<PAGE>
As filed with the Securities and Exchange Commission on May 3, 1996
Registration No. 333-
==================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------
FORM S-8
Registration Statement
Under
The Securities Act of 1933
HARLEYSVILLE GROUP INC.
(Exact name of registrant as specified in its charter)
Delaware 51-0241172
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
355 Maple Avenue, Harleysville, Pennsylvania 19438
(Address of principal executive offices) (Zip Code)
---------------
HARLEYSVILLE GROUP INC. 1996 DIRECTORS' STOCK PURCHASE PLAN
(Full title of the Plan)
Walter R. Bateman, II
President and Chief Executive Officer
Harleysville Group Inc.
355 Maple Avenue
Harleysville, Pennsylvania 19438
(Name and address of agent for service)
(215) 256-5000
(Telephone number, including area code, of agent for service)
--------------
WITH COPIES TO:
Donald A. Scott, Esquire Roger A. Brown, Esquire
Morgan, Lewis & Bockius Harleysville Group Inc.
2000 One Logan Square 355 Maple Avenue
Philadelphia, Harleysville,
Pennsylvania 19103-6993 Pennsylvania 19438-2297
(215) 963-5206 (215) 256-5173
CALCULATION OF REGISTRATION FEE
===========================================================================
Proposed Proposed
maximum maximum
Amount offering aggregate Amount of
Title of Securities to be price per offering registration
to be registered registered share <F1> price <F1> fee <F1>
- ----------------- ---------- ---------- ----------- -----------
Common Stock
$1.00 par value 100,000 $27.38 $2,738,000 $944.14
[FN]
<F1> Pursuant to Rule 457(c), the registration fee has been calculated based
on the average of the high and low prices of Registrant's Common Stock on
April 30, 1996 on the NASDAQ National Market System
<PAGE> Page II-1
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
-----------------------------------------------
The following documents filed by the Company with the
Securities and Exchange Commission are incorporated herein by
reference:
a. Annual Report on Form 10-K for the year ended December 31,
1995 filed by the Company pursuant to Section 13(a) of the
Securities Exchange Act of 1934 ("Exchange Act").
b. The description of the Company's common stock set forth in
response to Item 1(b) of the Registration Statement on
Form 8-A filed by the Company pursuant to Section 12 of
the Exchange Act and any amendment to such registration
statement filed for the purpose of updating such
description.
All documents subsequently filed by the Company pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, 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 incorpo-
rated by reference herein and to be a part hereof from the date of
the filing of such documents. Any statement contained in this
Registration Statement or in a document incorporated or deemed to
be incorporated by reference shall be deemed to be modified or
superseded to the extent that a statement contained in any other
subsequently filed document which also is deemed to be incorporated
by reference herein or in any subsequently filed appendix to this
Registration Statement modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this
Prospectus.
Item 4. Not applicable.
Item 5. Not applicable.
Item 6. INDEMNIFICATION OF OFFICERS AND DIRECTORS
------------------------------------------
The Company's Certificate of Incorporation and By-Laws contain
provisions permitted by the Delaware General Corporation Law (under
which the Company is organized) that provide that directors and
officers will be indemnified by the Company to the fullest extent
<PAGE> Page II-2
permitted by law for all losses that may be incurred by them in
connection with any action, suit or proceeding in which they may
become involved by reason of their service as a director or officer
of the Company. In addition, the Company's Certificate of
Incorporation contains provisions permitted by the Delaware General
Corporation Law that limit the monetary liability of directors of
the Company for certain breaches of their fiduciary duty, and its
By-Laws provide for the advancement by the Company to directors and
officers of expenses incurred by them in connection with a
proceeding of a type to which the duty of indemnification applies.
The Company maintains directors' and officers' liability insurance
to insure its directors and officers against certain liabilities
incurred in their capacity as such, including claims based on
breaches of duty, negligence, error and other wrongful acts.
Item 7. Not applicable.
Item 8. EXHIBITS
--------
Reference is made to the Exhibit Index on Page II-6.
