As filed with the Securities and Exchange Commission on October 29, 1999
                                                      Registration No. 333-
                                                                           ----

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM S-8
                             REGISTRATION STATEMENT
                        UNDER THE SECURITIES ACT OF 1933

                        PENN TREATY AMERICAN CORPORATION
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

                  Pennsylvania                           23-1664166
                  ------------                           ----------
(STATE OR OTHER JURISDICTION OF INCORPORATION          (I.R.S. EMPLOYER
             OR ORGANIZATION)                         IDENTIFICATION NO.)

                 3440 Lehigh Street
              Allentown, Pennsylvania                       18103
              -----------------------                       -----
      (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)            (ZIP CODE)

                        Penn Treaty American Corporation
                    1998 Employee Incentive Stock Option Plan
                    -----------------------------------------
                            (FULL TITLE OF THE PLAN)

                             Irving Levit, President
                        Penn Treaty American Corporation
                               3440 Lehigh Street
                          Allentown, Pennsylvania 18103
                        --------------------------------
                     (NAME AND ADDRESS OF AGENT FOR SERVICE)

                                 (610) 965-2222
                                 --------------
          (TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE)

                                 with a copy to:
                            Justin P. Klein, Esquire
                     Ballard Spahr Andrews & Ingersoll, LLP
                         1735 Market Street, 51st Floor
                      Philadelphia, Pennsylvania 19103-7599
                                 (215) 665-8500

                         CALCULATION OF REGISTRATION FEE
--------------------------------------------------------------------------------
                                  Proposed       Proposed
Title of                          Maximum        Maximum
Securities        Amount          Offering       Aggregate       Amount of
to be             to be           Price Per      Offering        Registration
Registered        Registered      Share(1)       Price(1)        Fee
--------------------------------------------------------------------------------
Common Stock,
par value $.10
per share         600,000(2)      $18.4375       $11,062,500     $3,076


<PAGE>

(1)      Calculated in  accordance  with Rule 457(c) and (h) on the basis of the
         average of the high and low prices of Penn Treaty American  Corporation
         Common  Stock on October  28,  1999,  as reported on the New York Stock
         Exchange.

(2)      Such number  represents the number of shares of Common Stock  initially
         issuable  upon  exercise of all options  available  for grant under the
         1998 Employee Incentive Stock Option Plan.


<PAGE>



          PART I - INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS


     The  documents  containing  the  information  specified  in  Part I of this
Registration  Statement  will be given or sent to all  officers  and  other  key
employees of Penn Treaty American Corporation who participate in the Penn Treaty
American  Corporation 1998 Employee  Incentive Stock Option Plan as specified by
Rule 428 under the Securities Act.


          PART II - INFORMATION REQUIRED IN THE REGISTRATION STATEMENT


ITEM 3.   INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE.

     The following  documents filed with the Securities and Exchange  Commission
pursuant to the Securities Exchange Act of 1934, as amended by Penn Treaty (File
No. 0-15972) are incorporated herein by reference:

     (i)  Penn  Treaty's  Annual  Report on Form 10-K for the fiscal  year ended
          December 31, 1998;

     (ii) Penn Treaty's  Quarterly  Reports on Form 10-Q for the quarters  ended
          March 31, 1999 and June 30, 1999;

     (iii) Penn Treaty's Current Report on Form 8-K dated January 15, 1999; and

     (iv) the  description  of Penn  Treaty's  common  stock  contained  in Penn
          Treaty's  Registration  Statement  on Form  8-A for  such  securities,
          including any  amendments or reports filed for the purpose of updating
          such description.

     All  documents  subsequently  filed by Penn  Treaty  after the date  hereof
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act prior to the
filing of a post-effective amendment which indicates that all securities offered
hereby have been sold or which  deregisters  all  securities  remaining  unsold,
shall be deemed to be incorporated by reference in this  Registration  Statement
and shall be part hereof from the date of filing of such documents.


ITEM 4.   DESCRIPTION OF SECURITIES.

          Not applicable.


<PAGE>

ITEM 5.   INTERESTS OF NAMED EXPERTS AND COUNSEL.

          Not applicable.


ITEM 6.   INDEMNIFICATION OF DIRECTORS AND OFFICERS.

     The Amended and Restated Bylaws of Penn Treaty provide for  indemnification
of directors  and  officers of Penn Treaty in  accordance  with  indemnification
provisions  of the  Pennsylvania  Business  Corporation  Law of  1988.  Sections
1741-50 of the Pennsylvania  Business Corporation Law permit  indemnification of
directors,  officers,  employees  and  agents  of a  corporation  under  certain
conditions and subject to certain limitations.

     The Company has directors' and officers'  liability  insurance insuring its
directors  and  officers  against  liability  incurred  in their  capacities  as
directors and officers and providing for reimbursement of the registrant for any
indemnification payments made by it to directors and officers.


ITEM 7.  EXEMPTION FROM REGISTRATION CLAIMED.

          Not applicable.


ITEM 8.  EXHIBITS.

          4.1  Specimen  copy  of  Common  Stock  Certificate  (incorporated  by
               reference  to Exhibit 4 to  Registration  Statement  on Form S-1,
               Reg. No. 33-92690).

          5.1  Opinion of Ballard Spahr Andrews & Ingersoll, LLP

          23.1 Consent of PricewaterhouseCoopers LLP

          23.2 Consent of Ballard Spahr Andrews & Ingersoll,  LLP  (contained in
               Exhibit 5.1)

          24.1 Power of Attorney  (included  on signature  page of  Registration
               Statement)

          99.1 Penn Treaty American  Corporation  1998 Employee  Incentive Stock
               Option Plan



<PAGE>


ITEM 9.  UNDERTAKINGS.

          The undersigned registrant hereby undertakes:

          (1) To file,  during  any  period  in which  offers or sales are being
     made, a post-effective amendment to this registration statement;

               (i) To include any prospectus required by section 10(a)(3) of the
          Securities Act of 1933;

               (ii) To reflect  in the  prospectus  any facts or events  arising
          after the effective  date of the  registration  statement (or the most
          recent post-effective amendment thereof) which, individually or in the
          aggregate, represent a fundamental change in the information set forth
          in the  registration  statement.  Notwithstanding  the foregoing,  any
          increase  or decrease  in volume of  securities  offered (if the total
          dollar  value of  securities  offered  would not exceed that which was
          registered)  and  any  deviation  from  the  low  or  high  end of the
          estimated  maximum  offering  range  may be  reflected  in the form of
          prospectus  filed with the  Commission  pursuant to Rule 424(b) if, in
          the aggregate,  the changes in volume and price represent no more than
          a 20% change in the maximum aggregate  offering price set forth in the
          "Calculation of Registration Fee" table in the effective  registration
          statement;

               (iii) To include any  material  information  with  respect to the
          plan of  distribution  not  previously  disclosed in the  registration
          statement  or  any  material   change  to  such   information  in  the
          registration statement;

          (2) Provided, however, that paragraphs (1)(i) and (1)(ii) do not apply
     if  the  registration  statement  is on  Form  S-3 or  Form  S-8,  and  the
     information required to be included in a post-effective  amendment by those
     paragraphs  is  contained  in  periodic  reports  filed  by the  registrant
     pursuant to section 13 or section 15(d) of the  Securities  Exchange Act of
     1934 that are incorporated by reference in the registration statement.

          (3) That,  for the  purpose of  determining  any  liability  under the
     Securities Act of 1933, each such post-effective  amendment shall be deemed
     to be a new  registration  statement  relating  to the  securities  offered
     therein,  and the offering of such  securities at that time shall be deemed
     to be the initial bona fide offering thereof.

          (4) To remove from registration by means of a post-effective amendment
     any  of  the  securities  being  registered  which  remain  unsold  at  the
     termination of the offering.

          The undersigned  registrant  hereby  undertakes  that, for purposes of
     determining  any liability under the Securities Act of 1933, each filing of
     the  registrant'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 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.

<PAGE>

          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.


<PAGE>


                                   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 Allentown,  Commonwealth  of Pennsylvania on October
29, 1999.


                                          Penn Treaty American Corporation


                                          By :  /s/ Irving Levit
                                                --------------------------
                                                    Irving Levit, President


     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.

     KNOW ALL  PERSONS  BY THESE  PRESENTS,  that each  person  whose  signature
appears below  constitutes and appoints Irving Levit and A.J. Carden and each or
any one of them,  his true and lawful  attorneys-in-fact  and agents,  with full
power of substitution  and  resubstitution,  for him and in his name,  place and
stead,  in any and all  capacities,  to sign any and all  amendments  (including
post-effective amendments) to this registration statement, and to file the same,
with all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange  Commission,  granting unto said  attorneys-in-fact  and
agents, and each of them, full power and authority to perform each and every act
and thing requisite and necessary to be done in connection  therewith,  as fully
to all intents and purposes as he might or could do in person,  hereby ratifying
and confirming all that said  attorneys-in-fact  and agents,  or any of them, or
his or their  substitute or substitutes,  may lawfully do or cause to be done by
virtue hereof.



