As filed with the Securities and Exchange Commission on
September 1, 1998.
Registration No. 333-__________
_________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
___________________________
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
___________________________
OLD GUARD GROUP, INC.
(Exact Name of Registrant as Specified in its Charter)
Pennsylvania 23-2852984
(State of Incorporation) (I.R.S. Employer Identification No.)
2929 Lititz Pike
Lancaster, Pennsylvania 17601
(717) 569-5361
(Address and Telephone Number of Principal Executive Offices)
___________________________
David E. Hosler Jeffrey P. Waldron, Esquire
Chairman, President and Stevens & Lee
Chief Executive Officer One Glenhardie Corporate Center
Old Guard Group, Inc. 1275 Drummers Lane
2929 Lititz Pike Wayne, Pennsylvania 19087
Lancaster, Pennsylvania 17601 (610) 293-4961
(717) 569-5361
(Names, Addresses and Telephone Numbers of Agents for Service)
Approximate date of commencement of proposed sale to the
public: As soon as practicable after this Registration Statement
becomes effective.
If the only securities being registered on this form are
being offered pursuant to dividend or interest reinvestment
plans, please check the following box. [X]
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 other than securities
<PAGE 1> offered only in connection with dividend or interest
reinvestment plans, check the following box. [ ]
__________________________
CALCULATION OF REGISTRATION FEE
_________________________________________________________________
Title of each Proposed
class of maximum Proposed
securities Amount offering aggregate Regis-
to be to be price per offering tration
registered registered unit(1) price Fee
_________________________________________________________________
Common Stock, 100,000 shares $16.13 $1,630,000 $494.00
no par value
_________________________________________________________________
(1) Estimated solely for the purposes of calculating the
registration fee based upon the closing price of Old Guard
Group, Inc. common stock on August 27, 1998.
__________________
PAGE 2
<PAGE>
PROSPECTUS
OLD GUARD GROUP, INC.
___________________________
SHAREHOLDER AUTOMATIC DIVIDEND REINVESTMENT AND
STOCK PURCHASE PLAN
___________________________
100,000 Shares of Common Stock
___________________________
No person has been authorized to give any information or to make
any representation not contained in this Prospectus, and, if
given or made, such information or representation must not be
relied upon as having been authorized by Old Guard Group, Inc.
(the "Company"). Neither the delivery of this Prospectus nor any
sale made hereunder shall, under any circumstances, create any
implication that there has been no change in the affairs of
Company since the date hereof. This Prospectus does not
constitute an offer to sell, or a solicitation of an offer to
buy, any of the securities offered hereby in any jurisdiction to
any person to whom it is unlawful to make such offer in such
jurisdiction.
___________________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED
BY THE SECURITIES AND EXCHANGE COMMISSION NOR HAS
THE COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
___________________________
100,000 authorized and unissued shares of the Company's
common stock, no par value, have been authorized for purchase
under the Shareholder Automatic Dividend Reinvestment and Stock
Purchase Plan. It is suggested that this Prospectus be retained
for future reference.
___________________________
The date of this Prospectus is September 15, 1998.
PAGE 3
<PAGE>
AVAILABLE INFORMATION
Old Guard Group, Inc. (the "Company") is subject to the
information requirements of the Securities Exchange Act of 1934,
as amended ("Exchange Act") and, in accordance therewith, files
reports, proxy statements and other information with the
Securities and Exchange Commission ("Commission"). Such reports,
proxy statements and other information can be inspected and
copied at the public reference facilities of the Commission at
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549,
and should be available for inspection and copying at the
following regional offices of the Commission: New York Regional
Office, 7 World Trade Center, Suite 1300, New York, New York
10048; and the Chicago Regional Office, Northwestern Atrium
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661. Copies of such material can be obtained at prescribed
rates from the Public Reference Section of the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549. The Company's
principal executive offices are located at 2929 Lititz Pike,
Lancaster, Pennsylvania 17601 and its telephone number is
(717) 569-5361. The Registration Statement also is available
through the Commissions's World Wide Web site on the Internet
(http:/www.sec.gov).
The Company has filed with the Commission in
Washington, D.C. a Registration Statement under the Securities
Act of 1933, as amended, with respect to the Common Stock offered
pursuant to this Prospectus. This Prospectus does not contain
all the information set forth in the Registration Statement,
certain portions of which have been omitted as permitted by the
rules and regulations of the Commission. In addition, certain
documents filed by the Company with the Commission have been
incorporated in this Prospectus by reference. See "Incorporation
of Certain Documents by Reference." For further information with
respect to the Company and the Common Stock offered hereby,
reference is made to the Registration Statement, including the
exhibits thereto, and the documents incorporated herein by
reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the
Commission are incorporated herein by reference:
(a) the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1997, filed pursuant to
Section 13(a) or 15(d) or the Securities Exchange Act of 1934, as
amended (the "Exchange Act").
(b) all other reports filed by the Company pursuant to
Section 13(a) or 15(d) of the Exchange Act since December 31,
1997.
<PAGE 4>
(c) The description of the Company's common stock, no
par value (the "Common Stock"), contained in the Company's
Registration Statement on Form 8-A filed with the Commission on
October 25, 1996.
All documents subsequently filed by the Company
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange
Act, prior to the termination of the offering of Common Stock
covered by this Prospectus, shall be deemed to be incorporated by
reference into this Prospectus and to be a part hereof from the
date of the filing of such documents. Any statement contained in
a document incorporated or deemed to be incorporated by reference
herein shall be deemed to be modified or superseded for purposes
of this Prospectus to the extent that a statement contained
herein or in any other subsequently filed document which also is
or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person
to whom this Prospectus is delivered, on the written or oral
request of any such person, a copy of any or all documents
incorporated herein by reference (other than exhibits to such
documents). Requests should be directed to:
Old Guard Group, Inc.
2929 Lititz Pike
Lancaster, Pennsylvania 17601
Attention: Investor Relations
Telephone requests may be directed to the Company at
(717) 569-5361.
PAGE 5
<PAGE>
SHAREHOLDER AUTOMATIC DIVIDEND REINVESTMENT AND
STOCK PURCHASE PLAN
The following, in a question and answer format, are the
provisions of the Company's Shareholder Automatic Dividend
Reinvestment and Stock Purchase Plan (the "Plan"). Those holders
of the Common stock who do not participate in the Plan will
continue to receive cash dividend payments by check, if and when
dividends are declared.
Purpose
1. What is the purpose of the Plan?
The purpose of the Plan is to provide holders of
twenty-five (25) or more shares of the Company's common stock, no
par value (the "Common Stock"), with an attractive and convenient
method of investing cash dividends and, from time to time, as the
Board of Directors of the Company may in its discretion
determine, voluntary cash payments, in shares of Common Stock.
To the extent the shares are purchased directly from the Company,
the Company will receive additional funds to be used for general
corporate purposes (see "Use of Proceeds").
The Plan offers eligible holders of Common Stock an
opportunity to invest conveniently for long-term growth. The
Plan is not intended to provide short-term holders of shares with
the means to acquire additional shares at a discount from market
price or to provide holders of shares with the means to generate
short-term profits through resale of shares acquired at a
discount from market price. The intended purpose of the Plan
precludes any person, organization or other entity from
establishing a series of related accounts for the purpose of
conducting arbitrage operations or exceeding the voluntary cash
payment limit. The Company accordingly reserves the right to
modify, suspend or terminate participation by a shareholder who
the Company determines is using the Plan for purposes
inconsistent with the intended purpose of the Plan.
Advantages
2. What are the advantages of the Plan?
- Participants may reinvest dividends and invest
voluntary cash payments without brokerage commissions
or other charges (see No. 13 below).
- Participants may, from time to time, as the Board of
Directors of the Company may in its discretion
determine, purchase Common Stock with voluntary cash
payments at the average price of the Common Stock (see
No. 10 below).
<PAGE 6>
- Participants will receive a detailed statement of
account transactions (see No. 17 below).
Administration
3. Who administers the Plan for Participants?
The Company or its appointed administrative agent will
administer the Plan as agent (the "Agent") for Participants, and
in such capacity sends statements of account to Participants and
performs other duties relating to the Plan. All correspondence
relating to the Plan should include your account number and
should be directed to:
American Stock Transfer and Trust Co.
40 Wall Street
46th Floor
New York, NY 10005
Attention: Dividend Reinvestment Department
Telephone requests may be directed to the Agent at
(800) 278-4353 or (718) 921-8283.
Participation
4. Who is eligible to participate?
All record holders of twenty-five (25) or more shares
of Common Stock are eligible to participate in the Plan. If you
hold your shares in your own name, you may participate in the
Plan. If you are a beneficial owner whose shares are registered
in any name other than your own (e.g., in a broker's "street
name" or in the name of a bank nominee), you must either make
appropriate arrangements for your broker or nominee to
participate in the Plan on your behalf or you must become a
shareholder of record by having those shares with respect to
which you wish to participate transferred into your own name.
