As filed with the Securities and Exchange Commission on May 17,2000
Registration No. 333-
=============================================================================
UNITED STATES
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. EXCESS STOCK PURCHASE PLAN
(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:
Henry S. Bryans, Esquire Roger A. Brown, Esquire
Drinker Biddle & Reath LLP Harleysville Group Inc.
One Logan Square 355 Maple Avenue
18th & Cherry Streets Harleysville, PA 19438-2297
Philadelphia, PA 19103-6996 (215) 256-5173
(215) 988-2823
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 50,000<F2> $15.875<F1> $793,750 $209.55
[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 May
12, 2000 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, 1999 filed by the Company pursuant to Section 13(a)
of the Securities Exchange Act of 1934 ("Exchange Act").
b. Quarterly Report on Form 10-Q for the quarter ended March
31, 2000.
c. The description of the Company's common stock contained in
the Registration Statement on Form S-1 filed by the Company on
April 15, 1986 (File No. 33-4885) 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.
Item 4. DESCRIPTION OF SECURITIES
--------------------------
Not applicable.
Item 5. INTERESTS OF EXPERTS AND NAMED COUNSEL
--------------------------------------
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
<PAGE> Page II-2
("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. EXEMPTION FROM REGISTRATION CLAIMED
-----------------------------------
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:
(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.
<PAGE> Page II-3
(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 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 with or furnished to the Commission
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 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
<PAGE> Page II-4
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 17th day of May, 2000.
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.
<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/Walter R. Bateman Chairman, President, May 17, 2000
- ------------------- Chief Executive Officer
Walter R. Bateman and a Director
/s/Bruce J. Magee Senior Vice President, May 17, 2000
- ------------------- Chief Financial Officer
Bruce J. Magee (Principal financial
officer and principal
accounting officer)
/s/Lowell R. Beck Director May 17, 2000
- -----------------
Lowell R. Beck
/s/Michael L. Browne Director May 17, 2000
- --------------------
Michael L. Browne
/s/Robert D. Buzzell Director May 17, 2000
- --------------------
Robert D. Buzzell
/s/Mirian M. Graddick Director May 17, 2000
- ---------------------
Mirian M. Graddick
/s/Joseph E. McMenamin Director May 17, 2000
- ----------------------
Joseph E. McMenamin
/s/Frank E. Reed Director May 17, 2000
- ----------------
Frank E. Reed
/s/Jerry S. Rosenbloom Director May 17, 2000
- -----------------------
Jerry S. Rosenbloom
<PAGE> Page II-6
EXHIBIT INDEX
Exhibit
Number Description of Exhibits
- ------- ------------------------
4.1 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).
4.2 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).
4.3* Excess Stock Purchase Plan of Registrant.
5.1* Opinion of Drinker Biddle & Reath LLP re legality of shares
of Common Stock being offered hereby.
23.1* Consent of KPMG LLP.
23.2 Consent of Drinker Biddle & Reath LLP (included in Exhibit 5.1.)
24.1* Power of Attorney included on Page II-4.
- ----------------
*Filed herewith.
EXHIBIT 4.3
HARLEYSVILLE GROUP INC.
EXCESS STOCK PURCHASE PLAN
ADOPTED BY BOARD OF DIRECTORS: NOVEMBER 17, 1999
APPROVED BY STOCKHOLDERS: APRIL 26, 2000
TABLE OF CONTENTS
----------------
ARTICLE NO. ARTICLE TITLE PAGE NO.
- ----------- ------------- --------
I. PURPOSE 1
II. ELIGIBLE EMPLOYEES 1
III. ENROLLMENT AND ENROLLMENT PERIODS 1
IV. DURATION OF OFFER AND SUBSCRIPTION PERIODS 2
V. NUMBER OF SHARES TO BE OFFERED 2
VI. SUBSCRIPTION PRICE 2
VII. AMOUNT OF CONTRIBUTION AND METHOD OF PAYMENT 3
VIII. PURCHASE OF SHARES 3
IX. WITHDRAWAL FROM THE PLAN 4
X. TAX WITHHOLDING 4
XI. SEPARATION FROM EMPLOYMENT 4
XII. ASSIGNMENT 4
XIII. ADJUSTMENT OF AND CHANGES IN THE STOCK 4
XIV. AMENDMENT OR DISCONTINUANCE OF THE PLAN 5
XV. ADMINISTRATION 5
XVI. EMPLOYEE'S RIGHTS 5
XVII. TITLES 5
XVIII. APPLICABLE LAW 5
HARLEYSVILLE GROUP INC.
EXCESS STOCK PURCHASE PLAN
---------------------------
ARTICLE 1 - PURPOSE
--------------------
The Harleysville Group Inc. Excess Stock Purchase Plan (the
"Plan") is established by the Harleysville Group Inc. (the "Company")
for the benefit of the Eligible Employees of the Company. The purpose
of the Plan is to provide each Eligible Employee with an opportunity to
acquire or increase a proprietary interest in the Company. The Plan is
available only to those employees who purchase the maximum number of shares
allowable under the Harleysville Group Inc. Employee Stock Purchase Plan
("ESPP"). It will permit them to purchase additional shares, on a non-tax
free basis, under the rules that apply to the ESPP.