     Signature                Title                             Date
     ---------                -----                             ----

/s/ Irving Levit              Chairman of the Board, President  October 29, 1999
    -----------               and Chief Executive Officer
    Irving Levit              (Principal Executive Officer)

<PAGE>

/s/ Michael F. Grill          Treasurer, Controller and         October 29, 1999
    ----------------          Director (Principal Accounting
    Michael F. Grill          Officer)


/s/ A.J. Carden               Executive Vice President and      October 29, 1999
    -----------               Director
    A.J. Carden


/s/ Domenic P. Stangherlin    Secretary and Director            October 29, 1999
    ----------------------
    Domenic P. Stangherlin


/s/ Jack D. Baum              Vice President, Marketing and     October 29, 1999
    ------------              Director
    Jack D. Baum


/s/ Glen A. Levit             Vice President, Sales and         October 29, 1999
    ------------              Director
    Glen A. Levit


/s/ Cameron Waite             Chief Financial Officer           October 29, 1999
    -------------             (Principal Financial Officer)
    Cameron Waite


/s/ Emile G. Ilchuk           Director                          October 29, 1999
    ---------------
    Emile G. Ilchuk


/s/ C. Mitchell Goldman       Director                          October 29, 1999
    -------------------
    C. Mitchell Goldman


/s/ David B. Trindle          Director                          October 29, 1999
    ----------------
    David B. Trindle


<PAGE>

                                  EXHIBIT INDEX

EXHIBIT
NUMBER            DESCRIPTION
------            -----------

4.1               Specimen copy  of Common Stock  Certificate  (incorporated  by
                  reference  to  Exhibit 4  to  Registration  Statement on  Form
                  S-1, Reg. No. 333-10777).

5.1               Opinion of Ballard Spahr Andrews & Ingersoll, LLP

23.1              Consent of PricewaterhouseCoopers, LLP

23.2              Consent of Ballard Spahr  Andrews & Ingersoll, LLP  (contained
                  in Exhibit 5.1)

24.1              Power of Attorney (included on signature page of  Registration
                  Statement)

99.1              Penn Treaty American Corporation 1998 Employee Incentive Stock
                  Option Plan


<PAGE>


                                   EXHIBIT 5.1

               [Ballard Spahr Andrews & Ingersoll, LLP Letterhead]




October 29, 1999


Penn Treaty American Corporation
3440 Lehigh Street
Allentown, PA  18103

Re: Registration Statement on Form S-8

Gentlemen:

We have  acted as special  counsel  to Penn  Treaty  American  Corporation  (the
"Company") in connection with the registration under the Securities Act of 1933,
as amended, of 600,000 shares of Common Stock of Penn Treaty, par value $.10 per
share (the  "Shares"),  issuable upon the exercise of options  granted under the
Penn Treaty American  Corporation 1998 Employee Incentive Stock Option Plan (the
"Plan").

In  rendering  our  opinion,  we have  reviewed  such  certificates,  documents,
corporate  records and other  instruments  as in our judgment  are  necessary or
appropriate to enable us to render the opinion  expressed  below. In giving this
opinion, we are assuming the authenticity of all instruments  presented to us as
originals,  the conformity with the originals of all instruments presented to us
as copies and the genuineness of all signatures.

Based on the foregoing,  we are of the opinion that the Shares, when issued upon
exercise  of  options  granted  under the  Plan,  in  accordance  with the terms
thereof, will be legally issued, fully paid and nonassessable.

We  consent to the filing of this  opinion  as Exhibit  5.1 to the  Registration
Statement on Form S-8 being filed with respect to the offering of the Shares.

Yours truly,

/s/ Ballard Spahr Andrews & Ingersoll, LLP
    --------------------------------------
    Ballard Spahr Andrews & Ingersoll, LLP



<PAGE>


                                  EXHIBIT 23.1


                       CONSENT OF INDEPENDENT ACCOUNTANTS



We  hereby  consent  to the  incorporation  by  reference  in this  Registration
Statement  on Form  S-8 of our  report  dated  March  8,  1999  relating  to the
financial  statements and financial  statement schedules of Penn Treaty American
Corporation which appears in Penn Treaty American Corporation's Annual Report on
Form 10-K for the year ended December 31, 1998.


/s/ PricewaterhouseCoopers LLP
    --------------------------
    PricewaterhouseCoopers LLP

Philadelphia, Pennsylvania
October 29, 1999


<PAGE>

                                  EXHIBIT 99.1


                        PENN TREATY AMERICAN CORPORATION
                    1998 EMPLOYEE INCENTIVE STOCK OPTION PLAN



                                    ARTICLE I

                                     Purpose

     The purpose of the 1998 Employee  Incentive  Stock Option Plan (the "Plan")
is to enable Penn Treaty American  Corporation  (the "Company") to offer certain
officers and key executive employees of the Company and its Subsidiaries options
to acquire equity interests in the Company,  thereby  attracting,  retaining and
rewarding such persons,  and  strengthening  the mutuality of interests  between
such persons and the Company's shareholders.


                                   ARTICLE II

                                   Definitions

     For  purposes of the Plan,  the  following  terms shall have the  following
meanings:


     "Award" shall mean an award under the Plan of a Stock Option.

     "Board" shall mean the Board of Directors of the Company.

     "Code" shall mean the Internal Revenue Code of 1986, as amended.

     "Committee" shall mean the Compensation Committee of the Board,  consisting
     of two or more members of the Board, each of whom shall be a "disinterested
     person" within the meaning of Rule 16b-3  promulgated by the Securities and
     Exchange Commission under the Securities Exchange Act of 1934, as amended.

     "Common  Stock" shall mean the Common Stock,  par value $.10 per share,  of
     the Company.

     "Disability"  shall  mean a  disability  that  results  in a  Participant's
     Termination of Employment  with the Company or a Subsidiary,  as determined
     pursuant to standard Company procedures.



<PAGE>

     "Fair Market Value" for purposes of the Plan, unless otherwise  required by
     any applicable  provision of the Code or any regulations issued thereunder,
     shall mean, as of any date, the average of the high and low sales prices of
     a share of Common Stock as reported on the  principal  national  securities
     exchange on which the Common Stock is listed or admitted to trading, or, if
     not  listed  or  traded  on any such  exchange,  The  Nasdaq  Stock  Market
     ("Nasdaq"),  or, if such sales prices are not available, the average of the
     bid and asked prices per share reported on Nasdaq,  or, if such  quotations
     are not available,  the fair market value as determined by the Board, which
     determination shall be conclusive.

     "Incentive Stock Option" shall mean any Stock Option awarded under the Plan
     intended to be and  designated  as an "Incentive  Stock Option"  within the
     meaning of Section 422 of the Code.

     "Non-Qualified  Stock Option" shall mean any Stock Option granted under the
     Plan that is not an Incentive Stock Option.

     "Participant" shall mean an employee to whom an Award has been granted.

     "Stock  Option" or  "Option"  shall mean any option to  purchase  shares of
     Common Stock granted pursuant to Article VI of the Plan.

     "Subsidiary"  shall mean any subsidiary of the Company,  80% or more of the
     voting stock of which is owned, directly or indirectly, by the Company.

     "Termination of Employment" shall mean a termination of employment with the
     Company and all of its Subsidiaries. Whether authorized leave of absence or
     absence for military or governmental  service shall constitute  termination
     of  employment,  for the purposes of the Plan,  shall be  determined by the
     Committee, which determination shall be final and conclusive.


                                   ARTICLE III

                                 ADMINISTRATION


     The  Committee.  The Plan  shall be  administered  and  interpreted  by the
     Committee.

     Awards.  The Committee shall have full authority to grant,  pursuant to the
     terms of the Plan,  Stock Options to persons  eligible  under Article V. In
     particular, the Committee shall have the authority:

     (a)  to select the  persons to whom Stock  Options may from time to time be
          granted;


<PAGE>


     (b)  to determine  whether and to what extent  Incentive  Stock Options and
          Non-Qualified  Stock Options,  or any combination  thereof,  are to be
          granted  to one or more  persons  eligible  to  receive  Awards  under
          Article V;

     (c)  to  determine  the  number of shares of Common  Stock to be covered by
          each Award granted hereunder; and

     (d)  to determine the terms and conditions, not inconsistent with the terms
          of the  Plan,  of any  Award  granted  hereunder  (including,  but not
          limited to, the option price, the option term, and provisions relating
          to  any   restriction   or   limitation,   any  vesting   schedule  or
          acceleration, or any waiver with respect to the Award).

     Guidelines.  Subject to Article VII hereof,  the  Committee  shall have the
     authority to adopt, alter and repeal such administrative rules,  guidelines
     and  practices  governing  the Plan as it shall,  from  time to time,  deem
     advisable;  to interpret the terms and provisions of the Plan and any Award
     granted  under  the Plan  (and any  agreements  relating  thereto);  and to
     otherwise  supervise  the  administration  of the Plan.  The  Committee may
     correct any defect,  supply any omission or reconcile any  inconsistency in
     the Plan or in any Award in the  manner  and to the  extent  it shall  deem
     necessary to carry the Plan into effect.  Notwithstanding the foregoing, no
     action of the  Committee  under this Section 3.3 shall impair the rights of
     any  Participant  without  the  Participant's  consent,   unless  otherwise
     required by law.

     Decisions Final. Any decision, interpretation or other action made or taken
     in good faith by the  Committee  arising out of or in  connection  with the
     Plan  shall  be  final,   binding  and  conclusive  on  the  Company,   all
     Participants  and  their  respective  heirs,   executors,   administrators,
     successors and assigns.


                                   ARTICLE IV

                                SHARE LIMITATION

     Shares.  The maximum aggregate number of shares of Common Stock that may be
     issued  under the Plan is 600,000  (subject  to any  increase  or  decrease
     pursuant  to Section  4.3),  which may be either  authorized  and  unissued
     shares of Common Stock or issued Common Stock reacquired by the Company. If
     any Option  granted under the Plan shall expire,  terminate or be cancelled
     for any  reason  without  having  been  exercised  in full,  the  number of
     unpurchased shares shall again be available for the purposes of the Plan.

