<PAGE>
As filed with the Securities and Exchange Commission on _______________, 1996
Registration No. 33-______
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------------
PROVIDENT AMERICAN CORPORATION
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Pennsylvania 23-2214195
- ------------------------------- -----------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.
2500 DeKalb Pike, Norristown, Pennsylvania 19404
- ------------------------------------------ -----------------
(Address of principal executive offices) (Zip Code)
PROVIDENT AMERICAN CORPORATION STOCK OPTION PLAN FOR DIRECTORS
(Formerly known as "Provident American Corporation Stock Option Plan
for Field Representatives and Directors" and as the "Non-Qualified
Stock Option Plan")
PROVIDENT AMERICAN CORPORATION 1996 EMPLOYEE INCENTIVE STOCK OPTION PLAN
PROVIDENT AMERICAN CORPORATION 1996 INCENTIVE STOCK OPTION PLAN
FOR LIFE AND HEALTH INSURANCE AGENTS
(Full title of the plans)
Alvin H. Clemens
Chief Executive Officer
Provident American Corporation
2500 DeKalb Pike, P.O. Box 511
Norristown, Pennsylvania 19404-0511
- -------------------------------------------------------------------------------
(Name and address of agent for service)
(610) 279-2500
- -------------------------------------------------------------------------------
(Telephone number, including area code, of agent for service)
Copy to:
Michael F. Beausang, Jr., Esquire
Butera, Beausang, Cohen & Brennan
630 Freedom Business Center, Suite 212
King of Prussia, Pennsylvania 19406
<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title of Amount Proposed maximum Proposed maximum Amount of
securities to to be offering price aggregate offering registration
be registered registered per share price fee
- ------------- ---------- ---------------- ----------------- -------
<S> <C> <C> <C> <C>
Common Stock, $.10 par value, issuable:
Upon exercise of options under the 356,500 shs.\1 $ 9.8955\2 $ 3,527,750 $1,069.02
Provident American Corporation Stock
Option Plan for Directors
Upon exercise of options under the 950,000 shs. $10.3747\3 $ 9,855,938 $2,986.65
Provident American Corporation 1996
Employee Incentive Stock Option Plan
Upon exercise of options under the 500,000 shs. $10.7512\4 $ 5,375,600 $1,628.97
Provident American Corporation 1996
Incentive Stock Option Plan for Life
and Health Insurance Agents
Total 1,806,500 shs. $10.3843 $18,759,288 $5,684.64
---------------- --------- ------------ ---------
</TABLE>
- --------
1 Additional shares being registered hereby; 585,000 shares have already
been registered under the Plan pursuant to two Form S-8 Registration
Statements filed with the Securities and Exchange Commission on October
6, 1989 (as amended on April 18, 1991) and on October 28, 1991.
2 Options have been granted for 175,000 shares. Pursuant to Rule 457(h),
the registration fee for these shares has been calculated upon the basis
of the price at which they may be exercised - 175,000 shares at $8.75.
The registration fee for the remaining 181,500 shares has been computed
on the basis of $11 per share, the average of the high and low sales
prices of the Common Stock of the Company on the NASDAQ National Market
System on November 5, 1996.
3 Options have been granted for 125,000 shares. Pursuant to Rule 457(h),
the registration fee for these shares has been calculated upon the basis
of the price at which they may be exercised - 110,000 shares at $6.00,
and 15,000 shares at $8.06250. The registration fee for the remaining
825,000 shares has been computed on the basis of $11 per share, the
average of the high and low sales prices of the Common Stock of the
Company on the NASDAQ National Market System on November 5, 1996.
4 Options have been granted for 31,100 shares. Pursuant to Rule 457(h),
the registration fee for these shares has been calculated upon the basis
of the price at which they may be exercised - 31,100 shares at $7.00.
The registration fee for the remaining 468,900 shares has been computed
on the basis of $11 per share, the average of the high and low sales
prices of the Common Stock of the Company on the NASDAQ National Market
System on November 5, 1996.
<PAGE>
Cross Reference Sheet
Pursuant to Item 501(b) of Regulation S-K
Item Number and Caption Heading in Prospectus
- ----------------------- ---------------------
1. Plan Information *
2. Registrant Information and Employee *
Plan Annual Information
- -------------------
* Omitted because no Prospectus is being filed herewith. All information
required in the Section 10(a) Prospectus will be furnished to Plan Participants
pursuant to Rule 428 under the Securities Act of 1933.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents filed with the Commission (unless otherwise
noted) are incorporated herein by reference:
(a) The Annual Report on Form 10-K of Provident American Corporation
(the "Registrant") for the Fiscal Year ended December 31, 1995 as filed by the
Registrant with the Securities and Exchange Commission (the "Commission")
pursuant to Section 13(a) of the Securities Exchange Act of 1934 ("Exchange
Act"). The Registrant's Form 10-Q Reports for the Quarters ended September 30,
1995, March 31, 1996 and June 30, 1996, filed by the Registrant with the
Commission pursuant to Section 13(a) of the Exchange Act. The Registrant's Rule
424(b) Prospectus (not required to be filed with the Commission).
(b) The Registrant's definitive proxy statement or information
statement, if any, filed pursuant to Section 14 of the Exchange Act in
connection with the latest annual meeting of its shareholders and any definitive
proxy or information statements so filed in connection with any subsequent
special meetings of its shareholders.
(c) The Provident American Corporation Stock Option Plan for Directors
as filed by the Registrant with the Commission on October 6, 1989 and by
amendments thereto filed on April 18, 1991 and October 28, 1991.
(d) The description of the Registrant's Common Stock set forth in the
Registrant's Registration Statements on Form S-1 (Registration Nos. 33-5884 and
33-40842) filed pursuant to the Act, including any amendment or report filed for
the purpose of updating such description.
