UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 10, 2003
ERIE INDEMNITY COMPANY
(Exact name of registrant as specified in its charter)
PENNSYLVANIA 0-24000 25-0466020
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(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation) File Number) Identification No.)
100 Erie Insurance Place, Erie, Pennsylvania 16530
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (814) 870-2000
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Item 5. OTHER EVENTS.
On December 10, 2003, Erie Indemnity Company issued a press release which is
filed as Exhibit 99.1 hereto and is incorporated herein by reference.
Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
Exhibit Number Description
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99.1 Press release dated December 10, 2003
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ERIE INDEMNITY COMPANY
Erie Indemnity Company
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(Registrant)
Date: December 10, 2003 /s/ Philip A. Garcia
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(Philip A. Garcia, Executive Vice President & CFO)
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EXHIBIT 99.1
Erie Indemnity Increases Dividend, Reauthorizes Stock Repurchase Program
and Sets Management Fee
Erie, Pa. - December 10, 2003 -- At the December 9, 2003, regular meeting of the
board of directors of the Erie Indemnity Company (NASDAQ: ERIE), the board
approved an increase in shareholders' dividends. In separate actions, the board
also reauthorized a stock repurchase program and set the management fee rate
charged to the Erie Insurance Exchange for 2004.
The board of directors increased the regular quarterly dividend from $0.19 to
$0.215 on each Class A share and from $28.50 to $32.25 on each Class B share.
The dividend is payable January 20, 2004, to shareholders of record as of
January 5, 2004, with a dividend ex-date of December 31, 2003. The dividend
increases were a result of the Company's continuing strong financial
performance. The new dividend represents a 13.2 percent increase over the
current dividend amount.
The board of directors also reauthorized a stock repurchase program effective
immediately, under which the Company may repurchase up to $250 million of its
outstanding Class A common stock through December 31, 2006. The Company may
repurchase the shares from time to time in the open market or by privately
negotiated transactions, depending on prevailing market conditions and
alternative uses of the Company's capital.
In a separate action, the board voted to reduce for 2004 the management fee rate
to 23.5 percent from the current 24 percent rate paid Erie Indemnity Company by
the Erie Insurance Exchange. If the 23.5 percent rate had been in effect for the
nine months ended September 30, 2003, the Company's net income per share would
have been reduced by $0.13 or 5.8 percent. The Company's board of directors has
the authority to change the management fee rate at its discretion; however the
maximum fee rate permissible by agreement is 25 percent. This action was taken
after the board's consideration and review of the relative financial position of
the Erie Insurance Exchange and the Erie Indemnity Company.
"Considering the Company's strong earnings position, as evidenced by third
quarter income per share growth, and the relative premium growth and surplus
position of the Erie Insurance Exchange, these actions support our long-term
goal of balancing the interests of the policyholders of Erie Insurance Exchange
with those of the Company's shareholders," says Jeffrey A. Ludrof, president and
CEO.
Erie Indemnity Company provides management services to the member companies of
the Erie Insurance Group, which includes the Erie Insurance Exchange, Flagship
City Insurance Company, Erie Insurance Company, Erie Insurance Property and
Casualty Company, Erie Insurance Company of New York and Erie Family Life
Insurance Company.
According to A.M. Best Company, Erie Insurance Group, based in Erie,
Pennsylvania, is the 17th largest automobile insurer in the United States based
on direct premiums written and the 20th largest property/casualty insurer in the
United States based on total lines net premium written. The Group, rated A+
(Superior) by A.M. Best Company, has more than 3.7 million policies in force and
operates in 11 states and the District of Columbia. Erie Insurance Group ranked
454 on the FORTUNE 500.
"Safe Harbor" Statement Under the Private Securities Litigation Reform Act of
1995: Certain forward-looking statements contained herein involve risks and
uncertainties. These statements include certain discussions relating to
management fee revenue, cost of management operations, underwriting, premium and
investment income volume, business strategies, profitability and business
relationships and the Company's other business activities during 2002 and
beyond. In some cases, you can identify forward-looking statements by terms such
as "may," will," "should," "could," "would," "expect," "plan," "intend,"
"anticipate," "believe," "estimate," "project," "predict," "potential" and
similar expressions. These forward-looking statements reflect the Company's
current views about future events, are based on assumptions and are subject to
known and unknown risks and uncertainties that may cause results to differ
materially from those anticipated in those statements. Many of the factors that
will determine future events or achievements are beyond our ability to control
or predict.
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