This limitation does not, however, apply to violations of the federal securities laws, nor
does it limit the availability of non-monetary relief in any action or proceeding.
Our
certificate of incorporation and by-laws obligate us, to the maximum extent Delaware law permits, to indemnify any person who is or was a party, or is threatened to be made a party, to any threatened or
pending action, suit or proceeding by reason of the fact that such person is serving or served as one of our directors or officers, or, while one of our directors or officers, is serving or served as, at our request, as a director or officer of
another entity. Insofar as indemnification for liabilities arising under the federal securities laws may be permitted to our officers and directors pursuant to the foregoing provisions, we understand that, in the opinion of the SEC, such
indemnification is against public policy as expressed in such laws and is unenforceable.
In addition, our certificate of incorporation
and by-laws permit us, at our expense, to purchase and maintain insurance to protect us, Donegal Mutual and any of our or their subsidiaries directors, officers or employees against any liability of any
character asserted against or incurred by us, Donegal Mutual or any such director, officer or employee or arising out of any such persons corporate status, whether or not we would have the power to indemnify such person against such liability
under Delaware law or Pennsylvania law, as the case may be. We also maintain, and intend to continue to maintain, liability insurance that covers our officers and directors as well as the officers and directors of Donegal Mutual and the directors
and officers of our subsidiaries and the subsidiaries of Donegal Mutual.
Pay Ratio Disclosure
We believe the compensation of our executive officers should be internally consistent and equitable in order to motivate our employees to seek
to create stockholder value. We have a commitment to internal pay equity, and our compensation committee monitors the relationship between the compensation of our executive officers and the compensation of our other employees. Our compensation
committee reviewed a comparison of the compensation of our chief executive officer (base salary, incentive pay and stock option awards) to the compensation (base salary, incentive pay and stock option awards) of all of our employees in 2019. For
2019, the median of the annual total compensation of all of our employees, excluding the compensation of our chief executive officer, was $71,495, and the annual total compensation of our chief executive officer in 2019 was $931,750. Thus, the ratio
of the annual total compensation of our chief executive officer in 2019 to the median of the annual total compensation in 2019 of all of our other employees was 13.0 to 1.
We calculated the ratio of the annual total compensation of our chief executive officer to the annual total compensation of our median
employee in accordance with applicable SEC regulations. We identified our median employee compensation by examining the total cash compensation in 2019 of all of our employees whom we employed on December 31, 2019, the last day of our 2019
payroll year, excluding our chief executive officer. We included all employees, whether employed on a full-time basis or a part-time basis on that date. We did not make any assumptions, adjustments or
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