(e) All other reports filed pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Registration Statement
in each case filed by the Registrant prior to the termination of the offering of
the securities offered hereby, shall be deemed to be incorporated by reference
in this Registration Statement and to be a part hereof from the date of filing
of such reports and documents. Any statement contained in a document
incorporated or deemed to be incorporated herein by reference shall be deemed to
be modified or superseded for the purposes of this Registration Statement to the
extent that a statement contained herein or in any other subsequently filed
document, which also is or is deemed to be incorporated herein by reference,
modifies or supersedes such statement. Any statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a part
of this Registration Statement.
Item 4. Description of Securities.
Not required.
<PAGE>
Item 5. Interests of Named Experts and Counsel.
The legality of the securities being offered under the Plans has been
passed upon by Michael F. Beausang, Jr. for Butera, Beausang, Cohen & Brennan.
As of September 30, 1996, the members of the firm of Butera, Beausang, Cohen &
Brennan owned either beneficially or of record 57,175 shares of the Registrant's
outstanding Common Stock and 24,750 shares of the Registrant's Series A
Cumulative Convertible Preferred Stock.
The consolidated financial statements of the Registrant and supplemental
schedules thereto incorporated by reference in this Registration Statement, to
the extent and for the periods as indicated in those financial statements and
schedules, have been audited by Coopers & Lybrand L.L.P, independent
accountants, as indicated in their reports with respect thereto, which are
incorporated herein by reference, and have been so incorporated in reliance upon
the authority of that firm as experts in accounting and auditing.
Item 6. Indemnification of Directors and Officers
Sections 1741-1743 of the Pennsylvania Business Corporation Law of 1988,
as amended (the "BCL"), the law of the state in which the Registrant is
organized, requires a corporation, subject to limitations, to indemnify its
officers and directors against expenses, including attorneys' fees, judgments,
fines and certain settlements, actually and reasonably incurred by them in any
suit or proceeding to which they are parties, as long as they acted in good
faith and in a manner they reasonably believed to be in, or not opposed to, the
best interests of the corporation, and with respect to a criminal action or
proceeding, as long as they had no reasonable cause to believe their conduct to
be unlawful. The Registrant's By-laws provide that the Registrant shall
indemnify the Registrant's officers and directors against expenses, including
attorneys' fees, judgments, fines and amounts paid in settlement, actually and
reasonably incurred by them in any action or proceeding, whether criminal,
civil, administrative or investigative, to which they are a party, except in any
case where the act or failure to act giving rise to the claim for
indemnification is determined by a court to have constituted willful misconduct
or recklessness.
The By-laws of the Registrant also contain certain provisions, permitted
by the BCL, which eliminate the personal liability of directors of the
Registrant to others, including the Registrant and the Registrant's
shareholders, for money damages relating to any action taken or omitted to be
taken by the director, unless the director breached or failed to perform his
duties in good faith, in a manner he reasonably believed to be in the best
interests of the Registrant and with such care, including reasonable inquiry,
skill and diligence, as a person of ordinary prudence would use under similar
circumstances, and such failure constituted self-dealing, willful misconduct or
recklessness. In effect, the By-laws eliminate the liability of the Registrant's
directors for negligent and grossly negligent business decisions. Such
elimination of directors' monetary liability limits the ability of the
Registrant and the Registrant's shareholders to bring claims against directors
of the Registrant.
<PAGE>
The Registrant maintains an insurance policy that insures the
Registrant's officers and directors against losses arising from claims brought
against them for any negligent act, error, omission, breach of duty,
misstatement or other act while acting in their capacity as officers or
directors. The policy includes certain standard coverage exclusions and
deductibles.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
(4.1) Amendment and Restatement of Provident American Corporation
Stock Option Plan for Directors
(4.2) Provident American Corporation 1996 Employee Incentive Stock
Option Plan
(4.3) Provident American Corporation 1996 Incentive Stock Option Plan
for Life and Health Insurance Agents
(5.1) Opinion of Butera, Beausang, Cohen & Brennan
(24.1) Consent of Butera, Beausang, Cohen & Brennan (included in
their opinion filed as Exhibit 5.1.)
(24.2) Consent of Coopers & Lybrand L.L.P
Item 9. Undertakings.
Rule 415 Offering.
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 of 1933, as amended ("Securities Act");
(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;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement;
<PAGE>
Provided, however, that paragraphs (1)(i) and (1)(ii) 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.
Subsequent Exchange Act Documents.
The undersigned Registrant hereby undertakes that, for the purpose of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to section 13(a) of section 15(d) of the
Exchange Act that is incorporated by reference in the Registration Statement
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
Indemnification.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant, 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.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
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 Norristown, Pennsylvania on this 30th day of October, 1996.
PROVIDENT AMERICAN CORPORATION
By: /s/ Alvin H. Clemens
------------------------------------
Alvin H. Clemens
Chairman of the Board and Chief
Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement or Amendment has been signed below by the following
persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signatures Title Date
---------- ----- ----
<S> <C> <C>
/s/ Alvin H. Clemens Chairman of the Board, October 30, 1996
- ------------------------------- Chief Executive
Alvin H. Clemens Officer and Director
/s/ James O. Bowles
- ------------------------------- President October 30, 1996
James O. Bowles
/s/ Anthony R. Verdi
- ------------------------------- Treasurer and Chief October 30, 1996
Anthony R. Verdi Financial Officer
(and Chief Accounting Officer)
/s/ Michael F. Beausang, Jr.
- ------------------------------- Director October 30, 1996
Michael F. Beausang, Jr.
/s/ Valerie A. Crooker Clemens
- ------------------------------- Director October 30, 1996
Valerie A. Crooker Clemens
/s/ Harold M. Davis
- ------------------------------- Director October 30, 1996
Harold M. Davis
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Signatures Title Date
---------- ----- ----
<S> <C> <C>
/s/ John T. Gillin
- ------------------------------- Director October 30, 1996
John T. Gillin
/s/ P. Glenn Moyer
- ------------------------------- Director October 30, 1996
P. Glenn Moyer
/s/ George W. Karr, Jr.
