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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. )*
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LANDAMERICA FINANCIAL GROUP, INC.
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(Name of Issuer)
COMMON STOCK, WITHOUT PAR VALUE
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(Title of Class of Securities)
521029-10-8
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(CUSIP Number)
Howard E. Steinberg
Senior Vice President and General Counsel
Reliance Financial Services Corporation
Park Avenue Plaza
55 East 52nd Street
New York, New York 10055
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(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
February 27, 1998
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box / /.
NOTE: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See ss.240.13d-7(b) for other
parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter the
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
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CUSIP NO. 521029-10-8 13D
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NAME OF REPORTING PERSON
I.R.S IDENTIFICATION NOS. OF ABOVE PERSONS
1 (entities only)
RELIANCE FINANCIAL SERVICES CORPORATION
I.R.S. EMPLOYER IDENTIFICATION NO.: 51-0113548
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
2 (b) / /
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SEC USE ONLY
3
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SOURCE OF FUNDS*
4 00
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) /X/
5
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CITIZENSHIP OR PLACE OF ORGANIZATION
6 Delaware
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SOLE VOTING POWER
7 4,039,473
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NUMBER OF SHARES SHARED VOTING POWER
BENEFICIALLY 8
OWNED BY
EACH ------------------------------------------------------------
REPORTING SOLE DISPOSITIVE POWER
PERSON WITH 9
4,039,473
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SHARED DISPOSITIVE POWER
10
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11 4,039,473
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CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES / /
CERTAIN SHARES*
12
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13 26.8%
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TYPE OF REPORTING PERSON*
14 HC
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
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The following information is filed by Reliance Financial Services Corporation, a
Delaware corporation ("Reliance Financial") relating to the ownership by its
subsidiaries of the Security set forth on the cover of this Schedule 13D.
ITEM 1. SECURITY AND ISSUER
This statement relates to the Common Stock, without par value ("Common Stock"),
of LandAmerica Financial Group, Inc., a corporation organized under the laws of
the Commonwealth of Virginia (the "Company"). The principal executive offices of
the Company are located at 6630 West Broad Street, Richmond, Virginia 23230.
ITEM 2. IDENTITY AND BACKGROUND.
This statement is filed by Reliance Financial. Reliance Financial owns all of
the common stock of Reliance Insurance Company ("RIC"), a Pennsylvania
corporation. RIC and its property and casualty insurance subsidiaries underwrite
a broad range of standard commercial and specialty commercial lines of property
and casualty insurance. All of the capital stock of Reliance Financial is owned
by Reliance Group Holdings, Inc., a Delaware corporation ("RGH").
Approximately 44.4% of the common voting stock of RGH is owned by Saul P.
Steinberg, members of his family and affiliated trusts. As a result of his
stock holdings in RGH, Saul P. Steinberg may be deemed to control RGH.
The principal executive offices of each of Reliance Financial and RGH are
located at Park Avenue Plaza, 55 East 52nd Street New York, New York 10055.
The names, address and principal occupations of the directors and executive
officers of Reliance Financial, all of whom are United States citizens, are as
follows:
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NAME AND BUSINESS ADDRESS POSITION WITH RELIANCE
- ------------------------- FINANCIAL AND PRINCIPAL
OCCUPATION
-----------------------
Saul P. Steinberg Chairman of the Board, Chief
Reliance Group Holdings, Inc. Executive Officer and Director,
Park Avenue Plaza Reliance Financial and RGH
New York, New York 10055
Robert M. Steinberg President, Chief Operating
Reliance Group Holdings, Inc. Officer and Director, Reliance
Park Avenue Plaza Financial and RGH; Chairman of
New York, New York 10055 the Board and Chief Executive
Officer, RIC
George E. Bello Executive Vice President,
Reliance Group Holdings, Inc. Controller and Director,
Park Avenue Plaza Reliance Financial and RGH
New York, New York 10055
Lowell C. Freiberg Senior Vice President, Chief
Reliance Group Holdings, Inc. Financial Officer and Director,
Park Avenue Plaza Reliance Financial and RGH
New York, New York 10055
Henry A. Lambert Senior Vice President--Real
Reliance Group Holdings, Inc. Estate Investments and
Park Avenue Plaza Operations, Reliance Financial
New York, New York 10055 and RGH; President and Chief
Executive Officer, Reliance
Development Group, Inc.
