8-K

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): April 28, 2011

RLI Corp.

(Exact name of registrant as specified in its charter)

Illinois	001-09463	37-0889946
(State or other jurisdiction	(Commission	(IRS Employer
of incorporation)	File Number)	Identification No.)

9025 North Lindbergh Drive, Peoria, IL	61615
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (309) 692-1000

Not applicable

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.01     Completion of Acquisition or Disposition of Assets.

On April 28, 2011, RLI Insurance Company (“RIC”), a wholly-owned subsidiary of RLI Corp., completed the previously announced acquisition of Data and Staff Service Co. (“DSSC”) pursuant to its Stock Purchase Agreement dated December 22, 2010, as amended, with DSSC and Mr. Donald Sirkin and Data and Staff Service Co. Employee Stock Ownership Plan, as selling stockholders of DSSC.  Under the Stock Purchase Agreement, RIC paid approximately $136 million in cash for the DSSC common stock.  The principal subsidiary of DSSC is Contractors Bonding and Insurance Company (“CBIC”), an insurance company specializing in surety bonds and related niche property and casualty insurance products.

A copy of the press release dated April 28, 2011 announcing the completion of RIC’s purchase of CBIC is furnished under this report as Exhibit 99.1 and is incorporated herein by reference.

On April 21, 2011, RIC entered into an Amendment to Stock Purchase Agreement (the “Amendment”) amending its Stock Purchase Agreement dated December 22, 2010, with DSSC and Mr. Sirkin and Data and Staff Service Co. Employee Stock Ownership Plan, as selling stockholders of DSSC. The Amendment is attached as Exhibit 99.2 hereto and is incorporated herein by reference.

Item 9.01     Financial Statements and Exhibits.

(d) Exhibits

Exhibit No.	Description
99.1	Press Release, dated April 28, 2011.
99.2	Amendment to Stock Purchase Agreement, dated as of April 21, 2011, by and among RLI Insurance Company, Data and Staff Service Co., Donald Sirkin, and Data and Staff Service Co. Employee Stock Ownership Plan.

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SIGNATURES

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.

	RLI CORP.
Date:  April 28, 2011	By:	/s/ Daniel O. Kennedy
	Daniel O. Kennedy
	Vice President and General Counsel

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EXHIBIT INDEX

Exhibit No.	Exhibit
99.1	Press Release, dated April 28, 2011.
99.2	Amendment to Stock Purchase Agreement, dated as of April 21, 2011, by and among RLI Insurance Company, Data and Staff Service Co., Donald Sirkin, and Data and Staff Service Co. Employee Stock Ownership Plan.

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EX-99.1

Exhibit 99.1

	NEWS RELEASE
RLI Corp.
9025 N. Lindbergh Drive  |  Peoria, IL 61615-1431
	P: 309-692-1000  |  F: 309-692-1068  |  www.rlicorp.com

FOR IMMEDIATE RELEASE	CONTACT: John Robison
	(309) 693-5846
	John.Robison@rlicorp.com
	www.rlicorp.com

RLI Completes Purchase of Contractors Bonding and Insurance Company

PEORIA, ILLINOIS, April 28, 2011, RLI Corp. (NYSE:RLI) — RLI Corp. announced that it has closed the previously announced purchase of Contractors Bonding and Insurance Company (CBIC). RLI purchased CBIC for approximately $136 million in cash.

“We are excited about the opportunities this acquisition creates, as it will allow us to offer enhanced products and solutions to both CBIC and RLI customers in more locations across the country,” said Jonathan E. Michael, President & CEO of RLI Corp. “CBIC brings a talented team of underwriters with deep industry expertise and an excellent underwriting track record to RLI. We welcome their employees and look forward to working together to create more value for our customers.”

CBIC is a privately held, Seattle-based insurance company specializing in surety bonds and related niche property and casualty insurance products.  The company serves over 30,000 contractors and over 4,000 insurance agents and brokers nationwide.  CBIC operates 13 regional branch offices and is considered a leading writer of contractor license bonds in the Northwest. They have achieved an underwriting profit in 14 of the last 15 years.

