EXHIBIT 3 (iii)
AMENDED AND RESTATED
BY-LAWS
of
DONEGAL GROUP INC.
Article 1
CORPORATION OFFICE
Section 1.1. Registered Office. The registered office of the
Corporation shall be 1100 North Market Street Building, Wilmington, County of
New Castle, Delaware, 19801.
Section 1.2. Principal Office. The principal office of the Corporation
shall be in Marietta, Pennsylvania.
Section 1.3. Other Offices. The Corporation may also have offices at
such other places as the Board of Directors may from time to time designate or
the business of the Corporation may from time to time require.
Article 2
STOCKHOLDERS
Section 2.1. Place and Time of Meetings. All meetings of the
stockholders shall be held at such time and place as may be fixed from time to
time by the Board of Directors and stated in the notice of meeting or in a duly
executed waiver of notice thereof. If no such place is fixed by the Board of
Directors, meetings of the stockholders shall be held at the principal office of
the Corporation.
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Section 2.2. Annual Meetings. The annual meeting of the stockholders
shall be held on the third Thursday in April in each year, if not a legal
holiday, and, if a legal holiday, then on the next full business day, at the
Corporation's principal office or at such other place, date and time as shall be
designated from time to time by the Board of Directors and stated in the notice
of meeting or a duly executed waiver of notice thereof.
At such annual meeting, the stockholders shall elect successors to the
directors whose terms shall expire that year to serve for the following three
years and until their successors shall have been duly elected and qualified or
until their earlier resignation or removal. The stockholders also shall transact
such other business as may properly be brought before the meeting and as are
consistent with the provisions of these By-laws.
Section 2.3. Stockholder Proposals.
(a) Stockholder Proposals Relating to Nominations for and Election
of Directors.
(i) Nominations of candidates for election by
stockholders to the Board of Directors shall be made exclusively by the
Nominating Committee of the Board of Directors.
(ii) A proposal by a stockholder for the nomination by the
Nominating Committee of the Board of Directors of a candidate for election by
stockholders as a director at any meeting of stockholders at which directors are
to be elected may only be made by notice in writing, delivered in person or by
first class United States mail postage prepaid or by reputable overnight
delivery service, to the Nominating Committee of the Board of Directors of the
Corporation to the attention of the Secretary of the Corporation at the
principal office of the Corporation, within the time limits specified herein.
(iii) In the case of an annual meeting of stockholders, any
such written proposal of nomination must be received by the Nominating Committee
not less than 90
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calendar days nor more than 120 calendar days before the first anniversary of
the date on which the Corporation first mailed its proxy statement to
stockholders for the annual meeting of stockholders in the immediately preceding
year; provided, however, that in the case of an annual meeting of stockholders
that is called for a date which is not within 30 calendar days before or after
the first anniversary date of the annual meeting of stockholders in the
immediately preceding year, any such written proposal of nomination must be
received by the Board of Directors not less than five business days after the
date the Corporation shall have mailed notice to its stockholders that an annual
meeting of stockholders will be held or issued a press release, filed a periodic
report with the Securities and Exchange Commission or otherwise publicly
disseminated notice that an annual meeting of stockholders will be held.
(iv) In the case of a special meeting of stockholders, any
such written proposal of nomination must be received by the Nominating Committee
not less than five business days after the earlier of the date that the
Corporation shall have mailed notice to its stockholders that a special meeting
of stockholders will be held or issued a press release, filed a periodic report
with the Securities and Exchange Commission or otherwise publicly disseminated
notice that a special meeting of stockholders will be held.
(v) Such written proposal of nomination shall set forth
(A) the name and address of the stockholder who intends to make the nomination
(the "Nominating Stockholder"), (B) the name, age, business address and, if
known, residence address of each person so proposed, (C) the principal
occupation or employment of each person so proposed for the past five years, (D)
the number of shares of capital stock of the Corporation beneficially owned
within the meaning of Securities and Exchange Commission Rule 13d-3
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by each person so proposed and the earliest date of acquisition of any such
capital stock, (E) a description of any arrangement or understanding between
each person so proposed and the Nominating Stockholder with respect to such
person's proposal for nomination and election as a director and actions to be
proposed or taken by such person as a director, (F) the written consent of each
person so proposed to serve as a director if nominated and elected as a director
and (G) such other information regarding each such person as would be required
under the proxy solicitation rules of the Securities and Exchange Commission if
proxies were to be solicited for the election as a director of each person so
proposed.
(vi) If a written proposal of nomination submitted to the
Nominating Committee fails, in the reasonable judgment of the Nominating
Committee, to contain the information specified in clause (v) hereof or is
otherwise deficient, the Chairperson of the Nominating Committee shall, as
promptly as is practicable under the circumstances, provide written notice to
the Nominating Stockholder of such failure or deficiency in the written proposal
of nomination and such Nominating Stockholder shall have five business days from
receipt of such notice to submit a revised written proposal of nomination that
corrects such failure or deficiency in all material respects.
(vii) Only candidates nominated for election by
stockholders as a member of the Board of Directors in accordance with the
foregoing provisions of this Section 2.3(a) shall be eligible for election as a
member of the Board of Directors at such meeting of stockholders, and any
candidate not nominated in accordance with such provisions shall not be
considered or acted upon for election as a director at such meeting of
stockholders.
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(b) Stockholder Proposals Relating to Other Than Nominations for
and Elections of Directors.
(i) A stockholder of the Corporation may bring a matter
before a meeting of stockholders only if (A) (x) such matter is a proper matter
for stockholder action and (y) such stockholder shall have provided notice in
writing, delivered in person or by first class United States mail postage
prepaid or by reputable overnight delivery service, to the Board of Directors of
the Corporation to the attention of the Secretary of the Corporation at the
principal office of the Corporation, within the time limits specified herein or
(B) the stockholder complies with the provisions of Rule 14a-8 under the
Securities Exchange Act of 1934 relating to inclusion of stockholder proposals
in the Corporation's proxy statement.