ARTICLE II - ELIGIBLE EMPLOYEES
-------------------------------
(a) All regular full-time employees and regular part-time employees
who work at least twenty (20) hours or more a week for the Company and
who, in any year, purchases the $25,000 in fair market value permitted
under the ESPP ("Eligible Employee").
(b) If an Employee obtains a hardship withdrawal under the Extra
Compensation Plan of the Company or any similar plan maintained
by the Company, its parent, or a subsidiary, then said Employee may
not, for the twelve month period following the hardship withdrawal,
make any contributions for purchase of stock under the Plan. In such
case, such Employee will be deemed to have withdrawn his or her
contribution for the current Subscription Period and will have such
contributions returned to him or her. The Employee is further not
entitled to re-subscribe to the Plan until the beginning of the first
Subscription Period following the completion of the twelve month period.
<PAGE> Page 2
ARTICLE III - ENROLLMENT AND ENROLLMENT PERIODS
----------------------------------------------
Separate enrollment for this Plan is not necessary. Enrollment
in the ESPP shall enable an Eligible Employee to participate in this Plan.
Actual participation shall not occur until (a) a Participant has purchased
$25,000 in fair market value of Company stock under the ESPP in any year, and
(b) the Participant has contributed to the ESPP an amount in excess of the
amount required to purchase $25,000 in fair market value under the ESPP.
Any person who is an Eligible Employee and desires to subscribe for the
purchase of stock for the following Subscription Period must file a subscription
agreement during the Enrollment Period or otherwise have a Subscription
Agreement on file. Once enrolled, an Eligible Employee will continue to
participate in the Plan for each succeeding Subscription Period until he or she
terminates his or her participation or ceases to be an Eligible Employee. If a
participant desires to change his or her rate of contribution he or she may do
so effective for the next Subscription Period by filing a new subscription
agreement during the applicable Enrollment Period.
ARTICLE IV - DURATION OF OFFER AND SUBSCRIPTION PERIODS
-------------------------------------------------------
This plan shall be in effect from July 1, 2000 through and including
July 31, 2005. During the duration of the Plan there will be ten (10)
"Subscription Periods". Each Subscription Period runs from January 15
through July 14 or from July 15 through January 14.
ARTICLE V - NUMBER OF SHARES TO BE OFFERED
------------------------------------------
The total number of shares to be made available under the Plan is
50,000 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 Article XII of the Plan.
ARTICLE VI - 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
<PAGE> Page 3
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 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.
ARTICLE VII - AMOUNT OF CONTRIBUTION AND METHOD OF PAYMENT
----------------------------------------------------------
Except as otherwise provided herein, the Subscription Price will be
payable as set forth in the ESPP. The combined maximum deduction under the
ESPP and this Plan shall be no more than fifteen percent (15%) of a
Participant's Base Pay. "Base Pay" means the regular compensation paid to an
Eligible Employee with respect to the Enrollment Period. Base Pay shall not
include overtime, bonuses, or other items which are not considered to be
regular earnings by the committee administering the Plan pursuant to
Article XV. Payroll deductions will commence with the first pay issued
during the Subscription Period and will continue with each pay throughout
the entire Subscription Period except for pay periods for which the Eligible
Employee receives no compensation (i.e., uncompensated personal leave, leave
of absence, etc.).
ARTICLE VIII- PURCHASE OF SHARES
---------------------------------
The Company will maintain on its books an ESPP "Plan Account" in the
name of each participant. At the close of each pay period, the amount
deducted from the participant's Base Pay will be credited to the
participant's Plan Account. As of the last day of each Subscription Period,
the amount then in the participant's Plan Account will be divided by the
Subscription Price for such Subscription Period and the participant's Plan
Account will be credited with the number of whole and fractional shares
which results. If there is an amount in the Plan account remaining after
application of the $25,000 cap sufficient to purchase additional shares, then
the remaining amounts shall be used to purchase additional shares under this
Plan pursuant to the procedures applicable to the ESPP, up to a maximum of
15% of pay under both Plans. Shares will be issued in a book entry form
with the Company's stock transfer agent. A participant will receive a
statement of
<PAGE> Page 4
account in a timely fashion from the transfer agent 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
participants in proportion to their Plan Account balances.
In the event that the number of shares which would be credited to any
participant's Plan Account in any Subscription Period exceeds the limit
specified in Article VII, the participant's account will be credited with
the maximum number of shares permissible, and the remaining amounts will be
refunded in cash without interest.
ARTICLE IX - WITHDRAWAL FROM THE PLAN
---------------------------------------
Withdrawal from the ESPP shall constitute withdrawal from this Plan.
At the time of withdrawal the amount credited to the participant's Plan
Account will be refunded in cash without interest.
