlantic States believe the Amendment
is in the best interests of Donegal Mutual and Atlantic States and have approved the Amendment.
NOW, THEREFORE, the parties hereto, in consideration of their mutual covenants and agreements
contained herein and in the Agreement and intending to be legally bound hereby, covenant and agree
as follows:
1. Amendment of Exhibit I to the Agreement. Exhibit I to the Agreement is hereby
amended and restated so that, as amended and restated, said Exhibit to the Agreement shall read in
its entirety as follows:
“EXHIBIT I
PROPORTIONAL REINSURANCE AGREEMENT
PROPORTIONAL REINSURANCE AGREEMENT
| Corporate Pool Participant | Pool Participation | |||
Donegal Mutual Insurance Company |
20 | % | ||
Atlantic States Insurance Company |
80 | % | ||
2. Effective Date of the Amendment. The Amendment shall be effective as to the
parties at 12:01 a.m., on March 1, 2008.
3. Ratification of Remainder of the Agreement. Except for the amendment to Exhibit I
to the Agreement as set forth in Section 1 of this Amendment, all of the terms and provisions of
the Agreement are hereby ratified and confirmed and shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto, by their officers thereunto duly authorized, have
executed this Amendment as of the date and year first above written.
| [SEAL] | DONEGAL MUTUAL INSURANCE COMPANY | |||||||
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇ |
By: | /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ | ||||||
Secretary |
President and Chief Executive Officer |
|||||||
| [SEAL] | ATLANTIC STATES INSURANCE COMPANY | |||||||
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ |
By: | /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | ||||||
Senior Vice President and Treasurer |
Senior Vice President and Chief Financial Officer |
|||||||
-2-