(ii) In the case of an annual meeting of stockholders, any
such written notice of presentation of a matter must be received by the Board of
Directors not less than 90 calendar days nor more than 120 calendar days before
the first anniversary of the date on which the Corporation first mailed its
proxy statement to stockholders for the annual meeting of stockholders in the
immediately preceding year; provided, however, that in the case of an annual
meeting of stockholders that is called for a date which is not within 30
calendar days before or after the first anniversary date of the annual meeting
of stockholders in the immediately preceding year, any such written notice of
presentation of a matter must be received by the Board of Directors not less
than five business days after the date the Corporation shall have mailed notice
to its stockholders that an annual meeting of stockholders will be held or
issued a press release, filed a periodic report with the Securities and Exchange
Commission or otherwise publicly disseminated notice that an annual meeting of
stockholders will be held.
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(iii) In the case of a special meeting of stockholders, any
such written notice of presentation of a matter must be received by the Board of
Directors not less than five business days after the earlier of the date the
Corporation shall have mailed notice to its stockholders that a special meeting
of stockholders will be held or issued a press release, filed a periodic report
with the Securities and Exchange Commission or otherwise publicly disseminated
notice that a special meeting of stockholders will be held.
(iv) Such written notice of presentation of a matter shall
set forth information regarding such matter equivalent to the information
regarding such matter that would be required under the proxy solicitation rules
of the Securities and Exchange Commission if proxies were solicited for
stockholder consideration of such matter at a meeting of stockholders.
(v) If a written notice of presentation of a matter
submitted to the Board of Directors fails, in the reasonable judgment of the
Board of Directors, to contain the information specified in clause (iv) hereof
or is otherwise deficient, the Chairperson of the Board of Directors shall, as
promptly as is practicable under the circumstances, provide written notice to
the stockholder who submitted the written notice of presentation of a matter of
such failure or deficiency in the written notice of presentation of a matter and
such stockholder shall have five business days from receipt of such notice to
submit a revised written notice of presentation of a matter that corrects such
failure or deficiency in all material respects.
(vi) Only matters submitted in accordance with the
foregoing provisions of this Section 2.3(b) shall be eligible for presentation
of such meeting of stockholders, and any
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matter not submitted to the Board of Directors in accordance with such
provisions shall not be considered or acted upon at such meeting of
stockholders.
Section 2.4. Special Meetings. Special meetings of stockholders for any
purpose or purposes may be called at any time by the President of the
Corporation, and shall be called by the Secretary of the Corporation at the
request in writing of a majority of the Board of Directors or stockholders
owning at least one-fifth of the entire capital stock of the Corporation issued
and outstanding and entitled to vote thereat. Any request for a special meeting
of stockholders shall be signed by the person or persons making the request and
shall state the purpose or purposes of the proposed meeting. Upon receipt of any
such request, it shall be the duty of the Secretary of the Corporation to call a
special meeting of stockholders to be held at such time, not less than ten nor
more than sixty days thereafter, as the Secretary of the Corporation may fix. If
the Secretary of the Corporation shall neglect or refuse to issue such call
within five days from the receipt of such request, the person or persons making
the request may do so. Business transacted at any special meeting of
stockholders shall be limited to the purposes stated in the notice of such
meeting or a duly executed waiver of notice thereof.
Section 2.5. Notice of Meetings. Written notice of all meetings of
stockholders other than adjourned, postponed or continued meetings of
stockholders, stating the place, date and hour, and, in the case of special
meetings of stockholders, the purpose or purposes thereof, shall be served upon
or mailed, postage prepaid, or telegraphed, charges prepaid, not less than ten
nor more than sixty days before the date of the meeting to each stockholder
entitled to vote thereat at such address as appears on the books of the
Corporation. Such notices may be given at the discretion of, or in the name of,
the Board of Directors, the President, any Vice
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President, the Secretary or any Assistant Secretary. When a meeting is
adjourned, postponed or continued it shall not be necessary to give any notice
of the adjourned, postponed or continued meeting or of the business to be
transacted at the adjourned, postponed or continued meeting, other than by
announcement at the meeting at which such adjournment, postponement or
continuation is taken.
Section 2.6. Participation in Meetings by Conference Telephone. One or
more stockholders may participate in any meeting of the stockholders by means of
conference telephone or similar communications equipment which enables all
persons participating in the meeting to hear one another, and such person or
persons shall be counted for purposes of a quorum.
Section 2.7. Quorum of and Action by Stockholders. The presence, in
person, by proxy or by telephonic or similar communications equipment, of
stockholders entitled to cast a majority of the votes which all stockholders are
entitled to cast on the particular matter shall constitute a quorum for purposes
of considering such matter, and, unless otherwise specifically provided by
statute, the acts of such stockholders at a duly organized meeting shall be the
acts of stockholders with respect to such matter.
If, however, such quorum shall not be present at any meeting of the
stockholders, the stockholders entitled to vote thereat present in person, by
proxy or by such communications equipment may, except as otherwise provided by
statute, adjourn, postpone or continue the meeting from time to time to such
time and place as they may determine, without notice other than an announcement
at the meeting, until a quorum shall be present in person, by proxy or by such
communications equipment.
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At any adjourned, postponed or continued meeting at which a quorum had
been present, stockholders present in person, by proxy or by such communications
equipment at a duly organized and constituted meeting, can continue to do
business with respect to any matter properly submitted to the meeting until
adjournment, postponement or continuation thereof notwithstanding the withdrawal
of enough stockholders to leave less than a quorum for the purposes of
considering any particular such matter.
Section 2.8. Voting. Except as may be otherwise provided by statute or
by the Certificate of Incorporation, at every meeting of the stockholders, every
holder of Class A Common Stock entitled to vote thereat shall have the right to
one-tenth of one vote for every share of Class A Common Stock standing in his
name on the stock transfer books of the Corporation on the record date fixed for
the meeting and every holder of Class B Common Stock entitled to vote thereat
shall have the right to one vote for every share of Class B Common Stock
standing in his name on the stock transfer books of the Corporation on the
record date fixed for the meeting. No share shall be voted at any meeting if any
installment is due and unpaid thereon.
