<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
PENN TREATY AMERICAN CORPORATION
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
5) Total fee paid:
- -------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
- ----------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
- ----------------------------------------------------------------------
3) Filing party:
- ----------------------------------------------------------------------
4) Date Filed:
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<PAGE>
PRELIMINARY PROXY STATEMENT
[PENN TREATY AMERICAN CORPORATION
LETTERHEAD APPEARS HERE]
December __, 1996
Dear Shareholder:
You are cordially invited to attend the Company's Special Meeting of
Shareholders to be held at 10:30 a.m. on Tuesday, January 28, 1997 at the
offices of the Company, 3440 Lehigh Street, Allentown, Pennsylvania. You are
being asked to approve an amendment to the Company's Restated Articles of
Incorporation to increase the number of authorized shares of Common Stock of the
Company. The reasons for the proposed amendment are discussed in detail in the
enclosed proxy statement. You are urged to read it carefully.
The Board hopes that as many shareholders as possible will join us for the
meeting. Whether or not you plan to attend the meeting, it is important that
your shares be represented. Accordingly, you are requested to sign, date and
mail the enclosed proxy in the envelope provided at your earliest convenience.
Thank you for your cooperation.
Very truly yours,
Irving Levit
Chairman of the Board, President
and Chief Executive Officer
<PAGE>
PRELIMINARY PROXY STATEMENT
PENN TREATY AMERICAN CORPORATION
3440 LEHIGH STREET
ALLENTOWN, PENNSYLVANIA 18103
---------------------------------
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD TUESDAY
JANUARY 28, 1997
TO THE SHAREHOLDERS OF PENN TREATY AMERICAN CORPORATION
NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders of PENN TREATY
AMERICAN CORPORATION (the "Company") will be held at the offices of the Company,
3440 Lehigh Street, Allentown, Pennsylvania on Tuesday, January 28, 1997, at
10:30 a.m. (the "Meeting") for the purpose of considering and voting upon the
following matters:
1. To consider and approve an amendment to the Company's Restated
Articles of Incorporation to increase the number of authorized shares
of Common Stock, par value $.10 per share, from 10,000,000 shares to
25,000,000 shares; and
2. To transact such other business as may properly come before the
Meeting, or any adjournments, continuations or postponements thereof.
Only those holders of Common Stock of record at the close of business on
December 10, 1996 shall be entitled to notice of, and to vote at, the Meeting.
All shareholders are cordially invited to attend the Meeting in person.
EACH SHAREHOLDER, WHETHER OR NOT HE OR SHE PLANS TO ATTEND THE SPECIAL
MEETING, IS REQUESTED TO SIGN, DATE AND RETURN THE ENCLOSED PROXY WITHOUT DELAY
IN THE ENCLOSED SELF-ADDRESSED ENVELOPE. ANY PROXY GIVEN BY THE SHAREHOLDER MAY
BE REVOKED AT ANY TIME BEFORE IT IS EXERCISED BY FILING WITH THE SECRETARY OF
THE COMPANY A WRITTEN REVOCATION OR A DULY EXECUTED PROXY BEARING A LATER DATE.
ANY SHAREHOLDER PRESENT AT THE SPECIAL MEETING MAY REVOKE HIS OR HER PROXY AND
VOTE PERSONALLY ON EACH MATTER BROUGHT BEFORE THE SPECIAL MEETING.
By order of the Board of Directors,
Domenic P. Stangherlin
Secretary
Allentown, Pennsylvania
December __, 1996
<PAGE>
PRELIMINARY PROXY STATEMENT
PENN TREATY AMERICAN CORPORATION
3440 LEHIGH STREET
ALLENTOWN, PENNSYLVANIA 18103
PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD JANUARY 28, 1997
INTRODUCTORY STATEMENT
This Proxy Statement is being furnished to the shareholders of Penn Treaty
American Corporation, a Pennsylvania corporation (the "Company"), in connection
with the solicitation by the Board of Directors of the Company of proxies to be
voted at the Special Meeting of the shareholders of the Company to be held on
Tuesday, January 28, 1997, at the offices of the Company, 3440 Lehigh Street,
Allentown, Pennsylvania at 10:30 a.m., or at any adjournments, continuations or
postponements thereof (the "Meeting"). This Proxy Statement and the
accompanying proxy are first being mailed to the shareholders on or about
December 18, 1996.
