<PAGE>
As filed with the Securities and Exchange Commission on February 7, 1997
Registration No. 33 -
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------
RELIANCE GROUP HOLDINGS, INC.
(Exact name of issuer as specified in its charter)
Delaware 13-3082071
(State or other Jurisdiction (I.R.S. Employer
of Incorporation or Identification No.)
Organization)
Park Avenue Plaza
55 East 52nd Street
New York, New York 10055
(Address of Principal Executive Offices) (Zip Code)
RELIANCE GROUP HOLDINGS, INC.
EMPLOYEE STOCK PURCHASE PLAN
(Full Title of the Plan)
--------------------
Howard E. Steinberg, Esq.
Senior Vice President, General Counsel and Corporate Secretary
Reliance Group Holdings, Inc.
Park Avenue Plaza
55 East 52nd Street
New York, New York 10055
(Name and address of agent for service)
(212) 909-1100
(Telephone Number, Including Area Code, of Agent for Service)
--------------------
<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Proposed
maximum maximum
offering aggregate Amount of
Title of securities Amount to be price offering registration
to be registered registered per share (1) price (1) fee
- ------------------ ----------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
common stock, $.10
par value per share 10,000,000 shares $9.0625 $90,625,000 $27,462.12
(the "Common Stock")
</TABLE>
(1) Estimated solely for the purpose of determining the registration fee
pursuant to Rule 457(h) under the Securities Act of 1933, as amended,
based upon the average of the high and low prices of the Common Stock
on February 3, 1997, as reported on the New York Stock Exchange
Composite Tape.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Information Incorporated by Reference.
There are hereby incorporated by reference in this registration
statement the following documents and information heretofore filed by Reliance
Group Holdings, Inc. ("Reliance Group Holdings") under the Securities Exchange
Act of 1934, as amended (the "Exchange Act") with the Securities and Exchange
Commission (the "Commission"):
(1) Reliance Group Holdings' annual report on Form 10-K for the
year ended December 31, 1995;
(2) Reliance Group Holdings' quarterly reports on Form 10-Q for
the quarters ended March 31, 1996, June 30, 1996 and
September 30, 1996;
(3) All other reports filed by Reliance Group Holdings pursuant
to Section 13(a) or 15(d) of the Exchange Act since December
31, 1995; and
(4) The description of the Common Stock which is contained in
Reliance Group Holdings' registration statement filed under
Section 12 of the Exchange Act, including any amendment or
report filed for the purpose of updating such description.
All reports and other documents subsequently filed by Reliance Group
Holdings pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act,
after the date of this registration statement and prior to the filing of a
post-effective amendment which indicates that all securities offered hereby
have been sold or which deregisters all securities then remaining unsold, shall
be deemed to be incorporated by reference in this registration statement and to
be a part hereof from the date of the filing of such reports and other
documents.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
The legality of the Common Stock being registered hereby has been
passed upon by Howard E. Steinberg, Esq., Senior Vice President, General Counsel
and Corporate Secretary of Reliance Group Holdings. Mr. Steinberg owns 100,000
shares of Common Stock and options to purchase an additional 750,000 shares of
Common Stock under the Reliance Group Holdings, Inc.
II-2
<PAGE>
1986 Stock Option Plan, as amended, and the Reliance Group Holdings, Inc. 1994
Stock Option Plan (468,750 of which options were exercisable as of September 30,
1996). Mr. Steinberg also holds 5,000 shares of Common Stock and warrants to
purchase 202 shares of Common Stock as trustee for his daughter and 5,000 shares
of Common Stock and warrants to purchase 202 shares of Common Stock as trustee
for his son, as to all of which shares and warrants he disclaims beneficial
ownership. Mr. Steinberg has participated in certain investments involving
Reliance Group Holdings and certain of its subsidiaries. He participates in the
Reliance Insurance Company Savings Incentive Plan and, as of December 31, 1996,
had a vested interest in 15,333 shares of Common Stock under such plan.
Item 6. Indemnification of Directors and Officers.
