As filed with the Securities and Exchange Commission on
September 12, 1996
Registration No. 333-_______
_________________________________________________________________
_________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________________________________
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
AMERICAN TRAVELLERS CORPORATION
(Exact name of registrant as specified in charter)
Pennsylvania 23-1738097
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3220 Tillman Drive
Bensalem, Pennsylvania 19020
(Address of Principal Executive Offices)
AMERICAN TRAVELLERS CORPORATION 1996 STOCK OPTION PLAN
(Full title of the plan)
John A. Powell
Chairman of the Board and President
American Travellers Corporation
3220 Tillman Drive
Bensalem, PA 19020
(Name and address of agent for service)
[215] 244-1600
(Telephone number, including area code, of agent for service)
Copies to:
Ramon R. Obod, Esquire
Fox Rothschild O'Brien & Frankel
2000 Market Street, 10th Floor
Philadelphia, PA 19103
Calculation of Registration Fee
- -----------------------------------------------------------------------------
Proposed Proposed
Maximum Maximum
Offering Aggregate
Title of Securities Amount to be Price Offering Registration
to be Registered Registered(1) Per Share(2) Price Fee
Common Stock, 2,000,000 $ 31.1875 $62,375,000 $21,508.77
$.01 par value Shares
_____________________________________________________________________________
(1) In accordance with Rule 416 under the Securities Act of 1933, also
includes such additional shares as may be issued to prevent dilution
of the shares covered hereby as a result of stock splits, stock
dividends or similar transactions.
(2) Estimated solely for purposes of computing the registration fee in
accordance with Rule 457(h) under the Securities Act of 1933.
INFORMATION NOT REQUIRED IN PROSPECTUS
PART II
Item 3. Incorporation of Documents by Reference
The Company hereby incorporates by reference, the following
documents, each of which shall be deemed to be incorporated by
reference herein and to be a part hereof from the date of filing
thereof with the Securities and Exchange Commission:
(a) The Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1995;
(b) The Company's Quarterly Reports on Form 10-Q for
the three months ended March 31, 1996 and June 30,
1996, respectively;
(c) The Company's Proxy Statement dated April 19,
1996;
(d) The Company's Form 8-K filed on August 28, 1996;
(e) The description of the Company's Common Stock,
$.01 par value, set forth on page 25 of Amendment No. 1
to the Company's Registration Statement on Form S-2,
dated July 18, 1990.
Item 4. Description of Securities
Not Applicable.
Item 5. Interests of Named Experts and Counsel
Legal Matters
Legality of the shares offered hereby has been passed upon
for the Company by Fox, Rothschild, O'Brien & Frankel, 2000
Market Street, 10th Floor, Philadelphia, Pennsylvania 19103.
Ramon R. Obod, a Director of the Company, is a partner in the
firm of Fox, Rothschild, O'Brien & Frankel.
Experts
The consolidated financial statements and schedules of the
Company and its subsidiaries contained in the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 1995
which have been incorporated herein by reference, have been
audited by Arthur Andersen LLP, independent public accountants,
as indicated in their report with respect thereto, and is
included herein in reliance upon the authority of such firm as
experts in accounting and auditing.
Item 6. Indemnification of Directors and Officers
Under Sections 1741 through 1750 of the Pennsylvania
Business Corporation Law of 1988, as amended, and Section 8365 of
the Pennsylvania Directors' Liability Act, the Company has the
power to indemnify directors and officers, under certain
prescribed circumstances and subject to certain limitations,
against certain costs and expenses, including attorney's fees,
actually and reasonably incurred in connection with any action,
suit or proceeding, whether civil, criminal, administrative or
investigative, to which any of them is a party by reason of his
being a director or officer of the Company if it is determined
that he acted in accordance with the applicable standard of
conduct set forth in such statutory provisions. Such
indemnification may be made whether or not the Company would have
the power to indemnify the director under any other provision of
law and whether or not the indemnified liability arises or arose
from any action by or in the right of the Company.
The Company may also purchase and maintain insurance for the
benefit of any director or officer and which may cover claims for
which the Registrant could not indemnify such person.
Article 8 of the Articles of Incorporation of the Company
provides as follows:
"The Corporation shall indemnify any and all of its present
or former directors and officers and any person who is or was
serving at the request of the Corporation as a director or
officer of another corporation or of a partnership, joint
venture, trust or other enterprise, including service with
respect to employee benefit plans, to the fullest extent
permitted by law. Such right of indemnification shall not be
exclusive of any other right which such officers and directors of
the Corporation and other persons may have or hereafter acquire
and, without limiting the generality of such statement, they
shall be entitled to their respective rights of indemnification
under any By-Law, agreement, vote of shareholders, provision of
law or otherwise, as well as their rights under this Article.
The foregoing indemnification provisions shall be retroactive to
January 27, 1987 to the fullest extent permitted by law."
Article X of the By Laws of the Company provides as follows:
"1. Right to Indemnification: Each person who was or is
made a party or is threatened to be made a party to or is
involved in any action, suit or proceeding (hereinafter a
"proceeding"), whether civil, criminal, administrative or
investigative, including, without limitation, an action or suit
by or in the right of the Corporation, by reason of the fact that
he or she, or a person of whom he or she is the legal
representative, is or was a director or officer of another
corporation or of a partnership, joint venture, trust or other
enterprise, including service with respect to employee benefit
plans, whether the basis of such proceeding is alleged action in
an official capacity as director or officer, or in any other
capacity, shall be indemnified and held harmless by the
Corporation to the fullest extent and manner authorized or
permitted by the laws of the Commonwealth of Pennsylvania, as the
same exists or may hereafter be amended (but, in the case of any
such amendment, only to the extent that such amendment permits
the Corporation to provide broader indemnification rights then
said law permitted the Corporation to provide prior to such
amendment), against all expense, liability and loss (including
attorneys' fees, judgments, penalties, fines, ERISA excise taxes
or penalties and amounts paid or to be paid in settlement)
reasonably incurred or suffered by such person in connection
therewith and such indemnification shall continue as to a person
who has ceased to be a director or officer and shall inure to the
benefit of his or her heirs, executors and administrators:
provided, however, that except as provided in subsection 4
hereof, the Corporation shall indemnify any such person seeking
indemnification in connection with a proceeding (or part thereof)
initiated by such person only if such proceeding (or part
thereof) was authorized by the Board of Directors of the
Corporation. The right to indemnification conferred in this
Section shall be a contract right and each person to whom this
right to indemnification applies shall be a third party
beneficiary of such right and shall be entitled to enforce
against the Corporation all indemnification and other rights
granted to such person by this such proceeding in advance of the
final disposition of a proceedings shall be made only upon
delivery to the Corporation of an undertaking, by or on behalf of
such director or officer to repay all amounts so advanced if it
shall ultimately be determined that such director or officer is
not entitled to be indemnified under this Section or otherwise.