MATTERS TO BE CONSIDERED
The matters to be considered and voted upon at the Meeting will be:
1. To consider and approve an amendment to the Company's Restated
Articles of Incorporation (the "Articles") to increase the number
of authorized shares of Common Stock, par value $.10 per share
("Common Stock") from 10,000,000 shares to 25,000,000 shares; and
2. To transact such other business as may properly come before the
Meeting, or any adjournments, continuations or postponements
thereof.
OUTSTANDING VOTING SECURITIES AND VOTING RIGHTS
The close of business on December 10, 1996 has been fixed as the record
date for the determination of shareholders entitled to notice of and to vote at
the Meeting and any adjournments, continuations or postponements thereof. As of
such date, there were outstanding _________ shares of Common Stock, held by ___
shareholders of record.
<PAGE>
Each share of Common Stock is entitled to one vote on all matters properly
submitted at the Meeting. Shareholders may vote by proxy by returning the
enclosed proxy to the Company. The presence, in person or by proxy, of the
holders of a majority of the outstanding shares of Common Stock entitled to vote
on the matters set forth in the accompanying Notice of Meeting will constitute a
quorum for the transaction of business at the Meeting. Broker non-votes and
abstentions will be included in the calculation of a quorum. The approval of
the amendment to the Articles will require the affirmative vote, either in
person or by proxy, of the holders of shares representing at least sixty-seven
percent (67%) of the outstanding shares of Common Stock.
Enclosed is a proxy for the shares of Common Stock held by you on the
record date. Shares represented by valid proxies will be voted in accordance
with instructions contained therein or, in the absence of such instructions, in
accordance with the recommendation of the Board of Directors FOR the approval of
the amendment to the Articles. Any shareholder who executes a proxy may revoke
it at any time before such proxy is voted by (i) delivering written notice to
the Secretary of the Company at the Company's principal executive offices or
(ii) delivering to the Secretary of the Company a duly executed proxy bearing a
later date than the proxy being revoked. Shareholders who execute proxies but
nevertheless attend the Meeting may revoke such proxies at any time before such
proxies are voted by giving written notice to the Secretary.
The expense of preparing, printing and mailing proxy material will be borne
by the Company. In addition to the solicitation of proxies by mail,
solicitation may be made by certain directors, officers and other employees of
the Company. No additional compensation will be paid for such solicitation.
Copies of solicitation material will be furnished to brokerage houses, nominees,
fiduciaries and custodians to forward to beneficial owners of Common Stock held
in their names. The Company will reimburse such persons for their reasonable
expenses in forwarding solicitation material to such beneficial owners. The
Company also has retained the services of Regan & Associates, Inc. at a cost of
approximately $5,000 to perform proxy solicitation activities on behalf of the
Company.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of November 29, 1996, information with
respect to the beneficial ownership of Common Stock of the Company by (i) each
person known to the Company to own 5% or more of the outstanding shares of
Common Stock, (ii) each of the Company's directors and executive officers and
(iii) all of the directors and executive officers of the Company as a group.
Each person named below has sole voting and investment power over the shares
listed opposite his name, except as set forth in the footnotes to the table.