Section 145 of the General Corporation Law of Delaware permits a
Delaware corporation to indemnify any person who was, is, 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 such corporation) by reason of the fact
that such person is or was an officer, director, employee or agent of such
corporation, or is or was serving at the request of such corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise. The indemnity may include expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by such person in connection with such action,
suit or proceeding, provided that such person acted in good faith and in a
manner such person reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his or her conduct was unlawful.
A Delaware corporation may indemnify any person who was, is, or is threatened
to be made, a party to any threatened, pending or completed action or suit by
or in the right of the corporation to procure a judgment in its favor by reason
of the fact that such person is or was a director, officer, employee or agent
of another corporation, partnership, joint venture, trust or other enterprise.
The indemnity may include expenses (including attorneys' fees) actually and
reasonably incurred by such person in connection with the defense or settlement
of such action, suit or proceeding, provided that such person acted in good
faith and in a manner such person reasonably believed to be in or not opposed
to the best interests of the corporation and except that no indemnification
shall be made in respect of any claim, issue or matter as to which such person
shall have been adjudged to be liable to the corporation unless and only to the
extent that the court in which such action, suit or proceeding was brought
shall determine upon application that, despite the adjudication of liability
but in view of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses which such court shall deem
proper. To the extent that a director, officer, employee or agent of a
corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to above, or in defense of any claim, issue
or matter therein, such person shall be indemnified against expenses (including
attorneys' fees) actually and reasonably incurred by such person in connection
therewith.
The Certificate of Incorporation and By-Laws of Reliance Group
Holdings require Reliance
II-3
<PAGE>
Group Holdings to indemnify its directors and officers to the fullest extent
permitted by Delaware law. The Certificate of Incorporation provides that no
director of Reliance Group Holdings shall be personally liable to Reliance Group
Holdings or its stockholders for monetary damages for breach of fiduciary duty
as a director, provided that such provision shall not eliminate the liability of
a director (i) for any breach of the director's 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 Delaware, or (iv) for any
transaction from which the director derived an improper personal benefit. Such
provision does not eliminate the liability of a director for any act or omission
occurring prior to July 22, 1986.
Article VIII of the By-laws of Reliance Group Holdings provides for
indemnification of the officers and directors of Reliance Group Holdings to the
full extent permitted by law, as now in effect or later amended. The By-laws of
Reliance Group Holdings also provide that by action of the Board of Directors,
notwithstanding any interest of the directors in such action, Reliance Group
Holdings may purchase and maintain insurance, in such amounts as the Board of
Directors may deem appropriate, on behalf of any person who is or was a
director, officer, employee or agent of Reliance Group Holdings or is or was
serving at the request of Reliance Group Holdings as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise against any liability asserted against such person and
incurred by such person in any such capacity, or arising out of such person's
status as such, whether or not Reliance Group Holdings would have the power to
indemnify such a person against such liability under applicable law.
Without in any way limiting the generality of Article VIII of the
By-laws of Reliance Group Holdings, such Article VIII specifically provides
that expenses incurred by an officer or director in defending a civil or
criminal action, suit or proceeding shall be paid by Reliance Group Holdings in
advance of the final disposition of such action, suit or proceeding upon
receipt of an undertaking by or on behalf of such officer or director to repay
such amount if it shall ultimately be determined that such officer or director
is not entitled to be indemnified by Reliance Group Holdings as authorized in
Section 145 of the General Corporation Law of Delaware.
Reliance Group Holdings has entered into agreements with its directors
and certain of its officers whereby Reliance Group Holdings shall indemnify
such persons for all damages, judgments, settlements and costs, costs of
investigation, and costs of defense of legal actions (other than fines or other
obligations which Reliance Group Holdings is prohibited by applicable law from
paying for any reason), because of any claim or claims made against such
persons of any act or omission or neglect or breach of duty including any
actual or alleged error or misstatement committed or suffered while acting in
the capacity and solely because of such capacity as officer and/or director.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933, as amended (the "Securities Act") may be permitted to directors,
officers and controlling persons of Reliance Group Holdings pursuant to the
foregoing provisions, or otherwise, Reliance Group Holdings has been informed
that in the opinion of the Securities and Exchange Commission such
II-4
<PAGE>
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
Exhibit No. Description
----------- -----------
4 Reliance Group Holdings, Inc. Employee Stock Purchase Plan
5 Opinion of Howard E. Steinberg, Esq. as to the legality of
the securities being registered.