When a quorum exists at any meeting, the vote of the holders of Class A
Common Stock and Class B Common Stock having a majority of the voting power
present at such meeting in person, by proxy or by telephonic or similar
communications equipment shall decide any question brought before such meeting,
unless the question is one for which, by express provision of statute or of the
Certificate of Incorporation or of these By-laws, a different vote is required.
Upon demand made by a stockholder at any election of directors before the voting
begins, the election shall be by ballot, in which event the vote shall be taken
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by written ballot, and the judge or judges of election or, if none, the
Secretary of the meeting, shall tabulate and certify the results of such vote.
Section 2.9. Voting by Proxy. Every stockholder entitled to vote at a
meeting of the stockholders or to express consent or dissent to corporate action
in writing without a meeting may authorize another person or persons to act for
him by proxy. Every proxy shall be executed in writing by the stockholder or his
duly authorized attorney in fact and filed with the Secretary of the
Corporation. A proxy, unless coupled with an interest, shall be revocable at
will, notwithstanding any other agreement or any provision in the proxy to the
contrary, but the revocation of a proxy shall not be effective until written
notice thereof has been given to the Secretary of the Corporation. No unrevoked
proxy shall be voted or acted upon after three years from the date of its
execution, unless a longer time is expressly provided therein. A proxy shall not
be revoked by the death or incapacity of the maker, unless, before the vote is
counted or the authority is exercised, written notice of such death or
incapacity is given to the Secretary of the Corporation.
Section 2.10. Record Date. The Board of Directors may fix a time, not
more than sixty nor less than ten days prior to the date of any meeting of the
stockholders, or the date fixed for the payment of any dividend or distribution,
or the date for the allotment of rights or the date when any change or
conversion or exchange of shares will be made or go into effect, as the record
date for the determination of the stockholders entitled to notice of, or to vote
at, such meeting, or to receive any such allotment of rights or to exercise the
rights in respect to any such change or conversion or exchange of shares. In
such case, only such stockholders as shall be stockholders of record on the date
so fixed shall be entitled to notice of, or to vote at, such meeting or to
receive payment of such dividend, or to receive such allotment of rights or
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to exercise such rights, as the case may be, notwithstanding any transfer of any
shares on the books of the Corporation after any record date fixed as aforesaid.
The Board of Directors may close the books of the Corporation against
transfers of shares during the whole or any part of such period, and in such
case written or printed notice thereof shall be mailed at least ten days before
the closing thereof to each stockholder of record at the address appearing on
the stock transfer books of the Corporation or supplied by him to the
Corporation for the purpose of notice. While the stock transfer books of the
Corporation are closed, no transfer of shares shall be made thereon. If no
record date is fixed by the Board of Directors for the determination of
stockholders who are entitled to receive notice of, or to vote at, a meeting of
the stockholders, or to receive payment of any such dividend or distribution, or
to receive any such allotment of rights or to exercise the rights in respect to
any such change or conversion or exchange of shares, transferees of shares which
are transferred on the stock transfer books of the Corporation within the ten
days immediately preceding the date of such meeting, dividend, distribution,
allotment of rights or exercise of such rights shall not be entitled to notice
of, or to vote at, such meeting, or to receive payment of any dividend or
distribution, or to receive any such allotment of rights or to exercise the
rights in respect to any such change or conversion or exchange of shares.
Section 2.11. Stockholders List. The officer or agent having charge of
the stock transfer books for shares of the Corporation shall make, at least ten
days before each meeting of the stockholders, a complete alphabetical list of
the stockholders entitled to vote at the meeting, with their addresses and the
number of shares held by each, which list shall be kept on file either at a
place within the city where the meeting is to be held, which place shall be
specified in the notice of the meeting or if not so specified, at the place
where the meeting is
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to be held and shall be subject to inspection by any stockholder for any purpose
germane to the meeting at any time during usual business hours for a period of
at least ten days prior to the meeting. Such list shall be produced at the
meeting and shall be kept open for inspection by any stockholder during the
entire meeting. The original stock transfer books of the Corporation shall be
prima facie evidence as to who are the stockholders entitled to exercise the
rights of a stockholder.
Section 2.12. Inspectors of Election. In advance of any meeting of the
stockholders, the Board of Directors shall appoint inspectors of election, who
need not be stockholders, to act at such meeting or any adjournment,
postponement or continuation thereof. If no inspector of election so appointed
is able to act at a meeting of stockholders, the chairman of any such meeting
shall make such appointment at the meeting. The number of inspectors of election
shall be one or three. No person who is a candidate for office shall act as an
inspector of election.
The inspectors of election shall do all such acts as may be proper to
conduct the election or vote and such other duties as may be prescribed by
statute with fairness to all stockholders, and shall make a written report of
any matter determined by them and execute a certificate as to any fact found by
them. If there are three inspectors of election, the decision, act or
certificate of a majority shall be the decision, act or certificate of all.
Section 2.13. Action by Written Consent of the Stockholders. Any action
required to be taken at an annual or special meeting of stockholders, or of a
class thereof, or any action which may be taken at any annual or special meeting
of such stockholders, or of a class thereof, may be taken without a meeting,
without prior notice and without a vote, if a consent or consents in writing
setting forth the action so taken shall be signed by the holders
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of outstanding stock having not less than the minimum number of votes that would
be necessary to authorize or take such action at a meeting at which all shares
entitled to vote thereon were present and voted and shall be delivered to the
Secretary of the Corporation at its principal place of business as specified in
Section 1.2 hereof.
Article 3
DIRECTORS
Section 3.1. Powers.
(a) General Powers. The Board of Directors shall have all the
power and authority granted by law to the Board of Directors, including all
powers necessary or appropriate to the management of the business and affairs of
the Corporation.