The Corporation may, by action of its Board of Directors, provide
indemnification to employees, agents or fiduciaries of the
Corporation or to any person who is or was serving at the request
of the Corporation as an employee, agent or fiduciary of another
corporation or of a partnership, joint venture, trust or other
enterprise, including service with respect to any employee
benefit plan, with the same or lesser scope and effect as set
forth herein and in the other subsections of this Section. If
and to the extent that the laws of the Commonwealth of
Pennsylvania require that indemnification be provided in a given
instance only if the person acted in good faith and in a manner
he or she reasonably believed to be in or not opposed to the best
interests of the Corporation, and, with respect to any criminal
proceeding, had no reasonable cause to believe his or her conduct
was unlawful, then termination of any proceeding by judgment,
order, settlement, conviction, or upon a plea of nolo contendere
or its equivalent, shall not of itself create a presumption that
the person did not act in good faith and in a manner which he or
she reasonably believed to be in or not opposed to the best
interests of the Corporation, and, with respect to any criminal
proceedings, that he or she had reasonable cause to believe that
his or her conduct was unlawful. Termination of any proceeding
by judgment, order, settlement, conviction, or upon a plea of
nolo contendere or its equivalent, shall not of itself be a
determination by a court that the act or failure to act giving
rise to a claim for indemnification constituted willful
misconduct or recklessness.
2. Denial of Right to Indemnification: Indemnification
under subsection 1 above shall be made by the Corporation unless
a determination is reasonably and promptly made that
indemnification of a director or officer is not proper in the
circumstances because of grounds for denying indemnification
under this Section or under applicable law. Such determination
may be made only (i) by the Board of Directors by a majority vote
of a quorum consisting of directors who were not parties to such
proceeding ("disinterested directors"), or (ii) if such quorum is
not obtainable, or even if obtainable, if a quorum of
disinterested directors so directs, by independent legal counsel
in a written opinion, or (iii) by the shareholders.
3. Expenses in Successful Defense: Notwithstanding any
other provision of this Section, to the extent that a director or
officer of the Corporation has been successful on the merits or
otherwise in defense of any proceeding referred to in subsection
1 above or in defense of any claim, issue or matter therein, he
shall be indemnified against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection therewith.
4. Right of Claimant to Bring Suit: If a claim under
subsection 1 of this Section is not paid in full by the
Corporation within thirty (30) days after a written claim has
been received by the Corporation, the claimant may at any time
thereafter bring suit against the Corporation to recover the
unpaid amount of the claim and, if successful in whole or in
part, the claimant shall be entitled to be paid also the expense
of prosecuting such claim. It shall be a defense to any such
action (other than an action brought to enforce a claim for
expenses incurred in defending any proceeding in advance of its
final disposition where the required undertaking, if any is
required, has been tendered to the Corporation) that the claimant
has not met the standards of conduct which make it permissible
under the laws of the Commonwealth of Pennsylvania for the
Corporation to indemnify the claimant for the amount claimed, but
the burden of proving such defense shall be on the Corporation.
Neither the failure of the Corporation (including its Board of
Directors, independent legal counsel, or its shareholders) that
the claimant has not met such applicable standard of conduct,
shall be a defense to the action or create a presumption that the
claimant has not met the applicable standard of conduct.
5. Non-Exclusivity of Rights: The rights to
indemnification and the payment of expenses incurred in a
proceeding in advance of its final disposition conferred in this
Section shall not be exclusive of any right which any person may
have or hereafter acquire under any statute, provision of the
Articles of Incorporation, by-law, agreement, vote of
shareholders or disinterested directors or otherwise.
6. Insurance: The Corporation may maintain insurance, at
its expense, to protect itself and any director, officer,
employee, agent or fiduciary of the Corporation or another
corporation, partnership, joint venture, trust or other
enterprise against any expense, liability or loss, whether or not
the Corporation would have the power to indemnify such person
against such expense, liability or loss under the laws of the
Commonwealth of Pennsylvania.
7. Interpretation: For purposes of this Section:
(a) References to "the Corporation" shall upon written
resolution of the Board of Directors of the Corporation include,
in addition to the Corporation, any constituent corporation
(including any constituent of a constituent) absorbed in a
consolidation or merger which, if its separate existence had
continued, would have had the power and authority to indemnify
its directors or officers, so that any person who is or was a
director or officer of such constituent corporation, or is or was
serving at the request of such constituent corporation as a
director or officer of another corporation, shall for purposes of
this Section be deemed to hold the same position in the
Corporation as he or she held in such constituent corporation.
(b) A person who acted in good faith and in a manner he or
she reasonably believed to be in the interest of the participants
and beneficiaries of an employee benefit plan shall be deemed to
have acted in a manner "not opposed to the best interests of the
Corporation" as referred to in this Section.
8. Amendment or Repeal: This Section may hereafter be
amended to repealed; provided, however, that no amendment or
repeal shall reduce, terminate or otherwise adversely affect the
right of a person who is or was a director or officer to obtain
indemnification or advancement of expenses with respect to a
proceeding that pertains to or arises out of actions or omissions
that occur prior to the effective date of such amendment or
repeal, which date cannot be retroactive."
Item 7. Exemption from Registration Claimed
Not Applicable.
Item 8. Exhibits
Exhibit No. Description
4(a) 1996 Stock Option Plan.
4(b) Articles of Incorporation, as
amended and restated
- Incorporated by reference to Exhibit
3(a) of the Registrant's Form 10-K for
the fiscal year ended December 31, 1995.