5. How does an eligible shareholder become a Participant?
An eligible shareholder who is the record holder of
Common Stock may join the Plan at any time by completing and
signing the authorization form ("Authorization Form") included
with this Prospectus and returning it to the Agent. A postage-
paid envelope is provided for that purpose. An eligible
beneficial owner whose shares of Common Stock are registered in
the name of a broker or bank nominee must make arrangements to
have such broker or bank nominee participate on his or her
behalf.
Authorization Forms for new Participants must be
received prior to a dividend record date for eligible
shareholders to reinvest the related dividend.
<PAGE 7>
6. Does a shareholder have to authorize dividend reinvestment
on a minimum number of shares?
Yes. An eligible shareholder must authorize the
reinvestment of dividends on at least twenty-five (25) shares of
Common Stock.
7. May a Participant change the number of shares subject to the
Plan?
Yes. If a Participant wishes to change the number of
shares of Common Stock subject to the Plan, the Participant must
notify the Agent in writing to that effect. Any such
notification received after a dividend record date will not be
effective until dividends paid for such record date have been
reinvested and the shares credited to the Participant's account.
A Participant must authorize the reinvestment of dividends on at
least twenty-five (25) shares of Common Stock in order to
continue participation in the Plan.
Purchases
8. What is the source for shares of Common Stock purchased
under the Plan?
Plan shares will be purchased, at the Company's
discretion, either directly from the Company or on the open
market, or by a combination of the foregoing. In the event the
purchase price of shares of Common Stock is less than the par
value per share of Common Stock, the Agent shall purchase shares
of Common Stock in the open market. Shares purchased from the
Company will be authorized, but unissued shares of Common Stock
or Common Stock held in treasury.
9. When and how will shares of Common Stock be purchased under
the Plan?
In the event the Agent purchases shares of Common Stock
from the Company, dividends will be reinvested on the dividend
payment date. In the event the Agent purchases shares of Common
Stock on the open market, dividends will be reinvested at such
times as the Agent may determine within thirty-one (31) days
after the dividend payment date or such later date as may be
necessary or advisable under any applicable federal securities
laws.
Any voluntary cash payment received by the Agent prior
to the twenty-fifth (25th) day of a month will be applied to the
purchase of Common Stock on the twenty-fifth (25th) day of that
month at a price determined in accordance with the provisions of
the Plan (the "Purchase Date"). Any voluntary cash payment
received on or after the twenty-fifth (25th) day of a month will
be applied to the purchase of Common Stock on the twenty-fifth
(25th) day of the following month. No interest will be paid on
voluntary cash payments. Therefore, you should forward voluntary
<PAGE 8> cash payments by the Agent shortly before the twenty-
fifth (25th) day of the month while taking care to allow
sufficient time to ensure that a voluntary cash payment is
received by that date.
10. At what price will shares of Common Stock be purchased under
the Plan?
The price of shares of Common Stock purchased with
reinvested cash dividends and voluntary cash payments, if any,
will be the market price.
Market price of the Common Stock means (i) the closing
price reported on the NASDAQ Stock Market on any relevant date
(or if not a trading date, on the last prior trading day on which
a trade is reported); or (ii) if the Common Stock is listed for
trading on a national exchange, the mean between the high and low
prices on such exchange on any relevant date, as reported in the
financial press (or if not a trading date, on the last prior
trading day on which a trade is reported). In the case of
purchases of shares of Common Stock on the open market, the price
at which the Agent shall be deemed to have acquired shares shall
be the weighted average market price with respect to all shares
purchased.
11. How many shares of Common Stock will be purchased for
Participants?
The number of shares that will be purchased for each
Participant will depend on the amount of dividends to be
reinvested, voluntary cash payments, or both in a Participant's
account and the applicable purchase price of the Common Stock
(see No. 10 above). Each Participant's account will be credited
with that number of shares, including any fractional interest
computed to three decimal places, equal to the total amount to be
invested divided by the applicable purchase price as described in
the response to Question No. 10 above.
12. Will dividends on shares held in a Participant's account be
used to purchase additional shares under the Plan?
Yes. All dividends on shares held in a Participant's
account, whether purchased through dividend reinvestment or
voluntary cash payments, will be automatically reinvested in
additional shares of Common Stock.
13. Are there any expenses to Participants in connection with
purchases under the Plan?
No. Participants will incur no brokerage commissions
or other charges for purchases made under the Plan.
<PAGE 9>
Voluntary Cash Payments
14. Who will be eligible to make voluntary cash payments?
All holders of twenty-five (25) or more shares of
Common Stock who elect to have dividends reinvested in accordance
with provisions of the Plan may, from time to time, as the Board
of Directors of the Company in its discretion determines, elect
to make voluntary cash payments. Participants will be permitted
to purchase shares of the Common Stock with voluntary cash
payments under the Plan on a monthly basis as described in No. 9
above.
15. What are the limitations on voluntary cash payments?
Voluntary cash payments may be made at any time. Such
payments on behalf of any Participant may not aggregate more than
$2,000 per month. Voluntary cash payments must be made in U.S.
currency. The Company reserves the right in its sole discretion
to determine whether voluntary cash payments are made on behalf
of a particular Participant.
16. How does the voluntary cash payment option work?
A voluntary cash payment may be made by forwarding a
check or money order to the Agent with a payment form which will
be attached to the investment statement sent to Participants
after each investment. Checks and money orders should be made
payable to American Stock Transfer and Trust Co. and should
include the Participant's account number.
Any voluntary cash payment received before the twenty-
fifth (25th) day of the month (see No. 9 above) will be applied
to the purchase of shares of Common Stock on the twenty-fifth
(25th) day of such month at a price determined in accordance with
provisions of the Plan (see Nos. 10 and 11 above).
Reports to Participants
17. What kind of reports will be sent to Participants in the
Plan?
A statement of account transactions will be mailed to
each Participant within approximately ten (10) days after the
dividend payment date or the date a voluntary cash contribution
is invested, as the case may be (see No. 9 above). These
statements will provide a record of cost information and should
be retained for tax purposes. Each Participant will also receive
copies of Company's annual and quarterly reports to shareholders,
proxy statements and information for income tax reporting
purposes.
<PAGE 10>
Share Certificates
18. Will certificates be issued for shares of Common Stock
purchased under the Plan?
Unless requested by a Participant, certificates for
shares of Common Stock purchased under the Plan will not be
issued. The number of shares credited to a Participant's account
under the Plan will be shown on his statement of account. This
safekeeping feature protects against loss, theft or destruction
of stock certificates. Certificates will be issued for shares
withdrawn from the Plan (see No. 20 below).
As an additional service to Participants, Participants
may deposit free of charge with the Agent for safekeeping any
certificate for shares of Common Stock subject to reinvestment of
dividends under the Plan. Delivery of certificates for this
service is at the risk of the shareholder and, for delivery by
mail, insured registered mail with return receipt is recommended.
The receipt of any shares delivered for safekeeping will be shown
on your account statement.
19. In whose name will certificates be registered when issued to
Participants?
All shares of Common Stock purchased by the Agent
pursuant to the Plan, including any fractions of a whole share,
will be registered in the name of the Agent or its nominee as
agent for each Participant. Shares of Common Stock purchased by
the Agent on behalf of each Participant will be credited to such
Participant's account on the books and records of the Plan, which
books and records will be maintained at all times by the Agent.
Withdrawal of Shares in Plan Accounts
20. How may a Participant withdraw shares purchased under the
Plan?
A Participant may withdraw from the Plan in whole or in
part at any time by giving the Agent written notice thereof, but
any such notice received by the Agent later than five (5) days
prior to a record date shall not be effective until dividends
paid for such record date have been credited to such
Participant's account. Upon withdrawal, certificates for the
number of whole shares specified in the Participant's notice and
credited to a Participant's account under the Plan shall be
issued to such Participant and, in the event of a total or
partial withdrawal, a cash payment shall be made for any fraction
of a whole share credited to such Participant's account (based
upon the market price per share of the Common Stock on the date
the withdrawal request is received, or the last prior trading
day). A Participant who withdraws from participation in the Plan
shall again have the right to participate in the Plan, provided
such Participant meets the eligibility requirements of the Plan
<PAGE 11> and makes the designation and authorization required by
the Plan (see Nos. 4 and 5 above).
If a Participant so requests in writing, the Agent
shall within seven (7) business days following receipt of such
notice place a sale order for the number of shares specified in
the Participant's notice and credited to such Participant's
account and shall deliver the proceeds therefrom, less any
brokerage fee, transfer tax, service charge, and costs, to the
withdrawing Participant.
If a Participant disposes of all the shares registered
in such Participant's name that are enrolled in the Plan, the
Agent shall, until otherwise notified, continue to reinvest the
dividends on the shares of Common Stock held in such
Participant's account. However, if such Participant holds less
than twenty-five (25) full shares of Common Stock in the Plan,
such Participant shall be deemed to have withdrawn from the Plan.
Federal Tax Information
21. What are the federal income tax consequences of
participation in the Plan?
