SEC Info - Bankers Fidelity Life Insurance Co - ‘PRE13E3/A’ on 2/23/96 re: Bankers Fidelity Life Insurance Co

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Bankers Fidelity Life Insurance Co – ‘PRE13E3/A’ on 2/23/96 re: Bankers Fidelity Life Insurance Co

As of: Friday, 2/23/96 · Accession #: 950144-96-661 · File #: 5-44637

  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

 2/23/96  Bankers Fidelity Life Ins Co      PRE13E3/A              1:215K Bankers Fidelity Life Ins Co      Bowne of Atlanta Inc/FA

Amendment to Preliminary Proxy Solicitation Material — Going-Private Transaction Statement — Schedule 13E-3
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: PRE13E3/A   Bankers Fidelity Schedule 13E3                        91    324K

Document Table of Contents

Page	(sequential)	\|	(alphabetic)	Top
			Alternative Formats (Word, et al.) Aac Absence of Public Market for Common Stock; Dividends Accounting Treatment Additional Information Amendment and Termination Annex A Annex B Annex C Available Information Background Background of the Merger Bfac Certain Covenants and Agreements Certain Federal Income Tax Consequences of the Merger Certain Financial Projections Certificates Conditions to the Merger Contracts, Arrangements or Understandings With Respect to the Issuer's Securities Dissenters' Rights Dividends Effective Time Effect of the Merger Exchange of Certificates Exchange of Stock Certificates Experts Fairness of the Transaction Financial Information General Identity and Background Incorporation of Documents by Reference Independent Auditors Interest of Securities of the Issuer Interests of Certain Persons in the Merger Introduction Material to Be Filed as Exhibits Meeting, The Merger, The Opinion of Financial Advisor Other Matters That May Come Before the Meeting Other Provisions of the Transaction Parties, The Past Contacts, Transactions or Negotiations Persons and Assets Employed, Retained or Utilized Plans of Proposals of the Issuer or Affiliate Position of AAC as to Fairness Present Intention and Recommendation of Certain Persons With Regard to the Transaction Proxy Statement Purpose and Effects of the Merger Purpose of the Special Meeting Purpose(S), Alternatives, Reasons and Effects Recommendation of the Special Committee and the Board of Directors Recommendations of the Special Committee and the Bankers Board, and Reasons for the Merger Regulatory Matters Reports, Opinions, Appraisals and Certain Negotiations Required Vote Rights to Terminate and Amendments Schedule 13E-3 Schedule I Security Ownership of Certain Beneficial Owners and Management Selected Financial Data Shareholder Proposals Source and Amounts of Funds or Other Consideration Source of Funds Special Factors Special Meeting, The Summary Surviving Corporation, The Terms of the Merger Agreement Terms of the Transaction The Meeting The Merger The Parties The Special Meeting The Surviving Corporation Trading of the Common Stock Voting Rights, Vote Required for Approval and Proxy Information
1	1st Page - Filing Submission
"	Schedule 13E-3
3	Item 2. Identity and Background
"	Item 3. Past Contacts, Transactions or Negotiations
"	Item 4. Terms of the Transaction
"	Item 5. Plans of Proposals of the Issuer or Affiliate
4	Item 6. Source and Amounts of Funds or Other Consideration
"	Item 7. Purpose(S), Alternatives, Reasons and Effects
"	Item 8. Fairness of the Transaction
"	Item 9. Reports, Opinions, Appraisals and Certain Negotiations
"	Item 10. Interest of Securities of the Issuer
"	Item 11. Contracts, Arrangements or Understandings With Respect to the Issuer's Securities
"	Item 12. Present Intention and Recommendation of Certain Persons With Regard to the Transaction
5	Item 13. Other Provisions of the Transaction
"	Item 14. Financial Information
"	Item 15. Persons and Assets Employed, Retained or Utilized
"	Item 16. Additional Information
"	Item 17. Material to Be Filed as Exhibits
12	Proxy Statement
16	Summary
"	Introduction
"	The Parties
18	Aac
19	Bfac
"	The Meeting
"	General
"	Required Vote
20	The Merger
"	Effect of the Merger
"	Effective Time
"	Exchange of Stock Certificates
21	Background
"	Opinion of Financial Advisor
"	Recommendations of the Special Committee and the Bankers Board, and Reasons for the Merger
22	Interests of Certain Persons in the Merger
"	Conditions to the Merger
"	Rights to Terminate and Amendments
"	Certain Federal Income Tax Consequences of the Merger
23	Source of Funds
"	Dissenters' Rights
24	The Special Meeting
"	Purpose of the Special Meeting
"	Voting Rights, Vote Required for Approval and Proxy Information
26	Incorporation of Documents by Reference
27	Available Information
"	Special Factors
"	Purpose and Effects of the Merger
28	Background of the Merger
37	Recommendation of the Special Committee and the Board of Directors
38	Position of AAC as to Fairness
46	Certain Financial Projections
54	Terms of the Merger Agreement
"	The Surviving Corporation
55	Exchange of Certificates
"	Certain Covenants and Agreements
56	Amendment and Termination
"	Regulatory Matters
"	Accounting Treatment
61	Absence of Public Market for Common Stock; Dividends
"	Trading of the Common Stock
62	Dividends
63	Security Ownership of Certain Beneficial Owners and Management
64	Selected Financial Data
66	Experts
"	Other Matters That May Come Before the Meeting
"	Independent Auditors
"	Shareholder Proposals
67	Schedule I
71	Annex A
74	Certificates
81	Annex B
83	Annex C

