As filed with the Securities and Exchange Commission November 6, 1997
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
AMERICAN COUNTRY HOLDINGS INC.
(Exact name of registrant as specified in its charter)
Delaware 06-0995978
(State or other jurisdiction of incorporation (I.R.S. employer identification
or organization) no.)
222 N. LaSalle Street 60601-1105
Chicago, Illinois (Zip Code)
(Address of principal executive offices)
1992 Stock Option Plan
(Full title of the plan)
SIDNEY TODRES, ESQ.
Epstein Becker & Green, P.C.
250 Park Avenue
New York, New York 10177
(Name and address of agent for service)
(212) 351-4500
(Telephone number, including area code, of agent for service)
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
===============================================================================================
Proposed Proposed
maximum maximum
Title of securities Amount to be offering price aggregate Amount of
to be registered registered per share(1) offering price(1) registration fee
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<S> <C> <C> <C> <C>
Common Stock, 750,000 shares $2.27 $1,702,500 $516
$.01 par value
===============================================================================================
</TABLE>
(1)Estimated solely for the purpose of calculating the registration
fee, pursuant to Rule 457(h), based on (i) the weighted average exercise price
of $2.24 per share with respect to the 474,000 shares underlying options granted
under the 1992 Stock Option Plan, as amended (the "Plan") and (ii) $2.31 per
share, the average of the high and low sale prices of the Common Stock on the
Nasdaq Stock Market (Small-Cap) on November 3, 1997 with respect to the 276,000
balance of the shares reserved for issuance under the Plan.
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<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Item 1. Plan Information.
Information will be sent or given to employees as specified by
Rule 428(b)(i) and is omitted hereunder in accordance with the Note to Part I of
Form S-8.
Item 2. Registrant Information and Employee Plan Annual Information.
Information will be sent or given to employees as specified by
Rule 428(b)(i) and is omitted hereunder in accordance with the Note to Part I of
Form S-8.
EXPLANATORY NOTE
The Prospectus filed as part of this Registration Statement has
been prepared in accordance with the requirements of Part I of Form S-3 and may
be used for reofferings of Common Stock of American Country Holdings Inc.
(formerly The Western Systems Corp.) acquired by the persons named therein
pursuant to the exercise of stock options under the 1992 Stock Option Plan.
2
<PAGE>
PROSPECTUS
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AMERICAN COUNTRY HOLDINGS INC.
56,000 Shares of Common Stock
($.01 par value)
-----------------
The 56,000 shares of Common Stock, $.01 par value, of American Country
Holdings Inc. (formerly The Western Systems Corp. and hereinafter the "Company")
to which this Prospectus relates (the "Shares") may be sold by C. Scott
Bartlett, Jr., Stuart M. Pellman and Richard O. Starbird (the "Selling
Stockholders"), former directors and, with respect to Mr. Pellman, a former
executive officer, of the Company, from time to time, in transactions on The
Nasdaq Stock Market at prices then prevailing, or in negotiated transactions at
negotiated prices, or a combination thereof. The Shares were purchased by the
Selling Stockholders upon exercise of stock options granted under the Company's
1992 Stock Option Plan (the "Plan"). See "Selling Stockholders."
The Common Stock is traded on The Nasdaq Stock Market's SmallCap Market
under the symbol "ACHI." On November 5, 1997, the closing price of the Common
Stock, as reported by The Nasdaq Stock Market, was $2.25 per share.
-----------------
See "Investment Considerations" for a discussion of certain factors that
should be considered by prospective purchasers of the Shares offered hereby.
-----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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The date of this Prospectus is November 6, 1997.
<PAGE>
No dealer, salesman, or any other person has been authorized to give any
information or to make any representations other than those contained in this
Prospectus in connection with the offering herein contained and, if given or
made, such information or representations must not be relied upon as having been
authorized by the Company or the Selling Stockholders. This Prospectus does not
constitute an offer to sell, or a solicitation of an offer to buy, the
securities offered hereby in any jurisdiction to any person to whom it is
unlawful to make an offer or solicitation. Neither the delivery of this
Prospectus nor any sale made hereunder shall, under any circumstances, create an
implication that there has been no change in the facts herein set forth since
the date hereof.