- ------------------------------- Director October 30, 1996
George W. Karr, Jr.
/s/ Henry G. Hager
- ------------------------------- Director October 30, 1996
Henry G. Hager
</TABLE>
<PAGE>
EXHIBIT INDEX
(Pursuant to Item 601 of Regulation S-K)
Sequential
Exhibit No. Description Page No.
----------- ----------- ----------
4.1 Amendment and Restatement of Provident
American Corporation Stock Option Plan
for Directors
4.2 Provident American Corporation 1996
Employee Incentive Stock Option Plan
4.3 Provident American Corporation 1996
Incentive Stock Option Plan for Life
and Health Insurance Agents
5.1 Opinion of Butera, Beausang, Cohen &
Brennan
24.1 Consent of Butera, Beausang, Cohen &
Brennan (included in Exhibit 5.1)
24.2 Consent of Coopers & Lybrand L.L.P.
<PAGE>
EXHIBIT 4.1
AMENDMENT AND RESTATEMENT OF THE
PROVIDENT AMERICAN CORPORATION
STOCK OPTION PLAN FOR DIRECTORS
This amendment and restatement of the Provident American Corporation
Stock Option Plan for Directors is effected as of the date set forth herein.
BACKGROUND
A. PROVIDENT AMERICAN CORPORATION, a Pennsylvania corporation
(hereinafter called "PAMCO"), maintains the Provident American Corporation Stock
Option Plan for Directors (formerly known as the Stock Option Plan for Field
Sales Representatives and Directors) dated January 25, 1985 (the "Plan").
B. Pursuant to Section 9 of the Plan, PAMCO has reserved the right to
amend the Plan at any time with the approval of either the Board of Directors or
the shareholders of PAMCO, provided such amendment does not prejudice the rights
of any optionee with respect to the shares covered by his option.
C. PAMCO now desires to amend and restate the Plan to incorporate prior
amendments to the Plan, to increase the number of shares which may be optioned
and sold under the Plan, to extend the term of the Plan, and to change the term
and certain conditions for the exercise of the options issued pursuant to the
Plan.
NOW THEREFORE, the Plan is hereby amended and restated as
follows:
PROVIDENT AMERICAN CORPORATION
STOCK OPTION PLAN FOR DIRECTORS
1. Purpose of the Plan.
The purpose of this Stock Option Plan for Directors
("Plan") is to afford an incentive to Directors of Provident American
Corporation ("PAMCO") and its subsidiaries and affiliates (collectively,
the "Company") to acquire a proprietary interest in PAMCO and to enable
the Company to attract and retain such key persons as Directors.
2. The Stock.
Except as provided in Section 7, the number of shares of
stock which may be optioned and sold under the Plan is 1,000,000
<PAGE>
shares of Common Stock, $.10 par value, of PAMCO ("Shares"). If options
granted under this Plan shall expire or terminate for any reason without
having been exercised in full, the unpurchased Shares subject thereto
shall again be available for the granting of options under this Plan.
Shares which are the subject of options to purchase may be made
available from authorized and unissued stock or from treasury stock.
3. Eligibility.
An option shall be granted only to a person who at the
time of the grant is a Director of the Company. The Board of Directors
of PAMCO (the "Board"), based upon the recommendation of the Committee
designated pursuant to Section 8 hereof (the "Committee"), shall
determine from time-to-time the persons to whom options shall be granted
and the number of Shares subject to each option.
4. Price.
The price at which Shares may be purchased upon exercise
of each option ("option price") shall be fixed by the Board at the time
of the grant of such option and shall not be less than 100% of the fair
market value of the stock at the time the option is granted. The Board
shall, in good faith, determine the fair market value of the stock based
upon a reasonable method of valuation adopted by the Board or the
Committee. In no event shall the option price be less than the par value
of the Shares. The Board will use its best efforts to determine the fair
market value of the Shares subject to the option, but neither the Board
nor the Company will be responsible for the payment of any tax which may
be imposed upon the participants, nor will they reimburse participants
for their payment of any tax so imposed. Neither the Company, the Board,
nor the Committee, nor any member thereof, makes or shall make any
representation or warranty to any participant regarding the consequences
or effects of participation in the Plan of federal or state income tax
or any other purpose.
Nothing contained in this Plan or in any option agreement
issued hereunder shall impose any liability or responsibility on the
Company, the Board, the Committee, or any member of either of the
foregoing to pay or reimburse any participant for the payment of any tax
arising out of, or on account of, the issuance of an option or options
hereunder to any participant, a participant's exercise of any option
issued under this Plan, or a participant's sale, transfer, or other
disposition of any Shares acquired pursuant to the exercise of an option
issued hereunder. Any person receiving an option hereunder shall
expressly acknowledge and agree that such participation is voluntary and
that the participant will be solely responsible for all taxes to which
he or she may be or become subject as a consequence of such
participation.
-2-
<PAGE>
5. Option Terms.
a. Subject to the provisions and limitations of this Plan,
and subject to applicable securities, tax, and other laws and
regulations, options may be granted at such time or times and pursuant
to such terms and conditions as may be determined by the Board during
the period this Plan is in effect.
b. Each option, which shall become exercisable in
accordance with its terms, must be exercised within ten (10) years after
the date on which it first becomes exercisable, and may not be exercised
in full or in part after the expiration of ten (10) years from the date
such option is granted. Unless otherwise provided in the option
agreement, any unvested portion of the option shall terminate upon the
optionee's resignation as a Director prior to two (2) years from the
date of grant of the option.
c. No new stock option granted to an optionee under the
Plan ("new option") shall be exercisable while there is outstanding, in
whole or in part, any stock option which option was granted to such
person before the granting of the new option to purchase stock in PAMCO
or in a corporation which (at the time of granting of such option) is a
subsidiary or affiliate corporation of PAMCO or in a predecessor
corporation of any such corporations.
d. Shares to be purchased upon the exercise of any option
shall be paid for, in full, in cash or by certified check payable to the
order of PAMCO or by the wire transfer of funds to PAMCO's bank account,
and delivered to PAMCO at the time of such exercise.
e. Each option granted under the Plan shall be evidenced
by a form of option agreement issued by PAMCO to the optionee. The Board
shall initially make all decisions as to the form of the option
agreement, and all forms of option agreements shall contain such
provisions, restrictions, and conditions as are not inconsistent with
this Plan, but need not be identical. The provisions of this Plan shall
be set forth in full or incorporated by reference in each form of option
agreement.
f. In the event an optionee resigns as a Director prior to
two (2) years from the date of grant of an option, any portion of the
option which has not become exercisable on such date shall terminate.