     Individual  Limit.  No employee may be granted  Awards  covering  more than
     50,000 shares of Common Stock (subject to increase or decrease  pursuant to
     Section 4.3) during any calendar year.



<PAGE>


     Changes.

     (a)  Subject to any required action by the shareholders of the Company, the
          number of shares of Common  Stock  covered by each  outstanding  Stock
          Option, and the exercise price per share in each such Option, shall be
          proportionately adjusted for any increase or decrease in the number of
          issued  shares  of  Common  Stock  of  the  Company  resulting  from a
          subdivision  or  consolidation  of  shares or the  payment  of a stock
          dividend  (but only on the  Common  Stock) or any  other  increase  or
          decrease  in the number of such  shares  effected  without  receipt of
          consideration by the Company.

     (b)  Subject to any required action by the shareholders of the Company,  if
          the  Company  shall be the  surviving  corporation  in any  merger  or
          consolidation,  each  outstanding  Stock Option  shall  pertain to and
          apply to the  securities  to which a holder of the number of shares of
          Common Stock subject to the Stock Option would have been  entitled.  A
          dissolution or liquidation of the Company or a merger or consolidation
          in which the  Company is not the  surviving  corporation,  shall cause
          each  outstanding  Stock  Option  to  terminate,  provided  that  each
          optionee  shall, in such event, if a period of 12 months from the date
          of the granting of the Stock Option shall have expired, have the right
          immediately  prior to such  dissolution or  liquidation,  or merger or
          consolidation  in which the Company is not the surviving  corporation,
          to exercise his Stock Option in whole or in part without regard to the
          installment provisions of Section 6.4(d) of the Plan.  Notwithstanding
          the above provisions,  an Incentive Stock Option will not terminate if
          assumed by the surviving or acquiring corporation, or its parent, upon
          a merger or consolidation  under  circumstances which are not deemed a
          modification  of the  Incentive  Stock  Option  within the  meaning of
          Sections 425(a) and 425(h)(3)(A) of the Code.

     (c)  In the  event of a  change  in the  Common  Stock  of the  Company  as
          presently  constituted,  which is  limited  to a change  of all of its
          authorized shares with par value into the same number of shares with a
          different par value or without par value,  the shares  resulting  from
          any such  change  shall be deemed to be the  Common  Stock  within the
          meaning of the Plan.

     (d)  To the  extent  that  the  foregoing  adjustments  relate  to stock or
          securities  of the  Company,  such  adjustments  shall  be made by the
          Committee, whose determination in that respect shall be final, binding
          and  conclusive,  provided  that no  Incentive  Stock  Option  granted
          pursuant  to the Plan shall be  adjusted  in a manner  that causes the
          Incentive  Stock Option to fail to continue to qualify as an incentive
          stock option within the meaning of Section 422 of the Code.

     (e)  The grant of a Stock  Option  pursuant to the Plan shall not affect in
          any way  the  right  or  power  of the  Company  to make  adjustments,
          reclassification,   reorganizations  or  changes  of  its  capital  or
          business  structure  or to merge  or to  consolidate  or to  dissolve,
          liquidate  or sell,  or  transfer  all or any part of its  business or
          assets.


<PAGE>

                                    ARTICLE V

                                   ELIGIBILITY

     All officers  (whether or not they are  Directors)  and other key executive
employees of the Company and its  Subsidiaries  are eligible to be granted Stock
Options under the Plan.


                                   ARTICLE VI
                                  STOCK OPTIONS


Options.  Each Stock Option  granted under the Plan shall be either an Incentive
Stock Option or a Non-Qualified Stock Option.

Grants.  The Committee  shall have the authority to grant to any person eligible
under  Article  V one or  more  Incentive  Stock  Options,  Non-Qualified  Stock
Options,  or both types of Stock  Options.  To the extent that any Stock  Option
does not qualify as an Incentive Stock Option (whether because of its provisions
or the time or manner of its  exercise or  otherwise),  such Stock Option or the
portion  thereof  which does not  qualify as an  Incentive  Stock  Option  shall
constitute a separate Non-Qualified Stock Option.

Incentive Stock Options.  Anything in the Plan to the contrary  notwithstanding,
no term of the Plan relating to Incentive  Stock  Options shall be  interpreted,
amended or altered, nor shall any discretion or authority granted under the Plan
be exercised,  so as to disqualify  the Plan under Section 422 of the Code,  or,
without the consent of the  Participants  affected,  to disqualify any Incentive
Stock Option under such Section 422.

Terms of  Options.  Options  granted  under  the Plan  shall be  subject  to the
following terms and conditions and shall contain such additional
terms and  conditions,  not  inconsistent  with the  terms of the  Plan,  as the
Committee shall deem desirable:

Notice of Grant of Stock  Option.  Each Stock Option shall be evidenced  by, and
subject  to the  terms  of, a Notice of Grant of Stock  Option  executed  by the
Company and the  Participant.  The Notice of Grant of Stock Option shall specify
whether the Option is an Incentive Stock Option or a Non-Qualified Stock Option,
the number of shares of Common  Stock  subject to the Stock  Option,  the option
price,  the option term,  and the other terms and  conditions  applicable to the
Stock Option.

Option  Price.  Subject to subsection  (l) below,  the option price per share of
Common Stock  purchasable upon exercise of a Stock Option shall be determined by
the Committee at the time of grant,  but shall be not less than 100% of the Fair
Market  Value of the  Common  Stock on the date of grant if the Stock  Option is
intended to be an Incentive Stock Option.  The Committee may, in its discretion,
grant  Non-Qualified  Stock  Options at an option price per share which is below
the Fair Market Value of the Common Stock on the date of grant.

<PAGE>

Option  Term.  Subject to  subsection  (l) below,  the term of each Stock Option
shall be fixed by the Committee at the time of grant,  but no Stock Option shall
be exercisable more than ten years after the date it is granted.

Exercisability.  Stock  Options shall be  exercisable  at such time or times and
subject to such terms and  conditions as shall be determined by the Committee at
the time of grant; provided,  however, that no Stock Option shall be exercisable
in whole or in part prior to 12 months from the date it is granted; and provided
further, that the Committee may waive any installment exercise or waiting period
provisions,  in whole or in part, at any time after the date of grant,  based on
such factors as the Committee shall deem appropriate in its sole discretion.

Method of Exercise.  Subject to such  installment  exercise  and waiting  period
provisions as may be imposed by the Committee, Stock Options may be exercised in
whole or in part at any time during the option term by delivering to the Company
written notice of exercise specifying the number of shares of Common Stock to be
purchased and the option price therefor;  provided,  however, that not less than
100 shares may be purchased  at any one time unless the number  purchased is the
total  number at the time  purchasable  under the Stock  Option.  The  notice of
exercise  shall be  accompanied  by payment in full of the option  price and, if
requested, by the representation described in Section 9.2. Payment of the option
price may be made (i) in cash or by check  payable to the  Company,  (ii) to the
extent  determined by the Committee on or after the date of grant,  in shares of
Common Stock duly owned by the  Participant  (and for which the  Participant has
good title free and clear of any liens and  encumbrances)  or (iii) by reduction
in the number of shares of Common Stock issuable upon such exercise,  based,  in
each case, on the Fair Market Value of the Common Stock on the last trading date
preceding the date of exercise.  In addition,  the Committee and the Board shall
have the discretion to include in any Option grant the right of the  Participant
(A) to receive a loan from the  Company to pay the  exercise  price of the Stock
Option,  with such terms as shall not cause the Stock  Option,  if an  Incentive
Stock Option, to become disqualified under Section 422 of the Code or amendments
thereto,  and/or (B) to receive such  assistance from the Company in obtaining a
loan from a financial  institution as is necessary in the sole discretion of the
Committee  and  the  Board.  Upon  payment  in  full  of the  option  price  and
satisfaction  of the  other  conditions  provided  herein,  a stock  certificate
representing  the number of shares of Common Stock to which the  Participant  is
entitled shall be issued and delivered to the Participant.

Death.  In the event of a  Participant's  Termination of Employment by reason of
death,  any Stock Option held by such  Participant  which was exercisable on the
date of death may  thereafter  be exercised by the legal  representative  of the
Participant's  estate  until the earlier of three months after the date of death
or the expiration of the stated term of such Stock Option,  and any Stock Option
not exercisable on the date of death shall be forfeited.

<PAGE>

Disability.  In the event of a Participant's Termination of Employment by reason
of Disability,  any Stock Option held by such Participant  which was exercisable
on the date of such Termination of Employment may thereafter be exercised by the
Participant  until the earlier of three months after such date or the expiration
of the stated term of such Stock Option, and any Stock Option not exercisable on
the date of such Termination of Employment  shall be forfeited.  If an Incentive
Stock  Option is exercised  after the  expiration  of the  exercise  period that
applies  for  purposes  of  Section  422 of the Code,  such  Stock  Option  will
thereafter be treated as a Non-Qualified Stock Option.

Termination of Employment.  Unless  otherwise  determined by the Committee on or
after  the  date of  grant,  in the  event  of a  Participant's  Termination  of
Employment  other than by reason of Death or Disability,  all Stock Options held
by such  Participant  on the date of such  Termination  of  Employment  shall be
forfeited as of such date.

Non-Transferability  of Options.  No Stock Option shall be  transferrable by the
Participant  otherwise than by will or by the laws of descent and  distribution,
to the  extent  consistent  with the terms of the Plan and the  Option,  and all
Stock Options shall be exercisable,  during the Participant's  lifetime, only by
the Participant.