2
<PAGE>
<TABLE>
SHARES PERCENT
NAME(1) OWNED OF CLASS (2)
<S> <C> <C>
Irving Levit (3) 1,855,288 24.42%
Domenic P. Stangherlin 41,887 *
A. J. Carden (4) 17,484 *
Michael F. Grill (5) 27,834 *
Jack D. Baum (6) 33,958 *
Glen A. Levit (7) 17,476 *
Emile G. Ilchuk 11,500 *
C. Mitchell Goldman (8) 1,700 *
Cameron Waite --- ---
John W. Mahoney (9) 12,000 *
---------- ---------
All directors and executive officers as a
group (10 persons) (10) 2,019,127 26.30%
</TABLE>
- ---------------
* Less than 1%.
(1) Unless otherwise noted, the address of each of the persons named above is
in care of the Company.
(2) Based on 7,509,999 shares outstanding, except that shares underlying
options exercisable within 60 days are deemed to be outstanding for
purposes of calculating the percentage owned by the holder of such options.
(3) Irving Levit is the President, Chief Executive Officer and Chairman of the
Board of the Company. Includes 49,450 shares held by a private foundation
of which Mr. Levit is an officer and director, 40,007 shares held by Mr.
Levit as trustee of a retirement account, 168,152 shares held by Mr. Levit
as co-trustee of an irrevocable trust for Mr. Levit's five children and
exercisable options to purchase 85,947 shares of Common Stock. Includes
30,000 shares held by Mr. Levit's wife as to which he disclaims beneficial
ownership. Excludes 43,665 shares held by four of his adult children and
options to purchase 89,142 shares of Common Stock.
(4) Consists of exercisable options and excludes options to purchase 31,500
shares of Common Stock.
(5) Consists of exercisable options and excludes options to purchase 26,250
shares of Common Stock.
(6) Includes exercisable options to purchase 33,877 shares of Common Stock and
excludes options to purchase 17,500 shares of Common Stock.
(7) Includes exercisable options to purchase 2,250 shares of Common Stock and
excludes options to purchase 18,750 shares of Common Stock.
(8) Includes 375 shares held by Mr. Goldman's wife and 450 shares beneficially
owned by Mr. Goldman's minor children.
(9) Consists of shares held jointly by Mr. Mahoney and his wife.
(10) Includes exercisable options held by members of the group to purchase
167,392 shares of Common Stock and excludes options held by members of the
group to purchase 183,142 shares of Common Stock.
3
<PAGE>
PROPOSAL TO AMEND THE COMPANY'S RESTATED ARTICLES OF
INCORPORATION TO INCREASE THE AUTHORIZED COMMON STOCK
PROPOSED AMENDMENT
At the Meeting, the shareholders will be asked to vote on a resolution
approving an amendment (the "Proposed Amendment") to Article FIFTH of the
Articles to increase the number of authorized shares of Common Stock from
10,000,000 shares to 25,000,000 shares.
REASONS FOR THE PROPOSED AMENDMENT
ISSUING COMMON STOCK INSTEAD OF CASH UPON CONVERSION OF THE NOTES
Pursuant to a Purchase Agreement between the Company and the initial
purchasers, on November 26, 1996, the Company issued $74,750,000 aggregate
principal amount of its 6-1/4% Convertible Subordinated Notes due 2003 (the
"Notes"). The initial purchasers purchased the Notes and then offered the
Notes for sale to investors in transactions exempt from the registration
requirements of the Securities Act of 1933, as amended, at an initial
offering price of 100% of the principal amount thereof.
The Notes were issued under an Indenture, dated as of November 26, 1996
(the "Indenture") between the Company and First Union National Bank, as
trustee. The Notes represent general unsecured subordinated obligations of
the Company. The Notes are convertible into shares of Common Stock, at the
option of the holder thereof, at any time after February 24, 1997 until the
close of business on November 28, 2003, subject to prior redemption or
repurchase, at an initial conversion price of $28.44 per share. The
conversion price is subject to adjustment (under formulae set forth in the
Indenture) upon the occurrence of certain events, including, but not limited
to: (i) the issuance of Common Stock as a dividend or distribution on the
outstanding Common Stock; (ii) the issuance to all holders of Common Stock of
certain rights, options or warrants to purchase Common Stock at less than the
Current Market Price (as defined in the Indenture); (iii) certain
subdivisions, combinations and reclassifications of Common Stock; (iv)
certain defined distributions to all holders of Common Stock of any class of
capital stock of the Company; (v) certain cash distributions; and (vi) the
purchase of Common Stock pursuant to a tender offer made by the Company or
any of its subsidiaries in certain defined circumstances.