-----------------
AVAILABLE INFORMATION
The Company is subject to the reporting requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files periodic reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such material can be
inspected and copied at the regional offices of the Commission at 7 World Trade
Center, Suite 1300, New York, New York 10048, and at Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago Illinois 60661-2511. This material can also
be inspected and copied at and, upon written request, copies obtained at
prescribed rates from, the Public Reference Section of the Commission at Room
1024 at its principal office, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549. Additionally, the Company files such reports, proxy
statements and other information electronically with the Commission pursuant to
the EDGAR system. The Commission maintains a Web site that contains reports,
proxy and information statements and other information regarding registrants
that file pursuant to the EDGAR system. The address of the Commission's Web site
is http:/www.sec.gov.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents (or portions thereof) which have heretofore been
filed by the Company with the Commission are hereby incorporated by reference in
this Registration Statement:
1. The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1996;
2. The Company's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1997 and June 30, 1997, respectively.
3. The Company's definitive Proxy Statement dated June 27, 1997 for its
July 25, 1997 Special Meeting in lieu of the Annual Meeting of
Stockholders (the "Definitive Proxy Statement").
4. The Company's Current Reports on Form 8-K filed on July 31, 1997 (as
amended on Form 8-K/A on August 11, 1997) and August 14, 1997.
All reports and proxy statements filed by the Company with the Commission
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act after the
date of this Prospectus and prior to termination of the offering of the Shares
to which this Prospectus relates shall likewise be deemed incorporated herein
and made a constituent part hereof by reference from their respective dates of
filing.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any subsequently filed document that is also incorporated by reference
herein modifies
2
<PAGE>
or replaces such statement. Any statements so modified or superseded shall not
be deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
Upon oral or written request, the Company will provide without charge a
copy of any document incorporated in this Prospectus by reference, exclusive of
exhibits, to each person to whom this Prospectus is delivered. Requests for such
documents should be directed to the Chief Financial Officer of the Company, 222
N. LaSalle Street, Chicago, Illinois 60601 (telephone no. (312) 456-2000.
THE COMPANY
This Prospectus contains forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933, as amended (the "Securities Act")
and Section 21E of the Exchange Act, which are not historical facts,
and involve risks and uncertainties that could cause actual results to differ
materially from those expected or projected. Such risks and uncertainties
include, but are not limited to, the factors set forth under the caption
"Investment Considerations" herein.
On July 29, 1997, the Company, through two newly-organized wholly-owned
subsidiaries acquired substantially all assets and assumed substantially all
liabilities of American Country Insurance Company ("American Country") and
its wholly-owned subsidiary, American Country Financial Services Corp., for cash
of $40,250,000 (the "Acquisition"), pursuant to an asset purchase agreement
dated April 30, 1997. Financing for the Acquisition was provided by the
Company's cash on hand of approximately $8,890,000, approximately $26,700,000
from the sale by the Company of 24,001,029 shares of its Common Stock and the
balance from a bank under a revolving credit facility described below.
On July 29, 1997, the Company obtained a five-year, $7,000,000 revolving
loan credit facility from The First National Bank of Chicago, and on such date
borrowed $6,800,000 ($2,000,000 of which was repaid on such date) at an initial
interest rate of 8 1/2% per annum which was converted, at the Company's option,
on August 1, 1997 to an interest rate based upon Eurodollar rates, equal to an
interest rate of 7 1/2% per annum through December 1, 1997, payable quarterly.
The initial borrowing was to fund a portion of the $40,250,000 purchase price
for the Acquisition. The maximum $7,000,000 credit facility is required to be
reduced by $2,333,333 on July 29, 2000 and by an additional $2,333,333 by July
29, 2001.
Also on July 29, 1997, the Company issued 24,001,029 shares of its
Common Stock to three investors for an aggregate of approximately $26,700,000 to
fund a portion of the $40,250,000 purchase price for the Acquisition.
For financial reporting purposes, the Acquisition has been accounted for as
a reverse acquisition. Accordingly, financial statements for the Company for the
periods prior to July 29, 1997 will become those of American Country. The
historical financial statements of American Country included in the Definitive
Proxy Statement, which is incorporated herein and is a constituent part of this
Prospectus, will change as a result of the reverse acquisition as follows: (i)
Certain account balances within the historical statement of stockholders' equity
will be reclassified but the total amount of stockholders' equity will remain
unchanged, and (ii) the number of shares of common stock and common stock
equivalents outstanding will be restated and, accordingly, earnings per share
will be restated; however, net income will not change. The restated earnings per
share balances will be consistent with the pro forma earnings per share
information included in the Definitive Proxy Statement.
