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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
(Rule 13d-101)
Under the Securities Exchange Act of 1934
RELIANCE GROUP HOLDINGS, INC.
(Name of Issuer)
COMMON STOCK, $0.10 PAR VALUE 75946410
(Title of class of securities) (CUSIP number)
JOSEPH A. ORLANDO
LEUCADIA NATIONAL CORPORATION
315 PARK AVENUE SOUTH
NEW YORK, NEW YORK 10010
(212) 460-1932
(Name, address and telephone number of person authorized to
receive notices and communications)
MAY 25, 2000
(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.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purposes of Section 18 of the Securities Exchange Act of
1934 (the "Exchange Act") or otherwise subject to the liabilities of that
section of the Exchange Act but shall be subject to all other provisions of the
Exchange Act.
(Continued on following pages)
(Page 1 of 9 pages)
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NY2:\917239\03\jnqv03!.DOC\76830.0244
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<TABLE>
<CAPTION>
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CUSIP No. 75946410 13D
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<S> <C>
---------------------- ----------------------------------------------------------- -------------------------------------------------
1 NAME OF REPORTING PERSON: Leucadia National Corporation
S.S. OR I.R.S. IDENTIFICATION NO.
OF ABOVE PERSON:
---------------------- -------------------------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP: (a) [_]
(b) [_]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS: WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e): [_]
---------------------- ----------------------------------------------------------- -------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION: New York
----------------------------------- -------- ---------------------------------------------------- ----------------------------------
NUMBER OF 7 SOLE VOTING POWER: 12,617,830 shares(1)(2)
SHARES
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BENEFICIALLY 8 SHARED VOTING POWER: 38,239,577 shares(2)(3)
OWNED BY
-------- ---------------------------------------------------- ----------------------------------
EACH 9 SOLE DISPOSITIVE POWER: 50,857,407 shares(1)(2)(3)
REPORTING
-------- ---------------------------------------------------- ----------------------------------
PERSON WITH 10 SHARED DISPOSITIVE POWER: N/A
---------------------- -------------------------------------------------------------------------- ----------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY REPORTING PERSON: 50,857,407 shares(1)(2)(3)
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES: [_]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 39.9%(4)
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14 TYPE OF REPORTING PERSON: CO
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</TABLE>
(1) Pursuant to the Stock Option Agreement defined and described in Item 4
hereof, the Reporting Person has the right, under certain circumstances, to
acquire these shares. See Items 4 and 5 herein.
(2) Pursuant to Rule 13d-4 under the Exchange Act, the Reporting Person
disclaims beneficial ownership of these shares.
(3) Pursuant to the Stockholders Agreement and Irrevocable Proxy defined and
described in Item 4 hereof, the Reporting Person has the right to vote these
shares for certain limited purposes and has the right to purchase these shares
upon the occurrence of certain events. Assuming the 38,239,577 shares are
purchased, the Reporting Person would have sole dispositive power over such
shares. See Items 4 and 5 herein.
(4) Pursuant to Rule 13d-3 under the Exchange Act, 12,617,730 shares of Common
Stock deemed to be beneficially owned by the Reporting Person as a result of the
Stock Option Agreement are also deemed to be outstanding for purposes of
computing this percentage. See Item 5 herein.
2
<PAGE>
Item 1. Security and Issuer.
-------------------
This Statement relates to the common stock, $0.10 par value
per share (the "Company Common Stock"), of Reliance Group Holdings, Inc., a
Delaware corporation (the "Company"). The address of the principal executive
office of the Company is 55 East 52nd Street, New York, New York 10055.
Item 2. Identity and Background.
-----------------------
(a)-(c) This Schedule 13D is being filed by Leucadia
National Corporation ("Leucadia").
Leucadia is a New York corporation with its principal
office at 315 Park Avenue South, New York, New York 10010. Leucadia is a
financial services holding company principally engaged in commercial and
personal lines of property and casualty insurance, banking and lending, mining,
real estate activities and manufacturing.
