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The record date of the Special Meeting is earlier than both the date of the Special Meeting andthe date that the Merger is expected to be completed. If you transfer your shares of common stockafter the record date but before the Special Meeting, you will retain the right to vote at the SpecialMeeting, but you will have transferred the right to receive the Merger consideration. In order toreceive the Merger consideration, you must beneficially own your shares of common stock throughcompletion of the Merger.Required VoteEach outstanding share of the Company’s common stock on the record date entitles the holder toone (1) vote at the Special Meeting. Completion of the Merger requires, among other conditions, theadoption of the Merger Agreement by the affirmative vote of a majority of the issued and outstandingshares of the Company’s common stock as of the close of business on the record date.In order for your shares of the Company’s common stock to be included in the vote, you mustsubmit your proxy by returning the enclosed proxy card, or by telephone or through the Internet byfollowing the instructions included with your proxy card, or you must vote in person at the SpecialMeeting. If you hold your shares through a broker or other nominee, you may receive separate votinginstructions with the proxy statement from your broker or nominee. Your broker or nominee mayprovide proxy submission through the Internet or by telephone. Please contact your broker or nomineeto determine how to vote.Because Harleysville Mutual has agreed in the Voting Agreement to vote its shares of commonstock of the Company in favor of the proposal to adopt the Merger Agreement, unless the VotingAgreement has been terminated as a result of the termination of the Merger Agreement, the vote ofno stockholder other than Harleysville Mutual is required to adopt the Merger Agreement, and theMerger Agreement will be adopted at the Special Meeting.Voting by Proxy; Revocability of ProxyEach copy of this proxy statement mailed to our stockholders is accompanied by a form of proxyand a self-addressed envelope. Instead of attending the Special Meeting and voting your shares inperson, you may choose to submit your proxies by any of the following methods:• Voting by Mail. If you choose to vote by mail, simply complete the enclosed proxy card, dateand sign it, and return it in the postage-paid envelope provided. If you intend to submit yourproxy by mail it must be received by us prior to the commencement of voting at the SpecialMeeting. If you sign your proxy card and return it without marking any voting instructions, yourshares will be voted ‘‘FOR’’ the proposal to adopt the Merger Agreement, and ‘‘FOR’’ theproposal to approve, on a non-binding advisory basis, compensation that may be paid or becomepayable to our named executive officers that is based on or otherwise relates to the Merger.• Voting by Telephone. You can vote your shares by telephone by calling the toll-free telephonenumber provided on the proxy card. Telephone voting is available 24 hours a day, and theprocedures are designed to authenticate votes cast by using the personal control number locatedon your proxy card. If you vote by telephone, you should not return your proxy card. If yousubmit your later-dated proxy by telephone you must do so no later than 11:59 p.m. (E.S.T.) onApril 23, 2012.• Voting by Internet. You can also vote on the Internet by signing on to the website identified onthe proxy card and following the procedures described on the website. Internet voting isavailable 24 hours a day, and the procedures are designed to authenticate votes cast by using apersonal control number located on your proxy card. If you vote on the Internet, you should not20