PRE13E3/A 1st Page of 91 TOC ↑Top Previous Next ↓Bottom Just 1st
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

Amendment No. 1
to

SCHEDULE 13E-3
Rule 13E-3 Transaction Statement
(Pursuant to Section 13(e) of the Securities Exchange Act of 1934
and Rule 13e-3 (Section 240.13e-3) thereunder)

-----------------

BANKERS FIDELITY LIFE INSURANCE COMPANY
(Name of the Issuer)

BANKERS FIDELITY LIFE INSURANCE COMPANY
ATLANTIC AMERICAN CORPORATION
(Name of Persons Filing Statement)

-----------------

Common Stock, $1.00 par value
(Title of Class of Securities)

-----------------

066131-10-3
(CUSIP Number of Class of Securities)

-----------------

HILTON H. HOWELL, JR.
BANKERS FIDELITY LIFE INSURANCE COMPANY
4370 Peachtree Road, N.E.
Atlanta, Georgia 30319
(404) 266-5500

(Names, Addresses and Telephone Numbers of Persons Authorized to Receive
Notices and
Communications on Behalf of Persons Filing Statement)

-----------------

with copy to:

DOM H. WYANT, ESQ.
Jones, Day, Reavis & Pogue
3500 One Peachtree Center
303 Peachtree Street, N.E.
Atlanta, Georgia 30308
(404) 521-3939

-----------------

This statement is filed in connection with (check the appropriate
box):
a. [X] The filing of solicitation materials or an information
statement subject to Regulation 14A, Regulation 14C, or Rule 13e-3(c) under the
Securities Exchange Act of 1934.
b. [ ] The filing of a registration statement under the Securities
Act of 1933.
c. [ ] A tender offer.
d. [ ] None of the above.
Check the following box if the soliciting materials or information
statement referred to in checking box (a) are preliminary copies: [X]

Calculation of Filing Fee
-------------------------------------------------------------------------------
Transaction valuation* $1,263,518.75 Amount of Filing Fee $253.00
-------------------------------------------------------------------------------

[X] Check box if any part of the fee is offset as provided by Rule
O-11(a)(2) and identify the filing with which the offsetting fee
was previously paid. Identify the previous filing by
registration statement number, or the form or schedule and the
date of its filing.

Amount Previously Paid:$253.00
Form or Registration No.:Schedule 13E-3
Filing Party: Listed above
Date Filed: January 10, 1996

Instruction: Eight copies of this statement, including all exhibits,
should be filed with the Commission.