23.1 Consent of Deloitte & Touche LLP.
23.2 Consent of Howard E. Steinberg, Esq. (included in
Exhibit 5).
24 Power of Attorney executed by certain officers and
directors of Reliance Group Holdings, Inc. (included at
Page II-7).
Item 9. Undertakings.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of
the Securities Act;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the
most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the registration
statement; and
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement;
II-5
<PAGE>
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the registration statement is on Form S-3 or Form S-8, and the
information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the
registrant pursuant to Section 13 or 15(d) of the Exchange Act that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under
the Securities Act, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at the time shall be
deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange
Act that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers, and controlling persons
of the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
II-6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, the registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form S-8 and has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of New
York, on February 7, 1997.
RELIANCE GROUP HOLDINGS, INC.
By: /s/ Saul P. Steinberg
-----------------------------
Saul P. Steinberg
Chairman of the Board and
Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Saul P. Steinberg, George E. Bello and
Howard E. Steinberg, and each of them acting individually, his true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution for him and in his name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
to this registration statement, and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, and to take such actions in, and file with the appropriate
authorities in, whatever states said attorneys-in-fact and agents, and each of
them, shall determine, such applications, statements, consents and other
documents as may be necessary or expedient to register securities of the
registrant for sale, granting unto said attorneys-in-fact and agents full power
and authority to do and perform each and every act and thing requisite or
necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents or any of them, or their or his
substitute or substitutes, may lawfully do or cause to be done by virtue hereof
and the registrant hereby confers like authority on its behalf.
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, as
amended, this registration statement has been signed by the following persons
in the capacities and on the dates indicated.
Signature Title Date
- --------- ----- ----
Chairman of the Board,
Principal Executive
/s/ Saul P. Steinberg Officer and Director February 7, 1997
- --------------------------
Saul P. Steinberg
Principal Accounting
/s/ George E. Bello Officer and Director February 7, 1997
- --------------------------
George E. Bello
Principal Financial
/s/ Lowell C. Freiberg Officer and Director February 7, 1997
- --------------------------
Lowell C. Freiberg
/s/ George R. Baker Director February 7, 1997
- --------------------------
George R. Baker
/s/ Dennis A. Busti Director February 7, 1997
- --------------------------
Dennis A. Busti
Director February 7, 1997
- --------------------------
Thomas P. Gerrity
/s/ Jewell J. McCabe Director February 7, 1997
- --------------------------
Jewell J. McCabe
/s/ Irving Schneider Director February 7, 1997
- --------------------------
Irving Schneider
<PAGE>
Signature Title Date
- --------- ----- ----
/s/ Bernard L. Schwartz Director February 7, 1997
- --------------------------
Bernard L. Schwartz
/s/ Richard E. Snyder Director February 7, 1997
- --------------------------
Richard E. Snyder
/s/ Thomas J. Stanton, Jr. Director February 7, 1997
- --------------------------
Thomas J. Stanton, Jr.
/s/ Robert M. Steinberg Director February 7, 1997
- ---------------------------
Robert M. Steinberg
/s/ James E. Yacobucci Director February 7, 1997
- ----------------------
James E. Yacobucci
<PAGE>
RELIANCE GROUP HOLDINGS, INC. EMPLOYEE STOCK PURCHASE PLAN
EXHIBIT INDEX
Exhibit No. Description Page
4 Reliance Group Holdings, Inc. Employee
Stock Purchase Plan.
5 Opinion of Howard E. Steinberg, Esq. as to the
legality of the securities being registered.
23.1 Consent of Deloitte & Touche LLP.
23.2 Consent of Howard E. Steinberg, Esq. (contained
in Exhibit 5).