Item 9. UNDERTAKINGS
------------
The undersigned registrant hereby undertakes:
(1) To file, during the period in which offers or sales are
being made, a post-effective amendment to this registration state-
ment:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of this registra-
tion statement (or the most recent post-effective
amendment hereof) which, individually or in the
aggregate, represent a fundamental change in the
information set forth in this registration state-
ment;
(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.
Provided, however, that paragraphs (1)(i) and
-------- -------
(1)(ii) shall not apply to this registration
statement on Form S-8 if the information required
to be included in the post-effective amendment by
these paragraphs is contained in periodic reports
filed by the registrant pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of
1934 that are incorporated by reference in this
registration statement.
<PAGE> Page II-3
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, 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 that 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.
(4) That, for purposes of determining any liability under
the Securities Act of 1933, each filing of the registrant's annual
report pursuant to Section 13(a) or Section 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of
the Securities Exchange Act of 1934) 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.
---- ----
(5) Insofar as indemnification for liabilities arising
under the Securities Act of 1933 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 Securities and Exchange Commission such
indemnification is against public policy as expressed in the 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 Act and will be governed by the final adjudication of such
issue.
<PAGE> Page II-4
SIGNATURES
----------
Pursuant to the requirements of the Securities Act of 1933, 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 Township of
Lower Salford, Commonwealth of Pennsylvania, on this 3rd day of
May, 1996.
HARLEYSVILLE GROUP INC.
BY: /s/Walter R. Bateman
---------------------
Walter R. Bateman, II
President and
Chief Executive Officer
POWER OF ATTORNEY
-----------------
Each person whose signature appears below constitutes and
appoints each of Walter R. Bateman, II and Roger A. Brown, as such
person's true and lawful attorney-in-fact and agent, with full
power of substitution and resubstitution, for such person and in
such person's name, place and stead, in any and all capacities, to
sign any and all amendments to the Registration Statement, and to
file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission,
granting unto said attorney-in-fact and agent full power and
authority to do and perform each and every act and thing requisite
and necessary to be done as fully to all intents and purposes as
such person might or could do in person, hereby ratifying and
confirming all that said attorney-in-fact and agent, or a
substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
<PAGE> Page II-5
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
--------- ---- ---
/s/ B.W. Mitchell Chairman of the Board May 3, 1996
- -------------------- and a Director
Bradford W. Mitchell
/s/ Walter R. Bateman President, May 3, 1996
- --------------------- Chief Executive Officer
Walter R. Bateman, II and a Director
/s/ Bruce J. Magee Senior Vice President May 3, 1996
- ------------------ and Chief Financial
Bruce J. Magee Officer (principal
financial officer and
principal accounting officer)
/s/ Michael L. Browne Director May 3, 1996
- ----------------------
Michael L. Browne
/s/ Robert D. Buzzell Director May 3, 1996
- ---------------------
Robert D. Buzzell
/s/ H. Bryce Jordan Director May 3, 1996
- --------------------
H. Bryce Jordan
/s/ William E. Strasburg Director May 3, 1996
- ------------------------
William E. Strasburg
/s/ Frank E. Reed Director May 3, 1996
- ------------------
Frank E. Reed
/s/ G. G. Johnson Director May 3, 1996
- -----------------
Gerard G. Johnson
<PAGE> Page II-6
EXHIBIT INDEX
Exhibit
Number Description of Exhibits
- ------ -----------------------
(4)(A)* Certificate of Incorporation of Registrant
(Restated to include Amendment adopted
April 24, 1996).
(4)(B) Amended and Restated By-Laws of Registrant -
incorporated by reference to Exhibit
(4)(B) to the Registrant's Post-Effective
Amendment No. 1 to S-3 Registration Statement
No. 33-90810 filed October 10, 1995.
(4)(C)* 1996 Directors' Stock Purchase Plan of
Registrant.
(5)* Opinion of Morgan, Lewis & Bockius re
legality of shares of Common Stock being
offered hereby.
(23)(A)* Consent of KPMG Peat Marwick LLP.