American Country is a property and casualty insurance company, domiciled
in the State of Illinois, which underwrites and markets commercial, specialty
and personal lines of insurance. Commercial lines, principally workers'
compensation, multi-peril, and auto and physical damage, accounted for
approximately 47% of American Country's direct premiums written in 1996, and the
related policies were marketed, inter alia, to artisan contractors and
distributors, restaurants and transportation companies. Specialty lines,
principally liability and collision coverage for taxicabs and limousine
companies in the City of Chicago and surrounding suburbs, accounted for
approximately 39% of American Country's 1996 direct written premiums, and
personal lines, primarily auto and home owners' policies, accounted for the
balance. American Country Financial Services Corp. operates principally as a
premium finance company.
3
<PAGE>
The Company was incorporated under the laws of the State of Delaware on
May 30, 1978. The Company's executive offices are located at 222 N. LaSalle
Street, Chicago, Illinois 60601 (telephone no. (312) 456-2000).
INVESTMENT CONSIDERATIONS
Prospective purchasers of the Shares offered hereby should carefully
consider the following investment considerations:
Regulation
American Country is subject to regulation and supervision by the
insurance commissioners of the States of Illinois, Indiana, Michigan and
Wisconsin. Such regulation generally is designed to protect policyholders rather
than investors and relates to such matters as the standards of solvency which
must be met and maintained; the licensing of insurers and their agents; the
nature of and examination of the affairs of insurance companies, which includes
periodic market conduct examinations by the regulatory authorities; annual and
other reports, prepared on a statutory accounting basis, required to be filed on
the financial condition of insurers or for other purposes; establishment and
maintenance of reserves for unearned premiums and losses; and requirements
regarding numerous other matters. American Country must file all rates for
insurance directly underwritten with the applicable state insurance departments.
Reinsurance generally is not subject to rate regulation. Further, state
insurance statutes place limitations on the amount of dividends or other
distributions payable by insurance companies in order to protect their solvency.
The National Association of Insurance Commissioners ("NAIC") has
established eleven financial ratios to assist state insurance department in
their oversight of the financial condition of insurance companies operating in
their respective states. The NAIC calculates these ratios based on information
submitted by insurers on an annual basis and shares the information with the
applicable state insurance departments. The ratios relate to leverage,
profitability, liquidity and loss reserve development.
In their ongoing effort to improve solvency regulation, the NAIC and
individual states have enacted certain laws and statutory-basis financial
statement reporting requirements. For example, NAIC rules require audited
statutory financial statements as well as actuarial certification of loss and
loss adjustment expense reserves therein. Other activities are focused
on greater disclosure of an insurer's reliance on reinsurance, changes in its
reinsurance programs and accounting for certain overdue reinsurance. In
addition, the NAIC has implemented risk-based capital requirements for property
and casualty insurance companies commencing in 1995 (see below). These
regulatory initiatives and the over all focus on solvency may intensify the
restructuring and consolidation of the insurance industry. It is also possible
that Congress may enact legislation regulating the insurance industry. While the
impact of these regulatory efforts on American Country's operations cannot be
quantified until enacted, American Country believes it will be adequately
positioned to compete in an environment of more stringent regulation.
In 1994, the NAIC implemented a risk-based capital measurement formula
to be applied, commencing in 1995, to all property/casualty insurance companies,
which formula calculates a minimum required statutory net worth based on the
underwriting, investment, credit loss reserve and other business risks
applicable to the insurance company's operations. An insurance company that does
not meet threshold risk-based capital measurement standards could be required to
reduce the scope of its operations and ultimately could become subject to
statutory receivership or other similar proceedings. As at December 31, 1996,
American Country exceeded the risk-based capital requirements.
4
<PAGE>
Competition
The property and casualty insurance business is highly competitive,
principally in terms of price and extent of coverage. Many insurance carriers
are submitting applications for admission to the states in which American
Country markets its insurance coverage.
In response, American Country will continue to focus on marketing to
specialty niches including transportation, artisan contractors and upscale
restaurants, areas in which American Country's personnel have extensive
experience. American Country has the largest market share of property and
casualty insurance coverage for the taxicab market in the Chicago Metropolitan
area. Competitors for taxicab liability coverage in Chicago and the surrounding
area include Merit Insurance Company and Acceptance Insurance Company. American
Country competes with CNA Insurance Company, West Bend Insurance Company and
Fremont Insurance Company with respect to workers' compensation coverage.
Adequacy of Loss Reserves
The liabilities for unpaid losses and loss adjustment expenses are
estimated by management utilizing methods and procedures which they believe are
reasonable. These liabilities are necessarily subject the impact of future
changes in claim severity and frequency, as well as numerous other factors.