(b) Specific Powers. Without limiting the general powers conferred
by the last preceding clause and the powers conferred by the Certificate of
Incorporation and the By-laws of the Corporation, it is hereby expressly
declared that the Board of Directors shall have the following powers:
(i) To appoint any person, firm or corporation to accept
and hold in trust for the Corporation any property belonging to the Corporation
or in which it is interested, and to authorize any such person, firm or
corporation to execute any documents and perform any duties that may be
requisite in relation to any such trust;
(ii) To appoint a person or persons to vote shares of
another corporation held and owned by the Corporation and, in the absence of any
such appointment, the Board of Directors of the Corporation shall have the
authority to vote any such shares;
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(iii) By resolution adopted by a majority of the whole
Board of Directors, to designate one or more committees, each committee to
consist of two or more of the directors of the Corporation. To the extent
provided in any such resolution, and to the extent permitted by law, a committee
so designated shall have and may exercise the authority of the Board of
Directors in the management of the business and affairs of the Corporation. The
Board of Directors may designate one or more directors as alternate members of
any committee, who may replace any absent or disqualified member at any meeting
of the committee. If specifically granted this power by the Board of Directors
in its resolution establishing the committee, in the absence or disqualification
of any member and all designated alternates of such committee or committees or
if the whole Board of Directors has failed to designate alternate members, the
member or members thereof present at any meeting and not disqualified from
voting, whether or not he or they constitute a quorum, may unanimously appoint
another director to act at the meeting in the place of any such absent or
disqualified member;
(iv) To fix the place, time and purpose of meetings of the
stockholders; and
(v) To fix the compensation of directors and officers for
their services.
Section 3.2. Number and Terms of Directors. The number of directors
which shall constitute the whole Board of Directors shall be not less than seven
nor more than twelve, who shall be natural persons of full age and need not be
residents of Delaware or stockholders of the Corporation. Within the limits
above specified, the number of directors shall be as determined from time to
time by resolution of the Board of Directors. Except as hereinafter provided in
the case of vacancies, each director shall be elected by the affirmative vote of
a plurality of the votes cast by the holders of Class A Common Stock and of
Class B
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Common Stock for a term of three years and until his successor has been elected,
subject to removal as provided by statute.
Section 3.3. Classes. The Board of Directors shall be divided into
three classes: Class A, Class B and Class C. At each annual meeting of the
stockholders, the successors to the directors of the class whose term shall
expire in that year shall be elected for a term of three years so that the term
of office of one class of directors shall expire in each year. The number of
directors in each class shall be as nearly equal as possible so that, except for
temporary vacancies, the number in any class shall not exceed the number in any
other class by more than one.
Section 3.4. Powers and Duties of the Chairman of the Board of
Directors. The Board of Directors shall appoint one of their number as the
Chairman of the Board who shall preside at all meetings of the Board of
Directors and who shall have such other powers and duties as may be assigned to
him from time to time by the Board of Directors.
Section 3.5. Powers and Duties of the Vice Chairman of the Board of
Directors. The Board of Directors may, in its discretion, appoint one of its
number as a Vice Chairman of the Board of Directors. In the absence of the
Chairman of the Board of Directors, the Vice Chairman of the Board of Directors
shall preside at all meetings of the Board of Directors. In addition, the Vice
Chairman of the Board of Directors shall have such other powers and duties as
may be assigned to him from time to time by the Board of Directors.
Section 3.6. Vacancies. Vacancies on the Board of Directors, including
vacancies resulting from an increase in the number of directors, shall be filled
by a majority of the remaining members of the Board of Directors, though less
than a quorum, or by the sole remaining director, as the case may be,
irrespective of whether holders of any class or series
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of stock or other voting securities of the Corporation are entitled to elect one
or more directors to fill such vacancies or newly created directorships at the
next annual meeting of the stockholders. Each person so elected shall be a
director until his successor is elected by the stockholders at the annual
meeting of the stockholders at which the class of directors to which he was
elected is up for election or at any special meeting of the stockholders prior
thereto duly called for that purpose.
Section 3.7. Organization Meetings. The organization meeting of each
newly elected Board of Directors shall be held immediately following each annual
meeting of the stockholders at which directors were elected without the
necessity of notice to such directors to constitute a legally convened meeting
or at such time and place as may be fixed by a notice, or a waiver of notice, or
a consent signed by all of such directors. At such meeting, the Board of
Directors shall elect officers of the Corporation and may also choose an
Executive Committee consisting of two members of the Board of Directors in
addition to the President.
Section 3.8. Regular Meetings. The Board of Directors shall have the
power to fix by resolution the place, date and hour of regular meetings of the
Board of Directors.
Section 3.9. Special Meetings. Special meetings of the Board of
Directors may be called by the President of the Corporation on one day's notice
to each director, either personally or by mail, telephone or telegram. Special
meetings of the Board of Directors shall be called by the President or the
Secretary of the Corporation in like manner and on like notice upon the written
request of any five directors.
Section 3.10. Notices of Meetings. All meetings of the Board of
Directors may be held at such times and places as may be specified in the notice
of meeting or in a duly executed
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waiver of notice thereof. Notice of regular meetings of the Board of Directors
shall be given to each director at least three days before each meeting either
personally or by mail, telegram or telephone. One or more directors may
participate in any meeting of the Board of Directors, or of any committee
thereof, by means of a conference telephone or similar communications equipment
which enables all persons participating in the meeting to hear one another, and
such participation in a meeting shall constitute presence in person at the
meeting.
Section 3.11. Quorum. At all meetings of the Board of Directors, the
presence, in person or by telephonic or similar communications equipment, of a
majority of the members of the Board of Directors shall constitute a quorum for
the transaction of business, and the acts of a majority of the directors present
at a duly convened meeting at which a quorum is present shall be the acts of the
Board of Directors, except as may be otherwise specifically provided by statute,
by the Certificate of Incorporation of the Corporation or by these By-laws. If a
quorum shall not be present, in person or by telephonic or similar
communications equipment, at any meeting of the Board of Directors, the
directors present may adjourn, postpone or continue the meeting from time to
time, without notice other than announcement at the meeting, until a quorum
shall be so present.