(23)(B) Consent of Morgan, Lewis & Bockius (included
in Exhibit (5)).
(24)* Power of Attorney included on Page II-4.
(28) Statement re Registrant - incorporated by
reference to Exhibit (28) to the Registrant's
Annual Report on Form 10-K for the year ended
December 31, 1995.
(28)(A) Schedule P of the 1995 statutory annual
statement for the total pooled business of
Harleysville Mutual Insurance Company and
the pooled participant property and casualty
insurance subsidiaries of Harleysville Group
Inc. - incorporated by reference to
Exhibit (28)(A) to the Registrant's Annual
Report on Form 10-K for the year ended
December 31, 1995.
(28)(B) Schedule P of the 1995 statutory annual
statement of Lake States Insurance Company -
incorporated by reference to Exhibit (28)(B)
to the Registrant's Annual Report on Form 10-K
for the year ended December 31, 1995.
- ---------------------
*Filed herewith.
<PAGE> Page 1
EXHIBIT (4)(A)
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
HARLEYSVILLE GROUP INC.
----------------------
(Restated to include Amendment adopted April 24, 1996)
Adopted Pursuant to Section 242 & 245 of the
General Corporation Law of the State of Delaware
Certificate of Incorporation Originally Filed August 2, 1979
1. The name of the Corporation is Harleysville Group Inc.
2. The address of its registered office is 1209 Orange
Street, Wilmington, County of New Castle, Delaware,
19801. The name of its registered agent at such address
is The Corporation Trust Company.
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 Corpora-
tion Law of the State of Delaware.
4. (a) The aggregate number of shares which the Corpora-
tion shall have authority to issue is: Eighty
Million (80,000,000) 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 there-
of, by filing a certificate pursuant to the General
Corporation Law, the number of shares in each such
<PAGE> Page 2
series and all designations, relative rights (in-
cluding 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 limi-
tations of the shares in each such series, includ-
ing, 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 redemp-
tion 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;
<PAGE> Page 3
(v) The amount per share payable on the shares
of such series upon the voluntary and invol-
untary 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 privi-
leges and any qualifications, limitations or
restrictions of such rights and privileges
of such series, provided, however, that no
such rights, privileges, qualifications,
limitations or restrictions shall be in
conflict with the Certificate of Incorpora-
tion of the Corporation or with the resolu-
tion or resolutions adopted by the Board of
Directors providing for the issue of any
series of which there are shares then out-
standing.
(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 dates, if any, from which divi-
dends thereon may accumulate. All shares of Pre-
ferred 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 designa-
tions, 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 there-
for.
<PAGE> Page 4
(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
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 exis-
tence and extent of the right to cumulative divi-
dends, as aforesaid.
(f) Except as otherwise specifically provided in the
certificate filed pursuant to law with respect to
any series of the 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 the 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, liquida-
tion or dissolution of the Corporation and except
as otherwise provided in the certificate filed
pursuant to law with respect to any series of the
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
<PAGE> Page 5
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 wind-
ing up of the Corporation, the assets of the Corpo-
ration or the proceeds thereof, distributable among
the holders of the shares of all series of Pre-
ferred Stock shall be insufficient to pay in full
the preferential amount aforesaid, then such as-
sets, or the proceeds thereof, shall be distributed
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
the 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 liquida-
tion, 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 Subpara-
graph (b)(iii) of this Article Four, the Corpora-
tion, 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 Pre-
ferred 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 cer-
tificate filed pursuant to law with respect to such
series of Preferred Stock.
(i) No holder of Preferred Stock of the Corporation
shall be entitled, as such, as a matter of right,
to subscribe for or purchase any part of any new or
additional issue of stock of any class or
<PAGE> Page 6
series whatsoever, any rights or options to
purchase stock of any class or series whatsoever or
any securities convertible into, exchangeable for
or carrying rights or options to purchase stock of
any class or series whatsoever, whether now or
hereafter authorized, and whether issued for cash
or other consideration or by way of dividend.