Approximately 34.3% of the outstanding common shares of
Leucadia is beneficially owned (directly and through family members) by Ian M.
Cumming, Chairman of the Board of Directors of Leucadia, and Joseph S.
Steinberg, a director and President of Leucadia (excluding an additional 2.0% of
the common shares of Leucadia beneficially owned by two trusts for the benefit
of Mr. Steinberg's children, as to which Mr. Steinberg disclaims beneficial
ownership). Private charitable foundations independently established by each of
Messrs. Cumming and Steinberg each beneficially own less than one percent of the
outstanding common shares of Leucadia. Mr. Cumming and Mr. Steinberg each
disclaim beneficial ownership of the common shares of Leucadia held by their
respective private charitable foundation.
The following information with respect to each executive
officer and director of Leucadia is set forth in Schedule A hereto: (i) name,
(ii) business address, (iii) citizenship, (iv) present principal occupation or
employment and (v) name of any corporation or other organization in which such
employment is conducted, together with the principal business and address of any
such corporation or organization other than Leucadia for which such information
is set forth above.
(d)-(f) During the last five years, neither Leucadia nor,
to its knowledge, any of the other persons identified pursuant to Paragraphs (a)
through (c) of this Item 2, has been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors) or was a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction as a
result of which such person 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. To the knowledge of Leucadia, each of the individuals
identified pursuant to Paragraphs (a) through (c) of this Item 2 is a United
States citizen.
3
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Item 3. Source and Amount of Funds or Other Consideration.
-------------------------------------------------
The information set forth in response to Item 4 hereof is
specifically incorporated in response to Item 3 hereof.
Item 4. Purpose of the Transaction.
--------------------------
On May 25, 2000. Leucadia, Leucadia Acquisition Corp., a
Delaware corporation and a direct wholly owned subsidiary of Leucadia ("Merger
Sub"), and the Company entered into an Agreement and Plan of Merger dated May
25, 2000 (the "Merger Agreement") pursuant to which, and subject to the
conditions set forth therein, Merger Sub would merge with and into the Company
(the "Merger"), with the Company as the surviving corporation and Merger Sub's
officers and directors at the effective time of the Merger (the "Effective
Time") as the officers and directors of the surviving corporation. As a result
of the Merger, the Company would become a wholly owned subsidiary of Leucadia
and each share of Company Common Stock issued and outstanding at the Effective
Time would be convertible into and exchangeable for the right to receive
0.11059346 of a share of Leucadia common stock, par value $1.00 per share
("Leucadia Common Shares"), subject to anti-dilution adjustment in accordance
with the Merger Agreement.
Pursuant to the Merger Agreement, Leucadia would be
entitled to receive a termination fee of $12.5 million dollars (plus expenses up
to $2 million) from the Company if the Merger Agreement is terminated (i) by
Leucadia or the Company after an Acquisition Proposal (as defined in the Merger
Agreement) has been made or an intention to make an Acquisition Proposal has
been publicly announced and, in either case, the Company's stockholders vote
necessary to authorize the Merger is not received (other than as a result of
Leucadia's voting any shares of Common Stock that it beneficially owns against
the Merger); (ii) by the Company, under certain circumstances, if the Board of
Directors of the Company authorizes the Company, subject to complying with the
terms of the Merger Agreement, to enter into a binding written agreement
concerning a Superior Proposal (as defined in the Merger Agreement); (iii) by
Leucadia, if the Company enters into a binding agreement for a Superior Proposal
or if the Company's Board of Directors withdraws or adversely modifies its
approval or recommendation of, or takes a public position materially
inconsistent with its approval or recommendation of the Merger Agreement and the
transactions contemplated thereby, or fails to reaffirm its recommendation of
the Merger Agreement and the transactions contemplated thereby within five
business days after a written request from Leucadia to do so; or (iv) and,
within 12 months of a termination under certain specified circumstances, the
Company enters into, agrees to, or consummates any Acquisition Proposal. The
Company's obligation to pay the termination fee and reimbursement of expenses is
subject to Leucadia's surrender to the Company of the Company Stock Option
(defined below) or the return to the Company of all shares of Common Stock
received on exercise of the Company Stock Option (upon receipt from the Company
of the exercise price paid for such Common Stock).