4(c) Articles of
Amendment - Incorporated by reference to
Exhibit 3(a) of the Registrant's Form 10-
Q for the quarter ended June 30, 1996.
4(d) Amended and
Restated Bylaws - Incorporated by
reference to Exhibit 3(b) to the
Registrant's Registration Statement on
Form S-3 (File No. 33-94614).
5 Opinion of Fox, Rothschild,
O'Brien & Frankel.
23(a) Consent of Fox, Rothschild,
O'Brien & Frankel. Reference
is made to item 5.
23(b) Consent of
Arthur Andersen LLP.
Item 9. Undertakings
The Company hereby undertakes 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 to the registration
statement.
The Company hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each
filing of a post-effective amendment to 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.
The Company hereby undertakes 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 Plan.
The Company hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each
filing of the Company's annual report pursuant to Section 13(a)
or Section 15(d) of the Securities Exchange Act of 1934 (and
where applicable, each filing of an employee benefit plan's
annual report pursuant to this Section 15(d) of the Securities
Exchange Act of 1934) 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.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers
and controlling persons of the registrant pursuant to the
foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the 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 Act and will be governed by the final adjudication of such
issue.
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 Bensalem, Commonwealth of Pennsylvania, on September
4, 1996.
AMERICAN TRAVELLERS CORPORATION
By:/s/ John A. Powell
John A. Powell, President,
Chairman of the Board and
Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints John A. Powell
and Walter J. Diener, and each of them, his or her true and
lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him or her and in his or her
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, granting unto said attorneys-
in-fact and agents full power and authority to do and perform
each and every act and thing requisite and necessary to be done,
as fully to all intents and purposes as he or she might or could
do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their or his
substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933,
this registration statement has been signed below by the
following persons in the capacities and on the dates indicated.
Signature Title Date
/s/ John A. Powell President, Chairman of September 12,1996
John A. Powell the Board, Chief
Executive Officer and
Director
/s/Benedict J. Iacovetti Treasurer and Chief September 12, 1996
Benedict J. Iacovetti Financial and Accounting
Officer
/s/ Susan T. Mankowski Vice-President September 12, 1996
Susan T. Mankowski Administration,
Secretary and Director
/s/ Walter E. Conrad Director September 12, 1996
Walter E. Conrad
/s/ Walter J. Diener Director September 12, 1996
Walter J. Diener
/s/ Arnold H. Keehn Director September 12, 1996
Arnold H. Keehn
/s/ Alice E. Powell Director September 12, 1996
Alice E. Powell
/s/ Ramon R. Obod Director September 12, 1996
Ramon R. Obod
/s/ Henry G. Hager Director September 12, 1996
Henry G. Hager
Index to Exhibits
Number Exhibit
4(a) 1996 Stock Option Plan
5 Opinion of Fox, Rothschild,
O'Brien & Frankel
23(b) Consent of Arthur Andersen LLP
Exhibit 4(a) 1996 Stock Option Plan
1. PURPOSES OF THE PLAN
The purposes of this 1996 Stock Option Plan are to enable
American Travellers Corporation and its Subsidiaries to attract
and retain the services of key employees and persons with
managerial, professional or supervisory responsibilities,
including, but not limited to, members of the Board of Directors,
officers of, and consultants to, the Company, responsible for the
past and continued success of the Company, and to provide them
with increased motivation and incentive to exert their best
efforts on behalf of the Company by enlarging their personal
stake in its success.
2. GENERAL PROVISIONS
2.1 Definitions
As used in the Plan:
(a) "Act" means the Securities Exchange Act of 1934, including
any and all amendments thereto.
(b) "Board of Directors" means the Board of Directors of the
Company.
(c) Code" means the Internal Revenue Code of 1986, including
any and all amendments thereto.
(d) "Committee" means the committee appointed by the Board of
Directors from time to time to administer the Plan pursuant to
Section 2.2.
(e) "Common Stock" means the Company's Common Stock, $.01 par
value.
(f) "Company" means American Travellers Corporation, a
Pennsylvania corporation.
(g) "Eligible Director" means a member of the Company's Board of
Directors who is not otherwise an employee of the Company or any
Subsidiary.
(h) "Fair Market Value" means, with respect to a specific date,
the last reported sale price of the Common Stock in the over-the-
counter market, as reported by NASDAQ; however, if the Common
Stock is listed or traded on a national securities exchange on
the date Fair Market Value is being determined, Fair Market value
shall mean the last reported sale price of Common Stock on such
exchange, as reported by a responsible reporting service the
Committee selects; or if there are no transactions in the Common
Stock on such day, then Fair Market Value shall mean the last
reported sale price of the Common Stock in the over-the-counter
market or on such exchange, as the case may be, on the last
preceding day on which there was a transaction in the Common
Stock. In the event the Common Stock is not so listed or traded
on a date Fair Market Value is being determined, Fair Market
Value shall be determined on the basis of an average of the fair
market values as of such date as determined by two or more
independent and well-qualified experts in the appraisal of stock
values, or on the basis of such other method as the Committee
shall, in good faith, determine to be reasonable.
(I) "Formula Award" means an option grant made to an Eligible
Director pursuant to Section 4.2.
(j) "Incentive Stock Option" means an option granted under the
Plan which is intended to qualify as an incentive stock option
under Section 422 of the Code.
(k) "NASDAQ" means the National Association of Securities
Dealers, Inc. Automated Quotation System.
(l) "Non-Qualified Stock Option" means an option granted under
the Plan which is not an Incentive Stock Option.
(m) "Participant" means a person to whom a Stock Option other
than a Formula Award has been granted under the Plan.
(n) "Plan" means this 1996 Stock Option Plan.
(o) "Rule 16b-3" means Rule 16b-3 promulgated under the Act or
any successor Rule.
(p) "Stock Option" means an Incentive Stock Option or a Non-
Qualified Stock Option granted under the Plan.
(q) "Subsidiary" means any corporation (other than the Company)
in an unbroken chain of corporations beginning with the Company
if, at the time of the granting of the Stock Option, each of the
corporations other than the last corporation in the unbroken
chain owns 50% or more of the total voting power of all classes
of stock in one of the other corporations in such chain.
