As filed with the Securities and Exchange Commission on August
26, 1999
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. YEAR 2000 DIRECTORS' STOCK OPTION PROGRAM
(Full title of the plan)
Walter R. Bateman
Chairman, 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:
James W. Jennings, Esquire Roger A. Brown, Esquire
Morgan, Lewis & Bockius LLP Harleysville Group Inc.
1701 Market Street 355 Maple Avenue
Philadelphia, PA 19103-2921 Harleysville, PA 19438-2297
(215) 963-5276 (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 unit price <F1> fee <F1>
- ------------------ ---------- -------- ---------- ------------
Common Stock
$1.00 par value 123,500<F2> $19.50<F1> $2,408,250 $669.49
[FN]
<F1>Pursuant to Rule 457(h), the registration fee has been calculated based
on the average of the high and low prices of Registrant's Common Stock on
August 23, 1999 on the NASDAQ National Market System.
<F2>Pursuant to Rule 416, this Registration Statement also covers such
additional shares as may be offered or issued to prevent dilution
resulting from stock splits, stock dividends, recapitalizations or
certain other capital adjustments.
===============================================================================
<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 fiscal year ended
December 31, 1998 filed by the Company pursuant to Section
13(a) of the Securities Exchange Act of 1934 ("Exchange Act").
b. Quarterly Reports on Form 10-Q for the quarters ended March
31, 1999 and June 30, 1999.
c. Current Report on Form 8-K filed June 23, 1999.
d. The description of the Company's common stock set forth
in response to Item 9 of the Registration Statement on
Form S-1 filed by the Company on April 15, 1986 under
the Securities Act of 1933, including all amendments
and reports subsequently 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 incorporated
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 Registration Statement.
EXPERTS
The consolidated financial statements and schedules of the Company as of
December 31, 1998 and for each of the years in the three-year period ended
December 31, 1998, which reports appear in or are incorporated by reference
in the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1998, have been incorporated by reference in the registration
statement in reliance upon the reports of KPMG LLP, independent certified
public accountants, and upon the authority of said firm as experts
<PAGE> Page II-2
in accounting and auditing. To the extent that KPMG LLP audits and reports
on financial statements of the Company issued at future dates, and consents
to the use of their reports thereon, such financial statements also will be
incorporated by reference in the registration statement in reliance upon
their report and said authority.
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 ("DGCL") (under which the
Company is organized) that provide that directors and officers will be
indemnified by the Company to the fullest extent 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. Under Section 145 of the
DGCL, a corporation has the power to indemnify directors and officers under
certain prescribed circumstances and subject to certain limitations
against certain costs and expenses, including attorney's fees actually
and reasonably incurred in connection with any action, suit or
proceeding, whether civil, criminal, administrative or investigative, to
which any of them is a party by reason of being a director or officer of the
corporation if it is determined that the director or officer acted in
accordance with the applicable standard of conduct set forth in such statutory
provision.
In addition, the Company's Certificate of Incorporation contains provisions
permitted by the DGCL 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 statement:
<PAGE> Page II-3
(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
registration 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
statement.
(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.
(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
<PAGE> Page II-4
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.
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 25th day of
August, 1999.
HARLEYSVILLE GROUP INC.
BY: /s/Walter R. Bateman
----------------------
Walter R. Bateman
Chairman, President and
Chief Executive Officer
POWER OF ATTORNEY
------------------
Each person whose signature appears below constitutes and
appoints each of Walter R. Bateman 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.
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.
<PAGE> Page II-5
Signature Title Date
--------- ----- -----
/s/Walter R. Bateman Chairman, President, August 25, 1999
- -------------------- Chief Executive Officer
Walter R. Bateman and a Director
/s/Bruce J. Magee Senior Vice President, August 25, 1999
- -------------------- Chief Financial Officer
Bruce J. Magee (Principal financial
officer and principal
accounting officer)
/s/Michael L. Browne Director August 25, 1999
- --------------------
Michael L. Browne
/s/Robert D. Buzzell Director August 25, 1999
- --------------------
Robert D. Buzzell
/s/William E. Strasburg Director August 25, 1999
- -----------------------
William E. Strasburg
/s/Frank E. Reed Director August 25, 1999
- ----------------
Frank E. Reed
/s/Joseph E. McMenamin Director August 25, 1999
- ----------------------
Joseph E. McMenamin
/s/Lowell R. Beck Director August 25, 1999
- -----------------
Lowell R. Beck
/s/Jerry S. Rosenblum Director August 25, 1999
- ---------------------
Jerry S. Rosenbloom
<PAGE> Page II-6
EXHIBIT INDEX
Exhibit
Number Description of Exhibits
- ------ -----------------------
(4)(A) Amended and Restated Certificate of Incorporation
of Registrant - incorporated by reference to Exhibit (4)(A)
to the Registrant's S-8 Registration Statement No. 333-03127
filed May 3, 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)* Year 2000 Directors' Stock Option Program of Registrant.