4
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The obligations of Leucadia and Merger Sub under the Merger
Agreement are subject to the completion by Leucadia of its due diligence review
of the Company and its subsidiaries, and Leucadia's determination that the
results of such due diligence review are wholly satisfactory to Leucadia in the
sole exercise of its discretion, acting solely in the best interests of Leucadia
as determined by Leucadia's Board of Directors (the "Due Diligence Condition").
Leucadia will have until the expiration of 30 days following the earlier of (i)
June 16, 2000 or (ii) the date on which the Company Disclosure Schedule required
under the Merger Agreement is delivered to Leucadia by the Company, to notify
the Company as to whether the results of its due diligence review are wholly
satisfactory to Leucadia (the "Due Diligence Period"). The Due Diligence
Condition will be deemed satisfied and no longer operable if Leucadia has not
notified the Company of the failure of this condition on or before the
expiration of the Due Diligence Period.
The Merger is also subject to the expiration or early
termination of the waiting period under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, the receipt of any other required
regulatory approvals, the approval of the Merger Agreement by the stockholders
of the Company, and other closing conditions.
To facilitate the consummation of the Merger, the Company
entered into a Stock Option Agreement with Leucadia, dated May 25, 2000 (the
"Stock Option Agreement"), and certain stockholders of the Company listed on
Schedule B hereto (the "Stockholders") entered into a Stockholders Agreement and
Irrevocable Proxy with Leucadia, dated May 25, 2000 (the "Stockholders
Agreement").
Pursuant to the Stock Option Agreement, the Company granted
to Leucadia the irrevocable option (the "Company Stock Option"), pursuant to
which Leucadia has the right, upon the first to occur of the termination of the
Merger Agreement or the satisfaction of the Due Diligence Condition, to purchase
up to 12,617,830 shares of Company Common Stock, or such other higher number of
shares of Company Common Stock as equals 9.9% of the issued and outstanding
shares of Company Common Stock at the time of exercise of the Company Stock
Option, at a price of $2.50, payable in cash. It is anticipated that, should the
Company Stock Option become exercisable and should Leucadia elect to exercise
the Company Stock Option, Leucadia would obtain the exercise price for these
shares from its working capital.
Pursuant to the Stockholders Agreement, the Stockholders
granted to Leucadia the irrevocable option (the "Stockholders Stock Option"),
pursuant to which Leucadia has the right, upon the occurrence of certain events,
to purchase from the Stockholders an aggregate of 38,239,577 (or such greater
number of shares of Common Stock beneficially owned by each Stockholder at the
time of exercise) shares of Company Common Stock (the "Stockholder Shares") at a
price of $2.50 per share, payable in cash. It is anticipated that, should the
Stockholders Stock Option become exercisable and should Leucadia elect to
exercise the Stockholders Stock Option, Leucadia would obtain the exercise price
for such shares from its working capital. The number of shares of Common Stock
beneficially owned by each of the Stockholders is listed on Schedule B hereto.
5
<PAGE>
In addition, pursuant to the Stockholders Agreement, each
Stockholder has agreed to vote in such Stockholder's capacity as a beneficial
owner of Common Stock and not in his capacity as a director of the Company all
of the Stockholder Shares during the period from the date of the Stockholders
Agreement through the first to occur of the Effective Time of the Merger or
termination of the Merger Agreement in accordance with its terms in favor of the
Merger and the transactions contemplated thereby and not to sell, pledge,
encumber, assign or otherwise dispose of any of the Stockholder Shares. In order
to permit Leucadia to exercise these voting rights, the Stockholders granted
Leucadia an irrevocable proxy coupled with an interest (the "Proxy") to vote all
or any part of the Stockholder Shares.