2.2 Administration of the Plan
(a) The Plan shall be administered by the Committee which shall
at all times consist of two (2) or more persons, each of whom
shall be members of the Board of Directors. Each member of the
Committee shall be a "disinterested person"(as such term is
defined in Rule 16b-3) and an "outside director" within the
meaning of Section 162(m) of the Code and any regulations issued
thereunder. The Board of Directors may from time to time remove
members from, or add members to, the Committee. Vacancies on the
Committee, howsoever caused, shall be filled by the Board of
Directors. The Committee shall select one of its members as
Chairperson, and shall hold meetings at such times and places as
it may determine.
(b) The Committee shall have the full power, subject to and
within the limits of the Plan, to: (i) interpret and administer
the Plan, and Stock Options granted under it; (ii) make and
interpret rules and regulations for the administration of the
Plan and to make changes in and revoke such rules and regulations
(and in the exercise of this power, shall generally determine all
questions of policy and expediency that may arise and may correct
any defect, omission, or inconsistency in the Plan or any
agreement evidencing the grant of any Stock Option in a manner
and to the extent it shall deem necessary to make the Plan fully
effective); (iii) determine those persons to whom Stock Options
other than Formula Awards shall be granted and the number of
Stock Options other than Formula Awards to be granted to any
person; (iv) determine the terms of Stock Options granted under
the Plan, consistent with the provisions of the Plan; and (v)
generally, exercise such powers and perform such acts in
connection with the Plan as are deemed necessary or expedient to
promote the best interests of the Company. The interpretation
and construction by the Committee of any provision of the Plan or
of any Stock Option shall be final, binding and conclusive.
(c) The Committee may act only by a majority of its members then
in office; however, the Committee may authorize any one (1) or
more of its members or any officer of the Company to execute and
deliver documents on behalf of the Committee.
(d) No member of the Committee shall be liable for any action
taken or omitted to be taken or for any determination made by him
or her in good faith with respect to the Plan, and the Company
shall indemnify and hold harmless each member of the Committee
against any cost or expense (including counsel fees) or liability
(including any sum paid in settlement of a claim with the
approval of the Committee) arising out of any act or omission in
connection with the administration or interpretation of the Plan,
unless arising out of such person's own fraud or bad faith.
2.3 Effective Date
The Plan is and shall be effective March 14, 1996, the date of
its adoption by the Board of Directors, and Stock Options may be
granted from time to time thereafter, subject, however, to
approval of the Plan by the affirmative vote of the holders of a
majority of the shares of the Common Stock present in person or
by proxy and entitled to vote at an annual meeting of the
shareholders of the Company or at a special meeting of the
shareholders of the Company expressly called for such purposes,
or any adjournments thereof, held on or before March 13, 1997.
If the Plan is not approved at such annual or special meeting or
at any adjournments thereof, the Plan and all Stock Options
previously granted thereunder shall become null and void.
2.4 Duration
If approved by the shareholders of the Company, as provided in
Section 2.3, unless sooner terminated by the Board of Directors,
the Plan shall remain in effect until March 13, 2006.
2.5 Shares Subject to the Plan
The maximum number of shares of Common Stock which may be subject
to Stock Options granted under the Plan shall be 2,000,000, of
which the number of such shares which shall be available for
issuance pursuant to Formula Awards made to Eligible Directors
under the Plan shall be 50,000. The Stock Options and Formula
Awards shall be subject to adjustment in accordance with Section
4.11 or 5.1, as appropriate, and shares to be issued upon
exercise of Stock Options and Formula Awards may be either
authorized and unissued shares of Common Stock or authorized and
issued shares of Common Stock purchased or acquired by the
Company for any purpose. If a Stock Option or Formula Award or
portion thereof shall expire or is terminated, cancelled or
surrendered for any reason without being exercised in full, the
unpurchased shares of Common Stock that were subject to such
Stock Option or Formula Award or portion thereof shall be
available for future grants of Stock Options or Formula Awards,
as the case may be, under the Plan.
2.6 Amendments
The Plan may be suspended, terminated or reinstated, in whole or
in part, at any time by the Board of Directors. The Board of
Directors may from time to time make such amendments to the Plan
as it may deem advisable, including, with respect to Incentive
Stock Options, amendments deemed necessary or desirable to comply
with Section 422 of the Code and any regulations issued
thereunder; provided, however, that (i) no amendment shall be
made more than once every six (6) months that would change the
amount, price or timing of Formula Awards, and (ii) without the
approval of the Company's shareholders no amendment shall be made
that:
(a) Increases the maximum number of shares of Common Stock that
may be subject to Stock Options or Formula Awards granted under
the Plan (other than as provided in Section 4.11 or 5.1, as
appropriate); or (b) Extends the term of the Plan; or
(c) Increases the period during which a Stock Option may be
exercised beyond ten (10) years from the date of grant; or
(d) Otherwise materially increases the benefits accruing to
Participants or Eligible Directors under the Plan; or
(e) Materially modifies the requirements as to eligibility for
participation in the Plan; or
(f) Changes the maximum number of shares of Common Stock for
which options may be granted to any Participant during any year
(a consecutive twelve (12) month period) (other than as provided
in Section 5.1); or
(g) Will cause Stock Options granted under the Plan to fail to
meet the requirements of Rule 16b-3.
Except as otherwise provided herein, termination or amendment of
the Plan shall not, without the consent of a Participant or
Eligible Director, affect such Participant's or Eligible
Director's rights under any Stock Option or Formula Award
previously granted to such Participant or Eligible Director, as
the case may be.
2.7 Participants and Grants
Stock Options may be granted by the Committee to those persons
who the Committee determines have the capacity to make a
substantial contribution to the success of the Company. The
Committee may grant Stock Options to purchase such number of
shares of Common Stock (subject to the limitations of Section
2.5) as the Committee may, in its sole discretion, determine.
Notwithstanding the foregoing, no Participant shall be granted
Stock Options in any year (a consecutive twelve (12) month
period) to purchase in excess of 750,000 shares of Common Stock.
In granting Stock Options, the Committee, on an individual basis,
may vary the number of Incentive Stock Options or Non-Qualified
Stock Options as between Participants and may grant Incentive
Stock Options and/or Non-Qualified Stock Options to a Participant
in such amounts as the Committee may determine in its sole
discretion.