Reinvestment Dividends. In the case of reinvested
dividends, when shares are acquired for a Participant's account
directly from the Company, the Participant must include in gross
income a dividend equal to the number of shares purchased with
reinvested dividends multiplied by the fair market value of the
Common Stock on the relevant dividend payment date. The
Participant's basis in such shares will also equal the fair
market value of the shares on the relevant dividend payment date.
Alternatively, when shares are purchased for a
Participant's account on the open market with reinvested
dividends, a Participant must include in gross income a dividend
equal to the actual price of the shares plus that portion of any
brokerage commissions paid by the Company which are attributable
to the purchase of the Participant's shares. The Participant's
basis in shares held for his or her account will be equal to the
purchase price for the shares plus allocable brokerage
commissions.
Voluntary Cash Payments. In the case of shares
purchased on the open market with voluntary cash payments,
Participants will be in receipt of a dividend to the extent of
any brokerage commissions paid by the Company. A Participant's
basis in shares acquired with optional cash payments will be
equal to the cost of the shares plus an allocable share of any
brokerage commissions.
Additional Information. The holding period for shares
acquired pursuant to the Plan will begin the day after the date
the shares are acquired. In the case of any shareholder as to
whom federal income tax withholding on dividends is required and
<PAGE 12> in the case of a foreign shareholder whose taxable
income under the Plan is subject to federal income tax
withholding, the Company will reinvest dividends net of the
required amount of tax withheld.
Participants should consult their own tax advisors as
to the tax consequences of account transactions. Certain tax
information will be provided to Participants by the Company (see
No. 18 above).
Other Information
22. What happens if the Company declares a stock dividend,
effects a stock split or has a rights offering with respect
to Common Stock?
Any shares resulting from a stock dividend or stock
split with respect to the Common Stock (whole shares and any
fractional interest) in a Participant's account will be credited
to such account. The basis for any rights offering will include
the shares of Common Stock and any fractional interest credited
to a Participant's account.
23. How will the shares credited to a Participant's account be
voted at a meeting of the shareholders?
If on a record date for a meeting of shareholders there
are shares credited to a Participant's account under the Plan,
such Participant will be sent proxy materials for such meeting.
A Participant will be entitled to one vote for each share of
Common Stock credited to his account. The Participant may vote
by proxy or in person at any such meeting.
24. What is the responsibility of the Agent?
The Agent receives the Participants' dividend payments
and voluntary cash payments, invests such amounts in additional
shares of Common Stock, maintains continuing records of each
Participant's account, and advises Participants as to all
transactions in and the status of their accounts. The Agent acts
in the capacity of agent for the Participants.
All notices from the Agent to a Participant will be
addressed to the Participant at his last address of record with
the Agent. The mailing of a notice to a Participant's last
address of record will satisfy the Agent's duty of giving notice
to such Participant. Therefore, Participants must promptly
notify the Agent of any change of address.
The Agent, in administering the Plan, will not be
liable for any act done in good faith or for any good faith
omission to act, including, without limitation, any claim for
liability arising out of failure to terminate a Participant's
account upon such Participant's death prior to receipt of notice
in writing of such death or modifying, suspending or terminating
<PAGE 13> participation by a shareholder who the Company
determines is using the Plan for purposes inconsistent with the
intended purposes of the Plan. Neither the Agent nor the Company
shall have any duties, responsibilities or liabilities except
such as are expressly set forth in the Plan.
All transactions in connection with the Plan shall be
governed by the laws of the Commonwealth of Pennsylvania.
25. May the Plan be modified or discontinued?
The Company reserves the right to suspend or terminate
the Plan at any time. It also reserves the right to make
modifications to the Plan. Participants will receive prior
notice of any such suspension, termination or modification. In
addition, the Company and the Agent may adopt reasonable
procedures for the administration of the Plan.
26. May a Participant pledge shares purchased under the Plan?
No. A Participant who wishes to pledge shares credited
to his account must request the withdrawal of such shares in
accordance with the procedures outlined in response to Question
No. 20 above.
SPECIAL CONSIDERATIONS
Prior to investing in the shares of Common Stock
offered hereby, prospective investors should consider, in
addition to the other information set forth herein, the
following:
Possible Adverse Impact of Catastrophe and Natural Peril Losses
on Financial Condition and Results of Operation
In common with other property and casualty insurers,
the Company's three primary operating subsidiaries, Old Guard
Insurance Company, Old Guard Fire Insurance Company and First
Patriot Insurance Company (collectively, the "Insurance
Companies"), are subject to claims arising from catastrophes that
may have a significant impact on their results of operations and
financial condition. The Insurance Companies have experienced,
and can be expected to experience in the future, catastrophe
losses that may materially affect financial condition and results
of operations. Catastrophe losses can be caused by various
events, including snow storms, ice storms, freezing, hurricanes,
earthquakes, tornadoes, wind, hail and fires and their incidence
and severity are inherently unpredictable. The extent of net
losses from catastrophes is a function of three factors: the
total amount of insured exposure in the area affected by the
event, the severity of the event and the amount of reinsurance
coverage.
The Insurance Companies' financial condition and
results of operations also are affected periodically by losses
<PAGE 14> caused by natural perils, regardless of whether such
losses, because of their magnitude, qualify as "catastrophes," as
classified by the Property Claims Service Division of American
Insurance Services Group, Inc., an insurance industry body.
Because of the geographic concentration of their business, the
Insurance Companies may be more exposed to losses of this type
than other property and casualty insurers. A multiplicity of
such events, all or some of which do not qualify as catastrophes,
in the aggregate, may materially affect the Company's financial
condition and results of operations. This is true, in part,
because losses from individual events may not permit recovery
under the Insurance Companies' catastrophe reinsurance coverage.
Possible Adverse Impact of Inadequate Loss Reserves on Financial
Condition and Results of Operation
The Insurance Companies are required to maintain
reserves to cover their estimated ultimate liability for losses
and loss adjustment expenses ("LAE") with respect to reported and
unreported claims incurred. Reserves are estimates involving
actuarial and statistical projections at a given time of what the
Insurance Companies expect to be the cost of the ultimate
settlement and administration of claims based on facts and
circumstances then known, predictions of future events, estimates
of future trends in claims severity and judicial theories of
liability, legislative activity and other variable factors, such
as inflation. The Insurance Companies' overall reserve practice
provides for ongoing claims evaluation and adjustment (if
necessary) based on the development of related data and other
relevant information pertaining to such claims. Loss and LAE
reserves, including reserves for claims that have been incurred
but not yet reported, are adjusted no less than monthly. The
uncertainties of estimating insurance reserves are greater for
certain types of property and casualty insurance lines written by
the Insurance Companies, particularly workers' compensation and
other liability coverages, because a longer period of time may
elapse before a definitive determination of ultimate liability
may be made and because of the changing judicial and political
climates relating to these types of claims.
Management believes that the Insurance Companies'
reserves for losses and loss adjustment expenses are adequate and
are in accordance with generally accepted actuarial principles
and practices. However, the establishment of appropriate loss
and loss adjustment expense reserves is an inherently uncertain
process and there can be no assurance that ultimate losses will
not exceed the Insurance Companies' loss reserves. To the extent
that reserves prove to be inadequate in the future, the Insurance
Companies would have to increase reserves which would adversely
affect earnings in the period such reserves are increased and
could have a material adverse effect on the Company's results of
operations and financial condition.
<PAGE 15>
Highly Competitive Nature of Insurance Industry
The property and casualty insurance market is highly
competitive. Competition is based on many factors, including
perceived financial strength of the insurer, premiums charged,
policy terms and conditions, service, reputation and experience.
The Insurance Companies compete with stock insurance companies,
mutual companies, local cooperatives and other underwriting
organizations. Certain of these competitors have substantially
greater financial, technical and operation resources than the
Insurance Companies. Many of the lines of insurance written by
the Insurance Companies are subject to significant price
competition. Some companies may offer insurance at lower premium
rates through the use of salaried personnel, rather than the use
of agents paid on a commission basis as the Insurance Companies
do, or other methods.
Articles of Incorporation, Bylaw and Statutory Provisions That
Could Discourage Hostile Acquisitions of Control
The Company's Articles of Incorporation and Bylaws
contain certain provisions that may have the effect of
discouraging a non-negotiated tender or exchange offer for the
Common Stock, a proxy contest for control of the Company, the
assumption of control of the Company by a holder of a large block
of Common Stock or the removal of the Company's management, all
of which certain shareholders might deem to be in their best
interests. These provisions include, among other things (i) the
classification of the terms of the members of the Board of
Directors, (ii) supermajority provisions for the approval of
certain business combinations and amendment of the Articles of
Incorporation or Bylaws of the Company, (iii) elimination of
cumulative voting in the election of directors, and
(iv) restrictions on the voting of the Company's equity
securities by any individual, entity or group owning more than
10% of the Common Stock. The provisions in the Company's
Articles of Incorporation requiring a supermajority vote for the
approval of certain business combinations and containing
restrictions on voting of the Company's equity securities provide
that the supermajority voting requirements and voting
restrictions do not apply to business combinations and
acquisitions of voting Common Stock meeting specified Board of
Director approval requirements. The Articles of Incorporation
also authorize the issuance of 5,000,000 shares of preferred
stock as well as additional shares of Common Stock. These shares
could be issued without shareholder approval on terms or in
circumstances that could deter a future takeover attempt.