Although management believes that the estimated liabilities for losses and loss
adjustment expenses are reasonable, because of the extended period of time over
which such losses are reported and settled, the subsequent development of these
liabilities may not conform to the assumptions inherent in their determination
and, accordingly, may vary significantly from the estimated amounts included in
the accompanying financial statements. To the extent that the actual emerging
loss experience varies from the assumptions used in the determination of these
liabilities, the liabilities are adjusted to reflect actual experience. Such
adjustments, to the extent they occur, are reported in the period recognized.
Ratings
Increased public and regulatory concerns with the financial stability of
insurers have resulted in greater emphasis by policyholders upon insurance
company ratings, with a resultant potential competitive advantage for carriers
with higher ratings. American Country currently is rated A- (Excellent) by A.M.
Best. In addition, S&P has given American Country an Insurer Claims-Paying
Ability Rating of BBBq (Adequate). There can be no assurance, however, that
American Country will maintain its ratings; any downgrade could materially
adversely affect its operations. A.M. Best's and S&P's ratings are based on an
analysis of the financial condition and operations of an insurance company as
they relate to the industry in general, are not designed for the protection of
investors and do not constitute recommendations to buy, sell or hold any
security.
Dependence on Management
The Company is dependent upon its executive management and upon its
ability to attract and retain qualified employees.
5
<PAGE>
Fluctuations in Industry Results
The financial results of property and casualty insurers historically
have been subject to significant fluctuations. Profitability is affected
significantly by volatile and unpredictable developments (including
catastrophes), changes in loss reserves resulting from changing legal
environments as different types of claims arise and judicial interpretations
develop relating to the scope of insurers' liability, fluctuations in interest
rates and other changes in the investment environment which affect returns on
invested capital, and inflationary pressures that affect the size of losses.
Further, underwriting results have been cyclical in the property and casualty
insurance industry, with protracted periods of overcapacity adversely impacting
premium rates, resulting in higher combined ratios, followed by periods of
undercapacity and escalating premium rates, resulting in lower combined ratios.
Dependence on Investment Income
American Country, similar to other property and casualty insurance
companies, depends on income from its investment portfolio for a substantial
portion of its earnings. A significant decline in investment yields could have a
material adverse effect on American Country's financial results.
6
<PAGE>
SELLING STOCKHOLDERS
The following table sets forth certain information with respect to the
beneficial ownership of the Company's Common Stock by the Selling Stockholders
prior to and after this offering, assuming all of the Shares being offered are
sold:
<TABLE>
<CAPTION>
After Offering
-------------------------------------
Shares Owned Shares Percent of
Name Prior to Offering Being Offered Shares Owned Outstanding(1)
---- ----------------- ------------- ------------ --------------
<S> <C> <C> <C> <C>
C. Scott Bartlett, 69,281(2) 20,000 49,281 *
Stuart M. Pellman 548,979(3) 30,000 518,979 1.6%
Richard O. Starbird 96,292(4) 6,000 90,292 *
</TABLE>
- ---------------------
* Less than 1%.
(1) Based on 31,937,815 shares of Common Stock outstanding on October 29,
1997.
(2) Includes (i) 2,517 shares held jointly with Mr. Bartlett's spouse, (ii)
16,000 shares subject to options and (iii) 12,881 shares underlying
Warrants held jointly with Mr. Bartlett's spouse.
(3) Includes (i) 257,500 shares subject to options and (ii) 143,145 shares
held by an individual retirement account of which Mr. Pellman is the
beneficiary (including 19,322 shares underlying Warrants).
(4) Includes 10,000 shares subject to options.
Mr. Pellman served as President and Chief Executive Officer and a
director of the Company, and Messrs. Bartlett and Starbird served as directors
of the Company, for at least three years through and until July 25, 1997.
DESCRIPTION OF SECURITIES
The Company is authorized to issue 60,000,000 shares of Common Stock,
$.01 par value, and 2,000,000 shares of Preferred Stock, $.10 par value.
Common Stock
The holders of outstanding shares of Common Stock are entitled to share
ratably on a share-for-share basis with respect to any dividends when, as and if
declared by the Board of Directors out of funds legally available therefor. Each
holder of Common Stock is entitled to one vote for each share held of record.
The Common Stock is not entitled to conversion or preemptive rights and is not
subject to redemption. Upon liquidation, dissolution or winding up of the
Company, the holders of Common Stock are entitled to share ratably in the net
assets legally available for distribution. All outstanding shares of Common
Stock are fully paid and nonassessable.