As of November 29, 1996, 7,509,999 shares of Common Stock were
outstanding and 605,629 shares of Common Stock were held in treasury. The
Company currently does not have a sufficient number of shares of Common Stock
available for issuance upon the conversion of all of the Notes and the
exercise of all outstanding options granted by the Company pursuant to the
Company's Employee Incentive Stock Option Plan and Agent Stock Option Plan.
The Company will be required to pay cash in an amount equal to the Market
Price (as defined below under the heading "Alternative Plan if Proposed
Amendment is Not Adopted") for the portion of Notes converted for which the
Company does not have a sufficient number of shares of Common
4
<PAGE>
Stock available. The Board of Directors is recommending approval of the
Proposed Amendment in order to avoid the necessity of making any cash payments
to the holders of the Notes.
OTHER POTENTIAL USES
The increase in the authorized number of shares of Common Stock is also
being proposed because the Board of Directors believes that it is advisable
to have authorized but unissued shares of Common Stock available for various
corporate purposes. The Company may from time to time consider acquisitions,
stock dividends or stock splits, and public or private financings to provide
the Company with capital, all of which may involve the issuance of additional
shares of Common Stock or securities convertible into Common Stock. In
addition, the authorized capital stock could be used for stock options,
warrants, employee benefit plans, shareholder rights plans (which could
contain anti-takeover measures) and other distributions. The Board of
Directors believes that having authority to issue additional shares of Common
Stock, without, except as required by law, obtaining specific shareholder
approval will avoid the possible delay of calling and holding a special
meeting of shareholders to increase the Company's authorized capital at the
time a transaction may be proposed, so as to enhance the Company's ability to
take prompt advantage of market conditions and to respond promptly to any
future acquisition opportunities.
Other than shares to be reserved for issuance upon conversion of the
Notes and exercise of the options granted by the Company pursuant to the
Company's Employee Incentive Stock Option Plan and Agent Stock Option Plan as
discussed above, the Company has no present plan, understanding or
arrangement to issue any of the additional shares of Common Stock that will
be authorized if the Proposed Amendment is approved.
The authorization of additional shares of Common Stock will not, by
itself, have any effect on the rights of holders of existing Common Stock.
Depending on the circumstances, any issuance of additional shares of Common
Stock may dilute the present equity ownership of current shareholders. If
the Proposed Amendment is approved, the Board of Directors will have the
authority to issue the additional authorized shares of Common Stock to such
persons and for such consideration as it may determine without further action
by the shareholders except as required by law, the Articles or the rules of
any stock exchange or national interdealer quotation system on which the
Company's securities may then be listed.
Although the Proposed Amendment is not intended to be an anti-takeover
measure, shareholders should note that, under certain circumstances, the
additional shares of Common Stock could be used to make any attempt to gain
control of the Company or the Board of Directors more difficult or
time-consuming. The Proposed Amendment might be considered to have the
effect of discouraging an attempt by another person or entity, through the
acquisition of a substantial number of shares of the Company's stock, to
acquire control of the Company, because the issuance of the additional shares
of Common Stock could be used to dilute the stock ownership of a person or
entity seeking to obtain control and to increase the cost to a person or
entity seeking to acquire a majority of the voting power of the Company. If
so used, the effect of the additional authorized shares of Common Stock might
be (i) to deprive shareholders of an
5
<PAGE>
opportunity to sell their stock at a higher price as a result
of a tender offer or other purchase of shares by a person seeking to obtain
control of the Company or (ii) to assist incumbent management in retaining its
present position.