Dennis J. O'Leary Senior Vice President--Taxes,
Reliance Group Holdings, Inc. Reliance Financial and RGH
Park Avenue Plaza
New York, New York 10055
Philip S. Sherman Senior Vice President--Group
Reliance Group Holdings, Inc. Controller, Reliance Financial
Park Avenue Plaza and RGH
New York, New York 10055
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Bruce L. Sokoloff Senior Vice President--
Reliance Group Holdings, Inc. Administration, Reliance
Park Avenue Plaza Financial and RGH
New York, New York 10055
Howard E. Steinberg, Esq. Senior Vice President, General
Reliance Group Holdings, Inc. Counsel and Corporate
Park Avenue Plaza Secretary, Reliance Financial
New York 10055 and RGH
James E. Yacobucci Senior Vice President--
Reliance Insurance Company Investments and Director,
Park Avenue Plaza Reliance Financial, RGH and RIC
New York, New York 10055
George R. Baker Director, Reliance Financial
WMS Industries and RGH; Corporate
3401 North California Avenue Director/Advisor various
Chicago, Illinois 60618 Business enterprises
Dennis A. Busti Director, Reliance Financial
Reliance National, a principal and RGH; President and Chief
subsidiary of Reliance Insurance Executive Officer, Reliance
77 Water Street National, a principal subsidiary of
New York, New York 10005 Reliance Insurance
Dr. Thomas P. Gerrity Director, Reliance Financial
The Wharton School and RGH; Dean, the Wharton
University of Pennsylvania School of the University of
Steinberg Hall- Dietrich Hall Pennsylvania
3620 Locust Walk
Philadelphia, PA 19104
Jewell J. McCabe Director, Reliance Financial
Jewell Jackson McCabe and RGH; President, Jewell
Associates Jackson McCabe Associates,
50 Rockefeller Plaza consultants specializing in
Suite 46 planning and communications
New York, New York 10020
Irving Schneider Director, Reliance Financial
Helmsley-Spear, Inc. and RGH; Executive Vice
60 East 42nd Street President, Helmsley-Spear, Inc.,
New York, New York 10165 a real estate management corporation
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Bernard L. Schwartz Director, Reliance Financial
Loral Space & Communications Ltd. and RGH; Chairman of the Board, Chief
600 Third Avenue Executive Officer, Loral Space &
New York, New York 10016 Communications Ltd., a
high-technology company concentrating
on satellite manufacturing and
satellite-based services, Chairman
of the Board and Chief Executive
Officer, Globalstar
Telecommunications, Ltd.
Richard E. Snyder Director, Reliance Financial
Golden Books Family and RGH; Chairman of Golden Books
Entertainment, Inc. Family Entertainment, Inc., a
850 Third Avenue publisher of children's books.
New York, New York 10022
Neither Reliance Financial nor, to the best of its knowledge, any other person
named in this Item 2 has, during the last five years, been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors) nor,
except as set forth below, been party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such proceeding
was or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to, Federal or
state securities laws or finding any violation with respect to such laws.
On February 17, 1994, in settlement of an administrative proceeding concerning
the accounting treatment for certain transactions in 1986 in the fixed income
portfolio of RIC, without admitting or denying the allegations against it, RGH
agreed to entry of an order by the Securities and Exchange Commission that RGH
cease and desist from committing or causing any violation, and from committing
or causing any future violation of, Section 13(a) of the Securities Exchange Act
of 1934, as amended and Rules 13a-1 and 13a-3 thereunder.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
The 4,039,473 shares of Common Stock beneficially owned by Reliance Financial
were acquired by RIC on February 27, 1998 as consideration for the sale (the
"Sale") by RIC to the Company of all of the outstanding shares of Commonwealth
Land Title Insurance Company and Transnation Title Insurance Company
(collectively, "Commonwealth/Transnation"). The Sale was completed pursuant to
the terms of an Amended and Restated Stock Purchase Agreement, dated as of
December 11, 1997 by and among, RIC, RGH, the Company and the Company's
subsidiary, Lawyers Title Insurance
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Corporation (the "Stock Purchase Agreement"). The Stock Purchase Agreement is
more fully described in Item 4 below and attached hereto as Exhibit 1. In
addition to the 4,039,473 shares of Common Stock, RIC received as consideration
for the Sale cash of $266.6 million and $110,000,000 face amount (2,200,000
million shares) of 7% Series B Cumulative Convertible Preferred Stock (the
"Series B Preferred Stock"). The Series B Preferred Stock is initially
convertible, except by RIC and its affiliates as described in Item 4 herein,
into 4,824,561 shares of Common Stock.
ITEM 4. PURPOSE OF TRANSACTION.
The Common Stock and Series B Preferred Stock described in Item 3 herein were
acquired for investment as part of the general investment portfolio of RIC.
In connection with, and as a condition to, the acquisition of the Common Stock
and Series B Preferred Stock the following agreements relating to or bearing on
the Common Stock and Series B Preferred Stock described in Item 3 herein were
executed and delivered:
(a) Stock Purchase Agreement pursuant to which the Company acquired all of
the issued and outstanding common stock of Commonwealth/Transnation from
RIC for cash in the aggregate amount of $266.6 million, the Common Stock
and Series B Preferred Stock.