3. STOCK OPTIONS
3.1 General
All Stock Options granted under the Plan shall be evidenced by
written agreements executed by the Company and the Participant to
whom granted and dated as of the applicable date of grant, which
agreement shall state the number of shares of Common Stock which
may be purchased upon the exercise thereof and shall contain such
investment representation and other terms and conditions as the
Committee may from time to time determine, or, in the case of
Incentive Stock Options, as may be required by Section 422 of the
Code, or any other applicable law. Each such grant shall be
signed on behalf of the Company by a member of the Committee or
by an officer delegated such authority by the Committee.
3.2 Price
Subject to the provisions of Sections 3.6(d), 4.11 and 5.1, the
purchase price per share of Common Stock subject to a Stock
Option shall, in no case, be less than one hundred percent (100%)
of the Fair Market Value of a share of Common Stock on the date
the Stock Option is granted.
3.3 Period
The duration or term of each Stock Option granted under the Plan
shall be for such period as the Committee shall determine but in
no event more than ten (10) years from the date of grant
thereof.
3.4 Exercise
Subject to Sections 2.3 and 5.4, Stock Options may be exercisable
immediately upon the grant of the Stock Option or at such other
time or times as the Committee shall specify when granting the
Stock Option. Once exercisable, a Stock Option shall be
exercisable, in whole or in part, by delivery of a written notice
of exercise to the Secretary of the Company at the principal
office of the Company specifying the number of whole shares of
Common Stock as to which the Stock Option is then being exercised
together with payment of the full purchase price for the shares
being purchased upon such exercise. Until the shares of Common
Stock as to which a Stock Option is exercised are issued, the
Participant shall have none of the rights of a shareholder of the
Company with respect to such shares.
3.5 Payment
The purchase price for shares of Common Stock as to which a Stock
Option has been exercised and any amount required to be withheld,
as contemplated by Section 5.3, may be paid:
(a) In United States dollars in cash, or by check, bank draft or
money order payable in United States dollars to the order of the
Company; or
(b) By the delivery by the Participant to the Company of whole
shares of Common Stock having an aggregate Fair Market Value on
the date of payment equal to the aggregate of the purchase price
of Common Stock as to which the Stock Option is then being
exercised or by the withholding of whole shares of Common Stock
having such Fair Market Value upon the exercise of such Stock
Option; or
(c) By a combination of both (a) and (b) above.
The Committee may, in its discretion, impose limitations,
conditions and prohibitions on the use by a Participant of shares
of Common Stock to pay the purchase price payable by such
Participant upon the exercise of a Stock Option.
3.6 Special Rules for Incentive Stock Options
Notwithstanding any other provision of the Plan, the following
provisions shall apply to Incentive Stock Options granted under
the Plan:
(a) Incentive Stock Options shall only be granted to
Participants who are employees of the Company or a Subsidiary.
(b) To the extent that the aggregate Fair Market Value of stock,
with respect to which Incentive Stock Options are exercisable for
the first time by a Participant during any calendar year under
the Plan and any other Stock Option Plan of the Company or a
Subsidiary, exceeds $100,000, such Stock Options shall be treated
as Non-Qualified Stock Options.
(c) Any Participant who disposes of shares of Common Stock
acquired upon the exercise of an Incentive Stock Option by sale
or exchange either within two (2) years after the date of the
grant of the Incentive Stock Option under which the shares were
acquired or within one (1) year of the acquisition of such
shares, shall promptly notify the Secretary of the Company at the
principal office of the Company of such disposition, the amount
realized, the purchase price per share paid upon exercise and the
date of disposition.
(d) No Incentive Stock Option shall be granted to a Participant
who, at the time of the grant, owns stock representing more than
ten percent (10%) of the total combined voting power of all
classes of stock either of the Company or any parent or
Subsidiary of the Company, unless the purchase price of the
shares of Common Stock purchasable upon exercise of such
Incentive Stock Option is at least one hundred ten percent (110%)
of the Fair Market Value (at the time the Incentive Stock Option
is granted) of the Common stock and the Incentive Stock Option is
not exercisable more than five (5) years from the date it is
granted.
3.7 Termination of Employment or Relationship
(a) In the event a Participant's employment by, or relationship
with, the Company or its Subsidiaries shall terminate for any
reason other than those reasons specified in Sections 3.7(b),
(c), (d), (e) or (f) while such participant holds Stock Options
granted under the Plan, then all rights of any kind under any
outstanding Stock Option held by such Participant which shall not
have previously lapsed or terminated shall expire immediately.
(b) If a Participant's employment by, or relationship with, the
Company or its Subsidiaries shall terminate as a result of such
Participant's total disability, each Stock Option held by such
Participant (which has not previously lapsed or terminated) shall
immediately become fully exercisable as to the total number of
shares of Common Stock subject thereto (whether or not
exercisable to that extent at the time of such termination) and
shall remain so exercisable by such Participant for a period of
six (6) months after termination unless such Stock Option expires
earlier by its terms. For purposes of the Plan, "total
disability" shall mean permanent mental or physical disability as
determined by the Committee.
(c) In the event of the death of a Participant, each Stock
Option held by such Participant (which has not previously lapsed
or terminated) shall immediately become fully exercisable as to
the total number of shares of Common Stock subject thereto
(whether or not exercisable to that extent at the time of death)
by the executor or administrator of the Participant's estate or
by the person or persons to whom the deceased Participant's
rights thereunder shall have passed by will or by the laws of
descent or distribution, and shall remain so exercisable for a
period of six (6) months after such Participant's death unless
such Stock Option expires earlier by its terms.
(d) If a Participant's employment by the Company or a Subsidiary
shall terminate by reason of such Participant's retirement in
accordance with Company policies, each Stock Option held by such
Participant at the date of termination (which has not previously
lapsed or terminated) shall immediately become fully exercisable
as to the total number of shares of Common Stock subject hereto
(whether or not exercisable to hat extent at the time of such
termination) and shall remain so exercisable by such Participant
for a period of three (3) months after termination, unless such
Stock Option expires earlier by its terms.