6. Transferability.
Any option granted hereunder shall be freely transferable
by the optionee, by presentation of the Option at the principal office
of PAMCO, properly endorsed for transfer, provided the transferee agrees
to be bound by the terms and conditions of the form of option agreement.
In the event an option is transferred, the owner agrees by holding the
-3-
<PAGE>
option that when endorsed in blank, the option may be deemed negotiable
and the owner may be treated by PAMCO and all other persons dealing with
the option as the absolute owner thereof for any purpose, and as the
party entitled to exercise the rights represented by the option, or to
the transfer thereof on the books of PAMCO, any notice to the contrary
notwithstanding. The form of an Option is exchangeable upon its
surrender by the owner at the principal office of PAMCO for a new option
of like tenor representing in the aggregate the right to purchase the
number of Shares purchasable under the option being exchanged, each such
new option to represent the right to purchase such number of Shares as
shall be designated by the owner at the time of surrender, but not to
exceed in the aggregate the number of Shares subject hereto.
7. Stock Dividends or Recapitalization.
In the event of a stock dividend paid in shares of the
class of stock subject to any option outstanding hereunder, or
capitalization, reclassification, split-up or combination of shares with
respect to said class of stock, the Committee shall make appropriate
adjustments to the option price under such option and to the kind and
number of shares as to which such option is then exercisable, so that
the optionee's proportionate interest shall be maintained as before the
occurrence of such event, and in any case an appropriate adjustment
shall also be made to the total number and kind of Shares of stock
reserved for the future granting of options under this Plan. Any such
adjustment made by the Committee pursuant to this Plan shall be binding
upon the holders of all unexpired options outstanding hereunder.
8. Administration of the Plan.
This Plan shall be administered by the Board of PAMCO. The
Executive Committee ("Committee"), consisting of three (3) or more
members of the Board, shall be elected from time to time by a majority
of the entire Board and shall make recommendations periodically to the
Board with respect to criteria for participation in the Plan, the extent
of their participation, and the form and content of the options to be
granted. Options shall be granted only by the Board, which shall provide
the form and content of the options to be granted, including such
provisions and conditions, in addition to those included in this Plan,
as the Board shall determine to be advisable; provided, however, that no
such additional provisions or conditions shall be inconsistent with the
provisions of this Plan. The Board or the Committee shall be authorized
to interpret the Plan, to prescribe, amend and rescind rules and
regulations relating to it, and to make all other determinations
necessary or appropriate for its administration.
9. Effective Date; Duration of the Plan; Amendments.
The Plan shall become effective upon adoption by the
-4-
<PAGE>
Board. Unless sooner terminated, the Plan shall expire on December 31,
2012. The Plan may be altered, suspended, discontinued or terminated at
any time by the approval of either the Board or the shareholders of
PAMCO. Nothing contained herein shall be construed to permit a
termination, modification, or amendment adversely affecting the rights
of any optionee under an existing option theretofore granted without
the consent of such optionee.
The amendments set forth herein shall be effective as of July 16, 1996,
and as herein amended and restated, the Plan shall continue in full force effect
and is hereby ratified, approved, and affirmed.
-5-
<PAGE>
EXHIBIT 4.2
PROVIDENT AMERICAN CORPORATION
1996 EMPLOYEE INCENTIVE STOCK OPTION PLAN
1. Purpose of the Plan.
The purpose of this 1996 Employee Incentive Stock Option Plan
("Plan") is to afford an incentive to key employees of Provident American
Corporation ("PAMCO") and its affiliates and subsidiaries (collectively "the
Company"), to acquire a proprietary interest in PAMCO and to enable the Company
to attract and retain such key employees.
2. The Stock
Except as provided in Section 7 hereof, the number of shares of
stock which may be optioned and sold under the Plan is 950,000 shares of Common
Stock, $.10 par value, of PAMCO (the 950,000 shares or any portion thereof shall
hereinafter be referred to as "Shares"). If options granted under this Plan
shall expire or terminate for any reason without having been exercised in full,
the unpurchased Shares subject thereto shall again be available for the granting
of options under this Plan. Shares which are the subject of options to purchase
may be made available from authorized and unissued stock or from treasury stock.
3. Eligibility
An option shall be granted only to a person who at the time of
the grant is a key employee of the Company. The term "key employee" shall mean
an employee (including officers) who has responsibility for the management,
administration, or support of the management or administration of the Company.
The Company's Board of Directors (the "Board"), based upon the recommendation of
the Committee (defined in Section 8 hereof), shall determine from time to time
the key employees to whom options shall be granted, any criteria for such
options, the number of Shares subject to each option, the exercise price of the
option, such restrictions on exercise as are permitted under Section 422 of the
Internal Revenue Code of 1986, as it may be amended from time to time (the
"Code"), and the other terms and conditions thereof. An option shall not be
granted to any employee who owns, directly or indirectly, more than ten percent
(10%) of the total combined voting power of all classes of stock of the Company,
unless such option shall satisfy the special rules set forth in Section
422A(c)(8) of the Code for the grant of an incentive stock option to such a
10-percent shareholder. For purposes of this provision, ownership of stock in
the Company shall be determined under Section 425(d) of the Code.