24 Power of Attorney executed by certain officers
and directors of Reliance Group Holdings, Inc.
(included at Page II-7).
<PAGE>
Exhibit 4
RELIANCE GROUP HOLDINGS, INC.
EMPLOYEE STOCK PURCHASE PLAN
February 7, 1997
The purpose of this Employee Stock Purchase Plan (the "Plan") is to
provide eligible employees of Reliance Group Holdings, Inc. (the "Company") and
certain of its subsidiaries with convenient opportunities to purchase shares of
the Company's common stock, par value $.10 per share (the "Common Stock"),
commencing on March 5, 1997. The aggregate number of shares of Common Stock
which may be issued under the Plan shall be Ten Million (10,000,000) shares,
subject to adjustment as provided in Section 16 hereof.
1. Administration. The Plan will be administered by the Company's
Board of Directors (the "Board") or by a committee appointed by the Board (the
"Committee"). The Board or the Committee has authority to make, amend and
rescind rules and regulations for the administration of the Plan (except as
otherwise provided in Section 2 below) and its interpretation and decisions
with regard thereto shall be final and conclusive. The Plan shall be
administered at the Company's expense.
2. Eligibility. Participation in the Plan will neither be permitted
nor denied contrary to the requirements of Section 423 of the Internal Revenue
Code of 1986, as amended (the "Code"), and the regulations promulgated
thereunder. All employees of the Company, including directors of the Company
who are also employees of the Company, and all employees of any subsidiary of
the Company (as defined in Section 424(f) of the Code) designated by the
Chairman of the Board of the Company from time to time (a "Designated
Subsidiary;" provided that such term shall not include any company which is not
a subsidiary of the Company on the Exercise Date (as defined in Section 10)),
are eligible to participate in any one or more of the offerings of Options (as
defined in Section 10) to purchase Common Stock under the Plan; provided that:
(a) such employees are customarily employed by the Company or
a Designated Subsidiary for more than 20 hours per week and for more
than five months per calendar year;
<PAGE>
(b) such employees have been employed by the Company or a
Designated Subsidiary for at least six (6) months prior to enrolling in
the Plan; and
(c) such employees are employees of the Company or a
Designated Subsidiary on the first day of the applicable Offering
Period (as defined below);
and provided further that, no employee may be granted an Option (as defined in
Section 10) hereunder if such employee, immediately after the option is
granted, would own 5% or more of the total combined voting power or value of
all classes of stock of the Company or any subsidiary of the Company. For
purposes of the preceding sentence, the attribution rules of Section 424(d) of
the Code shall apply in determining the stock ownership of an employee, and all
stock which the employee has a contractual right to purchase under outstanding
stock options shall be treated as stock owned by the employee.
3. Offerings. The Company will make one or more offerings
("Offerings") to eligible employees to purchase Common Stock under the Plan.
Offerings will begin March 5, 1997 or on such later date as the Committee shall
determine, with respect to the 1997 calendar year (the "Initial Year"), and
each January 1st thereafter, or, if such date is not a business day in New
York, New York, on the first business day thereafter (the "Offering
Commencement Date"). Each Offering Commencement Date will begin a calendar year
period (an "Offering Period") during which payroll deductions will be made and
held for the purchase of Common Stock at the end of the Offering Period;
provided, however, that with respect to the Initial Year, the period commencing
on March 5, 1997 (or such later date as the Committee shall determine) and
ending on December 31, 1997 shall constitute the Offering Period.
4. Participation. An employee eligible on, or who will be eligible as
of, the Offering Commencement Date of any Offering may participate in such
Offering by completing and forwarding a payroll deduction authorization form
("Payroll Form") to the employee's appropriate payroll office at least ten (10)
business days prior to the applicable Offering Commencement Date. The Payroll
Form will authorize a regular payroll deduction from the Compensation (as
defined below) received by the employee during the Offering Period in the
amounts permitted by Section 5 below. Subject to limitations contained in
clause (a) of Section 5 hereof, unless an employee files a new Payroll Form,
withdraws from the Plan or ceases to be eligible to participate in the Plan,
such employee's deductions and purchases will continue at the rate specified in
such employee's Payroll Form for future Offerings under the Plan for as long as
the Plan remains in effect.