5. The Corporation is to have perpetual existence.
6. In furtherance and not in limitation of the powers
conferred by statute, the Board of Directors is expressly
authorized to make, alter or repeal the By-Laws of the
Corporation.
7. Meetings of the stockholders may be held within or
without the State of Delaware, as the By-Laws may
provide. The books of the 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. Elec-
tions of directors need not be by written ballot unless
the By-Laws of the Corporation shall so provide.
8. A Director of the Corporation shall have no personal
liability to the Corporation or its stockholders for
monetary damages for breach of his fiduciary duty as a
director; provided, however, this Article shall not
eliminate or limit the liability of a director (i) for
any breach of the director's duty of loyalty to the
Corporation or its stockholder; (ii) for acts or omis-
sions not in good faith or which involve intentional
misconduct or a knowing violation of a law; (iii) for the
unlawful payment of dividends or unlawful stock repur-
chases under Section 174 of the General Corporation Law
of the State of Delaware or (iv) for any transaction from
which the director derived an improper personal benefit.
This Article shall not eliminate or limit the liability
of a director for any act or omission occurring prior to
the effective date of this Article.
<PAGE> Page 7
9. The Corporation reserves the right to amend, alter,
change or repeal any provision contained in this Certifi-
cate of Incorporation, in the manner now or hereafter
prescribed by statute, and all rights conferred upon
stockholders herein are granted subject to this reserva-
tion.
WE, THE UNDERSIGNED, being the Chairman of the Board,
President & CEO, and the Secretary of Harleysville Group Inc.,
which company was previously incorporated pursuant to the General
Corporation Law of the State of Delaware on August 2, 1979, and
which Certificate of Incorporation was Amended & Restated as of
April 9, 1986, and Amended as of May 6, 1987, do make this amended
and restated Certificate of Incorporation, hereby declaring and
certifying that this is our act and deed and the facts herein are
true, that the Certificate of Incorporation has been adopted in
accordance with the provisions of Sections 242 and 245 of the
General Corporation Law of the State of Delaware and that,
accordingly, we have hereunto set our hands this 1st day of June,
--- -----
1992.
/s/B.W. Mitchell
-----------------------------
Bradford W. Mitchell
Chairman of the Board,
President & CEO
/s/Lucinda J. Gannon
------------------------------
Lucinda J. Gannon
Vice President, Secretary
and General Counsel
<PAGE> Page 1
EXHIBIT (4)(C)
HARLEYSVILLE GROUP INC.
1996 DIRECTORS' STOCK PURCHASE PLAN
-----------------------------------
As approved by the Board of Directors
on February 28, 1996
Section I - Purpose
--------------------
The Harleysville Group Inc. Directors' Stock Purchase Plan
(the "Plan") is established by the Harleysville Group Inc. (the
"Company") for the benefit of the outside directors of the Company
and its parent, Harleysville Mutual Insurance Company
("Directors"). A Director shall be an outside Director if he or
she is also not a common law employee of the Company or its parent.
The purpose of the Plan is to provide each Director an opportunity
to increase his or her proprietary interest in the Company. The
Plan is designed to qualify for exemption from Section 16(b) of the
Securities Exchange Act of 1934 pursuant to Rule 16b-3(c) of the
Securities and Exchange Commission.
Section II - Eligible Directors
--------------------------------
All Directors are eligible to participate.
Section III - Duration of Offer and Subscription Periods
--------------------------------------------------------
This plan shall be in effect from July 1, 1996 through and
including July 31, 2006. During the duration of the Plan there will
be twenty (20) "Subscription Periods". Each Subscription Period
runs from January 15 through July 14 or from July 15 through
January 14.
<PAGE> Page 2
Section IV - Number of Shares to be Offered
--------------------------------------------
The total number of shares to be made available under the Plan
is 100,000 shares of common stock of the Company ("Stock"). The
shares issued hereunder may either be authorized but unissued
shares or treasury shares reacquired by the Company. In the event
this amount of Stock is subscribed prior to the expiration of the
Plan, the Plan may be terminated in accordance with Section XIV of
the Plan.