Incentive Stock Option Limitations. To the extent that the aggregate Fair Market
Value  (determined  as of the date of grant) of the Common Stock with respect to
which  Incentive  Stock  Options  are  exercisable  for  the  first  time by the
Participant  during  any  calendar  year under the Plan  and/or any other  stock
option plan of the Company or any subsidiary or parent  corporation  (within the
meaning of Section 424 of the Code)  exceeds  $100,000,  such  Options  shall be
treated as Options which are not Incentive Stock Options.

Should the foregoing  provisions not be necessary in order for the Stock Options
to qualify as Incentive  Stock Options,  or should any additional  provisions be
required, the Committee may amend the Plan accordingly, without the necessity of
obtaining the approval of the shareholders of the Company.

Ten-Percent Shareholder Rule. Notwithstanding any other provision of the Plan to
the  contrary,  no  Incentive  Stock  Option shall be granted to any person who,
immediately  prior to the grant,  owns stock possessing more than ten percent of
the total  combined  voting  power of all classes of stock of the Company or any
subsidiary  or parent  corporation  (within  the  meaning of Section  424 of the
Code),  unless the option price is at least 110% of the Fair Market Value of the
Common Stock on the date of grant and the Option, by its terms, expires no later
than five years after the date of grant.

Rights as  Shareholder.  A  Participant  shall not be deemed to be the holder of
Common  Stock,  or to have any of the rights of a holder of Common  Stock,  with
respect  to shares  subject  to the  Option,  unless  and  until  the  Option is
exercised and a stock  certificate  representing  such shares of Common Stock is
issued to the Participant.

<PAGE>

                                   ARTICLE VII

                            TERMINATION OR AMENDMENT

     7.1  Termination or Amendment of Plan. The Committee may at any time amend,
discontinue  or terminate the Plan or any part thereof  (including any amendment
deemed  necessary  to ensure that the  Company  may comply  with any  regulatory
requirement  referred  to  in  Article  IX);  provided,  however,  that,  unless
otherwise  required by law, the rights of a  Participant  with respect to Awards
granted  prior  to such  amendment,  discontinuance  or  termination  may not be
impaired  without the consent of such  Participant  and,  provided further that,
without the approval of the  Company's  shareholders,  no amendment  may be made
that would (i) materially increase the number of shares of Common Stock that may
be issued under the Plan (except by operation of Section 4.3);  (ii)  materially
modify the  requirements  as to eligibility to participate in the Plan; or (iii)
materially increase the benefits accruing to Participants.

     7.2  Amendment of Options.  The  Committee may amend the terms of any Award
previously granted, prospectively or retroactively,  but, subject to Article IV,
no such  amendment or other action by the  Committee  shall impair the rights of
any holder without the holder's  consent.  The Committee may also substitute new
Stock Options for previously granted Stock Options having higher option prices.


                                  ARTICLE VIII

                                  UNFUNDED PLAN

     The Plan is  intended  to  constitute  an  "unfunded"  plan  for  incentive
compensation.  With respect to any payment not yet made to a Participant  by the
Company,  nothing  contained  herein shall give any such  Participant any rights
that are greater than those of a general creditor of the Company.


                                   ARTICLE IX

                               GENERAL PROVISIONS

     9.1  Nonassignment.  Except as  otherwise  provided in the Plan,  any Award
granted  hereunder and the rights and privileges  conferred thereby shall not be
sold,  transferred,  assigned,  pledged or  hypothecated  in any way (whether by
operation  of  law  or  otherwise),  and  shall  not be  subject  to  execution,
attachment or similar  process.  Upon any attempt to transfer,  assign,  pledge,
hypothecate or otherwise dispose of an Award, right or privilege contrary to the
provisions  hereof,  or upon  the  levy of any  attachment  or  similar  process
thereon,  such  Award and the  rights  and  privileges  conferred  hereby  shall
immediately  terminate  and the Award  shall  immediately  be  forfeited  to the
Company.


<PAGE>

     9.2 Legend. The Committee may require each person acquiring shares pursuant
to an Award to  represent  to the  Company in writing  that the  Participant  is
acquiring  the  shares  without  a  view  to  distribution  thereof.  The  stock
certificates representing such shares may include any legend which the Committee
deems appropriate to reflect any restrictions on transfer.

     All  certificates  representing  shares of Common Stock delivered under the
Plan shall be subject to such stock transfer  orders and other  restrictions  as
the  Committee  may deem  advisable  under  the  rules,  regulations  and  other
requirements  of the Securities and Exchange  Commission,  any stock exchange or
stock  market  upon  which  the  Common  Stock is then  listed  or  traded,  any
applicable  Federal or state  securities law, and any applicable  corporate law,
and  the  Committee  may  cause  a  legend  or  legends  to be put  on any  such
certificates to make appropriate reference to such restrictions.

     9.3 Other Plans. Nothing contained in the Plan shall prevent the Board from
adopting other or additional compensation  arrangements,  subject to shareholder
approval  if such  approval is  required;  and such  arrangements  may be either
generally applicable or applicable only in specific cases.

     9.4 No Right to  Employment.  Neither  the Plan nor the  grant of any Award
hereunder shall give any Participant or other employee any right with respect to
continuance of employment by the Company or any  Subsidiary,  nor shall the Plan
impose any  limitation on the right of the Company or any  Subsidiary by which a
Participant is employed to terminate such Participant's employment at any time.

     9.5  Withholding  of Taxes.  The Company shall have the right to reduce the
number of shares of Common Stock otherwise  deliverable  pursuant to the Plan by
an  amount  that  would  have a Fair  Market  Value  equal to the  amount of all
Federal,  state and local taxes required to be withheld, or to deduct the amount
of such taxes from any cash payment otherwise to be made to the Participant.  In
connection with such  withholding,  the Committee may make such  arrangements as
are consistent with the Plan as it may deem appropriate.

     9.6 Listing and Other Conditions.

     (a)  If the Common Stock is listed on a national securities exchange or The
          Nasdaq  Stock  Market,  the  issuance  of any  shares of Common  Stock
          pursuant to an Award shallbe conditioned upon such shares being listed
          on such  exchange or Nasdaq.  The Company  shall have no obligation to
          issue any shares of Common  Stock  unless and until such shares are so
          listed,  and the right to exercise any Option shall be suspended until
          such listing has been effected.

     (b)  If at any time counsel to the Company shall be of the opinion that any
          sale or delivery of shares of Common Stock  pursuant to an Award is or
          may in the  circumstances  be unlawful or result in the  imposition of
          excise  taxes  under  the  statutes,   rules  or  regulations  of  any
          applicable jurisdiction,  the Company shall have no obligation to make
          such sale or delivery, or to make any application or to effect or to

<PAGE>

          maintain any qualification or registration under the Securities Act of
          1933, as amended,  or otherwise with respect to shares of Common Stock
          or Awards,  and the right to exercise  any Option  shall be  suspended
          until, in the opinion of such counsel,  such sale or delivery shall be
          lawful or shall not result in the imposition of excise taxes.

     (c)  Upon  termination of any period of suspension  under this Section 9.6,
          any  Award  affected  by such  suspension  which  shall  not then have
          expired or terminated  shall be reinstated as to all shares  available
          before such  suspension  and as to shares which would  otherwise  have
          become  available  during the period of such  suspension,  but no such
          suspension shall extend the term of any Option.

     9.7 Governing Law. The Plan and actions taken in connection  herewith shall
be governed and construed in  accordance  with the laws of the  Commonwealth  of
Pennsylvania.

     9.8 Construction.  Wherever any words are used in the Plan in the masculine
gender they shall be  construed  as though  they were also used in the  feminine
gender in all cases where they would so apply,  and  wherever any words are used
herein in the  singular  form they shall be  construed  as though they were also
used in the plural form in all cases where they would so apply.

     9.9 Liability of the Board and the Committee. No member of the Board or the
Committee  nor any employee of the Company or any of its  subsidiaries  shall be
liable for any act or action  hereunder,  whether of omission or commission,  by
any other member or employee or by any agent to whom duties in  connection  with
the  administration  of the Plan have been delegated or, except in circumstances
involving bad faith,  gross negligence or fraud, for anything done or omitted to
be done by himself.

     9.10  Other  Benefits.  No  payment  pursuant  to an Award  shall be deemed
compensation for purposes of computing benefits under any retirement plan of the
Company or any  Subsidiary  nor affect any benefits under any other benefit plan
now or hereafter in effect under which the availability or amount of benefits is
related to the level of compensation.

     9.11 Costs.  The Company shall bear all expenses  incurred in administering
the Plan, including expenses related to the issuance of Common Stock pursuant to
Awards.

     9.12  Severability.  If any part of the  Plan  shall  be  determined  to be
invalid or void in any respect,  such  determination  shall not affect,  impair,
invalidate or nullify the remaining  provisions of the Plan which shall continue
in full force and effect.

     9.13 Successors. The Plan shall be binding upon and inure to the benefit of
any successor or successors of the Company.

     9.14  Headings.  Article and  section  headings  contained  in the Plan are
included  for  convenience  only  and  are  not  to be  used  in  construing  or
interpreting the Plan.

