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

 

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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

 

 

                                     

 

 

 

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 (the “DGCL”),

DOES HEREBY CERTIFY THAT:

FIRST: The Board of Directors (the “Board”) of Donegal Group Inc. (the “Corporation”), at a meeting thereof held on March 12, 2013 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 consideration of the proposed amendment by the stockholders of the Corporation. The resolutions setting forth the proposed amendment are as follows:

WHEREAS, the Board 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 42,000,000 shares, consisting of 30,000,000 shares of Class A Common Stock, 10,000,000 shares of Class B Common Stock and 2,000,000 shares of Series Preferred Stock, to 52,000,000 shares, consisting of 40,000,000 shares of Class A Common Stock, 10,000,000 shares of Class B Common Stock and 2,000,000 shares of Series Preferred Stock and (ii) restate in its entirety Article 4 of the Corporation’s Certificate of Incorporation as so amended; it is

RESOLVED, that the Corporation hereby amends and restates Article 4 of the Corporation’s Certificate of Incorporation so that Article 4 as amended and restated shall read in its entirety as set forth on Exhibit A to this Certificate of Amendment; and


FURTHER RESOLVED, that the Corporation shall submit the amendment to and restatement of Article 4 of the Corporation’s Certificate of Incorporation to the stockholders of the Corporation for approval in accordance with the applicable provisions of the DGCL.

SECOND: Thereafter, pursuant to a resolution of the Board, at the annual meeting of the stockholders of the Corporation held on April 18, 2013, (i) the holders of a majority of the voting power of the outstanding shares of the Corporation’s Class A Common Stock and Class B Common Stock entitled to vote on the proposed amendment voting together as a single class approved and adopted the amendment and (ii) the holders of a majority of the voting power of the outstanding shares of the Corporation’s Class A Common Stock entitled to vote on the proposed amendment voting separately as a single class approved and adopted the amendment.

THIRD: The Corporation duly adopted the amendment in accordance with the provisions of Section 242 of the DGCL.

IN WITNESS WHEREOF, the Corporation has executed this Certificate of Amendment by Donald H. Nikolaus, its President and Chief Executive Officer, and Sheri O. Smith, its Secretary this 22nd day of April, 2013.

 

DONEGAL GROUP INC.

By:

 

/s/ Donald H. Nikolaus

 

Donald H. Nikolaus,

 

President and

 

Chief Executive Officer

ATTEST:

 

By:

 

/s/ Sheri O. Smith

 

Sheri O. Smith, Secretary

 


EXHIBIT A

4.        The aggregate number of shares of stock which the Corporation shall have authority to issue is 52,000,000 shares, consisting of (i) 40,000,000 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”).

(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 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 cash 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 (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 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.

 

[As Filed: 04-22-2013]