Section V - Subscription Price
-------------------------------
The "Subscription Price" for each share of Stock shall be the
lesser of eighty-five percent (85%) of the fair market value of
such share on the last trading day before the first day of the
Subscription Period or eighty-five percent (85%) of the fair market
value of such share on the last trading day of the Subscription
Period but in no event less than $1.00 per share, the par value of
a share of Company Common Stock. The fair market value of a share
shall be the Closing Price as reported on the NASDAQ National
Market System for the applicable date.
Section VI - Amount of Stock Available to be Purchased
-------------------------------------------------------
and Methods of Payment
-----------------------
Directors shall have the option to purchase Stock of the
Company at the end of each Subscription Period. The amount
available for purchase by each Director shall be
<PAGE> Page 3
the amount of stock that can be purchased at the Subscription Price
by the amount of contributions ("Contribution Amount") made during
each Subscription Period by a Director. The Contribution Amount
may be paid through either (1) deduction from retainer and
attendance fees ("Fees"), or (2) lump sum contribution or (3) both
and is subject to the limitations that (a) a Director may deduct
from 5% to 100% of his or her Fees, provided that the minimum
deduction shall be $500 per Subscription Period, and (b) the total
amount that can be contributed from Fees and lump sum contributions
in any Subscription Period shall be $20,000. A lump sum
contribution must be received by the Company not later than
December 31 or June 30 of the applicable Subscription Period.
Section VII - Enrollment
------------------------
A Director who desires to exercise his or her option to
purchase stock during a Subscription Period through deduction from
Fees must file a subscription agreement prior to the start of such
Subscription Period. Once enrolled, a Director will continue to
participate in the Plan for each succeeding Subscription Period
until he or she ceases to be a Director or withdraws from the Plan.
If a Director desires to change his or her rate of deduction he or
she may do so effective for the next Subscription Period by filing
a new subscription agreement prior to the start of the next
Subscription Period.
<PAGE> Page 4
Section VIII - Procedure for Purchase of Shares
------------------------------------------------
The Company will maintain on its books a "Plan Account" in the
name of each participating Director. At the close of each
Subscription Period, the Contribution Amount will be determined and
credited to the Director's Plan Account. As of the last day of each
Subscription Period, the Contribution Amount will be divided by the
Subscription Price for such Subscription Period and the Director's
Plan Account will be credited with the number of whole and
fractional shares which results. Shares will be issued in a book
entry form with the Company's stock transfer agent. Each
participating Director will receive a statement of account in a
timely fashion following the end of each Subscription Period. In
the event the number of shares subscribed for any Subscription
Period exceeds the number of shares available for sale under the
Plan for such period, the available shares shall be allocated among
the participating Directors in proportion to their Plan Account
balances.
Section IX - Withdrawal from the Plan
--------------------------------------
A Director may withdraw from the Plan at any time. At the
time of withdrawal the amount credited to the Director's Plan
Account will be refunded in cash without interest.
Section X - Holding Period
---------------------------
Directors must hold all Stock acquired under the Plan for a
period of at least six (6) months from the date of acquisition,
i.e., the end of each Subscription Period. The
<PAGE> Page 5
transfer agent shall not be permitted to transfer such shares until
the expiration of such six (6) month period.
Section XI - Cessation of Directorship
--------------------------------------
Cessation of Director status for any reason including death,
disability or retirement shall be treated as an automatic with-
drawal as set forth in Section IX.
Section XII - Assignment
-------------------------
No Director may assign his or her subscription or rights to
subscribe to any other person and any attempted assignment shall be
void.
Section XIII - Adjustment of and Changes in the Stock
-----------------------------------------------------
In the event that the shares of Stock shall be changed into or
exchanged for a different number or kind of shares of Stock or
other securities of the Company or of another corporation (whether
by reason of merger, consolidation, recapitalization, split-up,
combination of shares, or otherwise), or if the number of shares of
Stock shall be increased through a Stock split or the payment of a
Stock dividend, then there shall be substituted for or added to
each share of Stock theretofore reserved for sale under the Plan,
the number and kind of shares of Stock or other securities into
which each outstanding share of Stock shall be so changed, or for
which each such share shall be exchanged, or to which each such
share shall be entitled, as the case may be.