7
<PAGE>
Preferred Stock
The Preferred Stock may be issued from time to time without stockholder
approval in one or more classes or series, and the Board of Directors is
authorized to fix the dividend rights, dividend rates, any conversion rights or
rights of exchange, any voting rights, rights and terms or redemption (including
sinking fund provisions), the redemption price or prices, the liquidation
preferences and any other rights, preferences, privileges and restrictions of
any class or series of Preferred Stock, the number of shares constituting such
class or series and the designation thereof. The shares of any class or series
of Preferred Stock need not be identical. Depending upon the rights of such
Preferred Stock, the issuance of Preferred Stock could have an adverse effect on
holders of Common Stock by delaying or preventing a change in control of the
Company, making removal of the present management more difficult or resulting in
restrictions upon the payment of dividends and other distributions to the
holders of Common Stock. There are currently no shares of Preferred Stock
outstanding.
Warrants
Each Common Stock Purchase Warrant ("Warrant") entitles the registered
holder to purchase 2.19 shares of Common Stock at an exercise price of $1.83 per
share, subject to adjustment, at any time prior to the close of business on
December 31, 1997, subject to earlier redemption. The Warrants are redeemable by
the Company on 30 days' prior written notice at a redemption price of $1.00 per
Warrant provided the average of the closing bid prices of the Company's Common
Stock for 30 trading days exceeds $5.00 per share. All Warrants must be redeemed
if any are redeemed. Warrants that are not redeemed and are unexercised upon
expiration will be exchanged for shares of Common Stock in the ratio of one
share of Common Stock for 500 expired Warrants. Upon notice to the
Warrantholders, the Company has the right to reduce the exercise price or extend
the expiration date of the Warrants.
The exercise price of the Warrants and the number and kind of shares of
Common Stock or other securities and property issuable upon exercise of the
Warrants are subject to adjustment in certain circumstances, including a stock
split of, stock dividend on, or a subdivision, combination or capitalization of,
the Common Stock or the sale of Common Stock at less than the market price of
the Common Stock. The 2.19 shares of Common Stock issuable upon exercise of a
Warrant and the exercise price of $1.83 per Share give effect to an adjustment
resulting from the issuance by the Company of 24,001,029 shares of its Common
Stock for $26,700,000 in July 1997.
The Warrants have been issued pursuant to a warrant agreement between
the Company and American Stock Transfer & Trust Company, the warrant agent (the
"Warrant Agent"), and are evidenced by warrant certificates in registered form.
The Warrants do not confer upon the holder any voting or any other rights of a
shareholder of the Company.
The Warrants may be exercised upon surrender of the Warrant certificate
evidencing such Warrants on or prior to the respective expiration date (or
earlier redemption date) of such Warrants at the offices of the Warrant Agent
with the form of "Election to Purchase" on the reverse side of the Warrant
certificate completed and executed as indicated, accompanied by payment of the
full exercise price (by certified check payable to the order of the Warrant
Agent) for the number of Warrants being exercised.
8
<PAGE>
Transfer Agent and Warrant Agent
American Stock Transfer & Trust Company, New York, New York, is the
transfer and warrant agent for the Common Stock and Warrants.
PLAN OF DISTRIBUTION
All sales of Shares by the Selling Stockholders will be made from time
to time in transactions on The Nasdaq Stock Market at prices then prevailing, or
in negotiated transactions at negotiated prices, or a combination thereof.
The cost of registering the Shares under the Securities Act, estimated
at $5,000, will be paid by the Company.
The Selling Stockholders and any dealer participating in the
distribution of any of the Shares or any broker executing selling orders on
behalf of the Selling Stockholders may be deemed to be "underwriters" within the
meaning of the Securities Act, in which event any profit on the sale of any or
all of the Shares by them and any discounts or commissions received by any such
brokers or dealers may be deemed to be underwriting discounts and commissions
under the Securities Act. Furthermore, any broker or dealer participating in any
distribution of the Shares will be required to deliver a copy of this
Prospectus, including a Prospectus Supplement, if required, to any person who
purchases any of the Shares from or through such broker or dealer.
In order to comply with the securities laws of certain states, if
applicable, the Shares will be sold only through registered or licensed brokers
or dealers. In addition, in certain states, the Shares may not be sold unless
they have been registered or qualified for sale in such state or an exemption
from such registration or qualification requirement is available and is complied
with.
LEGAL MATTERS
The validity of the Shares offered hereby has been passed upon for the
Company by Epstein Becker & Green, P.C., New York, New York.
