CERTIFICATE OF INCORPORATION
OF
DONEGAL GROUP INC.
1. The name of the Corporation is Donegal Group Inc.
2. The address of its registered office is 1220 Market Street
Building, Wilmington, County of New Castle, Delaware 19801.
The name of its registered agent at such address is Wilmington
Corporate Services, Inc.
3. The nature of the business to be conducted or promoted is to
engage in any lawful act or activity for which corporations
may be organized under the General Corporation Law of the
State of Delaware.
4. (a) The aggregate number of shares which the
Corporation shall have authority to issue is: Ten
Million (10,000,000) shares of Common Stock of the
par value of One Dollar ($1.00) per share (the
"Common Stock") and One Million (1,000,000) shares of
Series Preferred Stock of the par value of One Dollar
($1.00) per share (the "Preferred Stock").
(b) The Preferred Stock may be issued from time to time
by the Board of Directors as herein provided in one
or more series. The designations, relative rights,
preferences and limitations of the Preferred Stock,
and particularly of the shares of each series
thereof, may, to the extent permitted by law, be
similar to or may differ from those of any other
series. The Board of Directors of the Corporation is
hereby expressly granted authority, subject to the
provisions of this Article Four, to issue from time
to time Preferred Stock in one or more series and to
fix from time to time before issuance thereof, by
filing a certificate pursuant to the General
Corporation Law, the number of shares in each such
series and all designations, relative rights
(including the right, to the extent permitted by law,
to convert into shares of any class or into shares of
any series of any class), preferences and limitations
of the shares in each such series, including, but
without limiting the generality of the foregoing, the
following:
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(i) The number of shares to constitute such
series (which number may at any time, or
from time to time, be increased or decreased
by the Board of Directors, notwithstanding
that shares of the series may be outstanding
at the time of such increase or decrease,
unless the Board of Directors shall have
otherwise provided in creating such series)
and the distinctive designation thereof;
(ii) The dividend rate on the shares of such
series, whether or not dividends on the
shares of such series shall be cumulative
and the date or dates, if any, from which
dividends thereon shall be cumulative;
(iii) Whether or not the shares of such series
shall be redeemable, and, if redeemable, the
date or dates upon or after which they shall
be redeemable and the amount or amounts per
share (which shall be, in the case of each
share, not less than its preference upon
involuntary liquidation, plus an amount
equal to all dividends thereon accrued and
unpaid, whether or not earned or declared)
payable thereon in the case of the
redemption thereof, which amount may vary at
different redemption dates or otherwise as
permitted by law;
(iv) The right, if any, of holders of shares of
such series to convert the same into, or
exchange the same for, Common Stock or other
stock as permitted by law, and the terms and
conditions of such conversion or exchange,
as well as provisions for adjustment of the
conversion rate in such events as the Board
of Directors shall determine;
(v) The amount per share payable on the shares
of such series upon the voluntary and
involuntary liquidation, dissolution or
winding up of the Corporation;
(vi) Whether the holders of shares of such series
shall have voting power, full or limited, in
addition to the voting powers provided by
law, and, in case additional voting powers
are accorded, to fix the extent thereof; and
(vii) Generally to fix the other rights and
privileges and any qualifications,
limitations or restrictions of such rights
and
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privileges of such series, provided,
however, that no such rights, privileges,
qualifications, limitations or restrictions
shall be in conflict with the Certificate of
Incorporation of the Corporation or with the
resolution or resolutions adopted by the
Board of Directors providing for the issue
of any series of which there are shares then
outstanding.
(c) All shares of Preferred Stock of the same
Series shall be identical in all respects,
except that shares of any one series issued
at different times may differ as to the
dates, if any, from which dividends thereon
may accumulate. All shares of Preferred
Stock of all series shall be of equal rank
and shall be identical in all respects,
except that to the extent not otherwise
limited in this Article Four any series may
differ from any other series with respect to
any one or more of the designations,
relative rights, preferences and limitations
described or referred to in subparagraphs
(b) (i) to (vii) inclusive of this Article
Four.