2
<PAGE>
The term "Compensation" means the amount of money reportable on the
employee's Federal Income Tax Withholding Statement, excluding overtime, shift
premium, incentive or bonus awards, allowances and reimbursements for expenses
(such as relocation allowances for travel expenses), income or gains on the
exercise of Company stock options or stock appreciation rights, and similar
items, whether or not shown on the employee's Federal Income Tax Withholding
Statement, but including, the amount of pre-tax contributions, if any,
authorized by the employee under any plan maintained by the Company or the
Designated Subsidiary that qualifies under Section 401(k) or Section 125 of the
Code and, in the case of salespersons, sales commissions to the extent
determined by the Board or the Committee.
5. Deductions. (a) With respect to any Offering, an employee may
authorize a payroll deduction in a fixed dollar amount per pay period; provided
that (i) an employee's aggregate payroll deductions during any Offering Period
cannot exceed 15% of such employee's annualized Compensation (rounded to the
next highest whole dollar amount), determined as of the Offering Commencement
Date, and (ii) an employee's maximum aggregate payroll deductions with respect
to any Offering Period may not exceed $21,250. The employee's fixed dollar
payroll deduction shall be indicated on the employee's Payroll Form.
(b) Contributions to the Plan may be made only by means of
payroll deductions. Accordingly, an employee who is on an unpaid leave from the
Company or any Designated Subsidiary (whether pursuant to a disability leave, a
leave of absence or otherwise) at any time during an Offering Period (including
on the Offering Commencement Date) but who is eligible to participate in the
Plan on the Offering Commencement Date of any Offering and has completed and
forwarded the Payroll Form in accordance with Section 4 hereof will be entitled
to participate in such Offering; provided, however, that such employee will not
be entitled to make contributions to the Plan at any time during such unpaid
leave from the Company or a Designated Subsidiary and will be entitled to make
contributions to the Plan by means of payroll deductions once his or her pay
from the Company or a Designated Subsidiary is resumed.
(c) No employee may be granted an Option (as defined in
Section 10) which permits such employee the right to purchase Common Stock under
the Plan and any other stock purchase plan of the Company and its subsidiaries,
taken together, to accrue at a rate which exceeds $25,000 of the fair market
value of such Common Stock (determined at the Offering Commencement Date of the
Offering
3
<PAGE>
Period) for each calendar year in which the Option is outstanding at any time.
6. Deduction Changes. An employee may decrease or discontinue his or
her payroll deduction once during any Offering Period by filing a new Payroll
Form. However, an employee may not increase his or her payroll deduction during
an Offering Period. If an employee elects to discontinue his or her payroll
deductions during an Offering Period, but does not elect to withdraw his or her
funds pursuant to Section 9 hereof, funds deducted prior to such employee's
election to discontinue will be applied to the purchase of Common Stock on the
Exercise Date (as defined in Section 10).
7. Payroll Deduction Accounts. The Board or the Committee shall appoint
a custodian, which may be the Company or an affiliate of the Company (the
"Custodian"), to maintain a separate payroll deduction account for each employee
in the Plan (the "Account"), which Account shall reflect, at any time, the
number of shares of Common Stock theretofore purchased under the Plan by such
employee. Each employee who is a participant in the Plan shall receive a
statement as soon as practicable after the end of each Offering Period
reflecting the purchases for such employee's Account under the Plan through the
end of such Offering Period.
8. Interest. Interest will not be paid on any Accounts, except to the
extent that the Board or the Committee, in its sole discretion, elects to credit
Accounts with interest at such per annum rate as it may from time to time
determine.