The granting of the Company Stock Option, the Stockholders
Stock Option and the Proxy were negotiated as material terms of the entire
Merger transaction. Leucadia did not pay additional consideration to the Company
or the Stockholders in connection with Leucadia entering into the Stock Option
Agreement or the Stockholders Agreement.
References to, and descriptions of, the Merger, the Merger
Agreement, the Stock Option Agreement and the Stockholders Agreement as set
forth herein are qualified in their entirety by reference to the copies of the
Merger Agreement, the Stock Option Agreement and the Stockholders Agreement,
respectively, included as Exhibits 99.1, 99.2 and 99.3, respectively, to this
Schedule 13D, and are incorporated herein in their entirety where such
references and descriptions appear.
In connection with the Merger, Ian M. Cumming, Chairman of
the Board of Leucadia, and Joseph S. Steinberg, a director and President of
Leucadia, agreed to vote an aggregate of 18,939,991 Leucadia Common Shares in
favor of the issuance of Leucadia Common Shares in the Merger if a Leucadia
shareholder vote is required on the matter, although no such vote is currently
anticipated.
Except as set forth above, Leucadia has no present plans or
intentions which would result in or relate to any of the transactions described
in subparagraphs (a) through (j) of Item 4 of Schedule 13D.
Item 5. Interest in Securities of the Issuer.
------------------------------------
(a)-(b) The information set forth or incorporated by
reference in Items 2, 3, and 4 is incorporated herein by reference.
As a result of the issuance of the Company Stock Option,
Leucadia may be deemed to be the beneficial owner of 12,617,830 shares of the
Common Stock, which would represent approximately 9.9% of the shares of the
Common Stock outstanding after the exercise of the option (based on the number
of shares of the Common Stock outstanding as of May 1, 2000, as set forth in the
Merger Agreement, and treating as outstanding for this purpose the shares of
Common Stock subject to the Company Stock Option).
6
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The Company Stock Option may only be exercised upon the
happening of specific events, none of which has occurred as of the date hereof.
Nothing contained herein shall be deemed to be an admission by Leucadia as to
the beneficial ownership of any shares of Common Stock, and, prior to the
occurrence of any such events, Leucadia disclaims beneficial ownership of all of
the Common Stock subject to the Company Stock Option.
Pursuant to the Stockholders Agreement, Leucadia has shared
power to vote an aggregate of 38,239,577 shares of Common Stock for the limited
purposes described in Item 4 above. In addition, pursuant to the Stockholder
Stock Option, which may only be exercised upon the happening of specific events,
none of which has occurred as of the date hereof, Leucadia may be deemed to be
the beneficial owner of such Common Stock. Such Common Stock represents
approximately 33.3% of the shares of Common Stock outstanding as of May 1, 2000.
Leucadia is not entitled to any rights as a stockholder of the shares of Common
Stock that are subject to the Stockholder Agreement and disclaims beneficial
ownership of the shares of Common Stock which are covered under the Stockholder
Agreement.
Leucadia would have the sole power to vote or direct the vote of and
sole power to dispose or direct the disposition of, all of the shares of Common
Stock that may be acquired upon the exercise of the Company Stock Option and the
Stockholders Stock Option.
(c) Except as disclosed in this Schedule 13D neither
Leucadia, nor, to the best of its knowledge, any of its executive officers or
directors has effected any transaction in any securities of the Company during
the past 60 days.
(d) So long as Leucadia has not purchased shares of Company
Common Stock pursuant to the Options, Leucadia does not have the right to
receive or the power to direct the receipt of dividends from securities covered
by this Statement.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or
Relationships with Respect to Securities of the
Issuer.
-----------------------------------------------
The information set forth or incorporated by reference in
Items 3, 4 and 5 is hereby incorporated herein by reference. Copies of the
Merger Agreement, Stock Option Agreement and Stockholders Agreement are included
as Exhibits 99.1, 99.2 and 99.3, respectively, to this Schedule 13D. Other than
those documents, there are no contracts, arrangements, understandings or
relationships with respect to any securities of the Company (i) among (a)
Leucadia and, to the best of its knowledge, any of the persons identified
pursuant to Item 2 above and (b) any other person.