<PAGE>

                                    ARTICLE X

                                  TERM OF PLAN

     10.1  Effective  Date.  The Plan shall be  effective  as of the date of its
approval by the Company's shareholders.

     10.2 Termination Date. Unless sooner  terminated,  the Plan shall terminate
ten  years  after it is  adopted  by the  Board  and no  Awards  may be  granted
thereafter.  Termination of the Plan shall not affect Awards granted before such
date.
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{"company-data": {"conformed-name": "PENN TREATY AMERICAN CORP", "cik": "0000814181", "assigned-sic": "6311", "irs-number": "231664166", "state-of-incorporation": "PA", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "S-8", "act": "33", "file-number": "333-89927", "film-number": "99737278"}, "business-address": {"street1": "3440 LEHIGH ST", "city": "ALLENTOWN", "state": "PA", "zip": "18103", "phone": "6109652222"}, "mail-address": {"street1": "3440 LEHIGH ST", "street2": "3440 LEHIGH ST", "city": "ALLENTOWN", "state": "PA", "zip": "18103"}}
As filed with the Securities and Exchange Commission on October 29, 1999
                                                      Registration No. 333-
                                                                           ----

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM S-8
                             REGISTRATION STATEMENT
                        UNDER THE SECURITIES ACT OF 1933

                        PENN TREATY AMERICAN CORPORATION
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

                  Pennsylvania                           23-1664166
                  ------------                           ----------
(STATE OR OTHER JURISDICTION OF INCORPORATION          (I.R.S. EMPLOYER
             OR ORGANIZATION)                         IDENTIFICATION NO.)

                 3440 Lehigh Street
              Allentown, Pennsylvania                       18103
              -----------------------                       -----
      (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)            (ZIP CODE)

                        Penn Treaty American Corporation
                    1998 Employee Incentive Stock Option Plan
                    -----------------------------------------
                            (FULL TITLE OF THE PLAN)

                             Irving Levit, President
                        Penn Treaty American Corporation
                               3440 Lehigh Street
                          Allentown, Pennsylvania 18103
                        --------------------------------
                     (NAME AND ADDRESS OF AGENT FOR SERVICE)

                                 (610) 965-2222
                                 --------------
          (TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE)

                                 with a copy to:
                            Justin P. Klein, Esquire
                     Ballard Spahr Andrews & Ingersoll, LLP
                         1735 Market Street, 51st Floor
                      Philadelphia, Pennsylvania 19103-7599
                                 (215) 665-8500

                         CALCULATION OF REGISTRATION FEE
--------------------------------------------------------------------------------
                                  Proposed       Proposed
Title of                          Maximum        Maximum
Securities        Amount          Offering       Aggregate       Amount of
to be             to be           Price Per      Offering        Registration
Registered        Registered      Share(1)       Price(1)        Fee
--------------------------------------------------------------------------------
Common Stock,
par value $.10
per share         600,000(2)      $18.4375       $11,062,500     $3,076
(1)      Calculated in  accordance  with Rule 457(c) and (h) on the basis of the
         average of the high and low prices of Penn Treaty American  Corporation
         Common  Stock on October  28,  1999,  as reported on the New York Stock
         Exchange.

(2)      Such number  represents the number of shares of Common Stock  initially
         issuable  upon  exercise of all options  available  for grant under the
         1998 Employee Incentive Stock Option Plan.
PART I - INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS

     The  documents  containing  the  information  specified  in  Part I of this
Registration  Statement  will be given or sent to all  officers  and  other  key
employees of Penn Treaty American Corporation who participate in the Penn Treaty
American  Corporation 1998 Employee  Incentive Stock Option Plan as specified by
Rule 428 under the Securities Act.

          PART II - INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

ITEM 3.   INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE.

     The following  documents filed with the Securities and Exchange  Commission
pursuant to the Securities Exchange Act of 1934, as amended by Penn Treaty (File
No. 0-15972) are incorporated herein by reference:

     (i)  Penn  Treaty's  Annual  Report on Form 10-K for the fiscal  year ended
          December 31, 1998;

     (ii) Penn Treaty's  Quarterly  Reports on Form 10-Q for the quarters  ended
          March 31, 1999 and June 30, 1999;

     (iii) Penn Treaty's Current Report on Form 8-K dated January 15, 1999; and

     (iv) the  description  of Penn  Treaty's  common  stock  contained  in Penn
          Treaty's  Registration  Statement  on Form  8-A for  such  securities,
          including any  amendments or reports filed for the purpose of updating
          such description.

     All  documents  subsequently  filed by Penn  Treaty  after the date  hereof
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act prior to the
filing of a post-effective amendment which indicates that all securities offered
hereby have been sold or which  deregisters  all  securities  remaining  unsold,
shall be deemed to be incorporated by reference in this  Registration  Statement
and shall be part hereof from the date of filing of such documents.

ITEM 4.   DESCRIPTION OF SECURITIES.

          Not applicable.
ITEM 5.   INTERESTS OF NAMED EXPERTS AND COUNSEL.

          Not applicable.

ITEM 6.   INDEMNIFICATION OF DIRECTORS AND OFFICERS.

     The Amended and Restated Bylaws of Penn Treaty provide for  indemnification
of directors  and  officers of Penn Treaty in  accordance  with  indemnification
provisions  of the  Pennsylvania  Business  Corporation  Law of  1988.  Sections
1741-50 of the Pennsylvania  Business Corporation Law permit  indemnification of
directors,  officers,  employees  and  agents  of a  corporation  under  certain
conditions and subject to certain limitations.

     The Company has directors' and officers'  liability  insurance insuring its
directors  and  officers  against  liability  incurred  in their  capacities  as
directors and officers and providing for reimbursement of the registrant for any
indemnification payments made by it to directors and officers.

ITEM 7.  EXEMPTION FROM REGISTRATION CLAIMED.

          Not applicable.

ITEM 8.  EXHIBITS.

          4.1  Specimen  copy  of  Common  Stock  Certificate  (incorporated  by
               reference  to Exhibit 4 to  Registration  Statement  on Form S-1,
               Reg. No. 33-92690).

          5.1  Opinion of Ballard Spahr Andrews & Ingersoll, LLP

          23.1 Consent of PricewaterhouseCoopers LLP

          23.2 Consent of Ballard Spahr Andrews & Ingersoll,  LLP  (contained in
               Exhibit 5.1)

          24.1 Power of Attorney  (included  on signature  page of  Registration
               Statement)

          99.1 Penn Treaty American  Corporation  1998 Employee  Incentive Stock
               Option Plan
ITEM 9.  UNDERTAKINGS.

          The undersigned registrant hereby undertakes:

          (1) To file,  during  any  period  in which  offers or sales are being
     made, a post-effective amendment to this registration statement;

               (i) To include any prospectus required by section 10(a)(3) of the
          Securities Act of 1933;

               (ii) To reflect  in the  prospectus  any facts or events  arising
          after the effective  date of the  registration  statement (or the most
          recent post-effective amendment thereof) which, individually or in the
          aggregate, represent a fundamental change in the information set forth
          in the  registration  statement.  Notwithstanding  the foregoing,  any
          increase  or decrease  in volume of  securities  offered (if the total
          dollar  value of  securities  offered  would not exceed that which was
          registered)  and  any  deviation  from  the  low  or  high  end of the
          estimated  maximum  offering  range  may be  reflected  in the form of
          prospectus  filed with the  Commission  pursuant to Rule 424(b) if, in
          the aggregate,  the changes in volume and price represent no more than
          a 20% change in the maximum aggregate  offering price set forth in the
          "Calculation of Registration Fee" table in the effective  registration
          statement;

               (iii) To include any  material  information  with  respect to the
          plan of  distribution  not  previously  disclosed in the  registration
          statement  or  any  material   change  to  such   information  in  the
          registration statement;

          (2) Provided, however, that paragraphs (1)(i) and (1)(ii) do not apply
     if  the  registration  statement  is on  Form  S-3 or  Form  S-8,  and  the
     information required to be included in a post-effective  amendment by those
     paragraphs  is  contained  in  periodic  reports  filed  by the  registrant
     pursuant to section 13 or section 15(d) of the  Securities  Exchange Act of
     1934 that are incorporated by reference in the registration statement.

          (3) That,  for the  purpose of  determining  any  liability  under the
     Securities Act of 1933, each such post-effective  amendment shall be deemed
     to be a new  registration  statement  relating  to the  securities  offered
     therein,  and the offering of such  securities at that time shall be deemed
     to be the initial bona fide offering thereof.

          (4) To remove from registration by means of a post-effective amendment
     any  of  the  securities  being  registered  which  remain  unsold  at  the
     termination of the offering.

          The undersigned  registrant  hereby  undertakes  that, for purposes of
     determining  any liability under the Securities Act of 1933, each filing of
     the  registrant'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 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 Allentown,  Commonwealth  of Pennsylvania on October
29, 1999.

                                          Penn Treaty American Corporation

                                          By :  /s/ Irving Levit
                                                --------------------------
                                                    Irving Levit, President

     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.

     KNOW ALL  PERSONS  BY THESE  PRESENTS,  that each  person  whose  signature
appears below  constitutes and appoints Irving Levit and A.J. Carden and each or
any one of them,  his true and lawful  attorneys-in-fact  and agents,  with full
power of substitution  and  resubstitution,  for him and in his name,  place and
stead,  in any and all  capacities,  to sign any and all  amendments  (including
post-effective amendments) to this registration statement, and to file the same,
with all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange  Commission,  granting unto said  attorneys-in-fact  and
agents, and each of them, full power and authority to perform each and every act
and thing requisite and necessary to be done in connection  therewith,  as fully
to all intents and purposes as he might or could do in person,  hereby ratifying
and confirming all that said  attorneys-in-fact  and agents,  or any of them, or
his or their  substitute or substitutes,  may lawfully do or cause to be done by
virtue hereof.