(d) Dividends on the outstanding Preferred Stock
of each series shall be declared and paid or
set apart for payment before any dividends
shall be declared and paid or set apart for
payment on the Common Stock with respect to
the same quarterly dividend period.
Dividends on any shares of Preferred Stock
shall be cumulative only if and to the
extent set forth in a certificate filed
pursuant to law. After dividends on all
shares of Preferred Stock (including
cumulative dividends if and to the extent
any such shares shall be entitled thereto)
shall have been declared and paid or set
apart for payment with respect to any
quarterly dividend period, then and not
otherwise as long as any shares of Preferred
Stock shall remain outstanding, dividends
may be declared and paid or set apart for
payment with respect to the same quarterly
dividend period on the Common Stock out of
the assets or funds of the Corporation
legally available therefor.
(e) All shares of Preferred Stock of all series
shall be of equal rank, preference and
priority as to dividends irrespective of
whether or not the rates of dividends to
which the particular series of Preferred
Stock shall be entitled shall be the same
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and when the stated dividends are not paid
in full, the shares of all series of
Preferred Stock shall share ratably in the
payment thereof in accordance with the sums
which would be payable on such shares if all
dividends were paid in full, provided,
however, that any two or more series of
Preferred Stock may differ from each other
as to the existence and extent of the right
to cumulative dividends, as aforesaid.
(f) Except as otherwise specifically provided in
the certificate filed pursuant to law with
respect to any series of Preferred Stock or
as otherwise provided by law, the Preferred
Stock shall not have any right to vote for
the election of directors or for any other
purpose and the Common Stock shall have the
exclusive right to vote for the election of
directors and for all other purposes. Each
holder of Common Stock shall be entitled to
one vote for each share thereof held. In all
instances in which voting rights are granted
to Preferred Stock or any series thereof,
such Preferred Stock or series shall vote
with the Common Stock as a single class,
except with respect to any vote for the
approval of any merger, consolidation,
liquidation or dissolution of the
Corporation and except as otherwise provided
in the certificate filed pursuant to law
with respect to any series of Preferred
Stock or as otherwise provided by law.
(g) In the event of any liquidation, dissolution
or winding up of the Corporation, whether
voluntary or involuntary, each series of
Preferred Stock shall have preference and
priority over the Common Stock for payment
of the amount to which each outstanding
series of Preferred Stock shall be entitled
in accordance with the provisions thereof
and each holder of Preferred Stock shall be
entitled to be paid in full such amount, or
have a sum sufficient for the payment in
full set aside, before any payments shall be
made to the holders of the Common Stock. If,
upon liquidation, dissolution or winding up
of the Corporation, the assets of the
Corporation or the proceeds thereof,
distributable among the holders of the
shares of all series of Preferred Stock
shall be insufficient to pay in full the
preferential amount aforesaid, then such
assets, or the proceeds thereof, shall be
distributed
4
among such holders ratably in accordance
with the respective amounts which would be
payable if all amounts payable thereon were
paid in full. After the holders of the
Preferred Stock of each series shall have
been paid in full the amounts to which they
respectively shall be entitled, or a sum
sufficient for the payment in full set
aside, the remaining net assets of the
Corporation shall be distributed pro rata to
the holders of the Common Stock in
accordance with their respective rights and
interests, to the exclusion of the holders
of Preferred Stock. A consolidation or
merger of the Corporation with or into
another corporation or corporations, or a
sale, whether for cash, shares of stock,
securities or properties, of all or
substantially all of the assets of the
Corporation, shall not be deemed or
construed to be a liquidation, dissolution
or winding up of the Corporation within the
meaning of this Article Four.
(h) In the event that Preferred Stock of any
series shall be made redeemable as provided
in subparagraph (b)(iii) of this Article
Four, the Corporation, at the option of the
Board of Directors, may redeem at any time
or times, and from time to time, all or any
part of any one or more series of Preferred
Stock outstanding by paying for each share
the then applicable redemption price fixed
by the Board of Directors as provided
herein, plus an amount equal to accrued and
unpaid dividends to the date fixed for
redemption, upon such notice and terms as
may be specifically provided in the
certificate filed pursuant to law with
respect to such series of Preferred Stock.