4. Price
The price at which Shares may be purchased upon exercise of each
option ("option price") shall be fixed by the Board at the time of the grant of
such option and shall not be less than 100% of the fair market value of the
<PAGE>
stock at the time the option is granted. The Board shall, in good faith,
determine the fair market value of the stock based upon a reasonable method of
valuation adopted by the Board or the Committee, or such other method as may be
permitted by the Code, or regulations or rulings promulgated thereunder. In no
event shall the option price be less than the par value of the Shares. The Board
will use its best efforts to determine the fair market value of the Shares
subject to the option, but neither the Board nor the Company will be responsible
for the payment of any tax which may be imposed upon the participants, nor will
they reimburse participants for their payment of any tax so imposed. Neither the
Company, the Boards of Directors, the Committee nor any member thereof makes or
shall make any representation or warranty to any participant regarding the
consequences or effects of participation in the Plan for federal or state income
tax or any other purpose.
Nothing contained in this Plan or in any option agreement issued
hereunder shall impose any liability or responsibility on the Company, the
Boards of Directors, the Committee or any member of any of the foregoing to pay
or reimburse any participant for the payment of any tax arising out of, or on
account of the issuance of, an option or options hereunder to any participant, a
participant's exercise of any option issued under this Plan, or a participant's
sale, transfer or other disposition of any Shares acquired pursuant to the
exercise of an option issued hereunder. Any person receiving an option hereunder
shall expressly acknowledge and agree that such participation is voluntary and
that the participant will be solely responsible for all taxes to which he or she
may be or become subject as a consequence of such participation.
5. Option Terms
(a) Subject to the provisions and limitations of this Plan, and
subject to applicable securities, tax and other laws and regulations, options
may be granted at such time or times and pursuant to such terms and conditions
as may be determined by the Board at the recommendation of the Committee during
the period this Plan is in effect.
(b) Each option, which shall become exercisable in accordance
with its terms, must be exercised within five (5) years after the date on which
it first becomes exercisable. Each option shall further provide that it may not
be exercised in full or in part after the expiration of ten (10) years from the
date such option is granted. Unless otherwise provided in the stock option
agreement issued pursuant hereto and except as set forth below, options which
have been granted to an employee will continue to be exercisable only so long as
the optionee remains an employee of the Company. Notwithstanding anything to the
contrary contained in this Section 5, the Board may, in its sole discretion,
accelerate the option exercise period, based upon its evaluation of an
optionee's individual performance.
(c) Any option granted to an employee which, when aggregated with
all other incentive stock options granted after December 31, 1986, to such
employee by the Company, would result in shares having an aggregate fair market
value (determined for each share as of the date of grant of the option covering
such share) in excess of $100,000 becoming first available for purchase upon
exercise of the option during any calendar year shall be deemed to be a
non-statutory stock option and upon the exercise thereof, the gain
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<PAGE>
shall be apportioned accordingly between the gain attributable to the statutory
stock options and the non-statutory stock options in the order in which the
options were granted.
(d) Shares to be purchased upon the exercise of any option shall
be paid for, in full, in cash, by wire transfer of funds to the Company's
account, or by certified check payable to the order of PAMCO. During the three
(3) month period immediately prior to the date the right to exercise an option
expires only, the shares to be purchased upon the exercise of that option may be
purchased with certificates of stock issued by PAMCO, which stock shall be
assigned a fair value by the Board in its discretion, and delivered to PAMCO at
the time of such exercise (including stock which is part of the option being
exercised).
(e) Each option granted under the Plan shall be evidenced by a
stock option agreement between PAMCO and the employee. The Board shall initially
make all decisions as to the form of stock option agreement to be entered into
with each optionee. All forms of stock option agreement shall contain such
provisions, restrictions and conditions as are not inconsistent with this Plan
but need not be identical. The provisions of this Plan shall be set forth in
full or incorporated by reference in each stock option agreement.
(f) In the event an optionee becomes permanently and totally
disabled, dies, retires or otherwise ceases to be employed by the Company for
any reason, including leaves of absence (other than a termination for cause),
such optionee, or the executors, administrators, legatees or distributees of the
estate of the optionee, shall have the right to exercise any option which became
exercisable prior to retirement or cessation of employment but only within a
period of three (3) months from the date of cessation of employment (but in any
event not later than the termination date of the option), after which time any
unexercised portion of all outstanding options shall expire. If the optionee
dies during such three-month period, the executors, administrators, legatees or
distributees of the optionee's estate shall have the right to exercise such
options during the remainder of such period. In the event an option is exercised
by the executors, administrators, legatees or distributees of the estate of the
optionee, PAMCO shall be under no obligation to issue Shares hereunder unless
and until PAMCO is satisfied that the person (or persons) exercising the option
is the duly-appointed legal representative of the optionee's estate or the
proper legatee or distributee thereof. In no event and under no circumstances
may an option be exercised by an employee (or his personal representative) after
termination of the optionee's employment for cause.
6. Non-Transferability
No option granted hereunder shall be transferable by the optionee
other than by will or by the laws of descent and distribution, and options shall
be exercisable, during the optionee's lifetime only by such optionee; provided,
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<PAGE>
however, that in the event an optionee shall be subject to a legal disability,
his legal representative may exercise an option on his behalf.
7. Stock Dividends or Recapitalization
In the event of a stock dividend paid in shares of the class of
stock subject to any option outstanding hereunder, or capitalization,
reclassification, splitup or combination of shares with respect to said class of
stock, the Committee shall make appropriate adjustments to the option price
under such option and to the kind and number of shares as to which such option
is then exercisable, so that the optionee's proportionate interest shall be
maintained as before the occurrence of such event, and in any case an
appropriate adjustment shall also be made to the total number and kind of Shares
of stock reserved for the future granting of options under this Plan. Any such
adjustment made by the Committee pursuant to this Plan shall be binding upon the
holders of all unexpired options outstanding hereunder.