9. Withdrawal of Funds. An employee may at any time prior to the close
of business on the last business day in an Offering Period, and for any reason,
permanently withdraw the balance accumulated in the employee's Account (without
interest thereon) and thereby withdraw from participation in an Offering (a
"Withdrawal"). Partial withdrawals are not permitted. In the event of a
Withdrawal, the employee may not resume participation in the Plan during the
remainder of the Offering Period during which such Withdrawal occurred. The
employee may participate in any subsequent Offering in accordance with terms and
conditions established by the Board or the Committee.
10. Purchase of Shares. (a) On the Offering Commencement Date of each
Offering Period, the Company will grant to each eligible employee who is then a
participant in the Plan an option ("Option") to purchase on the last business
day of such Offering Period (the "Exercise Date") (provided that such employee
is an employee of the Company or any of its Designated Subsidiaries on the
Exercise Date, or on any date which is within 45 days prior to the
4
<PAGE>
Exercise Date), at the option price hereinafter provided, such number of whole
and fractional shares of Common Stock of the Company reserved for purposes of
the Plan as does not exceed two hundred percent (200%) of the number of shares
determined by dividing (i) the aggregate payroll deductions authorized by the
employee on the Payroll Form with respect to the Offering Period, by (ii) 85%
of the closing price of the Common Stock on the New York Stock Exchange (or, if
the Common Stock is no longer listed on the New York Stock Exchange, on any
other national securities exchange on which the Common Stock is listed) on the
Offering Commencement Date of such Offering Period (subject to the limitations
set forth herein pursuant to Section 423 of the Code).
(b) The purchase price for each share purchased (the "Option
Price") by an employee will equal 85% of the closing price of the Common Stock
on the New York Stock Exchange (or, if the Common Stock is no longer listed on
the New York Stock Exchange, on any other national securities exchange on which
the Common Stock is listed) on (i) the Offering Commencement Date or (ii) the
Exercise Date, whichever closing price shall be less. If no sales of Common
Stock were made on such a day, the price of the Common Stock for purposes of
clauses (i) and (ii) above shall be the reported price for the next preceding
day on which sales were made.
(c) Each employee who (i) has not made a Withdrawal and (ii)
was an employee of the Company or a Designated Subsidiary within 45 days prior
to the Exercise Date shall be deemed to have exercised his or her Option at the
Option Price on such date and shall be deemed to have purchased from the Company
the number of whole and fractional shares of Common Stock reserved for the
purpose of the Plan that such employee's accumulated payroll deductions in such
employee's Account on such date will pay for as determined by the Option Price
set forth in paragraph (b) above (but not in excess of the maximum number
determined in the manner set forth in paragraph (a) above).
11. Issuance of Certificates. After an employee or Plan participant has
held shares of Common Stock purchased under the Plan for two years from the date
of grant of the Option to purchase such shares, the employee or Plan participant
may request from the Company a certificate (or certificates) representing such
shares. Certificates may be issued only in the name of the employee or Plan
participant, or in the name of the employee or Plan participant and another
person of legal age as joint tenants with rights of survivorship.
12. Rights on Retirement, Death, or Termination of Employment. In the
event of a participating employee's termination of employment
5
<PAGE>
prior to the last business day of an Offering Period, no further payroll
deductions shall be taken from any pay due and owing to an employee and, unless
such event has occurred within 45 days prior to the Exercise Date, the balance
in the employee's Account shall be paid to the employee (without interest) or,
in the event of the employee's death, (a) to a beneficiary previously designated
by the employee or (b) in the absence of such a designated beneficiary, to the
executor or administrator of the employee's estate or (c) if no such executor or
administrator has been appointed to the knowledge of the Company, to such other
person(s) as the Company may, in its discretion, designate. Any shares in the
employee's Account shall be delivered by the Custodian to the employee or his or
her legal representative as soon as practicable following such termination. If,
(i) prior to the last business day of the Offering Period, the Designated
Subsidiary by which an employee is employed shall cease to be a subsidiary of
the Company, or the employee is transferred to a subsidiary of the Company that
is not a Designated Subsidiary, or (ii) the employee is not an employee of the
Company or any of its Designated Subsidiaries on any date which is 45 days prior
to the Exercise Date, in any such case the employee shall be deemed to have
terminated employment for the purposes of the Plan.