* For purposes of calculating fee only. The amount of the filing fee,
calculated in accordance with Rule 0-11 promulgated under the Securities
Exchange Act of 1934, as amended, equals 1/50 of 1% of the product of (a)
202,163 (the maximum number of shares of Common Stock to be converted into
cash pursuant to the merger of BF Acquisition Corporation with and into
Bankers Fidelity Life Insurance Company and (b) $6.25 (the cash price per
share of Common Stock to be paid in the merger).
===============================================================================

PRE13E3/A 2nd Page of 91 TOC 1st Previous Next ↓Bottom Just 2nd

INTRODUCTORY NOTE

This Transaction Statement on Schedule 13E-3 (the "Statement") is being
filed with the Securities and Exchange Commission (the "Commission") by Bankers
Fidelity Life Insurance Company, a Georgia corporation (the "Company"), and
Atlantic American Corporation, a Georgia corporation ("AAC"), in connection
with the filing under the Securities Exchange Act of 1934, as amended, of a
proxy statement.

This Statement relates to a proposal to approve an Agreement of Merger
dated January 5, 1996, between the Company, AAC and BF Acquisition Corporation,
a Georgia corporation and a wholly owned subsidiary of AAC ("BFAC"), pursuant
to which BFAC would be merged with and into the Company (the "Merger"). Upon
the consummation of the Merger, each share of the Company's common stock, $1.00
par value ("Common Stock"), other than shares of Common Stock held in the
Company's treasury, owned by BFAC or owned by shareholders who properly
exercise their dissenters' rights, will be converted into the right to receive
$6.25 in cash per share.

Concurrently with the filing of this Statement, the Company is filing
revised preliminary copies of a Proxy Statement (the "Proxy Statement"), Letter
to Shareholders, Notice of Special Meeting of Shareholders, and form of Proxy
Card with the Commission. Pursuant to General Instruction F to Schedule 13E-3,
the cross-reference sheet below shows the location in the Proxy Statement of
the information required to be included in response to the items of this
Statement and such information is hereby incorporated by reference. Where
substantially identical information required by Schedule 13E-3 is included
under more than one caption, reference is made to only one caption of the Proxy
Statement.

PRE13E3/A 3rd Page of 91 TOC 1st Previous Next ↓Bottom Just 3rd

CROSS REFERENCE SHEET

Item of Location in Proxy Statement
Schedule 13E-3 (for incorporation by reference)
-------------- --------------------------------
ITEM 1 ISSUER AND CLASS OF SECURITY SUBJECT TO THE TRANSACTION.

(a) Cover Page of Proxy Statement, "Incorporation of Documents by
Reference"
(b) Cover Page of Proxy Statement, "The Special Meeting -- Voting
Rights, Votes Required for Approval and Proxy Information"
(c) "Absence of Public Market for Common Stock; Dividends -- Trading
of the Common Stock"
(d) "Absence of Public Market for Common Stock; Dividends -- Dividends"
(e) Not applicable
(f) "Absence of Public Market for Common Stock; Dividends -- Trading
of the Common Stock"

ITEM 2 IDENTITY AND BACKGROUND.

This Schedule 13E-3 is being filed by the Company, the issuer of the class of
equity securities which is the subject of this Rule 13e-3 transaction, and by
Atlantic American Corporation, the ultimate parent of the issuer.

(a)-(d) Schedule I
(e)-(f) None
(g) Schedule I

ITEM 3 PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS.

(a) "Special Factors -- Interests of Certain Persons in the Merger"

(b) Not applicable

ITEM 4 TERMS OF THE TRANSACTION.

(a) "The Merger -- Terms of the Merger Agreement"

(b) "Special Factors -- Purpose and Effects of the Merger"; "The
Merger -- Terms of the Merger Agreement"

ITEM 5 PLANS OF PROPOSALS OF THE ISSUER OR AFFILIATE.

(a)-(f) Not applicable

(g) "Special Factors -- Purpose and Effects of the Merger"

PRE13E3/A 4th Page of 91 TOC 1st Previous Next ↓Bottom Just 4th
ITEM 6 SOURCE AND AMOUNTS OF FUNDS OR OTHER CONSIDERATION.