     Signature                Title                             Date
     ---------                -----                             ----

/s/ Irving Levit              Chairman of the Board, President  October 29, 1999
    -----------               and Chief Executive Officer
    Irving Levit              (Principal Executive Officer)
/s/ Michael F. Grill          Treasurer, Controller and         October 29, 1999
    ----------------          Director (Principal Accounting
    Michael F. Grill          Officer)

/s/ A.J. Carden               Executive Vice President and      October 29, 1999
    -----------               Director
    A.J. Carden

/s/ Domenic P. Stangherlin    Secretary and Director            October 29, 1999
    ----------------------
    Domenic P. Stangherlin

/s/ Jack D. Baum              Vice President, Marketing and     October 29, 1999
    ------------              Director
    Jack D. Baum

/s/ Glen A. Levit             Vice President, Sales and         October 29, 1999
    ------------              Director
    Glen A. Levit

/s/ Cameron Waite             Chief Financial Officer           October 29, 1999
    -------------             (Principal Financial Officer)
    Cameron Waite

/s/ Emile G. Ilchuk           Director                          October 29, 1999
    ---------------
    Emile G. Ilchuk

/s/ C. Mitchell Goldman       Director                          October 29, 1999
    -------------------
    C. Mitchell Goldman

/s/ David B. Trindle          Director                          October 29, 1999
    ----------------
    David B. Trindle
EXHIBIT INDEX

EXHIBIT
NUMBER            DESCRIPTION
------            -----------

4.1               Specimen copy  of Common Stock  Certificate  (incorporated  by
                  reference  to  Exhibit 4  to  Registration  Statement on  Form
                  S-1, Reg. No. 333-10777).

5.1               Opinion of Ballard Spahr Andrews & Ingersoll, LLP

23.1              Consent of PricewaterhouseCoopers, LLP

23.2              Consent of Ballard Spahr  Andrews & Ingersoll, LLP  (contained
                  in Exhibit 5.1)

24.1              Power of Attorney (included on signature page of  Registration
                  Statement)

99.1              Penn Treaty American Corporation 1998 Employee Incentive Stock
                  Option Plan
EXHIBIT 5.1

               [Ballard Spahr Andrews & Ingersoll, LLP Letterhead]

October 29, 1999

Penn Treaty American Corporation
3440 Lehigh Street
Allentown, PA  18103

Re: Registration Statement on Form S-8

Gentlemen:

We have  acted as special  counsel  to Penn  Treaty  American  Corporation  (the
"Company") in connection with the registration under the Securities Act of 1933,
as amended, of 600,000 shares of Common Stock of Penn Treaty, par value $.10 per
share (the  "Shares"),  issuable upon the exercise of options  granted under the
Penn Treaty American  Corporation 1998 Employee Incentive Stock Option Plan (the
"Plan").

In  rendering  our  opinion,  we have  reviewed  such  certificates,  documents,
corporate  records and other  instruments  as in our judgment  are  necessary or
appropriate to enable us to render the opinion  expressed  below. In giving this
opinion, we are assuming the authenticity of all instruments  presented to us as
originals,  the conformity with the originals of all instruments presented to us
as copies and the genuineness of all signatures.

Based on the foregoing,  we are of the opinion that the Shares, when issued upon
exercise  of  options  granted  under the  Plan,  in  accordance  with the terms
thereof, will be legally issued, fully paid and nonassessable.

We  consent to the filing of this  opinion  as Exhibit  5.1 to the  Registration
Statement on Form S-8 being filed with respect to the offering of the Shares.

Yours truly,

/s/ Ballard Spahr Andrews & Ingersoll, LLP
    --------------------------------------
    Ballard Spahr Andrews & Ingersoll, LLP
EXHIBIT 23.1

                       CONSENT OF INDEPENDENT ACCOUNTANTS

We  hereby  consent  to the  incorporation  by  reference  in this  Registration
Statement  on Form  S-8 of our  report  dated  March  8,  1999  relating  to the
financial  statements and financial  statement schedules of Penn Treaty American
Corporation which appears in Penn Treaty American Corporation's Annual Report on
Form 10-K for the year ended December 31, 1998.

/s/ PricewaterhouseCoopers LLP
    --------------------------
    PricewaterhouseCoopers LLP

Philadelphia, Pennsylvania
October 29, 1999
EXHIBIT 99.1

                        PENN TREATY AMERICAN CORPORATION
                    1998 EMPLOYEE INCENTIVE STOCK OPTION PLAN

                                    ARTICLE I

                                     Purpose

     The purpose of the 1998 Employee  Incentive  Stock Option Plan (the "Plan")
is to enable Penn Treaty American  Corporation  (the "Company") to offer certain
officers and key executive employees of the Company and its Subsidiaries options
to acquire equity interests in the Company,  thereby  attracting,  retaining and
rewarding such persons,  and  strengthening  the mutuality of interests  between
such persons and the Company's shareholders.

                                   ARTICLE II

                                   Definitions

     For  purposes of the Plan,  the  following  terms shall have the  following
meanings:

     "Award" shall mean an award under the Plan of a Stock Option.

     "Board" shall mean the Board of Directors of the Company.

     "Code" shall mean the Internal Revenue Code of 1986, as amended.

     "Committee" shall mean the Compensation Committee of the Board,  consisting
     of two or more members of the Board, each of whom shall be a "disinterested
     person" within the meaning of Rule 16b-3  promulgated by the Securities and
     Exchange Commission under the Securities Exchange Act of 1934, as amended.

     "Common  Stock" shall mean the Common Stock,  par value $.10 per share,  of
     the Company.

     "Disability"  shall  mean a  disability  that  results  in a  Participant's
     Termination of Employment  with the Company or a Subsidiary,  as determined
     pursuant to standard Company procedures.
"Fair Market Value" for purposes of the Plan, unless otherwise  required by
     any applicable  provision of the Code or any regulations issued thereunder,
     shall mean, as of any date, the average of the high and low sales prices of
     a share of Common Stock as reported on the  principal  national  securities
     exchange on which the Common Stock is listed or admitted to trading, or, if
     not  listed  or  traded  on any such  exchange,  The  Nasdaq  Stock  Market
     ("Nasdaq"),  or, if such sales prices are not available, the average of the
     bid and asked prices per share reported on Nasdaq,  or, if such  quotations
     are not available,  the fair market value as determined by the Board, which
     determination shall be conclusive.

     "Incentive Stock Option" shall mean any Stock Option awarded under the Plan
     intended to be and  designated  as an "Incentive  Stock Option"  within the
     meaning of Section 422 of the Code.

     "Non-Qualified  Stock Option" shall mean any Stock Option granted under the
     Plan that is not an Incentive Stock Option.

     "Participant" shall mean an employee to whom an Award has been granted.

     "Stock  Option" or  "Option"  shall mean any option to  purchase  shares of
     Common Stock granted pursuant to Article VI of the Plan.

     "Subsidiary"  shall mean any subsidiary of the Company,  80% or more of the
     voting stock of which is owned, directly or indirectly, by the Company.

     "Termination of Employment" shall mean a termination of employment with the
     Company and all of its Subsidiaries. Whether authorized leave of absence or
     absence for military or governmental  service shall constitute  termination
     of  employment,  for the purposes of the Plan,  shall be  determined by the
     Committee, which determination shall be final and conclusive.

                                   ARTICLE III

                                 ADMINISTRATION

     The  Committee.  The Plan  shall be  administered  and  interpreted  by the
     Committee.

     Awards.  The Committee shall have full authority to grant,  pursuant to the
     terms of the Plan,  Stock Options to persons  eligible  under Article V. In
     particular, the Committee shall have the authority:

     (a)  to select the  persons to whom Stock  Options may from time to time be
          granted;
(b)  to determine  whether and to what extent  Incentive  Stock Options and
          Non-Qualified  Stock Options,  or any combination  thereof,  are to be
          granted  to one or more  persons  eligible  to  receive  Awards  under
          Article V;

     (c)  to  determine  the  number of shares of Common  Stock to be covered by
          each Award granted hereunder; and

     (d)  to determine the terms and conditions, not inconsistent with the terms
          of the  Plan,  of any  Award  granted  hereunder  (including,  but not
          limited to, the option price, the option term, and provisions relating
          to  any   restriction   or   limitation,   any  vesting   schedule  or
          acceleration, or any waiver with respect to the Award).

     Guidelines.  Subject to Article VII hereof,  the  Committee  shall have the
     authority to adopt, alter and repeal such administrative rules,  guidelines
     and  practices  governing  the Plan as it shall,  from  time to time,  deem
     advisable;  to interpret the terms and provisions of the Plan and any Award
     granted  under  the Plan  (and any  agreements  relating  thereto);  and to
     otherwise  supervise  the  administration  of the Plan.  The  Committee may
     correct any defect,  supply any omission or reconcile any  inconsistency in
     the Plan or in any Award in the  manner  and to the  extent  it shall  deem
     necessary to carry the Plan into effect.  Notwithstanding the foregoing, no
     action of the  Committee  under this Section 3.3 shall impair the rights of
     any  Participant  without  the  Participant's  consent,   unless  otherwise
     required by law.

     Decisions Final. Any decision, interpretation or other action made or taken
     in good faith by the  Committee  arising out of or in  connection  with the
     Plan  shall  be  final,   binding  and  conclusive  on  the  Company,   all
     Participants  and  their  respective  heirs,   executors,   administrators,
     successors and assigns.

                                   ARTICLE IV

                                SHARE LIMITATION

     Shares.  The maximum aggregate number of shares of Common Stock that may be
     issued  under the Plan is 600,000  (subject  to any  increase  or  decrease
     pursuant  to Section  4.3),  which may be either  authorized  and  unissued
     shares of Common Stock or issued Common Stock reacquired by the Company. If
     any Option  granted under the Plan shall expire,  terminate or be cancelled
     for any  reason  without  having  been  exercised  in full,  the  number of
     unpurchased shares shall again be available for the purposes of the Plan.