ARTICLE X - TAX WITHHOLDING
---------------------------
The Company shall require withholding tax to be collected on the
difference between the purchase price and the fair market value at closing
on the day prior to purchase, in accordance with IRS regulations; provided,
however, that a Participant may satisfy his or her withholding obligation by
having withheld from delivery shares equal in fair market value to the
withholding obligation or deliver shares of Company stock previously owned by
Participant for more than six months equal in fair market value to the amount
sought to be withheld, or any combination thereof, so long as there is no
accounting charge to earnings resulting therefrom.
ARTICLE XI - SEPARATION FROM EMPLOYMENT
---------------------------------------
Separation from employment with Company for any reason including death,
disability or retirement shall be treated as an automatic withdrawal as set
forth in Article IX.
<PAGE> Page 5
ARTICLE XII - ASSIGNMENT
-------------------------
No participant may assign his or her subscription or rights to
subscribe to any other person and any attempted assignment shall be void.
ARTICLE 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.
ARTICLE XIV - AMENDMENT OR DISCONTINUANCE OF THE PLAN
-----------------------------------------------------
The Board of Directors may suspend or terminate the Plan or revise or
amend it in any respect whatsoever; provided, however, that if shareholder
approval is required by federal or state laws or regulations or by rules and
regulations of a national securities exchange or the Nasdaq National Market of
The Nasdaq Stock Market, the amendment will not be effective until such
stockholder approval.
ARTICLE XV - ADMINISTRATION
---------------------------
The Plan shall be administered by a committee to be appointed by the
Board of Directors consisting of three employees of the Company. The
committee may from time to time adopt rules and regulations for carrying out
the Plan. Interpretation or construction of any provision of the Plan by the
committee shall be final and conclusive on all persons absent contrary action by
the Board of Directors.
<PAGE> Page 6
ARTICLE XVI - EMPLOYEE'S RIGHTS
-------------------------------
Nothing in the Plan shall prevent the Company, its parent or any
subsidiary from terminating any employee's employment. No employee shall
have any rights as a shareholder until full payment has been made for the shares
for which he has subscribed.
ARTICLE XVII - TITLES
----------------------
Titles are provided herein for convenience only and are not to serve
as a basis for interpretation or construction of this Agreement.
ARTICLE XVIII - APPLICABLE LAW
------------------------------
The Plan shall be construed, administered and governed in all respects
under the laws of the Commonwealth of Pennsylvania.
TO RECORD THE ADOPTION OF THIS PLAN, THE COMPANY HAS CAUSED ITS
AUTHORIZED OFFICERS TO AFFIX THE CORPORATE NAME AND SEAL HERETO THIS 17th DAY
OF NOVEMBER, 1999.
HARLEYSVILLE GROUP INC.
BY: /s/ Walter R. Bateman
------------------------------------------------
Walter R. Bateman, II, Chairman, President & CEO
ATTEST:
/s/ R. A. Brown
- -------------------------------------
Roger A. Brown, Senior Vice President,
Secretary & General Counsel
Exhibit 5.1
Drinker Biddle & Reath LLP
One Logan Square
18th & Cherry Streets
Philadelphia, PA 19103-6996
May 17, 2000
Harleysville Group Inc.
355 Maple Avenue
Harleysville, Pennsylvania 19438
Ladies and Gentlemen:
We have acted as counsel to Harleysville Group Inc. (the
"Company") in connection with the preparation and filing with the
Securities and Exchange Commission of the Company's Registration
Statement on Form S-8 under the Securities Act of 1933 (the
"Registration Statement") relating to 50,000 shares of Common
Stock of the Company, par value $1.00 per share (the "Shares"),
issuable pursuant to its Excess Stock Purchase Plan (the "Plan").
In this capacity, we have reviewed originals or copies,
certified or otherwise identified to our satisfaction, of the
Company's Certificate of Incorporation, its By-laws, resolutions
of its Board of Directors, the Plans, and such other documents
and corporate records as we have deemed appropriate for the
purpose of giving this opinion.
Based upon the foregoing and consideration of such questions
of law as we have deemed relevant, we are of the opinion that the
issuance of the Shares by the Company pursuant to the Plan has
been duly authorized by the necessary corporate action on the
part of the Company and such Shares, when issued in accordance
with the terms of the Plan, will be validly issued, fully paid
and nonassessable by the Company.
The opinions expressed herein are limited to the Delaware
General Corporation Law.
We consent to the use of this opinion as an exhibit to the
Registration Statement. This does not constitute a consent under
Section 7 of the Securities Act of 1933 since we have not
certified any part of the Registration Statement and do not
otherwise come within the categories of persons whose consent is
required under Section 7 or the rules and regulations of the
Securities and Exchange Commission.
Very truly yours,
/s/Drinker Biddle & Reath LLP
DRINKER BIDDLE & REATH LLP
Exhibit 23.1
Independent Auditors' Consent
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 14, 2000,
relating to the consolidated balance sheets of Harleysville Group Inc. as of
December 31, 1999 and 1998, 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, 1999, and all related schedules, which
reports appear in or are incorporated by reference in the December 31, 1999
annual report on Form 10-K of Harleysville Group Inc.
/s/KPMG LLP
Philadelphia, Pennsylvania
May 16, 2000