5. The Corporation shall have the power to indemnify any
person who was or is a party or is threatened to be
made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action
by or in the right of the Corporation) by reason of
the fact that he is or was a director, officer,
employee or agent of the Corporation, or is or was
serving at the request of the Corporation as a
director, officer, employee or agent of another
corporation, partnership, joint venture, trust or
other enterprise, against expenses (including
attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by him
in
5
connection with such action, suit or proceeding if he
acted in good faith and in a manner reasonably
believed to be in or not opposed to the best
interests of the Corporation, and, with respect to
any criminal action or proceedings, had no reasonable
cause to believe his conduct was unlawful. The
termination of any action, upon a plea of nolo
contendere or equivalent, shall not, of itself,
create a presumption that the person did not act in
good faith and in a manner which 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 reasonable
cause to believe that his conduct was unlawful.
6. The directors of the Corporation shall incur no
personal liability to the Corporation or its
stockholders for monetary damages for any breach of
the fiduciary duty as a director; provided, however,
that the directors of the Corporation shall continue
to be subject to liability (i) for any breach of
their duty of loyalty to the Corporation or its
stockholders, (ii) for acts or omissions not in good
faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 of
the General Corporation Law of the State of Delaware,
or (iv) for any transaction from which the directors
derived an improper benefit.
7. The business and affairs of the Corporation shall be
managed by or under the direction of the Board of
Directors, the number of members of which shall be
set forth in the By-laws of the Corporation. The
Directors need not be elected by ballot unless
required by the By-laws of the Corporation.
8. In the furtherance and not in limitation of the
objects, purposes and powers conferred by the laws of
the State of Delaware, the Board of Directors is
expressly authorized to made, amend and repeal the
By-laws, to fix the amount to be reserved as working
capital, and to authorize and cause to be executed
mortgages and liens without limit as to the amount,
upon the property and franchise of this corporation.
9. The Corporation is to have perpetual existence.
10. Meetings of the stockholders may be held within or
without the State of Delaware, as the By-laws may
provide. The books of the
6
Corporation may be kept, subject to any provisions
contained in the statutes, outside the State of
Delaware at such place or places as may be designated
from time to time by the Board of Directors or in the
By-laws of the Corporation. Elections of directors
need not be by written ballot unless the By-laws of
the Corporation shall so provide.
11. The Corporation reserves the right to amend, alter,
change or repeal any provision contained in this
Certificate of Incorporation, in the manner now or
hereafter prescribed by statute, and all rights
conferred upon stockholders herein are granted
subject to this reservation.
12. The name and address of the Incorporator is John L.
Olsen, Esquire, c/o Duane, Morris & Heckscher, 1220
Market Street Building, P.O. Box 195, Wilmington,
Delaware 19899.
13. The powers of Incorporator shall terminate upon the
election of directors.
I, THE UNDERSIGNED, being the Incorporator, for the purpose of forming
a corporation under the laws of the State of Delaware, do make, file and record
this Certificate of Incorporation, and do hereby certify that this is my act and
deed and the facts herein stated are true; and accordingly, have hereunto set my
hand and seal this 26th day of August, 1986.
/s/ John L. Olsen
--------------------------(SEAL)
John L. Olsen, Incorporator
7
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
DONEGAL GROUP INC.
UNDER SECTION 242 OF THE GENERAL CORPORATION
LAW OF THE STATE OF DELAWARE
Donegal Group Inc., a corporation organized and existing under and by
virtue of the General Corporation Law of the State of Delaware,
DOES HEREBY CERTIFY THAT:
FIRST: The Board of Directors of Donegal Group Inc. (the
"Corporation"), at a meeting of the Board of Directors held on March 16, 1998
pursuant to notice duly given, duly adopted the following resolution setting
forth a proposed amendment of the Certificate of Incorporation of the
Corporation, declaring such amendment to be advisable and calling for a meeting
of the stockholders of said Corporation for consideration thereof. The
resolution setting forth the proposed amendment is as follows:
RESOLVED, that Article 4(a) of the Certificate of
Incorporation of Donegal Group Inc. is hereby amended and
restated to provide in full as follows:
"4.(a) The aggregate number of shares which the
Corporation shall have authority to issue is: Fifteen
Million shares of Common Stock of the par value of
One Dollar ($1.00) per share (the "Common Stock") and
One Million shares of Series Preferred Stock of the
par value of One Dollar ($1.00) per share (the
"Preferred Stock")."