8. Administration of the Plan
This Plan shall be administered by the Board. An Option
Administration Committee ("Committee"), consisting of three (3) or more
employees, shall be elected from time to time by a majority of the entire Board
of Directors and shall make recommendations periodically to the Board with
respect to criteria for key employee participation in the Plan, the extent of
employees' participation, and the form and content of the options to be granted.
Options shall be granted only by the Board, which shall provide the form and
content of the options to be granted, including such provisions, conditions, and
such restrictions on exercise as are permitted under Section 422 of the Code, in
addition to those included in this Plan, as the Board shall determine to be
advisable; provided, however, that no such additional provisions or conditions
shall be inconsistent with the provisions of this Plan. The Board or the
Committee shall be authorized to interpret the Plan, to prescribe, amend and
rescind rules and regulations relating to it, and to make all other
determinations necessary or appropriate for its administration.
9. Effective Date; Duration of the Plan; Amendments
The Plan shall become effective upon adoption by the Board. At
the next regular meeting of the shareholders of PAMCO, which shall be scheduled
and will occur within twelve (12) months following the date of adoption by
PAMCO's Board, this Plan will be presented for consideration and approval by the
shareholders. If this Plan is not approved by the shareholders, this Plan shall
terminate, and all options granted hereunder shall be immediately forfeited.
Unless sooner terminated, the Plan shall expire ten (10) years from the date the
Plan is adopted by the Board. The Plan may be altered, suspended, discontinued
or terminated at any time by the approval of either the Board or the
shareholders of PAMCO. Nothing contained herein shall be construed to permit a
termination, modification, or amendment adversely affecting the rights of any
optionee under an existing option theretofore granted without the consent of
such optionee, except due to non-approval of the Plan by the shareholders.
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<PAGE>
10. General
(a) The provisions of this Plan shall be binding upon and inure
to the benefit of the parties and their respective heirs, executors,
administrators, personal representatives, successors and permitted assigns.
(b) Wherever used herein, the singular shall be deemed to refer
to and include the plural, and vice versa, where appropriate. Wherever used
herein, the masculine shall be deemed to refer to and include the feminine and
the neuter, and vice versa, where appropriate.
(c) The rights of any participant under the Plan shall not be
assignable by the participant and shall not be subject to the rights of
creditors, and any attempt to cause such right to be so subjected shall not be
recognized, except to such extent as may be required by law.
(d) PAMCO, upon notice to participants, at any time or from time
to time, may amend, modify or terminate any or all of the provisions of the Plan
without the consent of any participant. No amendment shall have the effect of
modifying any benefit election of any participant in effect at the time of such
amendment, unless such amendment is made to comply with federal, state or local
laws, statutes or regulations.
(e) This Plan shall not be deemed to constitute a contract
between the Company and any participant or to be a consideration or an
inducement for any contract with any participant. Nothing contained in this Plan
shall be deemed to give any participant the right to be retained in the service
of the Company or to interfere with the right of the Company to terminate any
participant's employment at any time, regardless of the effect which such
termination shall have upon him as a participant of this Plan.
(f) This Plan constitutes the entire agreement between the
Company and the participant relative to the purchase of PAMCO stock. This Plan
is governed by the laws of the Commonwealth of Pennsylvania.
(g) If any provision of the Plan is held invalid or
unenforceable, its invalidity or unenforceability shall not affect any other
provisions of the Plan, and the Plan shall be construed and enforced as if such
provision had not been included herein.
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<PAGE>
EXHIBIT 4.3
PROVIDENT AMERICAN CORPORATION
1996 INCENTIVE STOCK OPTION PLAN
FOR LIFE AND HEALTH INSURANCE AGENTS
1. Purpose of the Plan
The purpose of this 1996 Incentive Stock Option Plan for Life and
Health Insurance Agents ("Plan") is to afford an incentive to life and health
insurance agents, general agents and managing general agents who are licensed
with subsidiaries of Provident American Corporation (the "Company") to acquire a
proprietary interest in the Company and to enable the Company and its
subsidiaries to attract and retain such key persons.
2. The Stock
Except as provided in Section 7, the number of shares of stock
which may be optioned and sold under the Plan is 500,000 shares of Common Stock,
$.10 par value, of the Company (the 500,000 shares or any portion thereof shall
hereinafter be referred to as "Shares"). If options granted under this Plan
shall expire or terminate for any reason without having been exercised in full,
the unpurchased Shares subject thereto shall again be available for the granting
of options under this Plan. Shares which are the subject of options to purchase
may be made available from authorized and unissued stock or from treasury stock.
3. Eligibility
(a) An option may be granted under this Plan to an agent, general
agent or managing general agent ("Agent"), who or which is licensed with
Provident American Life & Health Insurance Company, Provident Indemnity Life
Insurance Company, or any other insurance subsidiary of the Company existing
from time to time (the "Insurance Company"), who or which utilizes the Insurance
Company as the Agent's primary insurance carrier, and acts primarily and
predominantly as an Agent for the Insurance Company ("Full-Time Agent").
(b) The Company's Board of Directors (the "Board"), based upon
the recommendation of the Committee (defined in Section 8 hereof), shall
determine from time to time the Agents to whom options shall be granted, the
number of Shares subject to each option, the exercise price of the option (which
shall not be less than the fair market value on the effective date of the
grant), and the other terms, conditions or restrictions on the right to exercise
an option as are permitted under Section 422 of the Internal Revenue Code of
1986, as it may be amended from time to time (the "Code") and related to
achievement of performance, goals or service with the Insurance Company.
(c) An option shall not be granted to any person who owns
directly or indirectly, more than ten percent (10%) of the total combined voting
power of all classes of stock of the Company or of any subsidiary of the Company
<PAGE>
unless such option shall satisfy the special rules set forth in Section
422(c)(8) of the Code, for the grant of an incentive stock option to such a
10-percent shareholder. For purposes of this provision, ownership of stock in
the Company shall be determined under Section 425(d) of the Code.