eturn your proxy card. If you submit your later-dated proxy by Internet you must do so no laterthan 11:59 p.m. (E.S.T.) on April 23, 2012.If you hold your shares through a broker or other nominee, you should follow the separate votinginstructions, if any, provided by the broker or other nominee with the proxy statement. Your broker ornominee may provide proxy submissions through the Internet or by telephone. Please contact yourbroker or nominee to determine how to vote.You can revoke your proxy at any time before the vote is taken at the Special Meeting. If you donot hold your shares through a broker or other nominee, you may revoke your proxy before the proxyis voted by:• Submitting a later-dated proxy by mail, over the telephone, or through the Internet.• Sending a written notice, including by facsimile or electronic mail, to the Secretary of theCompany. You must send any written notice of a revocation of a proxy so as to be deliveredbefore the taking of the vote at the Special Meeting to:Harleysville Group Inc.355 Maple AvenueHarleysville, Pennsylvania 19438Facsimile: (215) 256-5631Attention: Robert A. KauffmanEmail: rkauffman@harleysvillegroup.com• Attending the Special Meeting and voting in person. Your attendance at the Special Meeting willnot in and of itself revoke your proxy. You must also vote your shares at the Special Meeting. Ifyour shares are held in the name of a bank, broker or other holder of record, you must obtain aproxy, executed in your favor, from the institution that holds your shares to be able to vote atthe Special Meeting.If your shares are held in ‘‘street name,’’ you should follow the instructions of your broker ornominee regarding the revocation of proxies. If your broker or nominee allows you to submit a proxyby telephone or through the Internet, you may be able to change your vote by submitting a proxy againby telephone or through the Internet.All shares of the Company’s common stock represented by valid, unrevoked proxies we receivethrough this solicitation will be voted in accordance with your instructions on the proxy card. If youvote your shares by telephone or through the Internet, your shares will be voted at the Special Meetingas instructed.If other matters do properly come before the Special Meeting, or at any adjournment orpostponement thereof, we intend that shares of the Company’s common stock represented by properlysubmitted proxies will be voted, or not voted, by and at the discretion of the persons named as proxieson the proxy card. In addition, the grant of a proxy will confer discretionary authority on the personsnamed as proxies on the proxy card to vote in accordance with their best judgment on proceduralmatters incidental to the conduct of the Special Meeting, such as a motion to adjourn or postpone inthe absence of a quorum or a motion to adjourn or postpone for other reasons.PLEASE DO NOT SEND IN SHARE CERTIFICATES WITH THE PROXY CARD. If theMerger is completed, stockholders of record will receive a letter of transmittal with instructionsinforming them how to send in any share certificates to the exchange agent in order to receive thestockholder’s cash payment. Stockholders should use the letter of transmittal to exchange sharecertificates for the cash payment to which they are entitled as a result of the Merger.21
Page 2: Harleysville Group Inc. Stockholder
Page 5 and 6: TABLE OF CONTENTSSUMMARY TERM SHEET
Page 7 and 8: SUMMARY TERM SHEETExcept as otherwi
Page 9 and 10: February 29, 2012, there were 27,27
Page 11 and 12: non-binding advisory basis, the gol
Page 13 and 14: Opinion of Keefe, Bruyette & Woods,
Page 15 and 16: Governmental and Regulatory Approva
Page 17 and 18: QUESTIONS AND ANSWERS ABOUT THE SPE
Page 19 and 20: Q. Is any other vote required befor
Page 21 and 22: not apply to the proposal to approv
Page 23 and 24: Q: What happens if the Merger is no
Page 25: We undertake no obligation to publi
Page 29 and 30: Stockholder Voting AgreementIn conn
Page 31 and 32: Harleysville Mutual and their respe
Page 33 and 34: confidential discussions with other
Page 35 and 36: synergies between the companies and
Page 37 and 38: Mutual. At the end of the call, Cre
Page 39 and 40: advisors. He also indicated that Ha
Page 41 and 42: as to the fairness of the considera
Page 43 and 44: stockholders. Credit Suisse then re
Page 45 and 46: In addition, on September 28, 2011,
Page 47 and 48: closing of the Mergers, including t
Page 49 and 50: The foregoing discussion of factors