     Individual  Limit.  No employee may be granted  Awards  covering  more than
     50,000 shares of Common Stock (subject to increase or decrease  pursuant to
     Section 4.3) during any calendar year.
Changes.

     (a)  Subject to any required action by the shareholders of the Company, the
          number of shares of Common  Stock  covered by each  outstanding  Stock
          Option, and the exercise price per share in each such Option, shall be
          proportionately adjusted for any increase or decrease in the number of
          issued  shares  of  Common  Stock  of  the  Company  resulting  from a
          subdivision  or  consolidation  of  shares or the  payment  of a stock
          dividend  (but only on the  Common  Stock) or any  other  increase  or
          decrease  in the number of such  shares  effected  without  receipt of
          consideration by the Company.

     (b)  Subject to any required action by the shareholders of the Company,  if
          the  Company  shall be the  surviving  corporation  in any  merger  or
          consolidation,  each  outstanding  Stock Option  shall  pertain to and
          apply to the  securities  to which a holder of the number of shares of
          Common Stock subject to the Stock Option would have been  entitled.  A
          dissolution or liquidation of the Company or a merger or consolidation
          in which the  Company is not the  surviving  corporation,  shall cause
          each  outstanding  Stock  Option  to  terminate,  provided  that  each
          optionee  shall, in such event, if a period of 12 months from the date
          of the granting of the Stock Option shall have expired, have the right
          immediately  prior to such  dissolution or  liquidation,  or merger or
          consolidation  in which the Company is not the surviving  corporation,
          to exercise his Stock Option in whole or in part without regard to the
          installment provisions of Section 6.4(d) of the Plan.  Notwithstanding
          the above provisions,  an Incentive Stock Option will not terminate if
          assumed by the surviving or acquiring corporation, or its parent, upon
          a merger or consolidation  under  circumstances which are not deemed a
          modification  of the  Incentive  Stock  Option  within the  meaning of
          Sections 425(a) and 425(h)(3)(A) of the Code.

     (c)  In the  event of a  change  in the  Common  Stock  of the  Company  as
          presently  constituted,  which is  limited  to a change  of all of its
          authorized shares with par value into the same number of shares with a
          different par value or without par value,  the shares  resulting  from
          any such  change  shall be deemed to be the  Common  Stock  within the
          meaning of the Plan.

     (d)  To the  extent  that  the  foregoing  adjustments  relate  to stock or
          securities  of the  Company,  such  adjustments  shall  be made by the
          Committee, whose determination in that respect shall be final, binding
          and  conclusive,  provided  that no  Incentive  Stock  Option  granted
          pursuant  to the Plan shall be  adjusted  in a manner  that causes the
          Incentive  Stock Option to fail to continue to qualify as an incentive
          stock option within the meaning of Section 422 of the Code.

     (e)  The grant of a Stock  Option  pursuant to the Plan shall not affect in
          any way  the  right  or  power  of the  Company  to make  adjustments,
          reclassification,   reorganizations  or  changes  of  its  capital  or
          business  structure  or to merge  or to  consolidate  or to  dissolve,
          liquidate  or sell,  or  transfer  all or any part of its  business or
          assets.
ARTICLE V

                                   ELIGIBILITY

     All officers  (whether or not they are  Directors)  and other key executive
employees of the Company and its  Subsidiaries  are eligible to be granted Stock
Options under the Plan.

                                   ARTICLE VI
                                  STOCK OPTIONS

Options.  Each Stock Option  granted under the Plan shall be either an Incentive
Stock Option or a Non-Qualified Stock Option.

Grants.  The Committee  shall have the authority to grant to any person eligible
under  Article  V one or  more  Incentive  Stock  Options,  Non-Qualified  Stock
Options,  or both types of Stock  Options.  To the extent that any Stock  Option
does not qualify as an Incentive Stock Option (whether because of its provisions
or the time or manner of its  exercise or  otherwise),  such Stock Option or the
portion  thereof  which does not  qualify as an  Incentive  Stock  Option  shall
constitute a separate Non-Qualified Stock Option.

Incentive Stock Options.  Anything in the Plan to the contrary  notwithstanding,
no term of the Plan relating to Incentive  Stock  Options shall be  interpreted,
amended or altered, nor shall any discretion or authority granted under the Plan
be exercised,  so as to disqualify  the Plan under Section 422 of the Code,  or,
without the consent of the  Participants  affected,  to disqualify any Incentive
Stock Option under such Section 422.

Terms of  Options.  Options  granted  under  the Plan  shall be  subject  to the
following terms and conditions and shall contain such additional
terms and  conditions,  not  inconsistent  with the  terms of the  Plan,  as the
Committee shall deem desirable:

Notice of Grant of Stock  Option.  Each Stock Option shall be evidenced  by, and
subject  to the  terms  of, a Notice of Grant of Stock  Option  executed  by the
Company and the  Participant.  The Notice of Grant of Stock Option shall specify
whether the Option is an Incentive Stock Option or a Non-Qualified Stock Option,
the number of shares of Common  Stock  subject to the Stock  Option,  the option
price,  the option term,  and the other terms and  conditions  applicable to the
Stock Option.

Option  Price.  Subject to subsection  (l) below,  the option price per share of
Common Stock  purchasable upon exercise of a Stock Option shall be determined by
the Committee at the time of grant,  but shall be not less than 100% of the Fair
Market  Value of the  Common  Stock on the date of grant if the Stock  Option is
intended to be an Incentive Stock Option.  The Committee may, in its discretion,
grant  Non-Qualified  Stock  Options at an option price per share which is below
the Fair Market Value of the Common Stock on the date of grant.
Option  Term.  Subject to  subsection  (l) below,  the term of each Stock Option
shall be fixed by the Committee at the time of grant,  but no Stock Option shall
be exercisable more than ten years after the date it is granted.

Exercisability.  Stock  Options shall be  exercisable  at such time or times and
subject to such terms and  conditions as shall be determined by the Committee at
the time of grant; provided,  however, that no Stock Option shall be exercisable
in whole or in part prior to 12 months from the date it is granted; and provided
further, that the Committee may waive any installment exercise or waiting period
provisions,  in whole or in part, at any time after the date of grant,  based on
such factors as the Committee shall deem appropriate in its sole discretion.

Method of Exercise.  Subject to such  installment  exercise  and waiting  period
provisions as may be imposed by the Committee, Stock Options may be exercised in
whole or in part at any time during the option term by delivering to the Company
written notice of exercise specifying the number of shares of Common Stock to be
purchased and the option price therefor;  provided,  however, that not less than
100 shares may be purchased  at any one time unless the number  purchased is the
total  number at the time  purchasable  under the Stock  Option.  The  notice of
exercise  shall be  accompanied  by payment in full of the option  price and, if
requested, by the representation described in Section 9.2. Payment of the option
price may be made (i) in cash or by check  payable to the  Company,  (ii) to the
extent  determined by the Committee on or after the date of grant,  in shares of
Common Stock duly owned by the  Participant  (and for which the  Participant has
good title free and clear of any liens and  encumbrances)  or (iii) by reduction
in the number of shares of Common Stock issuable upon such exercise,  based,  in
each case, on the Fair Market Value of the Common Stock on the last trading date
preceding the date of exercise.  In addition,  the Committee and the Board shall
have the discretion to include in any Option grant the right of the  Participant
(A) to receive a loan from the  Company to pay the  exercise  price of the Stock
Option,  with such terms as shall not cause the Stock  Option,  if an  Incentive
Stock Option, to become disqualified under Section 422 of the Code or amendments
thereto,  and/or (B) to receive such  assistance from the Company in obtaining a
loan from a financial  institution as is necessary in the sole discretion of the
Committee  and  the  Board.  Upon  payment  in  full  of the  option  price  and
satisfaction  of the  other  conditions  provided  herein,  a stock  certificate
representing  the number of shares of Common Stock to which the  Participant  is
entitled shall be issued and delivered to the Participant.

Death.  In the event of a  Participant's  Termination of Employment by reason of
death,  any Stock Option held by such  Participant  which was exercisable on the
date of death may  thereafter  be exercised by the legal  representative  of the
Participant's  estate  until the earlier of three months after the date of death
or the expiration of the stated term of such Stock Option,  and any Stock Option
not exercisable on the date of death shall be forfeited.
Disability.  In the event of a Participant's Termination of Employment by reason
of Disability,  any Stock Option held by such Participant  which was exercisable
on the date of such Termination of Employment may thereafter be exercised by the
Participant  until the earlier of three months after such date or the expiration
of the stated term of such Stock Option, and any Stock Option not exercisable on
the date of such Termination of Employment  shall be forfeited.  If an Incentive
Stock  Option is exercised  after the  expiration  of the  exercise  period that
applies  for  purposes  of  Section  422 of the Code,  such  Stock  Option  will
thereafter be treated as a Non-Qualified Stock Option.

Termination of Employment.  Unless  otherwise  determined by the Committee on or
after  the  date of  grant,  in the  event  of a  Participant's  Termination  of
Employment  other than by reason of Death or Disability,  all Stock Options held
by such  Participant  on the date of such  Termination  of  Employment  shall be
forfeited as of such date.

Non-Transferability  of Options.  No Stock Option shall be  transferrable by the
Participant  otherwise than by will or by the laws of descent and  distribution,
to the  extent  consistent  with the terms of the Plan and the  Option,  and all
Stock Options shall be exercisable,  during the Participant's  lifetime, only by
the Participant.