4. Price
(a) The price at which Shares may be purchased upon exercise of
each option ("option price") shall be fixed by the Board at the time of the
grant of such option and shall not be less than 100% of the fair market value of
the stock at the time the option is granted. The Board shall, in good faith,
determine the fair market value of the stock based upon a reasonable method of
valuation adopted by the Board or the Committee, or such other method as may be
permitted by the Code, or regulations or rulings promulgated thereunder. In no
event shall the option price be less than the par value of the Shares. The Board
will use its best efforts to determine the fair market value of the Shares
subject to the option, but neither the Board nor the Company will be responsible
for the payment of any tax which may be imposed upon the participants, nor will
they reimburse participants for their payment of any tax so imposed. None of the
Company, the Board, the Committee or any member thereof makes or shall make any
representation or warranty to any participant regarding the consequences or
effects of participation in the Plan for federal or state income tax or any
other purpose.
(b) Nothing contained in this Plan or in any option agreement
issued hereunder shall impose any liability or responsibility on the Company,
the Board of Directors, the Committee, or any member thereof to pay or reimburse
any optionee for the payment of any tax arising out of, or on account of, the
issuance of an option or options hereunder to any optionee, an optionee's
exercise of any option issued under this Plan, or an optionee's sale, transfer
or other disposition of any Shares acquired pursuant to the exercise of an
option issued hereunder. Any person receiving an option hereunder shall
expressly acknowledge and agree that such participation is voluntary and that
the optionee will be solely responsible for all taxes to which he may be or
become subject as a consequence of such participation.
5. Option Terms
(a) Subject to the provisions and limitations of this Plan, and
subject to applicable securities, tax and other laws and regulations, options
may be granted at such time or times and pursuant to such terms and conditions
as may be determined by the Board during the period this Plan is in effect.
(b) Each option, which shall become exercisable in accordance
with its terms, must be exercised within five (5) years after the date on which
it first becomes exercisable. Each option shall further provide that it may not
be exercised in full or in part after the expiration of ten (10) years from the
date such option is granted. Except as set forth below, options which have been
granted to an Agent will continue to be exercisable only so long as the optionee
remains a Full-Time Agent. Notwithstanding anything to the contrary contained in
2
<PAGE>
this Section 5, the Board may, in its sole discretion, accelerate the option
exercise period, based upon its evaluation of an optionee's individual
performance.
(c) Shares to be purchased upon the exercise of any option shall
be paid for, in full, in cash, by wire transfer of funds to the Company's
account, or by certified check payable to the order of the Company.
(d) Each option granted under the Plan shall be evidenced by a
stock option agreement between the Company and the optionee. The Board shall
make all decisions as to the form of stock option agreement to be entered into
with each optionee. All forms of stock option agreement shall contain such
provisions, restrictions and conditions as are not inconsistent with this Plan
but need not be identical. The provisions of this Plan shall be set forth in
full or incorporated by reference in each stock option agreement.
(e) In the event (i) an optionee ceases to be a Full-Time Agent
(other than a cessation due to death or disability), (ii) an optionee breaches
the optionee's contract with the Insurance Company, or (iii) the optionee's
contract with the Insurance Company is terminated for cause, then the stock
option agreement shall be deemed to have terminated and such optionee shall have
no right to exercise any then unexercised options.
(f) In the event an optionee's contract is terminated for any
reason not set forth in (e) above, such optionee shall have the right to
exercise any options which became exercisable prior to such cessation but only
within a period of three months from the date of such cessation (the
"post-revocation exercise period") (but in any event not later than the
termination date of the option), after which time any unexercised portion of all
outstanding options shall expire. If the optionee dies during the
post-revocation exercise period, the executors, administrators, legatees or
distributees of the optionee's estate shall have the right to exercise such
options during the remainder of such period. In no event and under no
circumstances may an option be exercised by an optionee (or his personal
representative) after the end of the post-revocation exercise period.
(g) In the event an optionee becomes permanently and totally
disabled or dies while serving as a Full-Time Agent, any option which was
exercisable on the date when such optionee became disabled or died may be
exercised by the optionee or the executors, administrators, legatees or
distributees of the estate of the optionee, as applicable, within three months
after the date thereof (but in no event later than the termination date of the
option), after which time any unexercised portion of all outstanding options
shall expire. In the event an option is exercised by the executors,
administrators, legatees or distributees of the estate of the optionee, under
subsection (f) or (g) of this Section 5, the Company shall be under no
obligation to issue Shares hereunder unless and until the Company is satisfied
that the person exercising the option is the duly appointed legal representative
of the optionee's estate or the proper legatee or distributee thereof.
(h) In the case of options granted after December 31, 1986, no
3
<PAGE>
option may be granted to an optionee which, when aggregated with all other
incentive stock options granted after December 31, 1986, to such optionee by the
Company or its subsidiaries, would result in Shares having an aggregate fair
market value (determined for each Share as of the date of grant of the
option covering such Share) in excess of $100,000 becoming first available for
purchase upon exercise of the option during any calendar year.
6. Non-Transferability
No option granted hereunder shall be transferable by the optionee
other than by will or by the laws of descent and distribution and options shall
be exercisable during the optionee's lifetime only by such optionee; provided,
however, that in the event an optionee shall be subject to a legal disability,
his legal representative may exercise an option on his behalf.
7. Stock Dividends or Recapitalization
In the event of a stock dividend paid in shares of the class of
stock subject to any option outstanding hereunder, or recapitalization,
reclassification, split-up or combination of shares with respect to said class
of stock, the Committee shall make appropriate adjustments of the option price
under such option and of the kind and number of shares as to which such option
is then exercisable, to the end that the optionee's proportionate interest shall
be maintained as before the occurrence of such event, and in any case an
appropriate adjustment shall also be made in the total number and kind of shares
of stock reserved for the future granting of options under this Plan. Any such
adjustment made by the Committee pursuant to this Plan shall be binding upon the
holders of all unexpired options outstanding hereunder.