(b) Voting and Standstill Agreement (the "Voting and Standstill Agreement"),
dated February 27, 1998, among the Company, RIC and RGH pursuant to
which (i) RIC has the right to designate three directors to the
Company's Board of Directors; (ii) RIC and its affiliates are prohibited
from acquiring additional shares of Common Stock or Series B Preferred
Stock (except as provided in the Voting and Standstill Agreement); (iii)
requires RIC to vote the Common Stock in certain manners depending upon
the matter that is subject to a vote of the Company's shareholders; (iv)
requires the sale of all 4,039,473 shares of Common Stock received by
RIC from the Company pursuant to the Stock Purchase Agreement within six
and one-half years after February 27, 1998 (subject to extension as
provided in
the Voting and Standstill Agreement); (v) requires RIC, with respect to
the Series B Preferred Stock received by RIC from the Company and any
shares of Common Stock received upon conversion of such shares of Series
B Preferred Stock, to sell so many of the shares of Series B Preferred
Stock or shares of Common Stock received upon
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conversion thereof held by it or its affiliates as is necessary to
reduce the RIC ownership percentage to less than 20% of the Company's
outstanding shares by not later than eight and one-half years after
February 27, 1998 (subject to extension as provided in the Voting and
Standstill Agreement); (vi) restricts the ability of RIC and its
affiliates to convert the shares of Series B Preferred Stock then held
by them until all of the 4,039,473 shares of Common Stock (and certain
additional shares that may be issued with respect to such shares) have
been sold to persons that are not, at the time of the sale, conveyance
or transfer, an affiliate of RIC, provided that such restriction shall
not apply upon the occurrence of certain specified events set forth in
the Voting and Standstill Agreement; and (vii) prohibits the knowing
transfer of the Common Stock and Series B Preferred Stock to any person
or group if, as a result of such transfer, such person or group would
have beneficial ownership of Common Stock representing in the aggregate
more than 9.9% of the issued and outstanding shares of Common Stock of
the Company (subject to exceptions set forth in the Voting and
Standstill Agreement).
(c) Registration Rights Agreement, dated as of February 27, 1998, between
the Company and RIC pursuant to which the Company has filed two
Registration Statements with the Securities and Exchange Commission to
register the resale by RIC of the Common Stock and Series B Preferred
Stock under the Securities Act of 1933, as amended, and, will
use its best efforts to maintain the effectiveness of such Registration
Statement(s) for specified time periods. Although the Registration
Statements have become effective, RIC has agreed, pursuant to the terms
of a letter dated February 24, 1998 (the "Lock-up Letter") from RIC
delivered to Donaldson, Lufkin & Jenrette Securities Corporation
("DLJ"), Furman Selz LLC, Wheat First Securities, Inc. and Ferris,
Baker Watts, Incorporated, as representatives of the underwriters in the
Company's public offering of shares of Common Stock pursuant to a
registration statement on Form S-3 (Registration No. 333-43913), that
until May 24, 1998, it will not sell, transfer or otherwise directly or
indirectly dispose of the shares of Common Stock or Series B Preferred
Stock (or enter into any transaction that transfers the economic
consequences associated with the ownership of the Common Stock), subject
to enumerated exceptions, including certain privately negotiated sales,
without the prior written consent of DLJ.
In addition to the foregoing, the Company's Articles of Incorporation were
amended to create the Series B Preferred Stock. Shares of Series B Preferred are
convertible at any time at the option of the holder (other than RIC and its
affiliates as described in clause (b) above) into shares of Common Stock at an
initial conversion price of $22.80 per share of Common Stock (approximately
2.193 shares of Common Stock for each share of Series B Preferred Stock) or
4,824,561 shares of Common Stock. The provisions of the Series B Preferred Stock
contain covenants that will entitle RIC to certain rights in specific default
situations. Upon the occurrence of certain events, RIC will be entitled to
additional seats on the Company's Board of Directors, and RIC and its affiliates
will no longer be subject to certain restrictions under the Voting and
Standstill Agreement. Such events include the following: (i) the Company's
combined ratio exceeds the
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weighted average of the combined ratios of certain predetermined comparable
title insurance companies by more than five percentage points for any twelve
month period and the Company's claims-paying ability rating is downgraded by two
ratings agencies to or below a rating of "BBB-"; (ii) the Company fails to pay a
dividend on the Series B Preferred Stock on one occasion, on two occasions,
whether or not consecutive, and on three occasions, whether or not consecutive;
and (iii) the Company defaults on any of its material debt obligations in excess
of $15.0 million (individually or at any one time in aggregate).