(a)-(b) "The Merger -- Source of Funds"
(c)-(d) Not applicable

ITEM 7 PURPOSE(S), ALTERNATIVES, REASONS AND EFFECTS.

(a) "Special Factors -- Purpose and Effects of the Merger";
"Special Factors -- Background of the Merger";
"Special Factors -- Recommendation of the Special
Committee and the Board of Directors"
(b)-(c) "Special Factors -- Background of the Merger"; "Special Factors
-- Recommendation of the Special Committee and the Board of
Directors"
(d) "Special Factors -- Purpose and Effects of the Merger"; "The
Merger -- Terms of the Merger Agreement"; "The Merger -- Certain
Federal Income Tax Consequences of the Merger"

ITEM 8 FAIRNESS OF THE TRANSACTION.

(a)-(b) "Special Factors -- Background of the Merger"; "Special Factors
-- Recommendation of the Special Committee and the Board of
Directors"

(d)-(e) "Special Factors -- Background of the Merger"; "Special Factors
-- Recommendation of the Special Committee and the Board of
Directors"

(f) Not applicable

ITEM 9 REPORTS, OPINIONS, APPRAISALS AND CERTAIN NEGOTIATIONS.

(a)-(b) "Special Factors -- Background of the Merger"; "Special Factors
-- Opinion of Financial Advisor"
(c) "Special Factors -- Opinion of Financial Advisor"

ITEM 10 INTEREST OF SECURITIES OF THE ISSUER.

(a) "Security Ownership of Certain Beneficial Owners and Management"
(b) Not applicable

ITEM 11 CONTRACTS, ARRANGEMENTS OR UNDERSTANDINGS WITH RESPECT TO THE ISSUER'S
SECURITIES.

"The Merger -- Terms of the Merger Agreement"

ITEM 12 PRESENT INTENTION AND RECOMMENDATION OF CERTAIN PERSONS WITH REGARD TO
THE TRANSACTION.

PRE13E3/A 5th Page of 91 TOC 1st Previous Next ↓Bottom Just 5th

(a)-(b) "The Special Meeting -- Voting Rights, Votes Required for Approval
and Proxy Information"

ITEM 13 OTHER PROVISIONS OF THE TRANSACTION.

(a) "The Merger -- Dissenters' Rights"; Annex C

(b)-(c) Not applicable

ITEM 14 FINANCIAL INFORMATION.

(a) "Selected Financial Data"; the financial statements listed in Item
14(a)(1) and Item 14(a)(2) and included in the Annual Report on
Form 10-K of the Company for the year ended December 31, 1994 and
the Quarterly Report on Form 10-Q of the Company for the quarter
ended September 30, 1995, respectively, each of which are
incorporated by reference in the Proxy Statement
(b) Not applicable

ITEM 15 PERSONS AND ASSETS EMPLOYED, RETAINED OR UTILIZED.

(a) "The Special Meeting -- Voting Rights, Votes Required for Approval
and Proxy Information"
(b) Not applicable

ITEM 16 ADDITIONAL INFORMATION.

The Proxy Statement and the Schedule and Annexes attached thereto

ITEM 17 MATERIAL TO BE FILED AS EXHIBITS.

(a) Not applicable

(b)(1) Opinion of J.C. Bradford & Co. incorporated herein by reference
from "Annex B" of the Proxy Statement, included as Exhibit (d)(1)
hereto
*(2) Presentation Materials of J.C. Bradford & Co. dated January 5, 1996

(c) Agreement of Merger dated January 5, 1996 by and among the Company,
AAC and BFAC, incorporated by reference from "Annex A" of the Proxy
Statement, included as Exhibit (d)(1) hereto
(d)(1) Letter to Shareholders of the Company; Notice of Special Meeting of
Shareholders of the Company; Proxy Statement of the Company; Form
of Proxy Card
(2) The pertinent pages of the Annual Report on Form 10-K of the
Company for the year ended December 31, 1994 and the Quarterly
Report on Form 10-Q of the Company for the quarter ended
September 30, 1995 are hereby incorporated by reference
(e) Dissenters' rights provisions of the Georgia Business Corporation
Code incorporated herein by reference from "Annex C" of the Proxy
Statement, included as Exhibit (d)(1) hereto
(f) Not applicable

* To be filed by amendment.