<PAGE> Page 6
Section XIV - Amendment or Discontinuance of the Plan
-----------------------------------------------------
The Board of Directors of the Company shall have the right to
amend, modify or terminate the Plan at any time without notice
provided that no participant's existing rights are adversely
affected thereby and provided further that without the approval of
the holders of a majority of the issued and outstanding shares of
Stock no such amendment shall increase the total number of shares
subject to the Plan, change the formula by which the price at which
the shares shall be sold is determined, change eligibility to
participate in the Plan, or materially increase the benefits
accruing to participants under the Plan. The provisions of the
Plan may not be amended more than once every six months other than
to conform to changes in the Internal Revenue Code of 1986 or Rules
thereunder.
Section XV - Administration
----------------------------
The Plan shall be administered by the Compensation and
Personnel Development Committee of the Board of Directors of the
Company. The Committee may from time to time adopt rules and
regulations for carrying out the Plan. Interpretation or con-
struction of any provision of the Plan by the Committee shall be
final and conclusive on all persons.
Section XVI - Titles
---------------------
Titles are provided herein for convenience only and are not to
serve as a basis for interpretation or construction of this
Agreement.
<PAGE> Page 7
Section XVII - Applicable Law
-----------------------------
The Plan shall be construed, administered and governed in all
respects under the laws of the Commonwealth of Pennsylvania.
<PAGE>
EXHIBIT (5)
May 2, 1996
Harleysville Group Inc.
355 Maple Avenue
Harleysville, PA 19438
Re: Registration Statement on Form S-8 for
100,000 Shares of Common Stock
Ladies and Gentlemen:
As counsel for Harleysville Group Inc., a Delaware corporation (the
"Company"), we are furnishing this opinion in connection with the
above-captioned Registration Statement relating to the issuance and
sale of 100,000 shares of Common Stock, par value $1.00 per share,
of the Company (the "Shares") pursuant to the Company's 1996
Directors' Stock Purchase Plan. We have participated in the
preparation of the Registration Statement and have also examined
the Company's Certificate of Incorporation, as amended and
restated, and By-laws and resolutions of the Board of Directors and
stockholders of the Company.
Our opinion set forth below is limited to the General Corporation
Law of the State of Delaware.
In our opinion, the Shares have been duly authorized and, when
issued, will be legally issued, fully paid and non-assessable.
We hereby consent to the use of this opinion as Exhibit 5 to the
Registration Statement. In giving this opinion, we do not thereby
admit that we are acting within the category of persons whose
consent is required under Section 7 of the Securities Act of 1933
or the rules or regulations of the Securities and Exchange
Commission promulgated thereunder.
Very truly yours,
/s/ MORGAN, LEWIS & BOCKIUS LLP
- --------------------------------
Morgan, Lewis & Bockius LLP
<PAGE>
EXHIBIT (23)(A)
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
Harleysville Group Inc.:
We consent to incorporation by reference in this Registration
Statement on Form S-8 of Harleysville Group Inc. of our reports
dated February 19, 1996 and March 22, 1996 relating to the
consolidated balance sheets of Harleysville Group as of December
31, 1995 and 1994 and the related consolidated statements of
income, shareholders' equity, and cash flows and the related
schedules for each of the years in the three-year period ended
December 31, 1995, which reports appear in or are incorporated by
reference in the December 31, 1995 annual report on Form 10-K of
Harleysville Group Inc. which is incorporated by reference herein.
Our reports refer to the adoption of Statement of Financial
Accounting Standards No. 115, "Accounting for Certain Investments
in Debt and Equity Securities" as of January 1, 1994.
/s/ KPMG Peat Marwick LLP
- ---------------------------------
Philadelphia, Pennsylvania
May 3, 1996