Page 51 and 52: Management Financial Projections fo
Page 53 and 54: did not independently verify the ac
Page 55 and 56: Selected Publicly Traded Companies
Page 57 and 58: most recent quarter-end prior to th
Page 59 and 60: Historical Premiums Paid AnalysisKB
Page 61 and 62: ordinary income tax rates in effect
Page 63 and 64: Trade Commission under the HSR Act
Page 65 and 66: The following table identifies the
Page 67 and 68: stock, the aggregate number of shar
Page 69 and 70: directors’ and officers’ liabil
Page 71 and 72: occurring during the retention peri
Page 73 and 74: to the extent unvested as of April
Page 75 and 76: Program for that performance period
Page 77 and 78:
under the Harleysville Mutual Assum
Page 79 and 80:
should be executed by or for all jo
Page 81 and 82:
including a request that the court
Page 83 and 84:
A. Andrew Tignanelli v. W. Thacher
Page 85 and 86:
oard of directors from performing i
Page 87 and 88:
Effect of the MergerAt the effectiv
Page 89 and 90:
No consideration will be paid to st
Page 91 and 92:
• accuracy of information contain
Page 93 and 94:
• receipt by Nationwide Mutual’
Page 95 and 96:
affecting investment assets of us o
Page 97 and 98:
e made pursuant to existing contrac
Page 99 and 100:
No Solicitations by the CompanyUnde
Page 101 and 102:
defined in the Merger Agreement) to
Page 103 and 104:
• between the date of the Merger
Page 105 and 106:
Termination Fee if the Mergers Are
Page 107 and 108:
MARKET PRICE OF THE SHARES OF THE C
Page 109 and 110:
SHAREHOLDINGS OF DIRECTORS AND MANA
Page 111 and 112:
If you have questions about the Spe
Page 113 and 114:
TABLE OF CONTENTSARTICLE I DEFINITI
Page 115 and 116:
Section 7.12 Retention of Executive
Page 117 and 118:
membership interests, by contract,
Page 119 and 120:
‘‘Delaware Certificate of Merge
Page 121 and 122:
avoidance of doubt, Harleysville De
Page 123 and 124:
‘‘IRCA’’ means the Immigrat
Page 125 and 126:
‘‘Order’’ means an order, i
Page 127 and 128:
corporation) of which is beneficial
Page 129 and 130:
Nationwide Mutual and will have the
Page 131 and 132:
Section 3.2 HGI Stock Options and R
Page 133 and 134:
(e) Promptly following the date tha
Page 135 and 136:
have been made available to Nationw
Page 137 and 138:
execution and delivery of this Agre
Page 139 and 140:
Person the right to enjoin or resci
Page 141 and 142:
listing on any list maintained by a
Page 143 and 144:
accordance with their terms. Harley
Page 145 and 146:
facility or assigned risk pool. To
Page 147 and 148:
Section 4.20 Intellectual Property.
Page 149 and 150:
ARTICLE VREPRESENTATIONS AND WARRAN
Page 151 and 152:
are set forth in Section 5.2(b) of
Page 153 and 154:
development involving a prospective
Page 155 and 156:
(b) Except as set forth in Section
Page 157 and 158:
extent that it is a party thereto,
Page 159 and 160:
Section 5.15 Cancellations. Except
Page 161 and 162:
(d) Except as set forth in Section
Page 163 and 164:
agreements, information on the basi
Page 165 and 166:
Section 5.21 Rating Agencies. Excep
Page 167 and 168:
Agreement, the Mergers, the Voting
Page 169 and 170:
Agreement with and the approval of
Page 171 and 172:
Producers wrote, sold or produced s
Page 173 and 174:
(o) Brokers or Finders. No broker,
Page 175 and 176:
ARTICLE VIICOVENANTSSection 7.1 Har
Page 177 and 178:
(i) Except as set forth in Section
Page 179 and 180:
(w) Neither of the Harleysville Par
Page 181 and 182:
Notwithstanding anything to the con
Page 183 and 184:
(c) the receipt by such Party of an
Page 185 and 186:
of any nature whatsoever and, speci
Page 187 and 188:
Section 8.2 Stockholder Meeting and
Page 189 and 190:
Section 9.2 Conditions to Obligatio
Page 191 and 192:
(c) by any of the Harleysville Part
Page 193 and 194:
or related to the authorization, pr
Page 195 and 196:
allow the other Parties a reasonabl
Page 197 and 198:
IN WITNESS WHEREOF, Nationwide Mutu
Page 199 and 200:
In connection with this opinion, we
Page 201 and 202:
APPENDIX CGENERAL CORPORATION LAW O
Page 203 and 204:
either notice that such notice has
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You are cordially invited to attend a special meeting (the âSpecial