(e) In the event the Company terminates the employment of a
Participant who at the time of such termination was an officer of
the Company and had been continuously employed by the Company
during the five (5) year period immediately preceding such
termination, for any reason except "good cause" (hereafter
defined) and except upon such Participant's death, total
disability or retirement in accordance with Company policies,
each Stock Option held by such Participant (which has not
previously lapsed or terminated and which has been held by such
Participant for more than six (6) months prior to such
termination) shall immediately become fully exercisable as to the
total number of shares of Common Stock subject thereto (whether
or not exercisable to that extent at the time of such
termination) and shall remain so exercisable for a period of
three (3)months after such termination unless such Stock Option
expires earlier by its terms. A termination for "good cause"
shall have occurred only if the Participant in question is
terminated, by written notice (i) because of his or her
conviction of a felony for a crime involving an act of fraud or
dishonesty, (ii) intentional acts or omissions on such
Participant's part causing material injury to the property or
business of the Company, or (iii) because such Participant shall
have breached any material term of any employment agreement in
place between such Participant and the Company and shall have
failed to correct such breach within any grace period provided
for in such agreement. "Good cause" for termination shall not
include bad judgment or any act or omission reasonably believed
by such Participant, in good faith, to have been in, or not
opposed to, the best interests of the Company.
(f) In the event of the termination of a Participant's service
as a Director of the Company, who at the time of such termination
was an Eligible Director and had continuously served as a
Director of the Company during the five (5) year period
immediately preceding such termination, and such termination is
for any reason except for such participant's death or total
disability or the removal of such Participant as Director (by the
shareholders, the Board of Directors or otherwise) for "good
cause" (as defined in Section 3.7(e)(i) and (ii)), each Stock
Option held by such Participant (which has not previously lapsed
or terminated and which has been held by such Participant for
more than six (6) months prior to such termination) shall
immediately become fully exercisable as to the total number of
shares of Common Stock subject thereto (whether or not
exercisable to that extent at the time of such termination) and
shall remain so exercisable for a period of three (3) months
after such termination unless such Stock Option expires earlier
by its terms.
3.8 Effect of Leaves of Absence
It shall not be considered a termination of employment when a
Participant is on military or sick leave or such other type of
leave of absence which is considered continuing intact the
employment relationship of the Participant with the Company or
any of its Subsidiaries. In case of such leave of absence, the
employment relationship shall be deemed to have continued until
the later of (i) the date when such leave shall have lasted
ninety (90) days in duration, or (ii) the date as of which the
Participant's right to re-employment shall have no longer been
guaranteed either by statute or contract.
4. FORMULA AWARDS TO ELIGIBLE DIRECTORS
4.1 General
Each Formula Award granted under the Plan shall be evidenced by a
written agreement executed by the Company and by the Eligible
Director to whom such Formula Award is granted and dated as of
the applicable date of grant. Each Agreement shall be signed on
behalf of the Company by a member of the Committee or by an
officer delegated such authority by the Committee. Each such
agreement shall comply with and be subject to the terms and
conditions of the Plan. Any such agreement may contain such
other terms, provisions and conditions not inconsistent with the
Plan or this Section 4 as may be determined by the Committee. All
Formula Awards granted under the Plan shall, except where this
Section 4 or the context clearly indicates to the contrary, be
subject to the provisions of the Plan applicable to Non-Qualified
Stock Options.
4.2 Formula Awards
Subject to the limitations in Sections 4.13 and 4.14, an option
to purchase 1,500 shares of Common Stock (as adjusted pursuant to
Section 4.11) shall be granted automatically each year,
immediately following the annual meeting of the Company's
shareholders, to each member of the Company's Board of
Directors(each, a "Director") who is an Eligible Director at such
time immediately following such annual meeting beginning with the
annual meeting of the shareholders at which the shareholders
approve the Plan.
4.3 Formula Award Exercise Price
The exercise price per share for a Formula Award shall be the
average of the Fair Market Values for the fifth (5th) through the
ninth (9th) business days (which, for purposes of this Section
4.3 shall mean those days on which the NASDAQ National Market is
open for trading) following the date of grant.
4.4 Vesting and Exercisability
Except as otherwise provided in Section 4.7, a Formula Award
shall immediately vest and become non-forfeitable upon the grant
of the Formula Award. Except as otherwise provided in Section
4.7, a Formula Award shall become exercisable immediately upon
vesting for all Directors who have served as Directors of the
Company for a total of five (5) consecutive years as of the date
of the grant. If a Director has not served as a Director for
such period, a Formula Award shall become exercisable according
to the following schedule:
Period of Optionee's Continuous Portion of
Service as a Director of the Formula Award
Company following the Grant That is Exercisable
Twelve months 33-1/3%
Eighteen months 66-2/3%
Twenty-four months 100%
4.5 Time and Manner of Exercise
Except as otherwise provided in this Section 4.5, any vested
Formula Award, to the extent the same is exercisable in
accordance with Section 4.4, is exercisable in whole or in part
at any time from time to time until the expiration or
termination of its term in accordance with Section 4.7 by giving
written notice, signed by the person exercising the Formula
Award, to the Company (to the attention of the Company's
Corporate Secretary) stating the number of whole shares of Common
Stock with respect to which the Formula Award is being exercised,
accompanied by payment in full of the option exercise price for
the number of shares of Common Stock to be purchased. The date
both such notice and payment are received by the office of the
Corporate Secretary of the Company shall be the date of exercise
of the Formula Award as to such number of shares.
4.6 Payment of Exercise Price
Payment of the exercise price for a Formula Award may be in cash
or by check, bank draft or money order payable in United States
dollars to the order of the Company or payment may be n whole or
in part by
(a) transfer to the Company of shares of Common Stock having a
Fair Market Value (as determined in Section 4.3) on the date of
exercise equal to the exercise price; or
(b) delivery of instructions to the Company to withhold from
the shares of Common Stock that would otherwise be issued on
exercise of that number of such shares having a Fair Market Value
(as determined in Section 4.3) equal to the exercise price. If
the Fair Market Value (as determined in Section 4.3) of the
number of whole shares of Common Stock transferred or the number
of whole shares of Common Stock withheld is less than the total
exercise price, the shortfall must be paid in cash, check, bank
draft or money order, as aforesaid.