PRE13E3/A 6th Page of 91 TOC 1st Previous Next ↓Bottom Just 6th

SIGNATURES

After due inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.

Dated: February 22, 1996

BANKERS FIDELITY LIFE INSURANCE
COMPANY

By: /s/ Hilton Howell
------------------------------
Hilton Howell
Executive Vice President

ATLANTIC AMERICAN CORPORATION

By: /s/ Hilton Howell
------------------------------
Hilton Howell
President and Chief Executive
Officer

PRE13E3/A 7th Page of 91 TOC 1st Previous Next ↓Bottom Just 7th

EXHIBIT INDEX

[Enlarge/Download Table]

Exhibit
Number Description
------ -----------

(a) Not applicable
(b)(1) Opinion of J.C. Bradford & Co. incorporated herein by reference from "Annex B" of the Proxy
Statement, included as Exhibit (d)(1) hereto
*(2) Presentation Materials of J.C. Bradford & Co. dated January 5, 1996
(c) Agreement of Merger dated January 5, 1996 by and among the Company, AAC and BFAC, incorporated
by reference from "Annex A" of the Proxy Statement, included as Exhibit (d)(1) hereto
(d)(1) Letter to Shareholders of the Company; Notice of Special Meeting of Shareholders of the
Company; Proxy Statement of the Company; Form of Proxy Card
(2) The pertinent pages of the Annual Report on Form 10-K of the Company for the year ended
December 31, 1994 and the Quarterly Report on Form 10-Q of the Company for the quarter ended
September 30, 1995 are hereby incorporated by reference
(e) Dissenters' rights provisions of the Georgia Business Corporation Code incorporated herein by
reference from "Annex C" of the Proxy Statement, included as Exhibit (d)(1) hereto
(f) Not applicable

* To be filed by amendment.

PRE13E3/A 8th Page of 91 TOC 1st Previous Next ↓Bottom Just 8th
EXHIBIT (d)(1)
PRELIMINARY COPIES

BANKERS FIDELITY LIFE INSURANCE COMPANY
4370 Peachtree Road, N.E.
Atlanta, Georgia 30319

March ___, 1996

Dear Shareholder:

You are cordially invited to attend a Special Meeting of the
Shareholders (the "Special Meeting") of Bankers Fidelity Life Insurance Company
(the "Company") to be held at the Company's offices, 4370 Peachtree Road, N.E.,
Atlanta, Georgia, on March 29, 1996, at 9:00 a.m., Atlanta time. A Notice of
Special Meeting, a Proxy Statement and a Proxy containing information about the
matters to be acted upon at the Special Meeting, as well as copies of the
Company's Annual Report on Form 10-K for the fiscal year ended December 31,
1994 and Quarterly Report on Form 10-Q for the quarterly period ended September
30, 1995, are enclosed herewith.

At the Special Meeting you will be asked to consider and vote upon a
proposal to approve an Agreement of Merger, dated January 5, 1996 (the "Merger
Agreement"), by and among the Company, Atlantic American Corporation, a Georgia
corporation ("AAC"), and BF Acquisition Corporation, a Georgia corporation and
a wholly-owned subsidiary of AAC ("BFAC"), pursuant to which BFAC will be
merged with and into the Company (the "Merger"). As a result of the Merger,
the Company will become a wholly-owned subsidiary of AAC. If the Merger
Agreement is approved and the Merger becomes effective, each holder of common
stock, $1.00 par value, of the Company (the "Common Stock") (other than those
shares held by BFAC or by persons who properly perfect their dissenters' rights
under Georgia law) will have the right to receive $6.25 in cash, without
interest, for each share of Common Stock held at the time of the Merger. The
Merger and certain related matters are described in detail in the accompanying
Proxy Statement.