The response to Item 3 is incorporated herein by reference. The Stock Purchase
Agreement which is attached hereto as Exhibit 1, Voting and Standstill Agreement
which is attached hereto as Exhibit 2, the Registration Rights Agreement which
is attached hereto as Exhibit 3, the Certificate of Amendment containing the
terms of the Series B Preferred Stock which is attached hereto as Exhibit 4 and
the Lock-up Letter which is attached hereto as Exhibit 5 are incorporated herein
by reference.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
The 4,039,473 shares of Common Stock were acquired by RIC on February 27, 1998
as part of the consideration for the Sale. The Sale is described more fully in
Item 3 above, which description is incorporated herein by reference. The Stock
Purchase Agreement is attached hereto as Exhibit 1 and incorporated herein by
reference.
The Securities beneficially owned total 4,039,473 shares of Common Stock, which
based on information provided by the Company, represent approximately 26.8% of
the shares of Common Stock outstanding. All of the 4,039,473 shares of Common
Stock beneficially owned by Reliance Financial are owned directly by RIC. RIC
has sole voting (subject to the terms of the Voting and Standstill Agreement
described more fully in Item 4 above) and dispositive power over all of the
shares of Common Stock beneficially owned by Reliance Financial.
To the best knowledge of Reliance Financial, the other persons named in Item 2
hereof do not own or have the right to acquire any shares of the Security.
Except as described herein, neither Reliance Financial, nor to the best
knowledge of Reliance Financial, any of the persons named in Item 2 hereof has
effected any transaction in the Security during the 60 days preceding the date
of this filing.
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ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
SECURITIES OF THE ISSUER.
Except as described herein, no contracts, arrangements, understandings or
relationships (legal or otherwise) exist among the persons named in Item 2
hereof or between such persons and any other person with respect to any
securities of the Company, including but not limited to transfer or voting of
any such securities, finder's fees, joint ventures, loan or option arrangements,
puts or calls, guarantees of profits, divisions of profits or losses, or the
giving or withholding of proxies.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
1. Amended and Restated Stock Purchase Agreement, dated as of December 11, 1997
by and among, RIC, RGH, the Company and Lawyers Title Insurance Corporation
(incorporated by reference to Appendix A to the Company's definitive Proxy
Statement filed with the Securities and Exchange Commission on January 29,
1998).
2. Voting and Standstill Agreement, dated as of February 27, 1998, by and among
the Company, RGH and RIC (incorporated by reference to Exhibit B to Appendix
A to the Company's definitive Proxy Statement filed with the Securities and
Exchange Commission on January 29, 1998).
3. Registration Rights Agreement, dated as of February 27, 1998, by and between
the Company and RIC (incorporated by reference to Exhibit A to Appendix A to
the Company's definitive Proxy Statement filed with the Securities and
Exchange Commission on January 29, 1998).
4. Articles of Amendment to the Company's Articles of Incorporation
(incorporated by reference to Appendix B to the Company's definitive Proxy
Statement filed with the Securities and Exchange Commission on January 29,
1998).
5. Lock-up Letter dated February 24, 1998 from RIC to Donaldson, Lufkin &
Jenrette Securities Corporation, Furman Selz LLC, Wheat First Securities,
Inc. and Ferris, Baker Watts, Incorporated.
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SIGNATURE
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After reasonable inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
Dated: March 9, 1998
RELIANCE FINANCIAL SERVICES CORPORATION
By /s/ James E. Yacobucci
-------------------------------
James E. Yacobucci
Senior Vice President-Investments
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EXHIBIT INDEX
EXHIBIT EXHIBIT PAGE
NUMBER NUMBER
1 Amended and Restated Stock Purchase Agreement,
dated as of December 11, 1997 by and among,
RIC, RGH, the Company and Lawyers Title
Insurance Corporation (incorporated by
Reference to Appendix A to the Company's
definitive Proxy Statement filed with the
Securities and Exchange Commission on
January 29, 1998).
2 Voting and Standstill Agreement, dated as of
February 27, 1998, by and among the Company,
RGH and RIC (incorporated by reference to
Exhibit B to Appendix A to the Company's
Definitive Proxy Statement filed with the
Securities and Exchange Commission on
January 29, 1998).
3 Registration Rights Agreement, dated as of
February 27, 1998, by and between the Company
and RIC (incorporated by reference to
Exhibit A to Appendix A to the Company's
definitive Proxy Statement filed with the
Securities and Exchange Commission on January
29, 1998).
4 Articles of Amendment to the Company's
Articles of Incorporation (incorporated by
reference to Appendix B to the Company's
definitive Proxy Statement filed with the
Securities and Exchange Commission on January
29, 1998).
5. Lock-up Letter dated February 24, 1998 from RIC
to Donaldson, Lufkin & Jenrette Securities
Corporation, Furman Selz LLC, Wheat First
Securities, Inc. and Ferris, Baker Watts,
Incorporated.
