EXHIBIT 3.1
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:
(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
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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
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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 make, 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
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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
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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.
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 20th day of April, 1998.
(SEAL) DONEGAL GROUP INC.
By: /s/ Donald H. Nikolaus
----------------------
Donald H. Nikolaus,
President and Chief
ATTEST: Executive Officer
By: /s/ Ralph G. Spontak
--------------------------------
Ralph G. Spontak,
Senior Vice President, Chief
Financial Officer and Secretary
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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.
By: /s/ Donald H. Nikolaus
-----------------------
Donald H. Nikolaus,
President and Chief
ATTEST: Executive Officer
By: /s/ Ralph G. Spontak
-------------------------------
Ralph G. Spontak,
Senior Vice President, Chief
Financial Officer and Secretary
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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,
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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
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 April 6, 2001 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) authorize
30,000,000 shares of a new class of common stock with one-tenth of a vote
per share designated as Class A Common Stock; (ii) reclassify the
Corporation's existing Common Stock as Class B Common Stock, effect a
one-for-three reverse split of the Class B Common Stock effective as of the
close of business on April 19, 2001, reduce the number of authorized shares
thereof from 20,000,000 shares to 10,000,000 shares and reduce the par
value thereof from $1.00 per share to $.01 per share, and (iii) eliminate
the Corporation's existing authorization to issue 15,000,000 shares of
Class A Common Stock; it is
RESOLVED, that Article 4 of the Certificate of Incorporation of
Donegal Group Inc. is hereby amended to provide in full as set forth on
Exhibit A hereto; and
FURTHER RESOLVED, that the amendment to 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 19,
2001, 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: The amendment was duly adopted in accordance with the provisions of
Section 242 of the General Corporation Law of the State of Delaware.
FOURTH: The amendment shall be effective at 5:00 p.m. on April 19, 2001.
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 19th day of April, 2001.
(SEAL) DONEGAL GROUP INC.
By: /s/ Donald H. Nikolaus
-------------------------------------
Donald H. Nikolaus,
ATTEST: President and Chief Executive Officer
By: /s/ Ralph G. Spontak
--------------------------------
Ralph G. Spontak,
Senior Vice President, Chief
Financial Officer and Secretary
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EXHIBIT A
4. The aggregate number of shares of stock which the Corporation shall have
authority to issue is 42,000,000 shares, consisting of (i) 30,000,000 shares of
Class A Common Stock, par value $.01 per share (the "Class A Common Stock"),
(ii) 10,000,000 shares of Class B Common Stock, par value $.01 per share (the
"Class B Common Stock"), and (iii) 2,000,000 shares of Series Preferred Stock,
par value $.01 per share (the "Preferred Stock"). At the time the Certificate of
Amendment of the Corporation's Certificate of Incorporation becomes effective
(the "Effective Time") pursuant to the General Corporation Law of the State of
Delaware (the "DGCL"), and without any further action on the part of the
Corporation or its stockholders, the Corporation's Common Stock, par value $1.00
per share, authorized and issued immediately prior to the Effective Time (the
"Old Common Stock") shall be reclassified, converted and combined into shares of
Class B Common Stock at the rate of one share of Class B Common Stock for each
three shares of Old Common Stock (the "Reverse Split"); provided, however, that
the Corporation shall not issue certificates for any fractional shares of Class
B Common Stock but, in lieu of such fractional interest, each holder of Old
Common Stock who would otherwise be entitled to receive a certificate for a
fraction of a share of Class B Common Stock in the Reverse Split will receive
cash in an amount equal to the average of the closing sale prices of a share of
Old Common Stock for the ten trading days ending on the date on which the
Effective Time occurs (adjusted if necessary to reflect the per share price of
the Old Common Stock without giving effect to the Reverse Split) multiplied by
the number of shares of Old Common Stock held by such holder that would
otherwise be exchanged for such fractional interest. At the Effective Time, the
certificates representing shares of the Old Common Stock shall be deemed
cancelled and shall not be recognized as outstanding on the books of the
Corporation for any purpose.