SECOND: Thereafter, pursuant to a resolution of the Board of Directors,
at the annual meeting of the stockholders of the Corporation held on April 16,
1998, the holders of a majority of the outstanding shares entitled to vote
thereon voted in favor of the approval and adoption of the amendment.
THIRD: Such amendment was duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware.
Exhibit 3(i)
IN WITNESS WHEREOF, said Corporation has caused this Certificate of
Amendment to be signed by Donegal H. Nikolaus, its President and Chief Executive
Officer, and Ralph G. Spontak, its Senior Vice President, Chief Financial
Officer and Secretary, this 20th day of April, 1998.
(SEAL) DONEGAL GROUP INC.
By: /s/ Donald H. Nikolaus
-------------------------------------
Donald H. Nikolaus
President and Chief Executive Officer
ATTEST:
By: /s/ Ralph G. Spontak
--------------------
Ralph G. Spontak,
Senior Vice President,
Chief Financial Officer and Secretary
2
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
DONEGAL GROUP INC.
UNDER SECTION 242 OF THE GENERAL CORPORATION
LAW OF THE STATE OF DELAWARE
Donegal Group Inc., a corporation organized and existing under and by
virtue of the General Corporation Law of the State of Delaware,
DOES HEREBY CERTIFY THAT:
FIRST: The Board of Directors of Donegal Group Inc. (the "Corporation"), at
a meeting of the Board of Directors held on March 18, 1999 pursuant to notice
duly given, duly adopted the following resolutions setting forth a proposed
amendment of the Certificate of Incorporation of the Corporation, declaring such
amendment to be advisable and calling for a meeting of the stockholders of said
Corporation for consideration thereof. The resolutions setting forth the
proposed amendment are as follows:
WHEREAS, the Board of Directors declares it advisable to amend Article 4
of the Corporation's Certificate of Incorporation to (i) increase the number of
authorized shares of capital stock from 16,000,000 shares, consisting of
1,000,000 shares of Series Preferred Stock and 15,000,000 shares of Common
Stock, to 37,000,000 shares, consisting of 2,000,000 shares of Series Preferred
Stock, 20,000,000 shares of Common Stock and 15,000,000 shares of Class A Common
Stock and (ii) restate in its entirety Article 4 of the Corporation's
Certificate of Incorporation as so amended; it is
RESOLVED, that Article 4 of the Certificate of Incorporation of
Donegal Group Inc. is hereby amended and restated to provide in full as set
forth on Exhibit A hereto; and
FURTHER RESOLVED, that the amendment to and restatement of Article 4
of the Certificate of Incorporation shall be submitted to the stockholders
of the Corporation for approval in accordance with the applicable
provisions of the Delaware General Corporation Law.
SECOND: Thereafter, pursuant to a resolution of the Board of Directors, at
the annual meeting of the stockholders of the Corporation held on April 15,
1999, the holders of a majority of the outstanding shares entitled to vote
thereon voted in favor of the approval and adoption of the amendment.
THIRD: Such amendment was duly adopted in accordance with the provisions of
Section 242 of the General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, the Corporation has caused this Certificate of
Amendment to be signed by Donald H. Nikolaus, its President and Chief Executive
Officer, and Ralph G. Spontak, its Senior Vice President, Chief Financial
Officer and Secretary, this 15th day of April, 1999.
(SEAL) DONEGAL GROUP INC.