4.7 Term of Formula Awards
Each Formula Award shall expire ten (10) years from its date of
grant, but shall be subject to earlier termination as follows:
(a) In the event of the termination of a Formula Award holder's
service as a Director, by reason of his or her removal as
Director (by the shareholders, the Board of Directors or
otherwise), the then outstanding Formula Awards of such holder
(whether or not then exercisable) shall automatically expire on
(and may not be exercised on) the effective date of such
termination.
(b) In the event of the termination of a Formula Award holder's
service as a Director by reason of retirement or total
disability, the then outstanding Formula Awards of such holder
shall become exercisable, to the full extent of the number of
shares of Common Stock remaining covered by such Formula Awards,
regardless of whether such Formula Awards were previously
exercisable, and each such Formula Award shall expire one (1)
year after the date of such termination or on the stated grant
expiration date, whichever is earlier. or purposes of this
Section 4.7, the phrase "by reason of retirement" means (a)
mandatory retirement pursuant to Board policy or (b) termination
of service on or after the holder's 65th birthday.
(c) In the event of the death of a Formula Award holder while
such holder is a Director, the then outstanding Formula Awards of
such holder shall become exercisable, to the full extent of the
number of shares of Common Stock remaining covered by such
Formula Awards, regardless of whether such Formula Awards were
previously exercisable, and each such Formula Award shall expire
one (1) year after the date of death of such holder or on the
stated grant expiration date, whichever is earlier. Exercise of a
deceased holder's Formula Awards that are still exercisable shall
be by the estate of such holder or by the person or persons to
whom the holder's rights have passed by will or the laws of
descent and distribution.
(d) In the event of the termination of a Formula Award holder's
service as a Director by reason of the expiration of the
Director's term in office (without renomination or reelection) or
by reason of resignation, or for any other reason except those
described in Sections 4.7(a), (b) or (c), the then outstanding
Formula Awards of such holder shall become exercisable, to the
full extent of the number of shares of Common Stock remaining
covered by such Formula Awards, regardless of whether such
Formula Awards were previously exercisable, and each such Formula
Award shall expire three (3)months after the effective date of
such termination.
4.8 Transferability
The right to exercise a Formula Award shall, during the lifetime
of the Eligible Director to whom such Formula Award was granted,
be exercisable only by such recipient or pursuant to a qualified
domestic relations order as defined by the Code or Title l of the
Employee Retirement Income Security Act, or the rules thereunder
(a "QDRO") and shall not be assignable or transferable by such
recipient other than by will or the laws of descent and
distribution or a QDRO. Any purported transfer contrary to this
provision will be null and void and without effect.
4.9 Limitation of Rights
Neither the recipient of a Formula Award under the Plan nor the
recipient's successor or successors in interest shall have any
rights as a shareholder of the Company with respect to any shares
of Common Stock subject to a Formula Award granted to such person
until the date of issuance of a stock certificate for such shares
of Common Stock.
4.10 Limitation as to Directorship
Neither the Plan, nor the grant of a Formula Award, nor any other
action taken pursuant to the Plan shall constitute or be evidence
of any agreement or understanding, express or implied, that an
Eligible Director has a right to continue as a Director for any
period of time or at any particular rate of compensation.
4.11 Capital Adjustments
The number and class of shares with respect to which a Formula
Award may be granted to an Eligible Director under the Plan, the
number and class of shares subject to each outstanding Formula
Award, and the exercise price per share specified in each such
Formula Award shall be proportionately adjusted in accordance
with the provisions Section 5.1 For purposes of the preceding
sentence, the Company shall be deemed to have received
consideration for any shares issued pursuant to this or any other
employee benefit plan meeting the requirements of Rule 16b-3.
4.12 Limit on Grants to Eligible Directors
Notwithstanding any provision to the contrary, the Committee may,
but shall not be obligated to, grant an Eligible Director Stock
Options under the Plan and such grant, if any, shall not affect
the Eligible Director's entitlement to be granted Formula Awards
pursuant to Section 4.2.
4.13 Commencement of Grants of Formula Awards
Notwithstanding any provision to the contrary, no Formula Award
shall be granted pursuant to the Plan unless and until no
additional Formula Awards may be granted pursuant to the
Company's 1993 Stock Option Plan and 1995 Stock Option Plan.
4.14 Termination of Formula Awards
Notwithstanding any provision to the contrary, no Formula Award
shall be granted pursuant to the Plan on a date when the number
of shares of Common Stock authorized for issuance pursuant to the
Plan and then available for issuance pursuant to new Formula
Awards is less than the aggregate number of such shares that
would be issuable pursuant to Formula Awards otherwise required
to be granted on such date, assuming the full vesting and
exercise of such Formula Awards. In the event Formula Awards are
not granted as a result of the application of this Section 4.14,
no Formula Awards shall thereafter be granted pursuant to the
Plan.
4.15 Conflicting Provisions
In the event of any conflict between a provision of this Section
4 and a provision in any other paragraph of the Plan with respect
to Formula Awards, such provision of this Section 4 shall be
deemed to control.
5. MISCELLANEOUS PROVISIONS
5.1 Adjustments Upon Changes in Capitalization
In the event of changes to the outstanding shares of Common Stock
of the Company through reorganization, merger, consolidation,
recapitalization, reclassification, stock split-up, (except for
the 3-for-2 stock split approved by the Board of Directors on
March 4, 1996, payable April 10, 1996), stock dividend, stock
consolidation or otherwise, or in the event of a sale of all or
substantially all of the assets of the Company, an appropriate
and proportionate adjustment shall be made in the number and
class of shares as to which Stock Options and Formula Awards may
be granted. A corresponding adjustment changing the number or
class of shares and/or the exercise price per share of
unexercised Stock Options and Formula Awards or portions thereof
which shall have been granted prior to any such change shall
likewise be made. Notwithstanding the foregoing, in the case of a
reorganization, merger or consolidation, or sale of all or
substantially all of the assets of the Company, in lieu of
adjustments as aforesaid, the Committee may in its discretion
accelerate the date after which a Stock Option or Formula Award
may or may not be exercised or the stated expiration date
thereof. Adjustments or changes under this Section 5.1 shall be
made by the Committee, whose determination as to what adjustments
or changes shall be made, and the extent thereof, shall be final,
binding and conclusive.