Incentive Stock Option Limitations. To the extent that the aggregate Fair Market
Value  (determined  as of the date of grant) of the Common Stock with respect to
which  Incentive  Stock  Options  are  exercisable  for  the  first  time by the
Participant  during  any  calendar  year under the Plan  and/or any other  stock
option plan of the Company or any subsidiary or parent  corporation  (within the
meaning of Section 424 of the Code)  exceeds  $100,000,  such  Options  shall be
treated as Options which are not Incentive Stock Options.

Should the foregoing  provisions not be necessary in order for the Stock Options
to qualify as Incentive  Stock Options,  or should any additional  provisions be
required, the Committee may amend the Plan accordingly, without the necessity of
obtaining the approval of the shareholders of the Company.

Ten-Percent Shareholder Rule. Notwithstanding any other provision of the Plan to
the  contrary,  no  Incentive  Stock  Option shall be granted to any person who,
immediately  prior to the grant,  owns stock possessing more than ten percent of
the total  combined  voting  power of all classes of stock of the Company or any
subsidiary  or parent  corporation  (within  the  meaning of Section  424 of the
Code),  unless the option price is at least 110% of the Fair Market Value of the
Common Stock on the date of grant and the Option, by its terms, expires no later
than five years after the date of grant.

Rights as  Shareholder.  A  Participant  shall not be deemed to be the holder of
Common  Stock,  or to have any of the rights of a holder of Common  Stock,  with
respect  to shares  subject  to the  Option,  unless  and  until  the  Option is
exercised and a stock  certificate  representing  such shares of Common Stock is
issued to the Participant.
ARTICLE VII

                            TERMINATION OR AMENDMENT

     7.1  Termination or Amendment of Plan. The Committee may at any time amend,
discontinue  or terminate the Plan or any part thereof  (including any amendment
deemed  necessary  to ensure that the  Company  may comply  with any  regulatory
requirement  referred  to  in  Article  IX);  provided,  however,  that,  unless
otherwise  required by law, the rights of a  Participant  with respect to Awards
granted  prior  to such  amendment,  discontinuance  or  termination  may not be
impaired  without the consent of such  Participant  and,  provided further that,
without the approval of the  Company's  shareholders,  no amendment  may be made
that would (i) materially increase the number of shares of Common Stock that may
be issued under the Plan (except by operation of Section 4.3);  (ii)  materially
modify the  requirements  as to eligibility to participate in the Plan; or (iii)
materially increase the benefits accruing to Participants.

     7.2  Amendment of Options.  The  Committee may amend the terms of any Award
previously granted, prospectively or retroactively,  but, subject to Article IV,
no such  amendment or other action by the  Committee  shall impair the rights of
any holder without the holder's  consent.  The Committee may also substitute new
Stock Options for previously granted Stock Options having higher option prices.

                                  ARTICLE VIII

                                  UNFUNDED PLAN

     The Plan is  intended  to  constitute  an  "unfunded"  plan  for  incentive
compensation.  With respect to any payment not yet made to a Participant  by the
Company,  nothing  contained  herein shall give any such  Participant any rights
that are greater than those of a general creditor of the Company.

                                   ARTICLE IX

                               GENERAL PROVISIONS

     9.1  Nonassignment.  Except as  otherwise  provided in the Plan,  any Award
granted  hereunder and the rights and privileges  conferred thereby shall not be
sold,  transferred,  assigned,  pledged or  hypothecated  in any way (whether by
operation  of  law  or  otherwise),  and  shall  not be  subject  to  execution,
attachment or similar  process.  Upon any attempt to transfer,  assign,  pledge,
hypothecate or otherwise dispose of an Award, right or privilege contrary to the
provisions  hereof,  or upon  the  levy of any  attachment  or  similar  process
thereon,  such  Award and the  rights  and  privileges  conferred  hereby  shall
immediately  terminate  and the Award  shall  immediately  be  forfeited  to the
Company.
9.2 Legend. The Committee may require each person acquiring shares pursuant
to an Award to  represent  to the  Company in writing  that the  Participant  is
acquiring  the  shares  without  a  view  to  distribution  thereof.  The  stock
certificates representing such shares may include any legend which the Committee
deems appropriate to reflect any restrictions on transfer.

     All  certificates  representing  shares of Common Stock delivered under the
Plan shall be subject to such stock transfer  orders and other  restrictions  as
the  Committee  may deem  advisable  under  the  rules,  regulations  and  other
requirements  of the Securities and Exchange  Commission,  any stock exchange or
stock  market  upon  which  the  Common  Stock is then  listed  or  traded,  any
applicable  Federal or state  securities law, and any applicable  corporate law,
and  the  Committee  may  cause  a  legend  or  legends  to be put  on any  such
certificates to make appropriate reference to such restrictions.

     9.3 Other Plans. Nothing contained in the Plan shall prevent the Board from
adopting other or additional compensation  arrangements,  subject to shareholder
approval  if such  approval is  required;  and such  arrangements  may be either
generally applicable or applicable only in specific cases.

     9.4 No Right to  Employment.  Neither  the Plan nor the  grant of any Award
hereunder shall give any Participant or other employee any right with respect to
continuance of employment by the Company or any  Subsidiary,  nor shall the Plan
impose any  limitation on the right of the Company or any  Subsidiary by which a
Participant is employed to terminate such Participant's employment at any time.

     9.5  Withholding  of Taxes.  The Company shall have the right to reduce the
number of shares of Common Stock otherwise  deliverable  pursuant to the Plan by
an  amount  that  would  have a Fair  Market  Value  equal to the  amount of all
Federal,  state and local taxes required to be withheld, or to deduct the amount
of such taxes from any cash payment otherwise to be made to the Participant.  In
connection with such  withholding,  the Committee may make such  arrangements as
are consistent with the Plan as it may deem appropriate.

     9.6 Listing and Other Conditions.

     (a)  If the Common Stock is listed on a national securities exchange or The
          Nasdaq  Stock  Market,  the  issuance  of any  shares of Common  Stock
          pursuant to an Award shallbe conditioned upon such shares being listed
          on such  exchange or Nasdaq.  The Company  shall have no obligation to
          issue any shares of Common  Stock  unless and until such shares are so
          listed,  and the right to exercise any Option shall be suspended until
          such listing has been effected.

     (b)  If at any time counsel to the Company shall be of the opinion that any
          sale or delivery of shares of Common Stock  pursuant to an Award is or
          may in the  circumstances  be unlawful or result in the  imposition of
          excise  taxes  under  the  statutes,   rules  or  regulations  of  any
          applicable jurisdiction,  the Company shall have no obligation to make
          such sale or delivery, or to make any application or to effect or to
maintain any qualification or registration under the Securities Act of
          1933, as amended,  or otherwise with respect to shares of Common Stock
          or Awards,  and the right to exercise  any Option  shall be  suspended
          until, in the opinion of such counsel,  such sale or delivery shall be
          lawful or shall not result in the imposition of excise taxes.

     (c)  Upon  termination of any period of suspension  under this Section 9.6,
          any  Award  affected  by such  suspension  which  shall  not then have
          expired or terminated  shall be reinstated as to all shares  available
          before such  suspension  and as to shares which would  otherwise  have
          become  available  during the period of such  suspension,  but no such
          suspension shall extend the term of any Option.

     9.7 Governing Law. The Plan and actions taken in connection  herewith shall
be governed and construed in  accordance  with the laws of the  Commonwealth  of
Pennsylvania.

     9.8 Construction.  Wherever any words are used in the Plan in the masculine
gender they shall be  construed  as though  they were also used in the  feminine
gender in all cases where they would so apply,  and  wherever any words are used
herein in the  singular  form they shall be  construed  as though they were also
used in the plural form in all cases where they would so apply.

     9.9 Liability of the Board and the Committee. No member of the Board or the
Committee  nor any employee of the Company or any of its  subsidiaries  shall be
liable for any act or action  hereunder,  whether of omission or commission,  by
any other member or employee or by any agent to whom duties in  connection  with
the  administration  of the Plan have been delegated or, except in circumstances
involving bad faith,  gross negligence or fraud, for anything done or omitted to
be done by himself.

     9.10  Other  Benefits.  No  payment  pursuant  to an Award  shall be deemed
compensation for purposes of computing benefits under any retirement plan of the
Company or any  Subsidiary  nor affect any benefits under any other benefit plan
now or hereafter in effect under which the availability or amount of benefits is
related to the level of compensation.

     9.11 Costs.  The Company shall bear all expenses  incurred in administering
the Plan, including expenses related to the issuance of Common Stock pursuant to
Awards.

     9.12  Severability.  If any part of the  Plan  shall  be  determined  to be
invalid or void in any respect,  such  determination  shall not affect,  impair,
invalidate or nullify the remaining  provisions of the Plan which shall continue
in full force and effect.

     9.13 Successors. The Plan shall be binding upon and inure to the benefit of
any successor or successors of the Company.

     9.14  Headings.  Article and  section  headings  contained  in the Plan are
included  for  convenience  only  and  are  not  to be  used  in  construing  or
interpreting the Plan.
ARTICLE X

                                  TERM OF PLAN

     10.1  Effective  Date.  The Plan shall be  effective  as of the date of its
approval by the Company's shareholders.

     10.2 Termination Date. Unless sooner  terminated,  the Plan shall terminate
ten  years  after it is  adopted  by the  Board  and no  Awards  may be  granted
thereafter.  Termination of the Plan shall not affect Awards granted before such
date.