ATTEST:
By: /s/ Donald H. Nikolaus
----------------------------
Donald H. Nikolaus,
By: /s/ Ralph G. Spontak President and Chief
----------------------------- Executive Officer
Ralph G. Spontak,
Senior Vice President, Chief
Financial Officer and Secretary
-2-
EXHIBIT A
4. The aggregate number of shares of stock which the Corporation shall have
authority to issue is 37,000,000 shares, consisting of (i) 20,000,000 shares of
Common Stock (the "Common Stock"), par value $1.00 per share, (ii) 15,000,000
shares of Class A Common Stock (the "Class A Common Stock"), par value $.01 per
share, and (iii) 2,000,000 shares of Series Preferred Stock (the "Preferred
Stock"), par value $.01 per share.
(a) The Class A Common Stock may be issued from time to time by the Board
of Directors as herein provided in one or more series. The designations,
relative rights (including voting rights), preferences, limitations and
restrictions of the Class A Common Stock, and particularly of the shares of each
series thereof, may, to the extent permitted by law, be similar to or may differ
from those of any other series. The Board of Directors of the Corporation is
hereby expressly granted authority, subject to the provisions of this Article 4,
to issue from time to time Class A Common Stock in one or more series and to fix
from time to time before issuance thereof, by filing a certificate of
designations pursuant to the General Corporation Law of the State of Delaware
(the "GCL"), the number of shares in each such series and all designations,
relative rights (including the right, to the extent permitted by law, to convert
into shares of any class or into shares of any series of any class),
preferences, qualifications, limitations and restrictions of the shares in each
such series. Notwithstanding anything to the contrary set forth above, the
powers, preferences and rights, and the qualifications, limitations and
restrictions, of the Common Stock and the Class A Common Stock shall be subject
to the following:
(i) Except as otherwise required by law or as otherwise provided in
this Certificate of Incorporation or in a certificate of designations filed
pursuant to the GCL with respect to any series of Class A Common Stock,
each share of Common Stock and each share of Class A Common Stock shall be
of equal rank and shall have identical powers, preferences, qualifications,
limitations, restrictions and other rights, including rights in
liquidation. All shares of Class A Common Stock of the same series shall be
identical in all respects.
(ii) Each holder of Common Stock shall be entitled to one vote for
each share of Common Stock held. Except as otherwise specifically provided
in the certificate of designations filed pursuant to the GCL with respect
to any series of Class A Common Stock or as otherwise provided by law, the
Class A Common Stock shall not have any right to vote for the election of
directors or for any other purpose and the Common Stock and, to the extent
A-1
provided in a certificate of designations filed pursuant to the GCL with
respect to any series of Preferred Stock, the Preferred Stock shall have
the exclusive right to vote for the election of directors and for all other
purposes. In all instances in which voting rights are granted to the Class
A Common Stock or any series thereof, the Class A Common Stock or series
thereof shall vote with the Common Stock and, to the extent provided in a
certificate of designations filed pursuant to the GCL with respect to any
series of Preferred Stock, the Preferred Stock as a single class, except as
otherwise provided in the certificate of designations filed pursuant to the
GCL with respect to any series of Class A Common Stock or as otherwise
provided by law.
(iii) Each share of Common Stock and each share of Class A Common
Stock shall be equal in respect of rights to dividends and distributions,
except that (A) a dividend or distribution in cash or property on a share
of Class A Common Stock may be greater than a dividend or distribution in
cash or property on a share of Common Stock and (B) dividends or other
distributions payable on the Common Stock and the Class A Common Stock in
shares of capital stock shall be made to all holders of Common Stock and
Class A Common Stock and may be made (1) in shares of Common Stock to the
holders of Common Stock and in shares of Class A Common Stock to the
holders of Class A Common Stock, (2) in shares of Class A Common Stock to
the holders of Common Stock and to the holders of Class A Common Stock or
(3) in any other authorized class or series of capital stock to the holders
of Common Stock and to the holders of Class A Common Stock.
(iv) Except to the extent provided in paragraph (a)(iii) of this
Article 4, the Corporation shall not split, divide or combine the shares of
the Common Stock or the Class A Common Stock unless, at the same time, the
Corporation splits, divides or combines, as the case may be, the shares of
both the Common Stock and the Class A Common Stock in the same proportion
and manner.