13. Optionees Not Stockholders. Neither the granting of an Option to an
employee nor deductions from such employee's pay shall render such employee a
stockholder of the shares of Common Stock covered by an Option under the Plan
until such shares have been purchased by and issued to such employee.
14. Rights Not Transferable. Rights under the Plan are not transferable
by a participating employee other than by will or the laws of descent and
distribution, and are exercisable during the employee's lifetime only by the
employee.
15. Application of Funds. All funds received by the Company under the
Plan may be combined with other corporate funds and may be used for any
corporate purpose.
16. Adjustment in Case of Changes Affecting Common Stock. In the event
of a subdivision of outstanding shares of Common Stock, or the payment of a
dividend in Common Stock, the number of shares approved for the Plan, and the
share limitation set forth in Section 10, shall be increased proportionately,
and such other adjustment shall be made as may be deemed equitable by the Board
or the Committee. In the event of any other change affecting the Common Stock,
such adjustment shall be made as may be deemed equitable by the Board or the
Committee to give proper effect to such event.
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17. Adjustments. In the event of any change (through recapitalization,
merger, consolidation, stock dividend, split-up, combination or exchanges of
shares or otherwise) in the character or amount of the Common Stock (or any
other transaction described in Section 424 (a) of the Code) after any Option is
granted hereunder and prior to the exercise thereof, the Option, to the extent
that it has not been exercised, shall entitle the holder to such number and kind
of securities as such holder would have been entitled to had such holder
actually owned the stock subject to the Option at the time of the occurrence of
such change, with any such adjustment and adjustment in the exercise price of
the Option to be made in accordance with Section 424(a) of the Code. If any such
event should occur, the number of shares subject to Options which are authorized
to be issued hereunder, but which have not been issued, shall be similarly
adjusted. If any other event shall occur, prior to the exercise of an Option
granted hereunder, which shall increase or decrease the amount of Common Stock
outstanding and which the Board or the Committee, in its sole discretion, shall
determine equitably requires an adjustment in the number of shares which the
holder of such Option should be permitted to acquire, such adjustment as the
Board or the Committee shall determine may be made, and when so made shall be
effective and binding for all purposes of this Plan.
18. Amendment of the Plan. The Board may at any time, and from time to
time, amend the Plan in any respect, except that (a) with respect to any
amendment increasing the number of shares which may be issued under the Plan
(other than as provided in Section 15 hereof) or any other amendment with
respect to which approval by the shareholders of the Company is required by
Section 423 of the Code or by Rule 16b-3 under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), such amendment shall not be effected
without such approval, and (b) in no event may any amendment be made which would
cause the Plan to fail to comply with Section 16 under the Exchange Act and the
rules promulgated thereunder, as in effect from time to time, or Section 423 of
the Code.
19. Insufficient Shares. In the event that the total number of shares
of Common Stock specified in elections to be purchased under any Offering plus
the number of shares purchased under previous offerings under the Plan exceeds
the maximum number of shares issuable under the Plan, the Board or the Committee
will allot, in such manner as it may determine (provided that all employees
granted options under the Plan shall have the same rights and privileges with
respect thereto), the shares of Common Stock then available.
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20. Termination of the Plan. The Plan may be terminated at any time by
the Board; provided that such termination will not apply to then outstanding
Options.
21. Governmental Regulations. (a) The Company's obligation to sell and
deliver Common Stock under the Plan is subject to listing of the Common Stock on
a national stock exchange or quotation on the Nasdaq National Market and the
approval of all governmental authorities required in connection with the
authorization, issuance, or sale of the Common Stock.
(b) The Plan shall be governed by New York law, except to the
extent that such law is preempted by federal law.
(c) The Plan is intended to comply with the provisions of Rule
16b-3 promulgated under the Exchange Act. Any provision inconsistent with such
rule shall to that extent be inoperative and shall not affect the validity of
the Plan.