In addition, the Pennsylvania Business Corporation Law
(the "Pennsylvania BCL") provides for certain restrictions on
acquisition of the Company, and Pennsylvania law contains various
restrictions on acquisitions of control of insurance holding
companies.
<PAGE 16>
The Articles of Incorporation, Bylaw and statutory
provisions, as well as certain other provisions of state and
federal law, may have the effect of discouraging or preventing a
future takeover attempt not supported by the Company's Board of
Directors in which shareholders of the Company otherwise might
receive a substantial premium for their shares over then-current
market prices.
USE OF PROCEEDS
The proceeds from the sale of Common Stock offered
pursuant to the Plan will be used for general corporate purposes,
including, without limitation, investments in and advances to the
Company's banking subsidiary.
DESCRIPTION OF THE COMPANY'S CAPITAL STOCK
The following is a summary of the material provisions
of the Company's Articles of Incorporation and Bylaws. This
summary does not purport to be complete and is qualified in its
entirety by reference to such instruments, each of which is an
exhibit to the Registration Statement of which this Prospectus
forms a part.
General
The Company is authorized to issue 15,000,000 shares of
Common Stock, without par value, and 5,000,000 shares of
preferred stock, having such par value as the Board of Directors
of the Company shall fix and determine.
Common Stock
Voting Rights
Each share of the Common Stock will have the same
relative rights and will be identical in all respects with every
other share of the Common Stock. The holders of the Common Stock
will possess exclusive voting rights in the Company, except to
the extent that shares of preferred stock issued in the future
may have voting rights, if any. Each holder of shares of the
Common Stock will be entitled to one vote for each share held of
record on all matters submitted to a vote of holders of shares of
the Common Stock. Holders of Common Stock will not be entitled
to cumulate their votes for election of directors.
Dividends
The Company may, from time to time, declare dividends
to the holders of Common Stock, who will be entitled to share
equally in any such dividends. For additional information as to
cash dividends, see "Dividend Policy."
<PAGE 17>
Liquidation
In the event of any liquidation, dissolution or winding
up of any or all of the Insurance Companies, the Company, as
holder of all of the capital stock of the Insurance Companies,
would be entitled to receive all assets of the Insurance
Companies after payment of all debts and liabilities of Insurance
Companies. In the event of a liquidation, dissolution or winding
up of the Company, each holder of shares of Common Stock would be
entitled to receive, after payment of all debts and liabilities
of the Company, a pro rata portion of all assets of the Company
available for distribution to holders of Common Stock. If any
preferred stock is issued, the holders thereof may have a
priority in liquidation or dissolution over the holders of the
Common Stock.
Other Characteristics
Holders of the Common Stock will not have preemptive
rights with respect to any additional shares of Common Stock that
may be issued. The Common Stock is not subject to call for
redemption, and the outstanding shares of Common Stock, when
issued and upon receipt by the Company of the full purchase price
therefor, will be fully paid and nonassessable.
Preferred Stock
None of the 5,000,000 authorized shares of preferred
stock of the Company have been issued. The Board of Directors of
the Company is authorized, without shareholder approval, to issue
preferred stock and to fix and state voting powers, designations,
preferences or other special rights of such shares and the
qualifications, limitations and restrictions thereof. The
preferred stock may rank prior to the Common Stock as to dividend
rights or liquidation preferences, or both, and may have full or
limited voting rights. The Board of Directors has no present
intention to issue any of the preferred stock. Should the Board
of Directors of the Company subsequently issue preferred stock,
no holder of any such stock shall have any preemptive right to
subscribe for or purchase any stock or any other securities of
the Company other than such, if any, as the Board of Directors,
in its sole discretion, may determine and at such price or prices
and upon such other terms as the Board of Directors, in its sole
discretion, may fix.
CERTAIN RESTRICTIONS ON ACQUISITIONS OF THE COMPANY
Pennsylvania Law
The Pennsylvania BCL contains certain provisions
applicable to the Company that may have the effect of impeding a
change in control of the Company. These provisions, among other
things, (a) require that, following any acquisition by any person
or group of 20% of a public corporation's voting power, the
remaining shareholders have the right to receive payment for
<PAGE 18> their shares, in cash, from such person or group in an
amount equal to the "fair value" of their shares, including an
increment representing a proportion of any value payable for
acquisition of control of the corporation; and (b) prohibit, for
five years after an interested shareholder's acquisition date, a
"business combination" (which includes a merger or consolidation
of the corporation or a sale, lease or exchange of assets having
a minimum specified aggregate value or representing a minimum
specified percentage earning power or net income of the
corporation) with a shareholder or group of shareholders
beneficially owning 20% or more of a public corporation's voting
power.
In 1990, the Pennsylvania legislature further amended
the Pennsylvania BCL to expand the antitakeover protections
afforded by Pennsylvania law by redefining the fiduciary duty of
directors and adopting disgorgement and control-share acquisition
statutes. To the extent applicable to the Company at the present
time, this legislation generally (a) expands the factors and
groups (including shareholders) that the Board of Directors can
consider in determining whether a certain action is in the best
interests of the corporation; (b) provides that the Board of
Directors need not consider the interests of any particular group
as dominant or controlling; (c) provides that directors, in order
to satisfy the presumption that they have acted in the best
interests of the corporation, need not satisfy any greater
obligation or higher burden of proof with respect to actions
relating to an acquisition or potential acquisition of control;
(d) provides that actions relating to acquisitions of control
that are approved by a majority of "disinterested directors" are
presumed to satisfy the directors' standard unless it is proven
by clear and convincing evidence that the directors did not
assent to such action in good faith after reasonable
investigation; and (e) provides that the fiduciary duty of
directors is solely to the corporation and may be enforced by the
corporation or by a shareholder in a derivative action, but not
by a shareholder directly. The 1990 amendments to the BCL
explicitly provide that the fiduciary duty of directors shall not
be deemed to require directors (a) to redeem any rights under, or
to modify or render inapplicable, any shareholder rights plan;
(b) to render inapplicable, or make determinations under,
provisions of the BCL relating to control transactions, business
combinations, control-share acquisitions or disgorgement by
certain controlling shareholders following attempts to acquire
control; or (c) to act as the board of directors, a committee of
the board or an individual director solely because of the effect
such action might have on an acquisition or potential or proposed
acquisition of control of the corporation or the consideration
that might be offered or paid to shareholders in such an
acquisition. One of the effects of these fiduciary duty
provisions may be to make it more difficult for a shareholder to
successfully challenge the actions of the Company's Board of
Directors in a potential change in control context. Pennsylvania
case law appears to provide that the fiduciary duty standard
under the 1990 amendment to the BCL grants directors the
<PAGE 19> statutory authority to reject or refuse to consider any
potential or proposed acquisition of the corporation.
Under the Pennsylvania control-share acquisition
statute, a person or group is entitled to voting rights with
respect to "control shares" only after shareholders (both
disinterested shareholders and all shareholders) have approved
the granting of such voting rights at a meeting of shareholders.
"Control shares" are shares acquired since January 1, 1988, that
upon acquisition of voting power by an "acquiring person," would
result in a "control-share acquisition." ("Control shares" also
include voting shares where beneficial ownership was acquired by
the "acquiring person" within 180 days of the control-share
acquisition or with the intention of making a control-share
acquisition.) An "acquiring person" is a person or group who
makes or proposes to make a "control-share acquisition." A
"control-share acquisition" is an acquisition, directly or
indirectly, of voting power over voting shares that would, when
added to all voting power of the person over other voting shares,
entitle the person to cast or direct the casting of such
percentage of votes for the first time with respect to any of the
following ranges that all shareholders would be entitled to cast
in an election of directors: (a) at least 20% but less than 33-
1/3%; (b) at least 33-1/3% but less than 50%; or (c) 50% or more.
The effect of these provisions is to require a new shareholder
vote when each threshold is exceeded. In the event shareholders
do not approve the granting of voting rights, voting rights are
lost only with respect to "control shares."
A special meeting of shareholders is required to be
called to establish voting rights of control shares if an
acquiring person (a) files with the corporation an information
statement containing specified information, (b) makes a written
request for a special meeting at the time of delivery of the
information statement, (c) makes a control-share acquisition or a
bona fide written offer to make a control-share acquisition, and
(d) provides a written undertaking at the time of delivery of the
information statement to pay or reimburse the corporation for
meeting expenses. If the information statement is filed and a
control-share acquisition is made or proposed to be made, but no
request for a special meeting is made or no written undertaking
to pay expenses is provided, the issue of voting rights will be
submitted to shareholders at the next annual or special meeting
of shareholders of the corporation.