(v) The number of authorized shares of Common Stock and the number of
authorized shares of Class A Common Stock may be increased or decreased
(but not below the number of shares then outstanding) by the affirmative
vote of the holders of a majority of the voting power of the stock of the
Corporation entitled to vote irrespective of any other voting requirements
set forth in Section 242(b)(2) of the GCL, but subject in all events to
compliance with the requirements of this Article 4.
(b) The Preferred Stock may be issued from time to time by the Board of
Directors of the Corporation as herein provided in one or more series. The
designations, relative rights (including
A-2
voting rights), preferences, limitations and restrictions of the Preferred
Stock, and particularly of the shares of each series thereof, may, to the extent
permitted by law, be similar to or may differ from those of any other series.
The Board of Directors of the Corporation is hereby expressly granted authority,
subject to the provisions of this Article 4, to issue from time to time
Preferred Stock in one or more series and to fix from time to time before
issuance thereof, by filing a certificate of designations pursuant to the GCL,
the number of shares in each such series and all designations, relative rights
(including the right, to the extent permitted by law, to convert into shares of
any class or into shares of any series of any class), preferences, limitations
and restrictions of the shares in each such series. Notwithstanding anything to
the contrary set forth above, the powers, preferences and rights, and the
qualifications, limitations and restrictions, of the Preferred Stock shall be
subject to the following:
(i) The number of authorized shares of the Preferred Stock may be
increased or decreased (but not below the number of shares then
outstanding) by the affirmative vote of the holders of a majority of the
voting power of the stock of the Corporation entitled to vote irrespective
of any other voting requirements set forth in Section 242(b)(2) of the GCL,
but subject in all events to compliance with the requirements of this
Article 4.
(ii) All shares of Preferred Stock of the same series shall be
identical in all respects, except that shares of any one series issued at
different times may differ as to the dates, if any, from which dividends
thereon, if any, may accumulate. All shares of Preferred Stock of all
series shall be of equal rank and shall be identical in all respects,
except that, to the extent not otherwise limited in this Article 4, any
series may differ from any other series with respect to any one or more of
the designations, relative rights, preferences, limitations and
restrictions set forth in a certificate of designations filed under the GCL
with respect to any series.
(iii) Except as otherwise specifically provided in the certificate of
designations filed pursuant to the GCL with respect to any series of
Preferred Stock or as otherwise provided by law, the Preferred Stock shall
not have any right to vote for the election of directors or for any other
purpose and the Common Stock and, to the extent provided in a certificate
of designations filed pursuant to the GCL with respect to any series of
Class A Common Stock, the Class A Common Stock shall have the exclusive
right to vote for the election of directors and for all other purposes. In
all instances in which voting rights are granted to the Preferred Stock or
any series thereof, such Preferred Stock or series thereof shall vote with
the Common Stock and, to the extent provided in a certificate of
designations filed pursuant to the GCL with respect to any series of Class
A Common Stock, the Class A Common Stock as a single class,
A-3
except as otherwise provided in the certificate of designations filed
pursuant to the GCL with respect to any series of Preferred Stock or as
otherwise provided by law.
(c) In the event of any liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, each series of Preferred Stock
shall have preference and priority over the Common Stock and the Class A Common
Stock for payment of the amount to which each outstanding series of Preferred
Stock shall be entitled in accordance with the provisions thereof and each
holder of Preferred Stock shall be entitled to be paid in full such amount, or
have a sum sufficient for the payment in full set aside, before any payments
shall be made to the holders of the Common Stock and the Class A Common Stock.
After the holders of the Preferred Stock of each series shall have been paid in
full the amounts to which they respectively shall be entitled, or a sum
sufficient for the payment in full set aside, the remaining net assets of the
Corporation shall be distributed pro rata to the holders of the Common Stock and
the Class A Common Stock in accordance with their respective rights and
interests, to the exclusion of the holders of Preferred Stock. A consolidation
or merger of the Corporation with or into another corporation or corporations,
or a sale, whether for cash, shares of stock, securities or properties, of
all or substantially all of the assets of the Corporation, shall not be deemed
or construed to be a liquidation, dissolution or winding up of the Corporation
within the meaning of this Article 4.
A-4