22. Issuance of Shares. Shares may be issued upon exercise of an Option
from authorized but unissued Common Stock, from shares held in the treasury of
the Company, from any combination of the foregoing or from any other proper
source.
23. Window Periods. Dispositions of shares purchased under the Plan may
be made only during the following specified window periods: February 20 through
March 5, May 5 through May 20, August 5 through August 20 and November 5 through
November 20. No dispositions may be made after 4:00 p.m. (EST) on the last
business day of each window period.
24. Notification upon Sale of Shares. Each employee agrees by entering
the Plan to promptly give the Company notice of any disposition of shares
purchased under the Plan where such disposition occurs within two years after
the date of grant of the Option pursuant to which such shares were purchased. If
an employee or Plan participant disposes of any shares of Common Stock purchased
under the Plan within two years after the date of grant of the Option to
purchase such shares (a "Disqualifying Disposition"), the Disqualifying
Disposition shall be made only through the brokerage facilities provided by the
Plan.
25. Effective Date and Approval of Shareholders. The Plan shall take
effect on February 7, 1997, subject to approval by the shareholders of the
Company as required by Section 423 of the Code, which approval must occur within
twelve months of the adoption of the Plan by the Board; provided that, if
approval of the Company's shareholders is not received prior to twelve months of
the adoption
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of the Plan by the Board, no shares of Common Stock shall be purchased under
the Plan and all amounts deducted from participants' Compensation during the
initial Offering Period under the Plan shall be returned as promptly as
practicable thereafter.
Adopted by the Board of Directors
on October 2, 1996
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Exhibit 5
February 7, 1997
Reliance Group Holdings, Inc.
Park Avenue Plaza
55 East 52nd Street
New York, New York 10055
Re: Reliance Group Holdings, Inc.
Registration Statement on Form S-8
Ladies and Gentlemen:
I am the General Counsel of Reliance Group Holdings, Inc., a Delaware
corporation (the "Company"), and, acting in such capacity, am familiar with the
Registration Statement on Form S-8 (the "Registration Statement") under the
Securities Act of 1933, as amended (the "Securities Act"), relating to
10,000,000 shares of Common Stock, par value $.10 per share, of the Company (the
"Common Stock") to be issued and sold under the Reliance Group Holdings, Inc.
Employee Stock Purchase Plan (the "Plan").
I, or lawyers on my staff acting under my supervision, have examined
and relied upon such original, reproduced or certified copies of such records
of the Company and such certificates of public officials and officers of the
Company and such other documents as I or they have deemed necessary or
appropriate as a basis for the opinions hereinafter set forth. In such
examination, the genuineness of all signatures, the authenticity of all
documents submitted as originals and the conformity to authentic originals of
all documents submitted as certified or photostatic copies have been assumed.
Based on the foregoing, I am of the opinion that:
1. The Company has been duly incorporated and is validly existing under
the laws of the State of Delaware.
<PAGE>
2. The aforesaid 10,000,000 shares of Common Stock have been duly
authorized and, when issued pursuant and according to the terms of the Plan,
will be validly issued, fully paid and nonassessable.
I consent to the use of this opinion in the Registration Statement and
to the use of my name and the statements with respect to me under the heading
"Interests of Named Experts and Counsel" in the Registration Statement. In
giving such consent, I do not thereby admit that I come within the category of
persons whose consent is required under Section 7 of the Securities Act or the
rules and regulations of the Securities and Exchange Commission thereunder.
Very truly yours,
/s/ Howard E. Steinberg
-------------------------
Howard E. Steinberg
<PAGE>
Exhibit 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration
Statement of Reliance Group Holdings, Inc. on Form S-8 relating to the Reliance
Group Holdings, Inc. Employee Stock Purchase Plan of our reports dated February
26, 1996 (which express unqualified opinions and include explanatory paragraphs
concerning the adoption of Statement of Financial Accounting Standards No. 109)
appearing in and incorporated by reference in the Annual Report on Form 10-K of
Reliance Group Holdings, Inc. for the year ended December 31, 1995.
/s/ DELOITTE & TOUCHE LLP
New York, New York
February 7, 1997