Item 7. Material to be Filed as Exhibits.
--------------------------------
99.1. Agreement and Plan of Merger, dated May 25, 2000,
among the Company, Leucadia and Merger Sub.
7
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99.2 Stock Option Agreement, dated May 25, 2000, by and
between the Company and Leucadia.
99.3 Stockholders Agreement and Irrevocable Proxy, dated
May 25, 2000, among Leucadia and certain stockholders of the Company.
8
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SIGNATURE
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: June 5, 2000
LEUCADIA NATIONAL CORPORATION
BY: /S/ JOSEPH A. ORLANDO
------------------------------------
Name: JOSEPH A. ORLANDO
Title: Vice President
9
<PAGE>
SCHEDULE A
ADDITIONAL INFORMATION CONCERNING THE REPORTING PERSON
Directors and Executive Officers of the Reporting Person
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Set forth below are the name, business address, present
principal occupation or employment of each director and executive officer of
Leucadia. To the knowledge of such entity, each person listed below is a United
States citizen. Unless otherwise indicated, the business address of each person
named below is c/o Leucadia National Corporation, 315 Park Avenue South, New
York, New York 10010.
<TABLE>
<CAPTION>
Director- Principal Occupation or
Name and Business Address ships Offices Employment
------------------------- ----- ------- ------------------------
<S> <C> <C> <C>
Ian M. Cumming Director Chairman of the Board Chairman of the Board
Leucadia National
Corporation
529 E. South Temple
Salt Lake City, Utah
Joseph S. Steinberg Director President President
Paul M. Dougan Director -- President and Chief Executive
c/o Equity Oil Company Officer of Equity Oil Company (a
10 West 300 South company engaged in oil and gas
Salt Lake City, Utah exploration and production having
an office in Salt Lake City, Utah)
Lawrence D. Glaubinger Director -- Chairman of the Board of Stern &
c/o Stern & Stern Stern Industries (a company
Industries, Inc. engaged in the manufacture and
708 Third Avenue sale of textiles); President of
New York, N.Y. Lawrence Economic Consulting Inc.,
a management consulting firm
James E. Jordan Director -- Private investor
c/o The Jordan Company
767 Fifth Avenue
New York, N.Y. 10153
Jesse Clyde Nichols, III Director -- President of Crimsco, Inc. (a
c/o Crimsco, Inc. holding company for manufacturing
5001 E. 59th St. subsidiaries)
Kansas City, Mo. 64130
Thomas E. Mara -- Executive Vice President and Executive Vice President and
Treasurer Treasurer
<PAGE>
Director- Principal Occupation or
Name and Business Address ships Offices Employment
------------------------- ----- ------- ------------------------
Joseph A. Orlando -- Vice President and Chief Vice President and Chief Financial
Financial Officer Officer
Mark Hornstein -- Vice President Vice President
Barbara L. Lowenthal -- Vice President and Vice President and Comptroller
Comptroller
H. E. Scruggs -- Vice-President Vice-President
</TABLE>
<PAGE>
SCHEDULE B
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Name of No. of
Shareholder Shares
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1. Saul P. Steinberg, on behalf 26,275,053
of Steinberg Family Partners, L.P.
3,000,000
29,275,053
2. Robert M. Steinberg 4,838,840
3. Lynda Jurist 4,125,684
38,239,577 33.33%
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EXHIBIT INDEX
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Exhibit No. Description
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99.1. Agreement and Plan of Merger, dated May 25, 2000, among the
Company, Leucadia and Merger Sub.
99.2 Stock Option Agreement, dated May 25, 2000, by and between the
Company and Leucadia.
99.3 Stockholders Agreement and Irrevocable Proxy, dated May 25, 2000,
among Leucadia and certain stockholders of the Company.