The Articles do contain certain provisions intended to be anti-takeover
in nature including provisions: (i) authorizing the Board of Directors,
without further action by the shareholders, to issue shares of preferred
stock; (ii) creating a staggered Board of Directors, divided into three
classes, each of which is comprised of three directors elected for a
three-year term with one class being elected each year; (iii) requiring the
approval of 67% of the voting power of the stock entitled to vote in the
election of directors to remove directors without cause; (iv) requiring the
affirmative vote of shareholders owning at least 67% of the outstanding
shares of the Common Stock in order for the Company to: (a) amend, repeal or
add any provision to the Articles; (b) merge or consolidate with another
corporation, other than a wholly-owned subsidiary; (c) exchange shares of the
Common Stock in such a manner that a corporation, person or entity acquires
the issued or outstanding shares of Common Stock pursuant to a vote of
shareholders; (d) sell, lease, convey, encumber or otherwise dispose of all
or substantially all of the property or business of the Company; or (e)
liquidate or dissolve the Company; and (v) permitting the Board of Directors
to oppose a tender offer or other offer for the Company's securities, and
allowing the Board of Directors to consider any pertinent issue in
determining whether to oppose any such offer. In addition, the Company's
By-laws require shareholders to give timely written notice to the Company and
to provide certain information with respect to
any candidate nominated by shareholders for election as a director of the
Company. See the description of such requirements under the heading
"Shareholder Proposals" below.
The 1988 Pennsylvania Business Corporation Law, as amended (the "BCL")
also contains certain shareholder protection provisions applicable to the
Company that may have an anti-takeover effect including (i) a "control
transaction" provision that allows holders of voting shares of a corporation
to "put" their stock to an acquiror for fair value in the event of a control
transaction (the acquisition of 20% of the voting stock of the corporation);
(ii) an "interested shareholder" provision that precludes the beneficial
owner of 20% of the voting stock of a corporation or certain affiliates of
the corporation from engaging in a business combination with the corporation
for a period of five years unless: (a) the board approves the business
combination or the acquisition of shares in advance, or (b) if the interested
shareholder owns 80% of such stock, the business combination is approved by a
majority of the disinterested shareholders and the transaction satisfies
certain "fair price" provisions; (iii) a provision authorizing corporations
to adopt shareholders' rights plans with discriminatory provisions (sometimes
referred to as poison pills) which take effect only in the event of a control
transaction; (iv) a provision allowing directors taking action with respect
to a tender offer or takeover proposal to consider the effects of any action
upon employees, suppliers, customers, communities where the corporation is
located and all other pertinent factors when determining whether the action
is in the best interests of the corporation; and (v) a provision removing the
statutory right of shareholders to call special meetings of shareholders or
to propose amendments to the articles of incorporation.
6
<PAGE> The foregoing provisions may discourage certain types of
transactions that involve a change of control of the Company and ensure a
measure of continuity in the management of the business and affairs of the
Company. While the Company does not currently have a shareholders' rights
plan or poison pill, the effect of the above-described provisions may be to
deter hostile takeovers at a price higher than the prevailing market price
for the Common Stock and to permit current management to remain in control of
the Company.
In addition to the provisions of the BCL, the insurance laws and regulations
of each of Pennsylvania and Vermont, which are applicable to the Company,
provide, among other things, that without the consent of the insurance
commissioner of each such state, no person may acquire control of the Company
and that any person or holder of shares of Common Stock or securities
convertible into such Common Stock (such as the Notes) possessing 10% or more of
the aggregate voting power of the Common Stock (inclusive of shares issuable
upon conversion of all such convertible securities) will be presumed to have
acquired such control unless each such insurance commissioner, upon
application, has determined otherwise.
The holders of Common Stock have no preemptive rights to purchase
additional shares of Common Stock.