(5)* Opinion of Morgan, Lewis & Bockius LLP re legality of
shares of Common Stock being offered hereby.
(23)(A)* Consent of KPMG LLP.
(B) Consent of Morgan, Lewis & Bockius LLPv(included in
Exhibit (5)).
(24)* Power of Attorney included on Page II-4.
- -----------------
*Filed herewith.
EXHIBIT (4)(C)
HARLEYSVILLE GROUP INC.
YEAR 2000 DIRECTORS' STOCK OPTION PROGRAM
APPROVED BY BOARD OF DIRECTORS
FEBRUARY 24, 1999
T A B L E O F C O N T E N T S
I. INTRODUCTION 1
A. Purpose of the Program 1
B. Definitions 1
II. PROGRAM ADMINISTRATION 2
A. Administration 2
B. Participation 3
C. Maximum Number of Shares Available 3
D. Adjustments 3
E. Registration Conditions 3
F. General Provisions 4
III. STOCK OPTIONS 4
A. Price 4
B. Amount and Timing of Grants 4
C. Exercisability of Options 5
D. Period 5
E. Exercise Procedures 5
F. Payment 5
G. Termination of Service 5
H. Retirement, Disability or Death 5
IV. MISCELLANEOUS PROVISIONS 6
A. Amendment, Suspension and Termination of Program 6
B. Government and Other Regulations 6
C. Other Compensation Plans and Programs 6
D. Transferability 6
E. Withholding Taxes 6
F. Construction of Program 6
G. Unfunded Program 6
H. Pronouns, Singular and Plural 6
I. Effective Dates 7
J. Limitation of Rights 7
<PAGE> Page 1
HARLEYSVILLE GROUP INC.
YEAR 2000 DIRECTORS' STOCK OPTION PROGRAM
I. INTRODUCTION
------------
A. PURPOSE OF THE PROGRAM: Harleysville Group Inc. (the
----------------------
"Company) has established the Program to further its
long-term financial success by offering stock options
to non-employee Directors of the Company and of its
parent, Harleysville Mutual Insurance Company, whereby
such Directors can share in achieving and sustaining
such success. The Program also provides a means to
attract and retain the Directors needed to achieve the
Company's and the Parent's long-term growth and
profitability objectives. No more option grants shall
be made after May 1999 under the 1995 Directors' Stock
Option Program.
B. DEFINITIONS: When used in the Program, the following
-----------
terms shall have the meanings set forth below:
"Award(s)" shall mean Non-Qualified Stock Options
made under the Program.
"Board" shall mean the Board of Directors of the
Company and the Board of Directors of the Parent.
"Code" shall mean the Internal Revenue Code of
1986, as amended.
"Company" shall mean Harleysville Group Inc., a
Delaware corporation, and any successor in a
reorganization or similar transaction.
"Committee" shall mean the Compensation &
Personnel Development Committee of the Board of
Directors, which shall administer the Program. The
Committee shall be composed of at least two persons who
are from time to time appointed to serve by the Board
of the Company.
"Common Stock" shall mean the common stock of the
Company, par value of $1.00 per share, and may be
either stock previously authorized but unissued, or
stock reacquired by the Company.
"Director" shall mean a member of the Board of
Directors of the Company or a member of the Board of
Directors of the Parent.
<PAGE> Page 2
"Disability" shall mean the inability of a
Participant to perform the services normally rendered
due to any physical or mental impairment that can be
expected to be of either permanent or indefinite
duration, as determined by the Committee on the basis
of appropriate medical evidence, and that results in
the Participant's Termination of Service.
"Fair Market Value" shall mean with respect to a
given day, the closing price of Common Stock, as
reported by such responsible reporting service as the
Committee may select, or if there were no transactions
in the Common Stock on such day, then the last
preceding day on which transactions took place. The
foregoing notwithstanding, the Committee may determine
the Fair Market Value in such other manner as it may
deem more appropriate for Program purposes or as is
required by applicable laws or regulations.