EXPERTS
The financial statements incorporated in this Prospectus by reference
from the Company's Annual Report on Form 10-K for the year ended December 31,
1996 have been audited by Lazar, Levine & Company LLP, independent auditors, as
stated in their reports, which are incorporated herein by reference, and have
been so incorporated in reliance upon such reports given upon the authority of
such firm as experts in accounting and auditing.
The consolidated financial statements of American Country at
December 31, 1996 and 1995, and for each of the three years in the period ending
December 31, 1996 appearing in the Company's definitive Proxy Statement dated
June 27, 1997, have been audited by Ernst & Young LLP, independent auditors, as
set forth in their report thereon included therein and incorporated herein by
reference. Such consolidated financial statements are incorporated herein by
reference in reliance upon such report given upon the authority of such firm as
experts in accounting and auditing.
9
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents (or portions thereof) which have
heretofore been filed by American Country Holdings Inc. (the "Registrant") with
the Securities and Exchange Commission (the "Commission") are hereby
incorporated by reference in this Registration Statement: (i) the Registrant's
Annual Report on Form 10-K for the fiscal year ended December 31, 1996, (ii) the
Registrant's Quarterly Reports on Form 10-Q for the quarters ended March 31,
1996 and June 30, 1996, respectively, (iii) the Definitive Proxy Statement, and
(iv) the Registrant's Current Reports on Form 8-K filed on July 31, 1997 (as
amended on Form 8-K/A on August 11, 1997) and August 14, 1997, respectively. All
reports and proxy statements filed by the Registrant with the Commission
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act after the
date of this Registration Statement and prior to the filing of a post-effective
amendment which indicates that all of the shares to which this Registration
Statement relates have been sold or which deregisters all of the shares then
remaining unsold shall likewise be deemed incorporated herein and made a
constituent part hereof by reference from the respective dates of the filings.
Item 4. Description of Securities.
The Registrant is authorized to issue 60,000,000 shares of Common Stock,
$.01 par value, and 2,000,000 shares of Preferred Stock, $.10 par value.
Common Stock
The holders of outstanding shares of Common Stock are entitled to share
ratably on a share-for-share basis with respect to any dividends when, as and if
declared by the Board of Directors out of funds legally available therefor. Each
holder of Common Stock is entitled to one vote for each share held of record.
The Common Stock is not entitled to conversion or preemptive rights and is not
subject to redemption. Upon liquidation, dissolution or winding up of the
Registrant, the holders of Common Stock are entitled to share ratably in the net
assets legally available for distribution. All outstanding shares of Common
Stock are fully paid and nonassessable.
Preferred Stock
The Preferred Stock may be issued from time to time without stockholder
approval in one or more classes or series, and the Board of Directors is
authorized to fix the dividend rights, dividend rates, any conversion rights or
rights of exchange, any voting rights, rights and terms or redemption (including
sinking fund provisions), the redemption price or prices, the liquidation
preferences and any other rights, preferences, privileges and restrictions of
any class or series of Preferred Stock, the number of shares constituting such
class or series and the designation thereof. The shares of any class or series
of Preferred Stock need not be identical. Depending upon the rights of such
preferred Stock, the issuance of Preferred Stock could have an adverse effect on
holders of Common Stock by delaying or preventing a change in control of the
Company, making removal of the present management more difficult or resulting in
restrictions upon the payment of
II-1
<PAGE>
dividends and other distributions to the holders of Common Stock. There are
currently no shares of Preferred Stock outstanding.
Warrants
Each Common Stock Purchase Warrant ("Warrant") entitles the registered
holder to purchase 2.19 shares of Common Stock at an exercise price of $1.83 per
share, subject to adjustment, at any time prior to the close of business on
December 31, 1997, subject to earlier redemption. The Warrants are redeemable by
the Registrant on 30 days' prior written notice at a redemption price of $1.00
per Warrant provided the average of the closing bid prices of the Registrant's
Common Stock for 30 trading days exceeds $5.00 per share. All Warrants must be
redeemed if any are redeemed. Warrants that are not redeemed and are unexercised
upon expiration will be exchanged for shares of Common Stock in the ratio of one
share of Common Stock for 500 expired Warrants. Upon notice to the
Warrantholders, the Registrant has the right to reduce the exercise price or
extend the expiration date of the Warrants.
The exercise price of the Warrants and the number and kind of shares of
Common Stock or other securities and property issuable upon exercise of the
Warrants are subject to adjustment in certain circumstances, including a stock
split of, stock dividend on, or a subdivision, combination or capitalization of,
the Common Stock or the sale of Common Stock at less than the market price of
the Common Stock. The 2.19 shares of Common Stock issuable upon exercise of a
Warrant and the exercise price of $1.83 per Share give effect to an adjustment
resulting from the issuance by the Registrant of 24,001,029 shares of its Common
Stock for $26,700,000 in July 1997.