ALTERNATIVE PLAN IF PROPOSED AMENDMENT IS NOT ADOPTED
The Company currently does not have a sufficient number of shares of
Common Stock available for issuance upon the conversion of all of the Notes
and the exercise of all outstanding options granted by the Company pursuant
to the Company's Employee Incentive Stock Option Plan and Agent Stock Option
Plan. In the event the Proposed Amendment is not approved by the
shareholders at the Meeting, and a holder of Notes desires to convert all, or
any portion, of its Notes into shares of Common Stock at a time when the
Company does not have a sufficient number of shares of Common Stock available
for such conversion, in lieu of delivering shares of Common Stock upon
conversion of that portion of such holder's Notes for which there is an
insufficient number of shares of Common Stock (the "Cash Equivalent Notes"),
the Company will pay to the holder converting the Cash Equivalent Notes an
amount in cash equal to the Market Price of the shares of Common Stock into
which the Cash Equivalent Notes are then convertible. "Market Price" means
the average of the last reported closing prices of the Common Stock for the
ten trading day period (appropriately adjusted to take into account the
occurrence during such period of certain events that would result in an
adjustment of the conversion price), commencing on the first trading day
after delivery of notice to such holder that the Company must pay cash in
lieu of delivering shares of Common Stock.
PREFERRED STOCK
The Articles also authorize the issuance of 5,000,000 shares of preferred
stock, which the Board of Directors has the power to issue in one or more
series and to fix the number of shares of each series and all designations,
preferences, qualifications, limitations, restrictions and special
7
<PAGE>
or relative rights, if any, of the shares in each series. The Proposed
Amendment does not increase or otherwise affect the Company's authorized
preferred stock.
LANGUAGE OF THE PROPOSED AMENDMENT
If the Proposed Amendment is approved by the shareholders at the Meeting,
the first paragraph of Article FIFTH of the Articles will be amended and
restated so that such first paragraph of such Article FIFTH shall be and read
in its entirety as follows:
"FIFTH: The aggregate number of shares which the Corporation
shall have authority to issue is 25,000,000 shares of common stock,
par value $.10 per share ("Common Stock"); and 5,000,000 shares of
preferred stock, par value $1.00 per share ("Preferred Stock")."
No other changes will be required to the current Article FIFTH of the
Articles.
ACTION BY SHAREHOLDERS
The Board of Directors believes that adoption of the Proposed Amendment
is in the best interest of the Company and its shareholders. Approval of the
Proposed Amendment requires a favorable vote of the holders of sixty-seven
percent (67%) of the outstanding shares of Common Stock. Abstentions and
broker non-votes will have the effect of a vote against the Proposed Amendment,
but will be counted in determining the presence of a quorum.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE ADOPTION OF THE
PROPOSED AMENDMENT TO THE ARTICLES.
SHAREHOLDER PROPOSALS
The By-laws of the Company set forth procedures for shareholders to
nominate directors for election. In order for shareholders to nominate
directors for election, shareholders must give timely written notice to the
President of the Company and make certain specified disclosures to the extent
known to such shareholder including (i) the name and address of each proposed
nominee; (ii) the principal occupation of each proposed nominee; (iii) the
total number of shares of Common Stock that will be voted for each proposed
nominee by such shareholder; and (iv) the name and residence address of such
shareholder. In order for the notice to be timely, it must be submitted to
the Company not less than 50 nor more than 75 days prior to any meeting of
shareholders called for the election of directors; provided, however, if less
than 50 days' notice of the meeting is given to shareholders, such nomination
shall be mailed or delivered to the President of the Company not later than
the close of business on the seventh day following the day on which notice of
the meeting was mailed.
8
<PAGE> In addition, any shareholder proposals intended for inclusion in
the proxy materials for the 1997 Annual Meeting of Shareholders must be
received in writing by the Company on or before January 5, 1997. The
inclusion of any proposal in the proxy materials will be subject to the
applicable rules of the Securities and Exchange Commission.