The Board of Directors of the Company has fixed February ____, 1996 as
the record date for the determination of shareholders entitled to notice of and
to vote at the Special Meeting and any adjournment or postponement thereof.
The affirmative vote of holders of a majority of the shares of Common Stock
outstanding as of the record date and entitled to vote will be necessary to
approve and adopt the Merger Agreement and the transactions contemplated
thereby. Management of AAC has indicated that it intends to cause BFAC to vote
the approximately 93% of the outstanding shares of Common Stock it owns in
favor of the Merger Agreement. Approval of the Merger Agreement is

PRE13E3/A 9th Page of 91 TOC 1st Previous Next ↓Bottom Just 9th

therefore assured. Pursuant to Georgia law, the Company's shareholders will be
entitled to dissenters' rights in connection with the Merger, as more fully
described in the accompanying Proxy Statement.

Shareholders are urged to review carefully the information contained
in the accompanying Proxy Statement prior to making any voting decision in
connection with their Common Stock.

It is very important that your views be represented whether or not you
are able to attend the Special Meeting. Accordingly, please complete, sign and
date your proxy card and return it to us in the enclosed postage-paid return
envelope as soon as possible. Failure to return your proxy card or to vote in
person at the Special Meeting will have the effect of a vote against the
Merger. Returning your completed proxy card will not limit your right to vote
in person if you attend the Special Meeting.

Sincerely,

J. Mack Robinson
Chairman of the Board

Atlanta, Georgia

March ___, 1996

PRE13E3/A 10th Page of 91 TOC 1st Previous Next ↓Bottom Just 10th

BANKERS FIDELITY LIFE INSURANCE COMPANY
4370 Peachtree Road, N.E.
Atlanta, Georgia 30319

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS

TO BE HELD ON MARCH 29, 1996

NOTICE IS HEREBY GIVEN that a Special Meeting of the
Shareholders (the "Special Meeting") of Bankers Fidelity Life Insurance Company
(the "Company") will be held at the Company's offices, 4370 Peachtree Road,
N.E., Atlanta, Georgia, on Friday, March 29, 1996, at 9:00 a.m., Atlanta time,
for the following purposes:

1. To consider and vote upon a proposal to approve an
Agreement of Merger, dated January 5, 1996 (the "Merger Agreement"),
by and among the Company, Atlantic American Corporation, a Georgia
corporation ("AAC"), and BF Acquisition Corporation, a newly-formed
Georgia corporation ("BFAC") that is wholly-owned by AAC, pursuant to
which, among other things, (a) BFAC will be merged (the "Merger") with
and into the Company with the Company being the surviving corporation
(the "Surviving Corporation"), (b) each outstanding share of the
common stock of the Company (the "Common Stock") (other than Common
Stock held by (i) the Company as treasury shares, (ii) by BFAC, or
(iii) by persons who perfect their dissenters' rights under Georgia
law) will be converted into the right to receive $6.25 in cash,
without interest, (c) each outstanding share of Common Stock held by
BFAC or held by the Company as treasury shares will be cancelled
without consideration, and (d) each outstanding share of BFAC common
stock will be converted into the right to receive one share of common
stock of the Surviving Corporation; and

2. To transact such other business, if any, as may
properly be brought before the Special Meeting.

A copy of the Merger Agreement is included as Annex A to the
accompanying Proxy Statement. Only holders of record of shares of Common Stock
at the close of business on February ___, 1996, the record date for the Special
Meeting (the "Record Date"), are entitled to notice of and to vote at the
Special Meeting and any adjournment or postponement thereof.

Prior to the formation of BFAC, AAC directly owned
approximately 93% of the outstanding shares of Common Stock. In connection
with the formation of BFAC, AAC contributed all of such Common Stock to BFAC,
and as a result thereof BFAC presently

PRE13E3/A 11th Page of 91 TOC 1st Previous Next ↓Bottom Just 11th

owns approximately 93% of the outstanding shares of Common Stock. Management
of AAC has indicated that it intends to cause BFAC to vote such shares in favor
of the Merger Agreement. Approval of the Merger Agreement is therefore
assured. Following the Merger, all of the common stock of the Surviving
Corporation will be held by AAC.