The Warrants have been issued pursuant to a warrant agreement between
the Registrant and American Stock Transfer & Trust Company, the warrant agent
(the "Warrant Agent"), and are evidenced by warrant certificates in registered
form. The Warrants do not confer upon the holder any voting or any other rights
of a shareholder of the Registrant.
The Warrants may be exercised upon surrender of the Warrant certificate
evidencing such Warrants on or prior to the respective expiration date (or
earlier redemption date) of such Warrants at the offices of the Warrant Agent
with the form of "Election to Purchase" on the reverse side of the Warrant
certificate completed and executed as indicated, accompanied by payment of the
full exercise price (by certified check payable to the order of the Warrant
Agent) for the number of Warrants being exercised.
Transfer Agent and Warrant Agent
American Stock Transfer & Trust Company, New York, New York, is the
transfer and warrant agent for the Common Stock and Warrants.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
II-2
<PAGE>
Item 6. Indemnification of Directors and Officers.
Section 145 of the Delaware General Corporation Law grants
corporations the power to indemnify their directors, officers, employees and
agents in accordance with the provisions thereof. Article EIGHTH of the
Registrant's Amended and Restated Certificate of Incorporation and Article VII,
Section 7 of the Registrant's By-Laws, as amended, provide for indemnification
of the Registrant's directors, officers, agents and employees to the fullest
extent permissible under applicable law.
Item 7. Exemption from Registration Claimed.
The Shares to be reoffered by the Selling Stockholders pursuant
to this Registration Statement were issued by the Registrant to the Selling
Stockholders upon the Selling Stockholders' respective exercises of stock
options under the Plan. Such issuances were exempt from the registration
requirements of the Securities Act under Section 4(2) thereof.
Item 8. Exhibits.
The following are filed as exhibits to this Registration
Statement:
Exhibit
No. Description
-------- -----------
5 - Opinion of Epstein Becker & Green, P.C.
10.1 - Copy of the Registrant's 1992 Stock Option Plan
(as amended through March 26, 1997)(1)
23(a) - Consent of Lazar, Levine & Company LLP.
23(b) - Consent of Ernst & Young LLP.
23(c) - Consent of Epstein Becker & Green, P.C.
(included in Exhibit 5).
24 - Power of Attorney (included in signature page of this
Registration Statement).
- ------------------------
(1) Filed as same numbered exhibit to the Registrant's Annual Report on Form
10-K for the year ended December 31, 1996 and incorporated herein by
reference thereto.
Item 9. Undertakings
The undersigned Registrant hereby undertakes:
(1) To file, during any 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;
II-3
<PAGE>
ii) to reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or
the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the Registration
Statement; and
iii) to include any material information with respect to the
plan of distribution not previously disclosed in this
Registration Statement or any material change to such
information in this Registration Statement;
provided, however, that paragraphs (1)(i) and (1)(ii) above do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant pursuant to
Section 13 or Section 15(d) of the Exchange Act that are incorporated by
reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, 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.
The undersigned Registrant hereby undertakes that, for purposes
of determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in this 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.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers or controlling persons of
the Registrant pursuant to the provisions of Registrant's Restated Certificate
of Incorporation or By-Laws, as amended, or the provisions of the Delaware
General Corporation Law or otherwise, the Registrant has been advised that in
the opinion of the Commission such indemnification is against public policy as
expressed in the Securities 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
Securities Act and will be governed by the final adjudication of such issue.
II-4
<PAGE>
POWER OF ATTORNEY TO SIGN AMENDMENTS
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below does hereby constitute and appoint Martin L. Solomon and Edwin W.
Elder, and each of them, with full power to act without the other, his true and
lawful attorney-in-fact and agent for him and in his name, place and stead, in
any and all capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission and any other regulatory authority, granting
unto said attorneys-in-fact and agents, and each of them, full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises in order to effectuate the same, as fully,
for all intents and purposes, as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or any of
them, may lawfully do or cause to be done by virtue hereof.
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 City of Chicago, State of Illinois, on this 3rd day of
November, 1997.
AMERICAN COUNTRY HOLDINGS INC.
By: /s/ Edwin W. Elder
---------------------------------------
Edwin W. Elder, Executive Vice President
and Chief Operating Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities set forth and on the date indicated.