Section 3.12. Action by Unanimous Written Consent. Any action required
or permitted to be taken at any meeting of the Board of Directors or of any
committee thereof may be taken without a meeting if all members of the Board of
Directors or a committee thereof, as the case may be, consent thereto in
writing, and such consent is filed with the minutes of proceedings of the Board
of Directors, or committee.
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Section 3.13. Compensation. Directors, as such, may receive a stated
salary for their services, or a fixed sum and expenses for attendance at regular
or special meetings of the Board of Directors, or any committee thereof, or any
combination of the foregoing as may be determined from time to time by
resolution of the Board of Directors, and nothing contained herein shall be
construed to preclude any director from serving the Corporation in any other
capacity and receiving compensation therefor.
Section 3.14. The Coordinating Committee. The Coordinating Committee
shall consist of two members of the Corporation's Board of Directors, each of
whom is not a member of the Board of Directors or an officer of Donegal Mutual
Insurance Company, and two members of the Board of Directors of Donegal Mutual
Insurance Company, each of whom is not a member of the Board of Directors or an
officer of the Corporation. The Coordinating Committee shall review and either
approve or disapprove all contracts and other matters involving actual or
potential conflicts of interest between the Corporation and Donegal Mutual
Insurance Company. Whenever any new contract between the Corporation and Donegal
Mutual Insurance Company is proposed or any change is proposed in any existing
contract between the Corporation and Donegal Mutual Insurance Company or any
other matter arises that presents an actual or potential conflict of interest
between the Corporation and Donegal Mutual Insurance Company, such new contract,
change in an existing contract or other matter shall (i) first be submitted for
approval to the respective Boards of Directors of the Corporation and of Donegal
Mutual Insurance Company, (ii) only following approval by the respective Boards
of Directors of the Corporation and Donegal Mutual Insurance Company shall the
new contract, change in an existing contract or other matter be submitted to the
Coordinating Committee for its consideration thereof and (iii) the proposed new
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contract, change in an existing contract or other matter shall be consummated
only if (A) both of the Corporation's members of the Coordinating Committee
conclude that such new contract, change in an existing contract or other matter
is fair and equitable to the Corporation and its stockholders and (B) both of
Donegal Mutual Insurance Company's members of the Coordinating Committee
conclude that such new contract, change in an existing contract or other matter
is fair and equitable to Donegal Mutual Insurance Company and its policyholders.
For purposes of this Section 3.14, the term "the Corporation" shall mean Donegal
Group Inc. and its direct and indirect wholly owned subsidiaries and the term
"Donegal Mutual Insurance Company" shall mean Donegal Mutual Insurance Company
and its direct and indirect wholly owned subsidiaries.
Section 3.15. Executive Committee. There shall be an Executive
Committee that shall have and exercise all power and authority of the Board of
Directors between meetings of the Board of Directors to the extent consistent
with Delaware law. The Executive Committee shall consist of not fewer than three
members of the Board of Directors, one of whom shall be the Chief Executive
Officer of the Corporation and who shall be Chairman of the Executive Committee,
unless another member shall be designated by resolution of the Board of
Directors. The members of the Executive Committee shall be designated from time
to time by resolution of the Board of Directors. Not less than one-third of the
committee must be directors who are not officers or employees of the Corporation
or of any entity controlling, controlled by or under common control with the
Corporation and who are not beneficial owners of a controlling interest in the
voting securities of the Corporation. The Executive Committee shall meet at any
time and place designated upon not fewer than six hours oral or written notice
given by or on behalf of the Chairman of the Executive Committee. The
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Executive Committee shall report promptly to the entire Board of Directors the
substance of any action taken by the Executive Committee.
Section 3.16. Audit Committee. The Board of Directors shall appoint
annually an Audit Committee that shall consist of not fewer than three directors
who satisfy applicable independence requirements, are not officers or employees
of the Corporation or of any entity controlling, controlled by or under common
control with the Corporation and who are not beneficial owners of a controlling
interest in the voting securities of the Corporation. The Audit Committee shall
operate in accordance with its written charter adopted by the Board of Directors
on March 19, 2004 and shall have responsibility for the selection of the
Corporation's independent public accountants, reviewing the scope and results of
the audit and reviewing the adequacy of the Corporation's accounting, financial,
internal and operating controls.
Section 3.17. Nominating Committee. The Board of Directors shall
appoint annually a Nominating Committee which shall consist of not fewer than
two directors who satisfy applicable independence requirements, are not officers
or employees of the Corporation or of any entity controlling, controlled by, or
under common control with the Corporation and who are not beneficial owners of a
controlling interest in the voting securities of the Corporation. The Nominating
Committee shall operate in accordance with its written charter as adopted by the
Board of Directors on March 19, 2004 and shall have responsibility for
identification of individuals believed to be qualified to become members of the
Board of Directors and to recommend to the Board of Directors nominees to stand
for election as directors, identification of members of the Board of Directors
qualified to serve on the various committees of the Board of Directors,
evaluation of the procedures and processes by
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which the committees of the Board of Directors conduct a self-evaluation of
their performance and provision to the Board of Directors of an annual
performance evaluation of the Nominating Committee. The Chief Executive Officer
of the Company shall be an ex-officio member of the Nominating Committee.
Section 3.18. Compensation Committee. The Board of Directors shall
appoint annually a Compensation Committee that shall consist of not fewer than
two directors who satisfy applicable independence requirements, are not officers
or employees of the Corporation or of any entity controlling, controlled by, or
under common control with the Corporation and who are not beneficial owners of a
controlling interest in the voting securities of the Corporation. The
Compensation Committee shall be responsible for the annual review of the
compensation of the Corporation's executive officers, the provision of annual
compensation recommendations to the Board of Directors for all of the
Corporation's officers, the determination of employees who participate in the
Corporation's employee stock option plans and the provision of recommendations
to the Board of Directors as to individual stock option grants and the general
oversight of the Corporation's employee benefit plans.