If the Merger is consummated, holders of Common Stock who do
not vote in favor of the Merger Agreement and who perfect their statutory
dissenters' rights under Article 13 of the Georgia Business Corporation Code
(the "GBCC") will have the right to seek appraisal of their shares of Common
Stock. See "The Merger -- Dissenters' Rights" in the accompanying Proxy
Statement for a statement of the rights of such shareholders and a description
of the procedures required to be followed by shareholders to obtain appraisal
of their shares of Common Stock. A copy of Article 13 of the GBCC is included
as Annex C to the accompanying Proxy Statement.

To be assured that your interest will be represented,
regardless of whether you plan to attend in person, please complete, date and
sign the enclosed proxy card and return it promptly in the enclosed
postage-paid return envelope. This action will not limit any right to vote in
person if you wish to attend the Special Meeting. Your proxy may be revoked at
any time following the procedures set forth in the accompanying Proxy
Statement.

By Order of the Board of Directors,

Janie L. Ryan
Assistant Secretary

Atlanta, Georgia

March ___, 1996

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BANKERS FIDELITY LIFE INSURANCE COMPANY
4370 Peachtree Road, N.E.
Atlanta, Georgia 30319

_______________

PROXY STATEMENT

For the Special Meeting of Shareholders

To Be Held On March 29, 1996

______________

This proxy statement ("Proxy Statement") and the accompanying form of
proxy are being furnished on or about March ___, 1996 to the holders of the
common stock, $1.00 par value (the "Common Stock"), of Bankers Fidelity Life
Insurance Company, a Georgia corporation ("Bankers" or the "Company"), in
connection with the solicitation of proxies by the Board of Directors of the
Company (the "Bankers Board") for use at the special meeting of the
shareholders of the Company to be held at the Company's offices, 4370 Peachtree
Road, N. E., Atlanta, Georgia 30319, on Friday, March 29, 1996 at 9:00 a.m.,
Atlanta time, and at any adjournment or postponement thereof (the "Special
Meeting").

The Special Meeting has been called to consider and vote upon a
proposal to approve an Agreement of Merger, dated January 5, 1996 (the "Merger
Agreement"), by and among the Company, Atlantic American Corporation, a Georgia
corporation ("AAC"), and BF Acquisition Corporation, a newly-formed Georgia
corporation ("BFAC") that is wholly-owned by AAC. Unless otherwise specified,
all shares represented at the Special Meeting by effective proxies will be
voted in favor of approval of the Merger Agreement. Any shareholder who
executes and delivers a proxy may revoke it at any time prior to its use by:
(i) giving written notice of revocation to the Secretary of the Company, (ii)
executing a proxy bearing a later date, or (iii) appearing at the Special
Meeting and voting in person.

The Merger Agreement provides for the merger of BFAC with and into the
Company (the "Merger"), with the Company being the surviving corporation (the
"Surviving Corporation"). Pursuant to the Merger Agreement, (i) each
outstanding share of Common Stock (other than shares held by the Company as
treasury shares, by BFAC or by shareholders who do not vote in favor of the
Merger Agreement and who perfect their dissenters' rights under Article 13 of
the Georgia Business Corporation Code (the "GBCC")) will be converted into the
right to receive $6.25 per share in cash, without interest (the "Merger
Consideration"), (ii) each outstanding share of Common Stock held by BFAC or
held by the Company as treasury shares will be cancelled without consideration
and (iii) each outstanding share of BFAC common

PRE13E3/A 13th Page of 91 TOC 1st Previous Next ↓Bottom Just 13th

stock, par value $1.00 per share (the "BFAC Shares"), will be converted into
the right to receive one share of common stock of the Surviving Corporation. A
copy of the Merger Agreement is included as Annex A to this Proxy Statement.