"1995 Program" shall mean the 1995 Directors'
Stock Option Program.
"Non-Qualified Stock Option" or "NQSO" shall mean
a right to purchase the Company's Common Stock which is
not intended to comply with the terms and conditions
for an incentive stock option, as set forth in Section
422A of the Code, or such other sections of the Code as
may be in effect from time to time.
"Parent" shall mean Harleysville Mutua Insurance
Company.
"Participant" shall mean an active member of the
Board who is not an officer or full-time salaried
employee of the Company or of the Parent.
"Program" shall mean the Company's Year 2000
Directors' Stock Option Program.
"Termination of Service" shall mean a cessation of
the Participant's Board service for any reason.
II. PROGRAM ADMINISTRATION
----------------------
A. ADMINISTRATION: The Program shall be administered by
--------------
the Committee. Subject to the express provisions of
the Program, the Committee shall have authority to
interpret the Program, to prescribe, amend and rescind
rules and regulations relating to the Program and to
make all other determinations deemed necessary or
advisable in the implementation and administration of
the Program; provided, however, that the Committee
shall have no discretion with respect to the
eligibility or selection of Directors to receive
options under the Program, the number of shares of
stock subject to any such options under the Program, or
the purchase price thereunder, and provided further
that the Committee shall not have the authority to take
any action or make any determination that would
materially increase the benefits accruing to
Participants under the Program. The determination of
the Committee in the administration of the Program, as
described herein, shall be final, conclusive and
binding upon all persons including, without limitation,
<PAGE> Page 3
the Company, its stockholders and the persons granted
options under the Program. The Secretary of the
Company shall be authorized to implement the Program in
accordance with its terms and to take such action of a
ministerial nature as shall be necessary to effectuate
the intent and purposes thereof.
B. PARTICIPATION: All current and future non-employee
-------------
active Directors of the Company and the Parent who hold
office at any time between the May 2000 Board Meeting
and the May Board Meeting in 2004 shall be eligible to
participate in the Program. Non-employee Directors as
of the May 2000 Board of Directors Meeting shall
automatically participate in the Program. Future non-
employee Directors, including an employee Director who
becomes a non-employee Director, will automatically
participate in the Program as of the date of the first
May meeting of the Board of Directors following
election to the Board of Directors, or at the first May
Board of Directors meeting after becoming a non-
employee Director (whether or not newly elected to the
Board) at or prior to the May 2004 Board of Directors
meeting.
C. MAXIMUM NUMBER OF SHARES AVAILABLE: The maximum number
----------------------------------
of shares for which options may be granted under the
Program is 123,500, subject to adjustment as provided
under Article II, Paragraph D, of the Program. The
shares made available are comprised of all shares not
issued under the 1990 Directors' Stock Option Program
and 1995 Directors' Stock Option Program, with any
additional amount of shares concurrently necessary, up
to a maximum of 123,500, to be made available through a
reduction in the amount of total shares reserved for
the Company' s Equity Incentive Plan approved in 1997.
Stock options which expire or are terminated,
cancelled or forfeited in accordance with the Program
shall again be available for Award under the Program.
D. ADJUSTMENTS: In the event of stock dividends, stock
-----------
splits, re-capitalizations, mergers, consolidations,
combinations, exchanges of shares, spin-offs,
liquidations, reclassifications or other similar
changes in the capitalization of the Company, the
number of shares of Common Stock available for grant
under this Program shall be adjusted proportionately,
and the number of shares, and the option price of
outstanding stock options shall be similarly adjusted.
Also,in instances where another business entity is
acquired by the Company or its Parent, and the Company
or its Parent has assumed outstanding option grants
under a prior existing plan of the acquired entity,
similar adjustments are permitted at the discretion of
the Board of the Company. In the event of any other
change affecting the Common Stock reserved under the
Program, such adjustment, if any, as may be deemed
equitable by the Committee, shall be made to give
proper effect to such event.
E. REGISTRATION CONDITIONS:
-----------------------
1. Unless issued pursuant to a registration statement under
the Securities Act of 1933, as amended, no shares shall be
issued to a Participant under the Program unless the
Participant represents and agrees with the Company that
such shares are being acquired for investment and not with a
view to the resale or distribution thereof, or such other
documentation as may be
<PAGE> Page 4
required by the Company, unless in the opinion of counsel to
the Company such representation, agreement or
documentation is not necessary to comply with such Act.