A corporation may redeem all "control shares" at the
average of the high and low sales price, as reported on a
national securities exchange or national quotation system or
similar quotation system, on the date the corporation provides
notice of redemption (a) at any time within 24 months after the
date on which the control-share acquisition occurs if the
acquiring person does not, within 30 days after the completion of
the control-share acquisition, properly request that shareholders
consider the issue of voting rights to be accorded to control
shares and (b) at any time within 24 months after the issue of
<PAGE 20> voting rights is submitted to shareholders and such
voting rights either are not accorded or are accorded and
subsequently lapse. Voting rights accorded to control shares by
a vote of shareholders lapse and are lost if any proposed
control-share acquisition is not consummated within 90 days after
shareholder approval is obtained.
A person will not be considered an "acquiring person"
if the person holds voting power within any of the ranges
specified in the definition of "control-share acquisition" as a
result of a solicitation of revocable proxies if such proxies
(a) are given without consideration in response to a proxy or
consent solicitation made in accordance with the Exchange Act and
(b) do not empower the holder to vote the shares except on the
specific matters described in the proxy and in accordance with
the instructions of the giver of the proxy.
The statute does not apply to certain control-share
acquisitions effected pursuant to a gift or laws of inheritance,
in connection with certain family trusts or pursuant to a merger,
consolidation or plan of share exchange if the corporation is a
party to the agreement.
The effect of this statutory provision is to deter the
accumulation of a substantial block of Common Stock, including
accumulation with a view to effecting a non-negotiated tender or
exchange offer for Common Stock.
Under the disgorgement provisions of the Pennsylvania
BCL, any profit realized by any person or group who is or was a
"controlling person or group" from the disposition of any equity
security of a corporation shall belong to and be recoverable by
the corporation where the profit is realized (i) within 18 months
after the person becomes a "controlling person or group" and
(ii) the equity security had been acquired by the "controlling
person or group" within 24 months prior to or 18 months after
obtaining the status of a "controlling person or group."
A "controlling person or group" is a person or group
who (a) has acquired, offered to acquire or, directly or
indirectly, publicly disclosed the intention of acquiring 20%
voting power of the corporation or (b) publicly disclosed that it
may seek to acquire control of the corporation.
A person will not be deemed a "controlling person or
group" if the person holds voting power as a result of a
solicitation of revocable proxies if, among other things, such
proxies (a) are given without consideration in response to a
proxy or consent solicitation made in accordance with the
Exchange Act and (b) do not empower the holder to vote the shares
except on the specific matters described in the proxy and in
accordance with the instructions of the giver of the proxy. This
exception does not apply to proxy contents in connection with or
as a means toward acquiring control of the Company.
<PAGE 21>
The effect of this statutory provision is to deter the
accumulation of a substantial block of Common Stock with a view
to putting the Company "in play" and then selling shares at a
profit (whether to the Company, in the market or in connection
with an acquisition of the Company).
Certain Anti-Takeover Provisions in the Articles of Incorporation
and Bylaws
The Company's Articles of Incorporation include certain
provisions to protect the interests of the Company and its
shareholders from hostile takeovers that the Board might conclude
are not in the best interests of the Company or the Company's
shareholders. These provisions may have the effect of
discouraging a future takeover attempt that is not approved by
the Board but which individual shareholders may deem to be in
their best interests or in which shareholders may receive a
substantial premium for their shares over the then current market
price. As a result, shareholders who might desire to participate
in such a transaction may not have an opportunity to do so. Such
provisions will also render the removal of the Company's current
Board of Directors or management more difficult.
The following discussion is a general summary of
certain provisions of the Articles of Incorporation and Bylaws of
the Company that may be deemed to have such an "anti-takeover"
effect. The description of these provisions is necessarily
general and reference should be made in each case to the Articles
of Incorporation and Bylaws of the Company. For information
regarding how to obtain a copy of these documents without charge,
see "Additional Information."
Classified Board of Directors and Related Provisions
The Company's Articles of Incorporation provide that
the Board of Directors is to be divided into three classes which
shall be as nearly equal in number as possible. The directors in
each class will hold office following their initial appointment
to office for terms of one year, two years and three years,
respectively, and, upon reelection, will serve for terms of three
years thereafter. Each director will serve until his or her
successor is elected and qualified. The Articles of
Incorporation provide that a director may be removed by
shareholders only upon the affirmative vote of at least a
majority of the votes which all shareholders would be entitled to
cast. The Articles of Incorporation further provide that any
vacancy occurring in the Board of Directors, including a vacancy
created by an increase in the number of directors, shall be
filled for the remainder of the unexpired term by a majority vote
of the directors then in office.
A classified board of directors could make it more
difficult for shareholders, including those holding a majority of
the outstanding shares, to force an immediate change in the
composition of a majority of the Board of Directors. Because the
<PAGE 22> terms of only one-third of the incumbent directors
expire each year, it requires at least two annual elections for
the shareholders to change a majority, whereas a majority of a
non-classified board may be changed in one year. In the absence
of the provisions of the Articles of Incorporation classifying
the Board, all of the directors would be elected each year.
Management of the Company believes that the staggered
election of directors tends to promote continuity of management
because only one-third of the Board of Directors is subject to
election each year. Staggered terms guarantee that in the
ordinary course approximately two-thirds of the Directors, or
more, at any one time have had at least one year's experience as
directors of the Company, and moderate the pace of change in the
composition of the Board of Directors by extending the minimum
time required to elect a majority of Directors from one to two
years.
Other Antitakeover Provisions
The Company's Articles of Incorporation and Bylaws
contain certain other provisions that may also have the effect of
deterring or discouraging, among other things, a non-negotiated
tender or exchange offer for the Common Stock, a proxy contest
for control of the Company, the assumption of control of the
Company by a holder of a large block of the Common Stock and the
removal of the Company's management. These provisions:
(1) empower the Board of Directors, without shareholder approval,
to issue preferred stock, the terms of which, including voting
power, are set by the Board; (2) restrict the ability of
shareholders to remove directors; (3) require that shares with at
least 80% of total voting power approve mergers and other similar
transactions with a person or entity holding Common Stock with
more than 5% of the Company's voting power, if the transaction is
not approved, in advance, by the Board of Directors; (4) prohibit
shareholders' actions without a meeting; (5) require that shares
with at least 80%, or in certain instances a majority, of total
voting power approve the repeal or amendment of the Articles of
Incorporation; (6) require any person who acquires stock of the
Company with voting power of 25% or more to offer to purchase for
cash all remaining shares of the Company's voting stock at the
highest price paid by such person for shares of the Company's
voting stock during the preceding year; (7) limit the right of a
person or entity to vote more than 10% of the Company's voting
stock; (8) eliminate cumulative voting in elections of directors;
and (9) require that shares with at least 66-2/3% of total voting
power approve, repeal or amend the Bylaws.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Pennsylvania law provides that a Pennsylvania
corporation may indemnify directors, officers, employees and
agents of the corporation against liabilities they may incur in
such capacities for any action taken or any failure to act,
whether or not the corporation would have the power to indemnify
<PAGE 23> the person under any provisions of law, unless such
action or failure to act is determined by a court to have
constituted recklessness or willful misconduct. Pennsylvania law
also permits the adoption of a bylaw amendment, approved by
shareholders, providing for the elimination of a director's
liability for monetary damages for any action taken or any
failure to take any action unless (1) the director has breached
or failed to perform the duties of his office and (2) the breach
or failure to perform constitutes self-dealing, willful
misconduct or recklessness.
The bylaws of the Company provide for
(1) indemnification of directors, officers, employees and agents
of the registrant and its subsidiaries and (2) the elimination of
a director's liability for monetary damages, to the fullest
extent permitted by Pennsylvania law.
Directors and officers are also insured against certain
liabilities for their actions, as such, by an insurance policy
obtained by the Company.
Insofar as indemnification for liabilities arising
under the 1933 Act may be permitted to the directors, officers
and controlling persons of the Company pursuant to the foregoing
provisions, or otherwise, the Company has been advised that in
the opinion of the Commission such indemnification is against
public policy as expressed in the 1933 Act and is, therefore,
unenforceable.
LEGAL MATTERS
The validity of the shares offered hereby will be
passed upon for the Company by Stevens & Lee, Reading,
Pennsylvania.
EXPERTS
The consolidated financial statements and financial
statement schedules of the Company incorporated in this
Prospectus and the Registration Statement by reference have been
audited by PricewaterhouseCoopers LLP, independent accountants,
to the extent and for the periods as indicated in their report
and are incorporated herein by reference in reliance upon such
report and upon the authority of such firm as experts in
accounting and auditing.
PAGE 24
<PAGE>
OLD GUARD GROUP, INC.
SHAREHOLDER AUTOMATIC
DIVIDEND REINVESTMENT
AND
STOCK PURCHASE PLAN
____________________
P R 0 S P E C T U S
____________________
Dated: September 15, 1998
PAGE 25
<PAGE>
TABLE OF CONTENTS
Page
Available Information.....................................
Incorporation of Certain Documents by Reference...........