RLI, a specialty insurance company, offers a diversified portfolio of property and casualty coverages and surety bonds serving niche or underserved markets. RLI operates in all 50 states from office locations across the country. RLI’s insurance subsidiaries — RLI Insurance Company, Mt. Hawley Insurance Company and RLI Indemnity Company — are rated A+ “Superior” by A.M. Best Company and A+ “Strong” by Standard & Poor’s. RLI’s new subsidiary, Contractors Bonding and Insurance Company, is rated A “Excellent” by A.M. Best Company. RLI is recognized as one of the insurance industry’s top performing companies by its designation as a Ward’s 50® Top P&C Performer and has been a member of the group for 20 straight years since the list’s inception in 1991.

For additional information, contact John Robison, Treasurer and Chief Investment Officer, at (309) 693-5846 or at john.robison@rlicorp.com or visit our website at www.rlicorp.com.

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EX-99.2

Exhibit 99.2

AMENDMENT TO STOCK PURCHASE AGREEMENT

This AMENDMENT TO STOCK PURCHASE AGREEMENT, dated as of April 21, 2011 (this “Amendment”), is made by and among Donald Sirkin, a resident of the State of Washington, in his individual capacity (“Mr. Sirkin”), Data and Staff Service Co. Employee Stock Ownership Plan (the “ESOP”, and together with Mr. Sirkin, the “Sellers”), Data and Staff Service Co., a Washington corporation (“DSSC”), and RLI Insurance Company, an Illinois domiciled insurance company (the “Acquiror”).  Capitalized terms used but not otherwise defined in this Amendment shall have the respective meanings ascribed to such terms under the Stock Purchase Agreement (as hereinafter defined).

WHEREAS, the parties to this Amendment are parties to a Stock Purchase Agreement, dated as of December 22, 2010 (the “Stock Purchase Agreement”);

WHEREAS, the parties desire to amend the Stock Purchase Agreement and certain Schedules and Exhibits attached thereto as provided herein; and

WHEREAS, pursuant to Section 12.9 of the Stock Purchase Agreement, the Stock Purchase Agreement may be amended only by a written instrument signed by all of the parties to the Stock Purchase Agreement, and the parties to this Amendment constitute all of the parties to the Stock Purchase Agreement.

NOW, THEREFORE, in consideration of the foregoing premises and the covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

1.Section 2.2(a) of the Stock Purchase Agreement.  Section 2.2(a) of the Stock Purchase Agreement is hereby amended by deleting the reference to “$6,307,953” set forth therein and inserting “$4,308,537” in lieu thereof.

2.Section 2.4 of the Stock Purchase Agreement.  Section 2.4 of the Stock Purchase Agreement is hereby amended by deleting such section in its entirety and replacing it with the following:

“(a)Purchase Price.  The purchase price shall be an amount in cash equal to $135,900,380 (the “Purchase Price”).  The Purchase Price will be paid and adjusted pursuant to the provisions of Sections 2.5 and 2.6.

(b)Purchase Price Allocation.  The Acquiror and the Sellers agree to allocate $600,000 of the Purchase Price payable to Mr. Sirkin to the non-competition covenant of Mr. Sirkin set forth in Section 2 of the Closing Agreement and the remainder of the Purchase Price to the Shares.  The Acquiror and the Sellers covenant and agree that (i) such allocation was determined in an arm’s length negotiation and none of the Acquiror or the Sellers shall take a position on any Tax Return, before any Tax Authority or in any judicial proceeding that is in any way inconsistent with such allocation without the written consent of each other (such consent not to be unreasonably withheld) or unless specifically required

pursuant to a determination by an applicable Tax Authority; (ii) they shall cooperate with each other in connection with the preparation, execution and filing of all Tax Returns related to such allocation; and (iii) they shall promptly advise each other in writing regarding the existence of any tax audit, controversy or litigation related to such allocation.”

3.Section 2.5(b) of the Stock Purchase Agreement.  Section 2.5(b) of the Stock Purchase Agreement is hereby amended by deleting each of the references to “$6,307,953” set forth therein and inserting “$4,308,537” in lieu thereof.

4.Section 2.5(c) of the Stock Purchase Agreement.  Section 2.5(c) of the Stock Purchase Agreement is hereby amended by (a) deleting the word “and” at the end of subsection (i) thereof, (b) deleting the period at the end of subsection (ii) thereof and inserting a semi-colon in lieu thereof and (c) adding the following to the end thereof:

“(iii)an amount of cash equal to the portion of the Excluded Assets Purchase Price payable to DSSC, as reflected in the Allocation Schedule, shall be paid to DSSC; and

(iv)an amount of cash equal to the portion of the Excluded Assets Purchase Price payable to CBIC, as reflected in the Allocation Schedule, shall be paid to CBIC.”