2. Any restriction on the resale of shares
shall be evidenced by an appropriate legend on the
stock certificate.
3. The Company shall not be obligated to deliver any
Common Stock until it has been listed on each
securities exchange on which the Common Stock may
then be listed or until there has been qualification
under or compliance with such federal or state laws,
rules or regulations as the Company may deem applicable.
The Company shall use reasonable efforts to obtain
such listing, qualification and compliance.
F. GENERAL PROVISIONS: Each Award under the Program shall
------------------
be subject to the requirement that if at any time the
Committee shall determine that (i) the listings,
registrations or qualifications of the shares of Common
Stock subject or related thereto upon any securities
exchange or under any state or federal law, or (ii) the
consent or approval of any government regulatory body,
or (iii) an agreement by the recipient of an Award with
respect to the disposition of shares of Common Stock is
necessary or desirable as a condition of or in
connection with the granting of such Award or the issuance
or purchase of shares of Common Stock thereunder, such
Award shall not be consummated in whole or in part
unless such listing, registration, qualification,
consent, approval, or agreement shall have been
effected or obtained free of any conditions not
acceptable to the Committee.
III. STOCK OPTIONS
-------------
All stock options granted to Participants under the Program
shall be Non-Qualified Stock Options and evidenced by a
Notice of Award which shall be subject to applicable
provisions of the Program, and such other provisions as the
Committee may adopt, including the following provisions:
A. PRICE: The option price per share shall be one hundred
-----
percent (100%) of the Fair Market Value of a share of
Common Stock at the close of business on the date of
grant.
B. AMOUNT AND TIMING OF GRANTS: An incumbent Director
---------------------------
shall receive a grant of 2,500 Non-Qualified Stock
Options at the Year 2000 May Board Meeting and a grant
of 2,500 options at each May Board Meeting thereafter
for four successive years until and including the May
2004 Board Meeting, except that if an incumbent
Director has options under the 1995 Program that vest
in the same year as an award of options under this
Program then the amount of shares awarded in that year
shall be reduced by the number of shares that vest that
year under the 1995 Program. For Directors first
elected after May 2000, or for an employee Director
becoming a non-employee Director after May 2000, he or
she shall receive a grant of 2,500 options at the first
May Board Meeting following election or an employee
<PAGE> Page 5
Director becoming a non-employee Director and a grant
of 2,500 options at each May Board Meeting thereafter
occurring in or before May 2004. No options shall be
granted under this Program after May 2004.
In the event that at a May Board meeting there are
insufficient shares remaining in the Program on which
to grant 2,500 options to each Director otherwise
entitled to receive options, then the remaining shares
shall be divided by the number of Participants and
options shall be granted to the Participants in an
amount equal to the whole number so determined.
C. EXERCISABILITY OF OPTIONS: All options vest and are
--------------------------
exercisable as of the day of grant.
D. PERIOD: Stock options shall have a term of ten years
------
from the date of grant and shall expire at 5:00 p.m. on
the tenth anniversary of the grant, subject to earlier
expiration or termination as set forth herein.
E. EXERCISE PROCEDURES: A stock option, or portion
-------------------
thereof, shall be exercised by delivery of a written
notice of exercise to the Secretary of the Company, and
payment of the full price of the shares being
purchased.
F. PAYMENT: The price of an exercised stock option, or
-------
portion thereof, may be paid:
1. in cash or by check, bank draft or money
order payable to the order of the Company, or
2. through the delivery of shares of the
Company's Common Stock owned by the Participant,
having an aggregate Fair Market Value as
determined on the date of exercise equal to the
option price, or
3. by a combination of both 1 and 2 above.
G. TERMINATION OF SERVICE: In the event of the Termination
----------------------
of Service on the Board by a Director, other than by
reason of retirement, Disability or death as set forth
in paragraph H hereof, the then outstanding options of
such Director may be exercised within one hundred
twenty days after such termination, or on their stated
expiration date, whichever occurs first. For purposes
of this Program, the term "by reason of retirement"
shall mean mandatory retirement at age 72 pursuant to
Board policy.
<PAGE> Page 6
H. RETIREMENT, DISABILITY OR DEATH: In the event of
-------------------------------
Termination of Service by reason of retirement (as
defined above) or death, or Disability of a Director,
the Director or his/her guardian or legal representative
may exercise all options within two years after such
retirement, death or Disability, or on their stated
expiration date, whichever occurs first.