Article 4
OFFICERS
Section 4.1. Election and Office. The officers of the Corporation shall
be elected annually by the Board of Directors at its organization meeting and
shall consist of a President, a Secretary and a Treasurer. The Board of
Directors may also elect one or more Vice Presidents and such other officers and
appoint such agents as it shall deem necessary. Each officer of the Corporation
shall hold office for such term, have such authority and perform such duties as
set forth in these By-laws or as may from time to time be prescribed
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by the Board of Directors in consultation with the President. Any two or more
offices may be held by the same person.
Section 4.2. Salaries. The salaries of all officers of the Corporation
shall be fixed by the Board of Directors.
Section 4.3. Removal and Vacancies. The Board of Directors may remove
any officer or agent elected or appointed at any time and within the period, if
any, for which such person was elected or employed whenever in the judgment of
the Board of Directors it is in the best interests of the Corporation, and all
persons shall be elected and employed subject to the provisions hereof. If the
office of any officer becomes vacant for any reason, the vacancy shall be filled
by the Board of Directors.
Section 4.4. Powers and Duties of the President. Unless otherwise
determined by the Board of Directors, the President shall have the usual duties
of a chief executive officer with general supervision over and direction of the
affairs of the Corporation. In the exercise of these duties and subject to the
limitations of the laws of the State of Delaware or any other applicable law,
these By-laws and the actions of the Board of Directors, he may appoint, suspend
and discharge employees, agents and assistant officers, may fix the compensation
of all officers and assistant officers, shall preside at all meetings of the
stockholders at which he shall be present, and, unless there is a Chairman of
the Board of Directors, shall preside at all meetings of the Board of Directors
and shall be a member of all committees. He shall also do and perform such other
duties as from time to time may be assigned to him by the Board of Directors.
Unless otherwise determined by the Board of Directors, the President
shall have full power and authority on behalf of the Corporation to attend and
to act and to vote at any
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meeting of the stockholders of any corporation in which the Corporation may hold
stock, and, at any such meeting, shall possess and may exercise any and all the
rights and powers incident to the ownership of such stock and which, as the
owner thereof, the Corporation might have possessed and exercised.
Section 4.5. Powers and Duties of Vice Presidents. Each Vice President
shall have such duties as may be assigned to him from time to time by the Board
of Directors, the Executive Committee or the President. In the event of a
temporary absence of the President on vacation or business, the President may
designate a Vice President or Vice Presidents who will perform the duties of the
President in such absence. In the event of a prolonged absence of the President
due to illness or disability or for any other reason, the Board of Directors
shall designate a Vice President or Vice Presidents who will perform the duties
of the President during such absence.
Section 4.6. Powers and Duties of the Secretary. The Secretary of the
Corporation shall attend all meetings of the Board of Directors and of the
stockholders and shall keep accurate records thereof in one or more minute books
kept for that purpose, shall give, or cause to be given, the required notice of
all meetings of the stockholders and of the Board of Directors, shall keep in
safe custody the corporate seal of the Corporation and affix the same to any
instrument requiring it, and when so affixed, it shall be attested by his
signature or by the signature of the Treasurer or any Assistant Secretary or
Assistant Treasurer of the Corporation. The Secretary also shall keep, or cause
to be kept, the stock certificate books, stock transfer books and stock ledgers
of the Corporation, in which shall be recorded all stock issues, transfers, the
dates of same, the names and addresses of all stockholders and the number of
shares held by each, shall, when necessary, prepare new certificates upon the
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transfer of shares and the surrender of the old certificates, shall cancel such
surrendered certificates and shall perform such other duties as may be assigned
to him by the President.
Section 4.7. Powers and Duties of the Treasurer. The Treasurer of the
Corporation shall have the custody of the Corporation's funds and securities,
shall keep full and accurate accounts of receipts and disbursements in books
belonging to the Corporation, shall deposit all moneys and other valuable
effects in the name and to the credit of the Corporation in such depositories as
shall be designated by the President, shall disburse the funds of the
Corporation as may be ordered by the President or the Board of Directors, taking
proper vouchers for such disbursements, shall render to the President and the
Board of Directors, at the regular meetings of the Board of Directors or
whenever they may require it, an account of all his transactions as Treasurer
and of the financial condition of the Corporation and shall have the right to
affix the seal of the Corporation to any instrument requiring it, and to attest
to the same by his signature and, if so required by the Board of Directors, he
shall give bond in such sum and with such surety as the Board of Directors may
from time to time direct.
Section 4.8. Designation of a Chief Financial Officer. The Board of
Directors shall have the power to designate from among the President, any Vice
President or the Treasurer of the Corporation a Chief Financial Officer who
shall be deemed the principal financial and accounting officer. In the event
that the Treasurer is not designated by the Board of Directors as the Chief
Financial Officer, the Treasurer shall report to the Chief Financial Officer
from time to time concerning all duties which the Treasurer is obligated to
perform and the Chief Financial Officer shall, subject to the reasonable
direction of the President or the Board of Directors, at his election, assume
such of the duties of the Treasurer as are provided in Section 4.7 hereof as he
shall deem appropriate.
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Article 5
INDEMNIFICATION
Section 5.1. Indemnification. The Corporation shall indemnify any
director or officer of the Corporation and any director or officer of its
subsidiaries against expenses, including legal fees, judgments, fines and
amounts paid in settlement, actually and reasonably incurred by him to the
fullest extent now or hereafter permitted by law in connection with any
threatened, pending or completed action, suit or proceeding, whether derivative
or nonderivative, and whether civil, criminal, administrative or investigative,
brought or threatened to be brought against him by reason of his performance or
status as a director or officer of the Corporation, any of its subsidiaries or
any other entity in which he was serving at the request of the Corporation or in
any other capacity on behalf of the Corporation, its parent or any of its
subsidiaries if such officer or director acted in good faith and in a manner he
reasonably believed to be in, or not opposed to, the best interests of the
Corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful.