Shareholder Automatic Dividend Reinvestment and
Stock Purchase Plan.....................................
Special Considerations....................................
Use of Proceeds...........................................
Description of the Company's Capital Stock................
Indemnification of Directors and Officers.................
Legal Matters.............................................
Experts...................................................
PAGE 26
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
SEC Registration Fee $ 494.00
Legal Expenses 10,000.00
Printing Costs 1,500.00
Miscellaneous 500.00*
Total $12,494.00
*Estimated
Item 15. Indemnification of Directors
Pennsylvania law provides that a Pennsylvania
corporation may indemnify directors, officers, employees and
agents of the corporation against liabilities they may incur in
such capacities for any action taken or any failure to act,
whether or not the corporation would have the power to indemnify
the person under any provisions of law, unless such action or
failure to act is determined by a court to have constituted
recklessness or willful misconduct. Pennsylvania law also
permits the adoption of a bylaw amendment, approved by
shareholders, providing for the elimination of a director's
liability for monetary damages for any action taken or any
failure to take any action unless (1) the director has breached
or failed to perform the duties of his office and (2) the breach
or failure to perform constitutes self-dealing, willful
misconduct or recklessness.
The bylaws of the Company provide for (1)
indemnification of directors, officers, employees and agents of
the registrant and its subsidiaries and (2) the elimination of a
director's liability for monetary damages, to the fullest extent
permitted by Pennsylvania law.
Directors and officers are also insured against certain
liabilities for their actions, as such, by an insurance policy
obtained by the Company.
Insofar as indemnification for liabilities arising
under the 1933 Act may be permitted to the directors, officers
and controlling persons of the Company pursuant to the foregoing
provisions, or otherwise, the Company has been advised that in
the opinion of the Commission such indemnification is against
public policy as expressed in the 1933 Act and is, therefore,
unenforceable.
<PAGE 27>
Item 16. Exhibits
The following exhibits are included with this Registration
Statement:
4.1 Articles of Incorporation of Old Guard Group, Inc.
(incorporated herein by reference to Exhibit 3.1 of the
Registration Statement No. 333-12779 on Form S-1 of the
Registrant).
4.2 Bylaws of Old Guard Group, Inc. (incorporated herein by
reference to Exhibit 3.2 of the Registration Statement
No. 333-12779 on Form S-1 of the Registrant).
5.1 Opinion of Stevens & Lee re: legality of common stock
being registered.
23.1 Consent of Stevens & Lee (included at Exhibit 5.1 of
this Registration Statement).
23.2 Consent of PricewaterhouseCoopers LLP.
24.1 Power of Attorney (included on signature page).
99.1 Old Guard Group, Inc. Shareholder Automatic Dividend
Reinvestment and Stock Purchase Plan.
99.2 Authorization Form for Automatic Dividend Reinvestment
Item 17. Undertakings
The undersigned Registrant hereby undertakes to file
during any period in which offers or sales are being made, a
post-effective amendment to this registration statement to
include any material information with respect to the plan of
distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement.
The undersigned Registrant undertakes that, for the
purpose of determining any liability under the Securities Act of
1933, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
The undersigned Registrant undertakes to remove from
registration by means of a post-effective amendment any of the
securities being registered which remain unsold at the
termination of the offering.
The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of
1933, each filing of the Registrant's annual report pursuant to
section 13(a) or section 15(d) of the Securities Exchange Act of
<PAGE 28> 1934 (and, where applicable, each filing of an employee
benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by
reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
PAGE 29
<PAGE>
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-3 and has duly caused this Registration Statement on Form S-3
to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Lancaster, the Commonwealth of
Pennsylvania, as of this 11th day of August, 1998.
OLD GUARD GROUP, INC.
By /s/ David E. Hosler
David E. Hosler
Chairman, President and
Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints David E. Hosler,
Steven D. Dyer, Esquire, and Jeffrey P. Waldron, Esquire, and
each of them, his true and lawful attorney-in-fact, as agent with
full power of substitute and resubstitution for him and in his
name, place and stead, in any and all capacity, to sign any or
all amendments to this Registration Statement and to file the
same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange
Commission, granting unto such attorney-in-fact and agent full
power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the
premises, as fully and to all intents and purposes as they might
or could do in person, hereby ratifying and confirming all that
said attorneys-in-fact and agents, or their substitute or
substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of
1933, this Registration Statement on Form S-3 has been signed
below by the following persons in the capacities as of the dates
indicated.
Signature Title Date
/s/ David E. Hosler Chairman of the August 11, 1998
David E. Hosler Board, President
and Chief Executive
Officer and Director
(Principal Executive
Officer)
<PAGE 30>
/s/ Henry J. Straub Chief Financial August 11, 1998
Henry J. Straub Officer and Treasurer
(Principal Financial
and Accounting Officer)
/s/ James W. Appel Director August 11, 1998
James W. Appel
/s/ John E. Barry Director August 11, 1998
John E. Barry
/s/ Luther R. Campbell, Jr. Director August 11, 1998
Luther R. Campbell, Jr.
/s/ M. Scott Clemens Director August 11, 1998
M. Scott Clemens
/s/ Richard B. Neiley, Jr. Director August 11, 1998
Richard B. Neiley, Jr.
/s/ G. Arthur Weaver Director August 11, 1998
G. Arthur Weaver
/s/ Robert L. Wechter Director August 11, 1998
Robert L. Wechter
/s/ Karen M. Balaban Director August 11, 1998
Karen M. Balaban
/s/ Noah W. Kreider, Jr. Director August 11, 1998
Noah W. Kreider, Jr.
PAGE 31
<PAGE>
EXHIBIT INDEX
No. Description
4.1 Articles of Incorporation of Old Guard Group,
Inc. (incorporated herein by reference to
Exhibit 3.1 of the Registration Statement
No. 333-12779 on Form S-1 of the Registrant).
4.2 Bylaws of Old Guard Group, Inc. (incorporated
herein by reference to Exhibit 3.2 of the
Registration Statement No. 333-12779 on
Form S-1 of the Registrant).
5.1 Opinion of Stevens & Lee re: legality of
common stock being registered.
23.1 Consent of Stevens & Lee (included at
Exhibit 5.1 of this Registration Statement).
23.2 Consent of PricewaterhouseCoopers, LLP.
24.1 Power of Attorney (included on signature
page).
99.1 Old Guard Group, Inc. Shareholder Automatic
Dividend Reinvestment and Stock Purchase
Plan.
99.2 Authorization Form for Automatic Dividend
Reinvestment <PAGE 32>
Exhibit 5.1
September 1, 1998
Board of Directors
Old Guard Group, Inc.
2929 Lititz Pike
Lancaster, Pennsylvania 17601
Re: Old Guard Group, Inc. Shareholder Automatic Dividend
Reinvestment and Stock Purchase Plan
Ladies and Gentlemen:
You have asked us to provide you with our opinion whether
the 100,000 shares of common stock, no par value (the "Common
Stock"), of Old Guard Group, Inc. (the "Company") that may be
issued from time to time under the Old Guard Group, Inc.
Shareholder Automatic Dividend Reinvestment and Stock Purchase
Plan (the "Plan"), when and if such shares are issued pursuant to
and in accordance with the Plan, will be duly and validly issued,
fully paid and nonassessable. We, as counsel to the Company,
have reviewed:
1. The Pennsylvania Business Corporation Law of 1988, as
amended;
2. The Articles of Incorporation of the Company;
3. The By-laws of the Company; and
4. The Resolutions of the Board of Directors of the
Company adopted July 7, 1998 as certified by the Corporate
Secretary of the Company.
Based on our review of such documents, it is our opinion
that the Common Stock issuable under the Plan, when and as issued
and paid for in accordance with the provisions of the Plan, will
be duly and validly issued, fully paid and nonassessable. In
giving the foregoing opinion, we have assumed that the Company
will have, at the time of the issuance of such Common Stock, a
sufficient number of authorized shares available for issue.
<PAGE 1>
We consent to the filing of this opinion as an exhibit to
the registration statement the Company is filing today in
connection with the registration of 100,000 shares of the
Company's Common Stock. In giving this consent to inclusion of
our name in the Registration Statement under the caption "Legal
Matters," we do not thereby admit that we come within the
category of persons whose consent is required under Section 7 of
the Securities Act of 1933, as amended, or the Rules and
Regulations of the Securities and Exchange Commission thereunder.
Very truly yours
STEVENS & LEE
/s/ Ernest J. Choquette
Ernest J. Choquette
EJC:jam <PAGE 2>
Exhibit 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Registration
Statement on Form S-3 of our reports dated February 20, 1998, on
our audits of the consolidated financial statements and financial
statement schedules of Old Guard Group, Inc. as of December 31,
1997 and 1996, and for the years ended December 31, 1997, 1996,
and 1995. We also consent to the reference to our firm under the
captions "Experts."
/s/ PricewaterhouseCoopers LLP
2400 Eleven Penn Center
Philadelphia, Pennsylvania
August 31, 1998
OLD GUARD GROUP, INC.