(a) The powers, preferences and rights and the qualifications, limitations
and restrictions of the Class A Common Stock and the Class B Common Stock,
respectively, shall be as follows:
(i) Except as otherwise required by law or as otherwise provided in
this Article 4, each share of Class A Common Stock and each share of Class
B Common Stock shall be of equal rank and shall have identical powers,
preferences, qualifications, limitations, restrictions and other rights.
(ii) Except as otherwise required by law or as otherwise provided in
the Corporation's Certificate of Incorporation, with respect to all matters
upon which the stockholders of the Corporation are entitled to vote, each
holder of Class A Common
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Stock shall be entitled to one-tenth of one vote for each share of Class A
Common Stock held and each holder of Class B Common Stock shall be entitled
to one vote for each share of Class B Common Stock held. Except as
otherwise required by the DGCL or the Corporation's Certificate of
Incorporation, the holders of Class A Common Stock and the holders of Class
B Common Stock shall vote together as a single class on all matters to be
voted upon by the stockholders of the Corporation.
(iii) Each share of Class A Common Stock outstanding at the time of
the declaration of any dividend or other distribution payable in cash upon
the shares of Class B Common Stock shall be entitled to a dividend or
distribution payable at the same time and to stockholders of record on the
same date in an amount at least 10% greater than any dividend declared upon
each share of Class B Common Stock. Each share of Class A Common Stock and
Class B Common Stock shall be equal in respect to dividends or other
distributions payable in shares of capital stock provided that such
dividends or distributions may be made (1) in shares of Class A Common
Stock to the holders of Class A Common Stock and in shares of Class B
Common Stock to the holders of Class B Common Stock, (2) in shares of Class
A Common Stock to the holders of Class A Common Stock and to the holders of
Class B Common Stock or (3) in any other authorized class or series of
capital stock to the holders of Class A Common Stock and to the holders of
Class B Common Stock.
(iv) Except as otherwise specifically provided under clause (a)(iii)
above, the Corporation shall not split, divide or combine the shares of
Class A Common Stock or Class B Common Stock unless, at the same time, the
Corporation splits, divides or combines, as the case may be, the shares of
both the Class A Common Stock and the Class B Common Stock in the same
proportion and manner.
(v) In the event of a merger or consolidation of the Corporation with
or into another entity (whether or not the Corporation is the surviving
entity), the holders of Class A Common Stock and the holders of Class B
Common Stock shall be entitled to receive the same per share consideration
in such merger or consolidation, except that, if the consideration paid to
the stockholders of the Corporation shall consist in whole or in part of
shares of another entity, the shares of such other entity issued to the
holders of the Class B Common Stock may have greater voting rights than the
shares of the other entity issued to the holders of the Class A Common
Stock.
(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
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(including 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 DGCL,
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 of capital stock or into shares of any series of any class of capital
stock), 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) Except as otherwise specifically provided in the certificate of
designations filed under the DGCL with respect to any series of Preferred
Stock, the number of authorized shares of any series of 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
DGCL, 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
DGCL with respect to any series.
(iii) Except as otherwise specifically provided in the certificate of
designations filed pursuant to the DGCL 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 Class A Common Stock and the Class B 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 Class A Common Stock and the Class B Common
Stock as a single class, except as
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otherwise provided in the certificate of designations filed pursuant to the
DGCL with respect to any series of Preferred Stock or as otherwise provided
by law.
(iv) 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 Class A Common Stock and
the Class B 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
thereof in full set aside, before any payments shall be made to the holders
of the Class A Common Stock and the Class B 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 thereof in full set aside, the remaining net assets of the
Corporation shall be distributed pro rata to the holders of the Class A
Common Stock and the Class B 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 entity, 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.
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