Signature Title Date
/s/ Martin L. Solomon President, Chairman of the November 3, 1997
- -------------------------- Board, Chief Executive Officer
Martin L. Solomon and Director (Principal
Executive Officer)
/s/ Edwin W. Elder Executive Vice President,
- -------------------------- Chief Operating Officer and November 3, 1997
Edwin W. Elder Director
/s/ James P. Byrne Treasurer, Chief Financial November 3, 1997
- -------------------------- Officer and Vice President
James P. Byrne (Principal Financial and
Accounting Officer)
/s/ William J. Barrett Director November 3, 1997
- --------------------------
William J. Barrett
/s/ Herbert M. Gardner Director November 3, 1997
- --------------------------
Herbert M. Gardner
/s/ Wilmer J. Thomas, Jr. Director November 3, 1997
- --------------------------
Wilmer J. Thomas, Jr.
/s/ Peter H. Foley Director November 3, 1997
- --------------------------
Peter H. Foley
II-5
<PAGE>
INDEX TO EXHIBITS
Exhibit Page
No. Description Number
- ------
5 Opinion of Epstein Becker & Green, P.C.
10.1 Copy of the Registrant's 1992 Stock Option Plan
(as amended through March 26, 1997)(1)
23(a) Consent of Lazar, Levine & Company LLP.
23(b) Consent of Ernst & Young LLP.
23(c) Consent of Epstein Becker & Green, P.C.
(included in Exhibit 5).
24 Power of Attorney (included in signature page of this
Registration Statement).
- --------------------
(1) Included as same numbered exhibit to Registrant's Annual Report on Form
10-K for the year ended December 31, 1996 and incorporated herein by
reference thereto.
II-6
EXHIBIT 5
EPSTEIN BECKER & GREEN, P.C.
250 Park Avenue
New York, New York 10177-0077
(212) 351-4735
November 4, 1997
The Board of Directors of
American Country Holdings Inc.
222 N. LaSalle Street
Chicago, Illinois 60601
Re: 1992 Stock Option Plan
Gentlemen:
We have acted as counsel to American Country Holdings Inc.
(formerly The Western Systems Corp. and hereinafter the "Company") in connection
with its filing of a Registration Statement on Form S-8 (the "Registration
Statement") covering an aggregate of 750,000 shares (the "Shares") of the
Company's authorized shares of Common Stock, $.01 par value, consisting of
694,000 Shares (the "Unissued Shares") issuable upon exercise of options granted
or to be granted under the Company's 1992 Stock Option Plan (the "Plan") and
56,000 Shares issued upon exercise of stock options granted under the Plan (the
"Issued Shares").
As such counsel, we have examined original copies, or copies
certified to our satisfaction, of the corporate records of the Company,
agreements and other instruments, certificates of public officials and such
other documents as we deemed necessary as a basis for the opinion hereinafter
set forth.
On the basis of the foregoing, we are of the opinion that the
Shares have been validly authorized and that the Issued Shares are, and the
Unissued Shares, when issued upon due and valid exercise of options granted
under the Plan will be, validly issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion as an exhibit to
the aforesaid Registration Statement.
Very truly yours,
EPSTEIN BECKER & GREEN, P.C.
By: /s/ Sidney Todres
---------------------------------------------
Sidney Todres
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the registration statement on
Form S-8 of American Country Holdings Inc. (formerly The Western Systems Corp.
and hereinafter the "Company") of our report dated March 12, 1997 relating to
the consolidated balance sheets of the Company as of December 31, 1996 and
December 31, 1995 and the related consolidated statements of operations, changes
in shareholders' equity and cash flows for each of the years in the three-year
period ended December 31, 1996, included in the Company's annual report on Form
10-K for the fiscal year ended December 31, 1996. We also consent to the
reference to our firm under the caption "Experts" in the Prospectus.
LAZAR, LEVINE & COMPANY LLP
New York, New York
November 3, 1997
Consent of Ernst & Young LLP, Independent Auditors
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-8) pertaining to the 1992 Stock Option Plan of
American Country Holdings Inc. and to the incorporation by reference therein of
our report dated March 7, 1997, except as to Note 1, as to which the date is
May 1, 1997, with respect to the consolidated financial statements of American
Country Insurance Company at December 31, 1996 and 1995, and for each of the
three years in the period ended December 31, 1996 included in American Country
Holdings Inc. definitive Proxy Statement dated June 27, 1997, filed with the
Securities and Exchange Commission.
ERNST & YOUNG LLP
November 4, 1997
Chicago, Illinois