SHAREHOLDER AUTOMATIC DIVIDEND REINVESTMENT
AND STOCK PURCHASE PLAN
As of July 7, 1998 the Board of Directors of OLD GUARD
GROUP, INC. (the "Company") has established the Shareholder
Automatic Dividend Reinvestment and Stock Purchase Plan (the
"Plan"). The Plan provides the Company's shareholders with a
simple, convenient and systematic method for investing quarterly
cash dividends and optional cash payments in additional common
stock of the Company. Any proceeds received by the Company from
sales of common stock under the Plan will provide additional
funds which may be used for such purpose or purposes as the
Company, in its discretion, may deem advisable.
The following sets forth the text of the Plan in its
entirety.
Section 1. Definitions:
The following words and phrases, when capitalized and
used herein, shall have the indicated meanings unless the context
clearly indicates otherwise:
(a) Agent: The Company or its appointed
administrative agent, American Stock Transfer Company or any
successor appointed by the Company.
(b) Purchase Price: the Market Price Per Share
of the Common Stock as of any date.
(c) Market Price Per Share of the Company's
Common Stock: (i) the closing price as reported on the
NASDAQ Stock Market on any relevant date (or if not a
trading date, on the last prior trading day on which a trade
is reported); or (ii) if the Common Stock is listed for
trading on a national exchange, the mean between the high
and low prices on such exchange on any relevant date, as
reported in the financial press (or if not a trading date,
on the last prior trading day on which a trade is reported).
(d) Company: Old Guard Group, Inc.
(e) Common Stock: the Company's common stock, no
par value.
(f) Participant: Any holder of shares of the
Common Stock who meets the eligibility requirements set
forth at Section 3 of the Plan and who effects the
authorizations required by Section 4 of the Plan.
(g) Plan: This Shareholder Automatic Dividend
Reinvestment and Stock Purchase Plan, as it may be hereafter
amended, supplemented, or modified. <PAGE 1>
(h) Record Date: The date for determining
shareholders of record for the purpose of receiving any
quarterly dividends.
Section 2. Purpose.
The purpose of the Plan is to provide record holders of
twenty-five (25) or more shares of Common Stock with an
attractive and convenient method of investing cash dividends and
voluntary cash payments in Common Stock for long-term growth.
The Plan is not intended to provide short-term holders of shares
with the means to acquire additional shares at a discount from
market price or to provide holders of shares with the means to
generate short-term profits through resale of shares acquired at
a discount from market price. The intended purpose of the Plan
precludes any person, organization or other entity from
establishing a series of related arbitrage operations or
exceeding the voluntary cash payment limit. The Company
accordingly reserves the right to modify, suspend or terminate
participation by a shareholder who the Company determines is
using the Plan for purposes inconsistent with the intended
purpose of the Plan.
Section 3. Eligibility.
Any holder of twenty-five (25) or more shares of Common
Stock is eligible to participate in the Plan commencing as of the
date such shares are registered in his name on the books of the
Company.
Section 4. Participation.
(a) Full and Partial Dividend Reinvestment
Options. In order to participate in the Plan, a shareholder
who meets the eligibility requirements set forth in
Section 3 must, on such form or forms and in such manner as
may from time to time be prescribed by the Company,
designate and authorize the Company, on such shareholder's
behalf, to reinvest all of the quarterly dividends payable
on at least twenty-five (25) or more of such shareholder's
shares of the Common Stock held of record in additional
shares of the Common Stock pursuant to the provisions of
Section 6 or Section 7 of the Plan, as the case may be.
Participation, once commenced, shall continue until a
Participant withdraws as such from the Plan in accordance
with Section 12(a) of the Plan or until the Plan terminates
in accordance with Section 13(d) of the Plan.
(b) Voluntary Cash Payment Option. A shareholder
who meets the eligibility requirements set forth at
Section 3 of the Plan and who elects to participate in the
Plan by meeting the requirements set forth in subsection (a)
of this Section 4 may, from time to time as the Board of
Directors of the Company may in its discretion determine,
invest cash not more frequently than monthly in an amount
<PAGE 2> not to exceed $2,000.00 per month, in additional
shares of Common Stock, by (i) designating and authorizing
the Agent on the form or forms received by the Agent as
described in subsection (a) of this Section 4, to apply all
of such cash to the purchase, on such Participant's behalf,
of additional shares of Common Stock, pursuant to the
provisions of Section 6 or Section 7 of the Plan, as the
case may be, and (ii) by transmitting such cash amount to
the Agent so that it is received by the Agent on or before
the dividend payment date, or in the case of a voluntary
cash payment made by check or other draft, by transmitting
such check or draft prior to the twenty-fifth (25th) day of
any month.
Section 5. Agent; Payments by the Company.
The Agent shall be the administrative agent for a
Participant to receive dividends and voluntary cash payments made
by a Participant pursuant to Section 4(b) of the Plan and to
purchase shares of Common Stock for Participants. The Agent
shall act in such capacity in accordance with the provisions of
Section 6 or Section 7 of the Plan, as the case may be.
Section 6. Dividend Reinvestment and Cash Purchases
from the Company.
In the event that the Agent does not purchase shares of
Common Stock on the Nasdaq Stock Market in accordance with the
provisions of Section 7 of the Plan, the Agent shall, for each
Participant, apply:
(a) the quarterly dividends authorized to be
reinvested pursuant to Section 4(a) of the Plan that are
attributable to shares registered in such Participant's name
on the books of the Company as of the Record Date to the
purchase on the dividend payment date, at the Purchase
Price, of additional shares (including fractions of a whole
share computed to 3 decimal places) of Common Stock held in
treasury or authorized but unissued shares of Common Stock;
(b) the quarterly dividends attributable to
shares (including fractions of a whole share computed to 4
decimal places) credited to such Participant's account
pursuant to Section 8(b) of the Plan as of the Record Date
as described in Section 4(b) of the Plan, at the Purchase
Price, of additional shares (including fractions of a whole
share computed to 3 decimal places) of Common Stock held in
treasury or authorized but unissued shares of Common Stock;
and
(c) the cash payments duly authorized and paid by
such Participant pursuant to Section 4(b) of the Plan to the
purchase on the 25th day of each month, at the Purchase
Price, of additional shares (including fractions of a whole
<PAGE 3> share computed to 3 decimal places) of Common Stock
held in treasury or authorized but unissued shares of Common
Stock.
Section 7. Dividend Reinvestment and Cash Purchases
Other Than from the Company.
(a) Notwithstanding the provisions of Section 6
of the Plan, the Agent may, subject to approval of the
Company, and in the event that the Purchase Price is less
than the par value per share of the Common Stock, the Agent
shall:
(i) following the dividend payment date, for
each Participant, apply the quarterly dividends
authorized to be reinvested pursuant to Section 4(a) of
the Plan that are attributable to (A) shares registered
in such Participant's name on the books of the Company
as of the Record Date, and (B) shares (including
fractions of a whole share computed to 3 decimal
places) credited to such Participant's account pursuant
to Section 8(b) of the Plan as of the Record Date; and
(ii) on the twenty-fifth (25th) day of the
month, for each Participant, apply the cash payments
duly authorized and paid by such Participant pursuant
to Section 4(b) of the Plan;
to the purchase of whole shares of Common Stock in
accordance with Section 7(b) below.
(b) All purchases of Common Stock pursuant to
this Section 7 shall be made at such times as the Agent may
determine within thirty-one (31) days of the relevant
dividend payment date or cash contribution date, or such
later date as may be necessary or advisable under any
applicable federal securities laws. Any such purchases
shall be made through one or more broker-dealers independent
of the Company in the over-the-counter market, on an
exchange, or in negotiated transactions upon such terms as
to price, delivery, and related matters as the broker-dealer
deems advisable, subject to approval of the Company with
respect to negotiated transactions. In making purchases on
behalf of a Participant, the Agent may commingle such
Participant's funds with those of other Participants. The
price at which the Agent shall be deemed to have acquired
shares for each Participant's account shall be the weighted
average Purchase Price with respect to all shares purchased
with amounts applied in accordance with Section 7(a) above,
in each case excluding any fees, commissions, costs or
expenses relating to such purchases. Neither any
broker-dealer, the Company nor the Agent shall be liable for
any loss, damage or expense resulting, directly or
indirectly, from the failure to make a purchase or from the
timing of any purchase made. Shares of Common Stock
<PAGE 4> purchased pursuant to this Section 7 shall be
purchased in the name of the Agent or its nominee.
Section 8. Administration of the Plan.
(a) The Agent shall administer the Plan for all
Participants.
(b) All shares of Common Stock purchased by the
Agent pursuant to Section 6 and Section 7 of the Plan,
including any fractions of a whole share, shall be
registered in the name of the Agent or its nominee as agent
for each Participant and shall be credited to such
Participant's account on the books and records of the Plan,
which books and records shall be maintained at all times by
the Agent. The Agent shall transmit to a Participant no
later than thirty (30) days following the dividend payment
date or the date a cash contribution is invested, a
statement setting forth the total number of whole shares and
fractions of a whole share of Common Stock credited to such
Participant's account.