Notwithstanding the foregoing, in the case of any threatened, pending
or completed action or suit by or in the right of the Corporation, no
indemnification shall be made in respect of any claim, issue or matter as to
which such officer or director shall have been adjudged to be liable to the
Corporation unless and only to the extent the court in which such action or suit
was brought shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which the court
shall deem proper.
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The Board of Directors by resolution adopted in each specific instance
may similarly indemnify any person other than a director or officer of the
Corporation for liabilities incurred by him in connection with services rendered
by him for or at the request of the Corporation or any of its subsidiaries.
The provisions of this Section 5.1 shall be applicable to all actions,
suits or proceedings commenced after its adoption, whether such arise out of
acts or omissions which occurred prior or subsequent to such adoption and shall
continue as to a person who has ceased to be a director or officer or to render
services for or at the request of the Corporation and shall inure to the benefit
of the heirs, executors and administrators of such a person. The rights of
indemnification provided for herein shall not be deemed the exclusive rights to
which any such director, officer or other person may be entitled.
Section 5.2. Authorization and Determination of Indemnification. Any
indemnification under this Article 5, unless ordered by a court, shall be made
by the Corporation only as authorized in the specific case upon a determination
that indemnification of the director, officer or other person is proper in the
circumstances because he has met the applicable standard of conduct as specified
in Section 5.1 of this Article 5. A person shall be deemed to have met such
applicable standard of conduct if his action is based on the records or books of
account of the Corporation or another enterprise, or on information supplied to
him by the officers of the Corporation or another enterprise in the course of
their duties, or on the advice of legal counsel for the Corporation or another
enterprise or on information or records given or reports made to the Corporation
or another enterprise by an independent certified public accountant or by an
appraiser or other expert selected with reasonable care by the Corporation or
another enterprise.
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Such determination shall be made (i) by the Board of Directors by a
majority vote of a quorum consisting of directors who were not parties to such
action, suit or proceeding, or (ii) if such a quorum is not obtainable, or, even
if obtainable, a majority vote of a quorum of disinterested directors so
directs, by independent legal counsel in a written opinion or (iii) by the
stockholders. To the extent, however, that a director, officer or other person
has been successful on the merits or otherwise in defense of any action, suit or
proceeding described above, or in defense of any claim, issue or matter therein,
he shall be indemnified against expenses, including attorneys' fees, actually
and reasonably incurred by him in connection therewith, without the necessity of
authorization in the specific case.
The provisions of this Section 5.2 shall not be deemed to be exclusive
or to limit in any way the circumstances in which a person may be deemed to have
met such applicable standard of conduct.
Section 5.3. Advances. Expenses incurred in defending or investigating
a threatened or pending action, suit or proceeding shall be paid by the
Corporation in advance of the final disposition of such action, suit or
proceeding as authorized by the Board of Directors upon receipt of an
undertaking by or on behalf of the director, officer or other person to repay
such amount if it shall ultimately be determined that he is not entitled to be
indemnified by the Corporation as authorized in this Article 5.
Section 5.4. Scope and Alteration of Indemnification Provisions. The
indemnification and advancement of expenses provided by, or granted pursuant to,
the other sections of this Article 5 shall not be deemed exclusive of any other
rights to which those seeking indemnification or advancement of expenses may be
entitled under any By-law, agreement, contract, vote of the stockholders or
disinterested directors or pursuant to the direction,
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howsoever embodied, of any court of competent jurisdiction or otherwise, both as
to action in his official capacity and as to action in another capacity while
holding such office, it being the policy of the Corporation that indemnification
of, and advancement of expenses to, the persons specified in Section 5.1 of this
Article 5 shall be made to the fullest extent permitted by law.
To this end, the provisions of this Article 5 shall be deemed to have
been amended for the benefit of such persons effective immediately upon any
modification of the General Corporation Law of the State of Delaware which
expands or enlarges the power or obligation of corporations organized under such
law to indemnify, or advance expenses to, such persons. The provisions of this
Article 5 shall not be deemed to preclude the indemnification of, or advancement
of expenses to, any person who is not specified in this Section 5.4 or Section
5.1 of this Article 5 but whom the Corporation has the power or obligation to
indemnify, or to advance expenses for, under the provisions of the General
Corporation Law of the State of Delaware or otherwise.
Section 5.5. Insurance. The Corporation may purchase and maintain
insurance on behalf of any person who is or was a director, officer or employee
of the Corporation, or is or was serving at the request of the Corporation as a
director, officer or employee of another corporation, partnership, joint
venture, trust or other enterprise against any liability asserted against him
and incurred by him in any such capacity, or arising out of his status as such,
whether or not the Corporation would have the power or the obligation to
indemnify him against such liability under the provisions of this Article 5.
Section 5.6. Definitions. For purposes of this Article 5, references to
the "Corporation" shall include, in addition to the resulting corporation, any
constituent corporation (including
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any constituent of a constituent) absorbed in a consolidation or merger which,
if its separate existence had continued, would have had power and authority to
indemnify its directors, officers, and employees or agents, so that any person
who is or was a director, officer or employee of such constituent corporation,
or is or was serving at the request of such constituent corporation as a
director, officer or employee of another corporation, partnership, joint
venture, trust or other enterprise, shall stand in the same position under the
provisions of this Article 5 with respect to the resulting or surviving
corporation as he would have with respect to such constituent corporation if its
separate existence had continued.
The term "another enterprise" as used in this Article 5 shall mean any
other corporation or any partnership, joint venture, trust or other entity of
which such person is or was serving at the request of the Corporation as a
director, officer, employee or agent and shall include employee benefit plans.
Article 6
CAPITAL STOCK
Section 6.1. Stock Certificates. The certificates for shares of the
Corporation's capital stock shall be numbered and registered in a share register
as they are issued, shall bear the name of the registered holder, the number and
class of shares represented thereby and the par value of each share or a
statement that such shares are without par value, as the case may be, shall be
signed by the President or any Vice President of the Corporation and the
Secretary, any Assistant Secretary or the Treasurer of the Corporation or any
other person properly authorized by the Board of Directors and shall bear the
seal of the Corporation, which seal may be a facsimile engraved or printed.