8. Administration of the Plan
This Plan shall be administered by the Board. An Option
Administration Committee ("Committee"), consisting of three (3) or more
employees of the Company, shall be elected from time to time by a majority of
the entire Board and shall make recommendations periodically to the Board with
respect to the individuals to whom options should be granted, the number of
options to be granted and the form and content of the options to be granted.
Options shall be granted only by the Board which shall provide the form and
content of the options to be granted, including such provisions and conditions,
and such restrictions on exercise of an option as are permitted under Section
422 of the Code, in addition to those included in this Plan, as the Board shall
determine to be advisable; provided, however, that no such additional provisions
or conditions shall be inconsistent with the provisions of this Plan. The Board
or the Committee shall be authorized to interpret the Plan, to prescribe, amend
and rescind rules and regulations relating to it, and to make all other
determinations necessary or appropriate for its administration.
4
<PAGE>
9. Effective Date; Duration of the Plan Amendments
The Plan shall be effective upon adoption by the Board. At the
next regular meeting of the shareholders of PAMCO, which shall be scheduled and
will occur within twelve (12) months following the date of adoption by PAMCO's
Board, this Plan will be presented for consideration and approval by the
shareholders. If this Plan is not approved by the shareholders, this Plan shall
terminate, and all options granted hereunder shall be immediately forfeited.
Unless sooner terminated, the Plan shall expire ten (10) years from the date the
Plan is adopted by the Board. The Plan may be altered, suspended, discontinued,
or terminated by the Board at any time. Nothing contained herein shall be
construed to permit a termination, modification, or amendment adversely
affecting the rights of any optionee under an existing option theretofore
granted without the consent of such optionee, except due to non-approval of the
Plan by the shareholders.
10. General
(a) The provisions of this Plan shall be binding upon and inure
to the benefit of the parties and their respective heirs, executors,
administrators, personal representatives, successors and permitted assigns.
(b) Wherever used herein, the singular shall be deemed to refer
to and include the plural and vice versa, where appropriate. Wherever used
herein, the masculine shall be deemed to refer to and include the feminine and
the neuter and vice versa, where appropriate.
(c) The rights of any participant under the Plan shall not be
assignable by the participant and shall not be subject to the rights of
creditors, and any attempt to cause such right to be so subjected shall not be
recognized, except to such extent as may be required by law.
(d) The Company, upon notice to participants, at any time or from
time to time, may amend, modify or terminate any or all of the provisions of the
Plan without the consent of any participant. No amendment shall have the effect
of modifying any benefit election of any participant in effect at the time of
such amendment, unless such amendment is made to comply with federal, state or
local laws, statutes or regulations.
(e) This Plan shall not be deemed to constitute a contract
between the Company and any participant or to be a consideration or an
inducement for any contract with any participant. Nothing contained in this Plan
shall be deemed to give any participant the right to be retained as an Agent of
the Company or to interfere with the right of the Company to terminate any
participant's contract at any time, regardless of the effect which such
termination shall have upon him as a participant of this Plan.
(f) This Plan constitutes the entire agreement between the
Company and the participant relative to the purchase of Company stock. This Plan
is governed by the laws of the Commonwealth of Pennsylvania.
5
<PAGE>
(g) The invalidity of any provision of this Plan shall not affect
the validity of the remaining provisions, and this Plan shall be construed as if
such invalid provision had been omitted. The failure to qualify under this Plan
of any participant shall not affect the qualification of this Plan or the
qualification of other participants in this Plan, and this Plan shall be
construed as if such non-qualifying participant had not been included.
<PAGE>
EXHIBIT 5.1
[LETTERHEAD OF BUTERA BEAUSANG COHEN BRENNAN]
October 30, 1996
THE BOARD OF DIRECTORS OF
PROVIDENT AMERICAN CORPORATION
2500 DeKalb Pike
P.O. Box 511
Norristown, PA 19404-0511
Re: S-8 Registration Statement
Gentlemen:
We have acted as counsel to Provident American Corporation (the
"Company") in connection with the preparation and filing with the Securities and
Exchange Commission under the Securities Act of 1933, as amended, of a
Registration Statement on Form S-8 (the "Registration Statement") relating to
the offer and sale of 1,806,500 additional shares of the Company's Common Stock,
$.10 par value (the "Shares") under the Provident American Corporation Stock
Option Plan for Directors (356,500 shares), the Provident American Corporation
1996 Incentive Stock Option Plan For Employees (950,000 shares), and the
Provident American Corporation 1996 Incentive Stock Option Plan for Life and
Health Insurance Agents (500,000 shares).
As counsel to the Company, we have supervised all corporate proceedings
in connection with the preparation and filing of the Registration Statement. We
have also examined the Company's Articles of Incorporation and By-Laws, as
amended to date, the corporate minutes and other proceedings and records
relating to the authorization, sale, and issuance of the Shares, and such other
documents and matters of law as we have deemed necessary or appropriate in order
to render this opinion. Based upon the foregoing, it is our opinion that each of
the Shares to be offered pursuant to the Registration Statement, when paid for,
will be duly authorized, legally and validly issued and outstanding, fully paid
and non-assessable.
We hereby consent to the use of this opinion in the Registration
Statement and to the references to us under the heading "Interests of Named
Experts and Counsel" in this Registration Statement.
Very truly yours,
BUTERA, BEAUSANG, COHEN & BRENNAN
<PAGE>
Exhibit 24.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statement of
Provident American Corporation on Form S-8 of our report dated March 22, 1996,
on our audits of the consolidated financial statements and financial statement
schedules of Provident American Corporation as of December 31, 1995 and 1994,
and for the years ended December 31, 1995, 1994 and 1993, which report is
included in the Annual Report on Form 10-K. We also consent to the reference to
our firm under the caption "Interests of Named Experts and Counsel."
Coopers & Lybrand L.L.P.
Philadelphia, Pennsylvania
November 7, 1996