5.Section 2.6 of the Stock Purchase Agreement.  Section 2.6 of the Stock Purchase Agreement is hereby amended by (a) deleting the word “and” at the end of subsection (s) thereof, (b) deleting the period at the end of subsection (t) thereof and inserting a semi-colon in lieu thereof and (c) adding the following to the end thereof:

“(u)the Acquiror shall pay to DSSC the portion of the Excluded Assets Purchase Price payable to DSSC, as reflected in the Allocation Schedule, by wire transfer of immediately available funds to the account designated in the Closing Notice; and

(v)the Acquiror shall pay to CBIC the portion of the Excluded Assets Purchase Price payable to CBIC, as reflected in the Allocation Schedule, by wire transfer of immediately available funds to the account designated in the Closing Notice.”

6.Form of Allocation Schedule.  The form of Allocation Schedule attached as Exhibit B to the Stock Purchase Agreement is hereby amended by deleting such exhibit in its entirety and replacing it with Annex A attached hereto.

7.Form of Lease Agreement.  The form of Lease Agreement attached as Exhibit F to the Stock Purchase Agreement is hereby amended by deleting the second sentence of Section 6 thereof in its entirety and replacing it with the following:

“Landlord shall demise the Premises to the extent necessary to completely separate and secure the Leased Premises from the remainder of the Building, as

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shown on Exhibit “A” (“Demising Work”), which Demising Work shall be completed by the Landlord as soon as reasonably practicable following the Commencement Date.”

8.Form of Employee Lease Agreement.  The form of Employee Lease Agreement attached as Exhibit G to the Stock Purchase Agreement is hereby amended by:

(a)adding “Paul Richardson” to the end of the list of Persons set forth in Schedule A thereto; and

(b)deleting the reference to “Paul Richardson” set forth in Schedule B thereto.

9.Schedule 7.1(a) to the Stock Purchase Agreement.  Schedule 7.1(a) to the Stock Purchase Agreement is hereby amended by deleting the reference to “Paul Richardson” set forth therein.

10.Schedule 7.2(a) to the Stock Purchase Agreement.  Schedule 7.2(a) to the Stock Purchase Agreement is hereby amended by (a) deleting the references to “Paul Richardson” and “$241,000” set forth therein and (b) deleting the reference to “$93,773” set forth therein in respect of the Initial Transaction Bonus amount to be paid to Gary Bingham and inserting “$97,000” in lieu thereof.

11.Full Force and Effect.  Except as expressly modified by this Amendment, all of the terms, covenants, agreements, conditions and other provisions of the Stock Purchase Agreement shall remain in full force and effect in accordance with their respective terms.  As used in the Stock Purchase Agreement, the terms “this Agreement,” “herein,” “hereinafter,” “hereto,” and words of similar import shall mean and refer to, from and after the date of this Amendment, unless the context requires otherwise, the Stock Purchase Agreement as amended by this Amendment.  For the avoidance of doubt, references to the phrases “the date of this Agreement” or “the date hereof”, wherever used in the Stock Purchase Agreement, as amended by this Amendment, shall mean December 22, 2010.

12.Governing Law.  This Amendment shall in all respects be governed by, and construed in accordance with, the Laws of the State of New York without giving effect to any conflicts of law principles of such state to the extent such principles would require or permit the application of the Laws of another jurisdiction.

13.Counterparts.  This Amendment may be executed in two or more counterparts, and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement.  Delivery of an executed counterpart of a signature page to this Amendment by facsimile shall be as effective as delivery of a manually executed counterpart of this Amendment.

[Signature Page Follows]

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to Stock Purchase Agreement to be executed by their respective officers or representatives thereunto duly authorized as of the date first above written.

DONALD SIRKIN, in his individual capacity
By:	/s/ Donald Sirkin
DONALD SIRKIN, as Trustee of the Data and Staff Service Co. Employee Stock Ownership Program
By:	/s/ Donald Sirkin
DATA AND STAFF SERVICE CO.
By:	/s/ Donald Sirkin
Name:			Donald Sirkin
Title:		President and Chief Executive Officer
RLI INSURANCE COMPANY
By:	/s/ Michael J. Stone
Name:			Michael J. Stone
Title:		President & COO