(c) On written request, the Agent will send a
Participant certificates for any full shares of Common Stock
credited to his account; provided that no such request
received during the period beginning five (5) trading days
prior to a Record Date and ending on the corresponding
dividend payment date shall be effective until after the
reinvestment of dividends pursuant to this Plan. No share
certificate for any full share of Common Stock shall be
issued to any Participant except pursuant to such request or
upon such Participant's withdrawal from the Plan in
accordance with Section 12(a) of the Plan or termination of
the Plan in accordance with Section 13(d) of the Plan. In
no event shall any certificate be issued evidencing a
fraction of a whole share of Common Stock.
(d) Participants may deposit free of charge with
the Agent for safekeeping any certificate for shares of
Common Stock subject to reinvestment of dividends under the
Plan.
(e) All costs of administering the Plan,
including without limitation any brokerage commission or
other fee payable to or through any broker-dealer or any
other party in connection with the purchase of shares, shall
be paid by the Company.
Section 9. Voting of Shares Held Under the Plan.
(a) All shares of Common Stock held for a
Participant in such Participant's account under the Plan
shall be voted at a meeting of the Company's shareholders in
accordance with the instructions of such Participant given
on any proxy executed by such Participant and returned to
<PAGE 5> the Agent with respect to such shares. A
Participant desiring to vote shares of Common Stock held for
a Participant in such Participant's account under the Plan
in person at a meeting of the Company's shareholders may do
so. Shares of Common Stock held for a Participant in such
Participant's account under the Plan will not be voted at a
meeting of the Company's shareholders if voting instructions
on a proxy are not received by the Company from such
Participant or if such Participant does not vote such shares
in person at the meeting.
(b) Each Participant shall have the right to
instruct the Agent as to the manner in which to respond to a
tender or exchange offer for shares of Common Stock, with
respect to such shares in such Participant's account.
Section 10. Stock Dividends and Stock Splits on Shares
Held in Plan.
Shares of Common Stock (including any fraction of a
whole share) distributed as a result of the declaration of a
stock dividend or a stock split on shares credited to the account
of a Participant under the Plan shall be added to his account and
shall be shares subject to the Plan, and shall be treated, for
all purposes, as if held by such Participant directly.
Section 11. Effect of Rights Offering on Shares Held in Plan.
In the event that the Company grants to its
shareholders rights to purchase additional shares of Common Stock
or other securities, rights shall be granted to the Participant
on whole shares of Common Stock credited to the account of a
Participant under the Plan. Rights based on any fraction of a
share credited to such Participant's account shall at the
Company's option be either redeemed by the Company for cash or
sold for such Participant, and the net proceeds therefrom shall
be credited to his account and shall be invested as an optional
cash payment in accordance with the provisions of Section 6 or
Section 7 of the Plan, as the case may be.
Section 12. Withdrawal from the Plan.
(a) A Participant may withdraw from the Plan in
whole or in part at any time by giving the Agent written
notice thereof, but any such notice received by the Agent
later than five (5) days prior to a Record Date shall not be
effective until dividends paid for such Record Date have
been credited to such Participant's account. Upon
withdrawal, certificates for the number of whole shares
specified in the Participant's notice and credited to a
Participant's account under the Plan shall be issued to such
Participant and, in the event of a total withdrawal, a cash
payment shall be made for any fractions of a whole share
credited to such Participant's account (based upon the
Market Price Per Share of the Common Stock on the date the
<PAGE 6> withdrawal request is received, or the last prior
trading day). A Participant who withdraws in whole in
accordance with this Section 12(a) shall again have the
right to participate in the Plan, provided such Participant
meets the eligibility requirements set forth at Section 3 of
the Plan and makes the designation and authorization
required by Section 4(a) of the Plan.
If a Participant so requests in writing, the Agent
shall within seven (7) business days following receipt of
such notice place a sale order for the number of shares
specified in the Participant's notice and credited to such
Participant's account and shall deliver the proceeds
therefrom, less any brokerage fee, transfer tax, and costs,
to the withdrawing Participant.
(b) If a Participant disposes of all the shares
registered in such Participant's name that are enrolled in
the Plan, the Agent shall, until otherwise notified,
continue to reinvest the dividends on the shares of Common
Stock held in such Participant's account. However, if such
Participant holds less than twenty-five (25) full shares of
Common Stock in the Plan, such Participant shall be deemed
to have withdrawn from the Plan.
Section 13. Amendment, Supplementation, Waiver,
Suspension, or Termination.
(a) The Plan may be amended or supplemented by
the Company at any time or times by mailing appropriate
notice to each Participant at such Participant's last
address of record prior to the effective date of such
amendment or supplementation. The amendment or supplement
shall conclusively be deemed to be accepted by each
Participant unless the Agent receives written notice from a
Participant of such Participant's withdrawal from the Plan
in accordance with Section 12(a) of the Plan. Amendments or
supplements may be required from time to time due to changes
in existing rules and regulations or new rules and
regulations issued by a governing authority. In such cases,
the Company may make such amendments or supplements as
required, and thereafter notify each Participant thereof.
(b) Any waiver of any provision of the Plan must
be made by the Company in writing, and each waiver, if any,
shall only apply to the specific instance involved.
(c) The Plan may be suspended by the Company at
any time or times, from time to time, by mailing appropriate
notice to each Participant at such Participant's last
address of record prior to the effective date of such
suspension. In the event of a suspension of this Plan, all
voluntary cash contributions paid by Participants pursuant
to Section 4(b) of the Plan shall be returned to such
Participants immediately. <PAGE 7>
(d) The Plan may be terminated by the Company at
any time by mailing appropriate notice to each Participant
at such Participant's last address of record prior to the
effective date of such termination. In the event of
termination of the Plan, certificates for whole shares of
Common Stock credited to a Participant's account under the
Plan shall be issued to such Participant and a cash payment
shall be made for any fractional shares credited to such
Participant's account (computed according to Section 12(a)
of the Plan).
Section 14. Miscellaneous.
(a) In the event that the Company shall, as of
any dividend payment date, have insufficient authorized
shares of Common Stock available for issuance pursuant to
any purchase required to be made under Section 6 of the
Plan, all shares available shall be issued and credited pro
rata to all Participants' accounts. All uninvested
dividends shall be paid to Participants in cash.
(b) There shall be 100,000 shares of Common Stock
available for purchase under the Plan.
(c) The Company shall not be liable for any loss,
damage, or expense arising out of or resulting from any act
performed in good faith or any good faith omission on the
part of any of them including, but not limited to, (i) the
Company's failure to terminate a Participant's account upon
such Participant's death or the transfer of such
Participant's shares prior to a reasonable length of time
after receipt of notice in writing of such death or such
transfer; (ii) any purchase or failure to purchase shares
for a Participant's account at a particular time or day or
at a particular price; and/or (iii) modifying, suspending or
terminating participation by a shareholder who the Company
determines is using the Plan for purposes inconsistent with
the intended purposes of the Plan.
(d) A Participant shall notify the Agent promptly
in writing of any change of address. Notices to a
Participant may be given by letter addressed to such
Participant at such Participant's last address of record on
file with the Company.
(e) No Participant shall have any right to draw
checks or drafts against his account or to give instructions
to the Company with respect to any shares or cash held
therein except as expressly provided herein, nor shall a
Participant have the right to sell, assign, or transfer his
account.
<PAGE 8>
Section 15. Effective Date of Plan.
The effective date of the Plan shall be July 7, 1998.
Section 16. Governing Law.
The validity and enforceability of the Plan and the
rights and obligations set forth therein shall be governed by the
law (but not the law of conflicts of law) of the Commonwealth of
Pennsylvania. <PAGE 9>
Form
of
Authorization
Old Guard Group, Inc.
Shareholder Automatic
Dividend Reinvestment
And Stock Purchase Plan
I hereby appoint American Stock Transfer and Trust Co. (the
"Agent") as my agent, under the terms and conditions of the
Shareholder Automatic Dividend Reinvestment and Stock Purchase
Plan (the "Plan") and authorize the Agent, as such agent, to
receive dividends on my shares of Old Guard Group, Inc. ("Old
Guard") stock as indicated below, and to apply such amounts to
the purchase of shares of Old Guard Common Stock without charge
as provided in the Plan.
This is not a Proxy
[_] Reinvest all my Common [_] Reinvest Dividends on ____*
Stock Dividends Shares of my Common Stock
(Insert number of shares in
space provided)
*Minimum number of shares to reinvest is 25 shares.
I acknowledge receipt of Old Guard Shareholder Automatic Dividend
Reinvestment and Stock Purchase Plan Prospectus and agree to the
terms and conditions of the Plan as stated therein. I understand
that I may withdraw from the Plan at any time by notifying the
Agent, as agent, in writing.
Date Telephone Number Signature Signature
All persons whose names appear on the reverse side of this
Authorization Form must sign this Authorization Form.