Where the certificate is signed by a transfer agent or a registrar, the
signature of any corporate officer on such certificate may be
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a facsimile engraved or printed. In case any officer who has signed, or whose
facsimile signature has been placed upon, any share certificate shall have
ceased to be such officer because of death, resignation or otherwise, before the
certificate is issued, it may be issued by the Corporation with the same effect
as if the officer had not ceased to be such at the date of its issue.
Section 6.2. Transfer of Shares. Upon surrender to the Corporation of a
share certificate duly endorsed by the person named in the certificate or by an
attorney duly appointed in writing and accompanied where necessary by proper
evidence of succession, assignment or authority to transfer, a new certificate
shall be issued to the person entitled thereto and the old certificate cancelled
and the transfer recorded upon the stock transfer books and share register of
the Corporation.
Section 6.3. Lost Certificates. Should any stockholder of the
Corporation allege the loss, theft or destruction of one or more certificates
for shares of the Corporation and request the issuance by the Corporation of a
substitute certificate therefor, the Board of Directors may direct that a new
certificate of the same tenor and for the same number of shares be issued to
such person upon such person's making of an affidavit in form satisfactory to
the Board of Directors setting forth the facts in connection therewith, provided
that prior to the receipt of such request the Corporation shall not have either
registered a transfer of such certificate or received notice that such
certificate has been acquired by a bona fide purchaser. When authorizing such
issuance of a new certificate, the Board of Directors may, in its discretion and
as a condition precedent to the issuance of such certificate, require the owner
of such lost, stolen or destroyed certificate, or his heirs or legal
representatives, as the case may be, to advertise the same in such manner as the
Board of Directors shall require and/or to give the
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Corporation a bond in such form and for such sum and with such surety or
sureties, with fixed or open penalty, as shall be satisfactory to the Board of
Directors, as indemnity for any liability or expense which it may incur by
reason of the original certificate remaining outstanding.
Section 6.4. Dividends. The Board of Directors may, from time to time,
at any duly convened regular or special meeting or by unanimous consent, declare
and pay dividends upon the outstanding shares of capital stock of the
Corporation in cash, property or shares of the Corporation.
Before payment of any dividend, there may be set aside out of any funds
of the Corporation available for dividends such sum or sums as the Board of
Directors from time to time, in its absolute discretion, shall deem proper as a
reserve fund to meet contingencies, or for equalizing dividends, or for
repairing or maintaining any property of the Corporation or for such other
purposes as the Board of Directors shall believe to be in the best interests of
the Corporation, and the Board of Directors may reduce or abolish any such
reserve in the manner in which it was created.
Article 7
FINANCIAL REPORT TO STOCKHOLDERS
The President of the Corporation and the Board of Directors shall
present at each annual meeting of the stockholders a full and complete statement
of the business and affairs of the Corporation for the preceding year. Such
statement shall be prepared and presented in whatever manner the Board of
Directors shall deem advisable and need not be verified by a certified public
accountant or sent to the stockholders of the Corporation.
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Article 8
CHECKS AND NOTES
All checks or demands for money and notes of the Corporation shall be
signed by such officer or officers or such other person or persons as the Board
of Directors or the President may from time to time designate.
Article 9
FISCAL YEAR
The fiscal year of the Corporation shall be as determined from time to
time by resolution of the Board of Directors.
Article 10
SEAL
The seal of the Corporation shall have inscribed thereon the name of
the Corporation, the year of its organization and the words "Corporate Seal,
Delaware." Said seal may be used by causing it or a facsimile thereof to be
impressed or affixed or in any manner reproduced.
Article 11
NOTICES; COMPUTING TIME PERIODS
Section 11.1. Method and Contents of Notice. Whenever, under the
provisions of statute or of the Certificate of Incorporation or of these
By-laws, written notice is required to be given to any person, it may be given
to such person either personally or by sending a copy thereof through the mail,
postage prepaid, or by telegram, charges prepaid, to his address appearing on
the books of the Corporation or supplied by him to the Corporation for the
purpose of notice. If the notice is sent by mail or telegraph, it shall be
deemed to have been
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given to the person entitled thereto when deposited in the United States mail or
with a telegraph office for transmission to such person. Such notice shall
specify the place, day and hour of the meeting, if any, and, in the case of a
special meeting of the stockholders, the general nature of the business to be
transacted.
Section 11.2. Waiver of Notice. Any written notice required to be given
to any person may be waived in a writing signed by the person entitled to such
notice whether before or after the time stated therein. Attendance of any person
entitled to notice, whether in person or by proxy, at any meeting shall
constitute a waiver of notice of such meeting, except where any person attends a
meeting for the express purpose of objecting to the transaction of any business
because the meeting was not lawfully called or convened. Where written notice is
required for any meeting, the waiver thereof must specify the purpose only if it
is for a special meeting of the stockholders.
Section 11.3. Computing Time Periods. In computing the number of days
for purposes of these By-laws, all days shall be counted, including Saturdays,
Sundays or holidays; provided, however, that if the final day of any time period
falls on a Saturday, Sunday or holiday, then the final day shall be deemed to be
the next day which is not a Saturday, Sunday or holiday. In computing the number
of days for the purpose of giving notice of any meeting, the date upon which the
notice is given shall be counted but the day set for the meeting shall not be
counted.
Article 12
AMENDMENTS
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These By-laws may be altered, amended or repealed by a majority vote of
the stockholders entitled to vote thereon at any annual or special meeting duly
convened after notice to the stockholders of that purpose or by a majority vote
of the members of the Board of Directors at any regular or special meeting of
the Board of Directors duly convened after notice to the Board of Directors of
that purpose, subject always to the power of the stockholders to change such
action of the Board of Directors.
Article 13
INTERPRETATION OF BY-LAWS
All words, terms and provisions of these By-laws shall be interpreted
and defined by and in accordance with the General Corporation Law of the State
of Delaware, as amended, and as amended from time to time hereafter.
Last Amended March 19, 2004
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