OTHER MATTERS
At the date of this Proxy Statement, the only business which the Board of
Directors intends to present or knows that others will present at the Meeting
is that which is presented above. If any other matter or matters are
properly brought before the Meeting, or any adjournments, continuations or
postponements thereof, it is the intention of the persons named in the
accompanying proxy to vote on such matters in accordance with their judgment.
YOU ARE URGED TO VOTE, SIGN, DATE AND RETURN THE ACCOMPANYING PROXY IN
THE ENCLOSED POSTAGE-PAID ENVELOPE AT YOUR EARLIEST CONVENIENCE, WHETHER OR
NOT YOU CURRENTLY PLAN TO ATTEND THE MEETING IN PERSON.
By order of the Board of Directors
Domenic P. Stangherlin
Secretary
December __, 1996
Allentown, Pennsylvania
9
<PAGE>
PRELIMINARY PROXY
PENN TREATY AMERICAN CORPORATION
PROXY SOLICITED BY THE BOARD OF DIRECTORS
SPECIAL MEETING OF SHAREHOLDERS
JANUARY 28, 1997
The undersigned shareholder(s) of Penn Treaty American Corporation, a
Pennsylvania corporation ("Penn Treaty"), revoking all previous proxies,
hereby appoints Irving Levit and A. J. Carden, and each of them acting
individually, as the attorneys and proxies of the undersigned, with full
power of substitution, to cast all votes for all shares of Penn Treaty common
stock, par value $0.10 per share ("Penn Treaty Common Stock"), which the
undersigned would be entitled to cast if personally present at the Special
Meeting of Shareholders of Penn Treaty, to be held at 3440 Lehigh Street,
Allentown, Pennsylvania, on Tuesday, January 28, 1997 at 10:30 a.m., local
time, and any and all adjournments, continuations or postponements thereof.
Said proxies are authorized and directed to vote as indicated with respect to
the following matters:
1. To amend Article FIFTH of the Restated Articles of Incorporation of
Penn Treaty to increase the authorized shares of Penn Treaty Common
Stock from 10,000,000 shares to 25,000,000 shares.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
2. To vote on such other business as may properly come before the Special
Meeting of Shareholders and any and all adjournments, continuations or
postponements thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. UNLESS
OTHERWISE SPECIFIED, THE SHARES WILL BE VOTED "FOR" APPROVAL OF THE AMENDMENT
TO PENN TREATY'S RESTATED ARTICLES OF INCORPORATION. THIS PROXY ALSO
DELEGATES DISCRETIONARY AUTHORITY TO VOTE WITH RESPECT TO ANY OTHER BUSINESS
WHICH MAY PROPERLY COME BEFORE THE SPECIAL MEETING OF SHAREHOLDERS AND ANY
AND ALL ADJOURNMENTS, CONTINUATIONS OR POSTPONEMENTS THEREOF.
(PLEASE DATE AND SIGN ON REVERSE SIDE)
_________________________________________________
<PAGE>
(continued from reverse side)
THE UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT OF THE NOTICE OF SPECIAL MEETING
AND THE PROXY STATEMENT.
NOTE: PLEASE SIGN THIS PROXY EXACTLY AS DATED: ___________________, 199_
THE NAME(S) APPEARS HEREON. WHEN SIGNING AS
ATTORNEY-IN-FACT, EXECUTOR, ADMINISTRATOR,
TRUSTEE OR GUARDIAN, PLEASE ADD YOUR TITLE AS SUCH.
PROXIES EXECUTED IN THE NAME OF A CORPORATION ___________________________
SHOULD BE SIGNED ON BEHALF OF THE CORPORATION SIGNATURE OF SHAREHOLDER
BY A DULY AUTHORIZED OFFICER. WHERE SHARES ARE
OWNED IN THE NAME OF TWO OR MORE PERSONS, ALL
SUCH PERSONS SHOULD SIGN THIS PROXY.
__________________________
SIGNATURE OF SHAREHOLDER
PLEASE SIGN, DATE AND RETURN IN THE
ENCLOSED POSTAGE PAID ENVELOPE.