IV. MISCELLANEOUS PROVISIONS
------------------------
A. AMENDMENT, SUSPENSION AND TERMINATION OF PROGRAM: The
------------------------------------------------
Board of Directors may suspend or terminate the Program
or revise or amend it in any respect whatsoever;
provided, however, that without approval of the
stockholders, no revision or amendment shall change the
selection or eligibility of Directors to receive
options under the Program, the number of shares of
stock subject to any such options of the Program, the
purchase price thereunder, or materially increase the
benefits accruing to Participants under the Program.
B. GOVERNMENT AND OTHER REGULATIONS: The obligation of the
--------------------------------
Company to issue Awards under the Program shall be
subject to all applicable laws, rules and regulations,
and to such approvals by any government agencies as may
be required.
C. OTHER COMPENSATION PLANS AND PROGRAMS: The Program
-------------------------------------
shall not be deemed to preclude the implementation by
the Company or its Parent of other compensation plans
or programs which may be in effect from time to time.
D. TRANSFERABILITY: No right or interest of any
---------------
Participant in any Award under the Program shall
be (a) assignable or transferable, except by will or
the laws of descent and distribution or a valid
beneficiary designation made in accordance with
procedures established by the Committee, and (b) liable
for, or subject to, any lien, obligation or liability.
E. WITHHOLDING TAXES: The Company shall have the right to
-----------------
require a payment from a Participant to cover
applicable withholding for any federal, state or local
taxes, if any. The Company reserves the right to
offset such tax payment from any other funds which may
be due the Participant by the Company.
F. CONSTRUCTION OF PROGRAM: The interpretation of the
-----------------------
Program and the application of any rules implemented
hereunder shall be determined in accordance with the
laws of the Commonwealth of Pennsylvania.
G. UNFUNDED PROGRAM: The Program shall be unfunded, and
----------------
the Company shall not be required to segregate any
assets which may at any time be represented by Awards.
Any liability of the Company to any person with respect
to an Award under this Program shall be based solely
upon any obligations which may be created by this
Program; no such obligation of the Company shall be
deemed to be secured by any pledge or other encumbrance
on any property of the Company.
<PAGE> Page 7
H. PRONOUNS, SINGULAR AND PLURAL: The masculine may be
-----------------------------
read as feminine, the singular as plural, and the
plural as singular as necessary to give effect to the
Program.
I. EFFECTIVE DATES: The Program will become effective on
----------------
approval by stockholders. The Program and all
outstanding Awards shall remain in effect until all
outstanding Awards have been exercised or repurchased,
have expired or have been cancelled.
J. LIMITATION OF RIGHTS:
----------------------
1. No Right to Continue as a Director: Neither the
-----------------------------------
Program, nor the granting of an option nor any
other action taken pursuant to the Program, shall
constitute or be evidence of any agreement or
understanding, express or implied, that the
Director has a right to continue as a Director for
any period of time, or at any particular rate of
compensation.
2. No Share Owners' Rights for Options: A Director
------------------------------------
who has been granted options shall have no rights
as a share owner with respect to the shares
covered by options granted hereunder until the
date of the issuance of a stock certificate
therefor, and no adjustment will be made for
dividends or other rights for which the record
date is prior to the date such certificate is
issued.
EXHIBIT (5)
August 25, 1999
Harleysville Group Inc.
355 Maple Avenue
Harleysville, PA 19438
Re: Registration Statement on Form S-8 for
123,500 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 123,500 shares of Common
Stock, par value $1.00 per share, of the Company (the "Shares")
pursuant to the Company's Year 2000 Directors' Stock Option
Program. 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 the
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 originally issued by the Company
to participants under the Program have been duly authorized and,
when issued in accordance with the laws of the Program, will be
validly 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
EXHIBIT (23)(A)
The Board of Directors
Harleysville Group Inc.:
We consent to incorporation by reference in the registration
statement on Form S-8 of Harleysville Group Inc. of our reports
dated February 15, 1999, relating to the consolidated balance
sheets of Harleysville Group Inc. as of December 31, 1998 and
1997, and the related consolidated statements of income,
shareholders' equity, and cash flows for each of the years in the
three-year period ended December 31, 1998, and all related
schedules, which reports appear in or are incorporated by
reference in the December 31, 1998 annual report on Form 10-K of
Harleysville Group Inc., and to the reference of our firm under
the heading "Experts" in the registration statement.
/s/KPMG LLP
Philadelphia, Pennsylvania
August 25, 1999