5.2 Non-Transferability
No Stock Option shall be transferable except by will or the laws
of descent and distribution, nor shall any Stock Option be
exercisable during the Participant's lifetime by any person other
than the Participant or his guardian or legal representative.
5.3 Withholding
The Company's obligations under the Plan shall be subject to
applicable federal, state and local tax withholding requirements.
Federal, state and local withholding tax due at the time of a
grant or upon the exercise of any Stock Option may, in the
discretion of the Committee, be paid in shares of Common Stock
already owned by the Participant or through the withholding of
shares otherwise issuable to such Participant, upon such terms
and conditions as the Committee shall determine. If the
Participant shall fail to pay, or make arrangements satisfactory
to the Committee for the payment to the Company of all such
federal, state and local taxes required to be withheld by the
Company, then the Company shall, to the extent permitted by law,
have the right to deduct from any payment of any kind otherwise
due to such Participant an amount equal to any federal, state or
local taxes of any kind required to be withheld by the Company.
5.4 Compliance with Law and Approval of Regulatory Bodies
No Stock Option or Formula Award shall be exercisable and no
shares will be delivered under the Plan except in compliance with
all applicable federal and state laws and regulations ncluding,
without limitation, compliance with all federal and state
securities laws and withholding tax requirements and with the
rules of NASDAQ and of all domestic stock exchanges on which the
Common Stock may be listed. Any share certificate issued to
evidence shares for which a Stock Option or Formula Award is
exercised may bear legends and statements the Committee shall
deem advisable to assure compliance with federal and state laws
and regulations. No Stock Option or Formula Award shall be
exercisable and no shares will be delivered under the Plan, until
the Company has obtained the consent or approval from regulatory
bodies, federal or state, having jurisdiction over such matters
as the Committee may deem advisable. In the case of the exercise
of a Stock Option or Formula Award by a person or estate
acquiring the right to exercise the Stock Option or Formula Award
as a result of the death of the Participant, the Committee may
require reasonable evidence as to the ownership of the Stock
Option or Formula Award and may require consents and releases of
taxing authorities that it may deem advisable.
5.5 No Right to Employment
Neither the adoption of the Plan nor its operation, nor any
document describing or referring to the Plan, or any part
thereof, nor the granting of any Stock Options hereunder, shall
confer upon any Participant under the Plan any right to continue
in the employ of the Company or any Subsidiary, or shall in any
way affect the right and power of the Company or any Subsidiary
to terminate the employment of any Participant at any time with
or without assigning a reason therefor, to the same extent as
might have been done if the Plan had not been adopted.
5.6 Exclusion from Pension Computations
By acceptance of a grant of a Stock Option under the Plan, the
recipient shall be deemed to agree that any income realized upon
the receipt or exercise thereof or upon the disposition of the
shares received upon exercise will not be taken into account as
"base remuneration", "wages", "salary" or "compensation" in
determining the amount of any contribution to or payment or any
other benefit under any pension, retirement, incentive, profit-
sharing or deferred compensation plan of the Company or any
Subsidiary.
5.7 Abandonment of Options
A Participant or Eligible Director may at any time abandon a
Stock Option or Formula Award prior to its expiration date. The
abandonment shall be evidenced in writing, in such form as the
Committee may from time to time prescribe. A Participant or
Eligible Director shall have no further rights with respect to
any Stock Option or Formula Award so abandoned.
5.8 Severability
If any of the terms or provisions of the Plan conflict with the
requirements of Rule 16b-3, then such terms or provisions shall
be deemed inoperative to the extent they so conflict with the
requirements of Rule 16b-3.
5.9 Interpretation of the Plan
Headings are given to the sections of the Plan solely as a
convenience to facilitate reference, such headings, numbering and
paragraphing shall not in any case be deemed in any way material
or relevant to the construction of the Plan or any provision
hereof. The use of the masculine gender shall also include
within its meaning the feminine. The use of the singular shall
also include within Its meaning the plural and vice versa.
5.10 Use of Proceeds
Funds received by the Company upon the exercise of Stock Options
and Formula Awards shall be used for the general corporate
purposes of the Company.
5.11 Construction of Plan
The place of administration of the Plan shall be in the
Commonwealth of Pennsylvania, and the validity, construction,
interpretation, administration and effect of the Plan and of its
rules and regulations, and rights relating to the Plan, shall be
determined solely in accordance with the laws of the
Commonwealth of Pennsylvania.
Exhibit 5 Opinion of Fox, Rothschild, O,Brien & Frankel
September 11, 1996
American Travellers Corporation
3220 Tillman Drive
Bensalem, PA 19020
Gentlemen:
We have acted as your counsel in connection with the filing of a
Registration Statement on Form S-8 (the "Registration Statement")
with the Securities and Exchange Commission covering 2,000,000
shares of Common Stock, $.01 par value (the "Shares"), of American
Travellers Corporation, a Pennsylvania corporation (the "Company").
The Shares may be issued pursuant to the Company's 1996 Stock Option
Plan ( the "Plan").
As counsel for the Company, we have examined such corporate records,
certificates and other documents and questions of law as we have
considered necessary or appropriate for purposes of this opinion.
For the purposes of this opinion, we have assumed that the shares
will be issued in accordance with the term and conditions of the
Plan. Based on the foregoing, we advise you that, in our opinion,
such of the Shares as are issued and paid for in accordance with the
terms and conditions of the Plan, will be legally issued, fully-paid
and non-assessable.
We consent to the filing of this opinion as an exhibit to the
Registration Statement. In giving this consent, we do not hereby
admit that we come within the category of persons whose consent is
required under Section 7 of the Securities Act of 1933, as amended,
or the rules and regulations thereunder.
Very truly yours,
/s/Fox, Rothschild, O'Brien & Frankel
Exhibit 23(b) Consent of Arthur Andersen LLP
Arthur Andersen LLP
As independent public accountants, we hereby consent to the
incorporation in this Registration Statement of our report dated
March 4, 1996 included in the American Travellers Corporation From
10-K for the year ended December 31, 1995 and to all references to
our firm included in the Registration Statement.
/s/ Arthur Andersen LLP
Philadelphia, PA
September 12, 1996