BFAC was organized by AAC for the sole purpose of enabling AAC, which
prior to the formation of BFAC directly owned approximately 93% of the
outstanding shares of Common Stock, to effect the Merger and, as a result,
acquire the entire equity interest in the Company. In connection with the
formation of BFAC, AAC contributed all of the shares of Common Stock owned by
AAC to BFAC, and as a result thereof BFAC presently owns approximately 93% of
the outstanding Common Stock. The Merger Agreement does not require approval
by the holders of a majority of the shares of Common Stock other than BFAC.
Approval of the Merger Agreement is, therefore, assured. As a result of the
Merger, shareholders of the Company other than AAC will no longer have any
continuing interest in the Company.

Holders of shares of Common Stock who do not vote in favor of, or who
abstain from voting on, the Merger Agreement and who comply with the provisions
of Article 13 of the GBCC have the right to receive cash payment for the "fair
value" of their shares of Common Stock. Any shareholder contemplating the
exercise of dissenters' rights should carefully review Article 13 of the GBCC,
a copy of which is included as Annex C to this Proxy Statement and incorporated
herein by reference, particularly the procedural steps required to perfect
dissenters' rights, a description of which is provided under "The Merger --
Dissenters' Rights." A shareholder who fails to comply with such procedural
requirements will lose such holder's rights to dissent and will receive the
Merger Consideration for the shares of Common Stock held by such shareholder.
See "The Merger -- Dissenters' Rights" and Annex C.

Approximately 70.19% of the outstanding voting securities of AAC are
owned beneficially or of record by Mr. J. Mack Robinson, the Chairman of the
Company, or by his wife and other affiliates of Mr. Robinson. Mr. Robinson
also serves as Chairman of the Board of AAC, and his son-in-law, Hilton H.
Howell, Jr., serves as Executive Vice President and a director of the Company
and as President and Chief Executive Officer and a director of AAC. In
addition, three other members of the Bankers Board serve as officers or
directors of AAC or certain other subsidiaries of AAC. See "The Merger -
Interests of Certain Persons in the Merger."

THIS TRANSACTION HAS NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE
FAIRNESS OR MERITS OF SUCH TRANSACTION NOR UPON THE ACCURACY OR ADEQUACY OF THE
INFORMATION CONTAINED IN THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS
UNLAWFUL.

The date of this Proxy Statement is March ___, 1996.

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TABLE OF CONTENTS

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Page
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SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
The Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

The Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Required Vote . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

The Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Effect of the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Effective Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Exchange of Stock Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Opinion of Financial Advisor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Recommendations of the Special Committee and the Bankers Board, and Reasons for the Merger . . . . . . . . . 10
Interests of Certain Persons in the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Conditions to the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Rights to Terminate and Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Certain Federal Income Tax Consequences of the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Source of Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Dissenters' Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

THE SPECIAL MEETING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Purpose of the Special Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Voting Rights, Vote Required for Approval and Proxy Information . . . . . . . . . . . . . . . . . . . . . . 13

INCORPORATION OF DOCUMENTS BY REFERENCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

AVAILABLE INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

SPECIAL FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Purpose and Effects of the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Background of the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Recommendation of the Special Committee and the Board of Directors . . . . . . . . . . . . . . . . . . . . . 26
Position of AAC as to Fairness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Opinion of Financial Advisor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Interests of Certain Persons in the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

CERTAIN FINANCIAL PROJECTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

THE MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Terms of the Merger Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44

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The Surviving Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Exchange of Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Certain Covenants and Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Conditions to the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Amendment and Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Regulatory Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Accounting Treatment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Certain Federal Income Tax Consequences of the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Source of Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Dissenters' Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48

ABSENCE OF PUBLIC MARKET FOR COMMON STOCK; DIVIDENDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Trading of the Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . 53

SELECTED FINANCIAL DATA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54

EXPERTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56

OTHER MATTERS THAT MAY COME BEFORE THE MEETING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56

INDEPENDENT AUDITORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56

SHAREHOLDER PROPOSALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56

SCHEDULE I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-1

ANNEX A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1

ANNEX B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-1

ANNEX C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-1

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SUMMARY

The following summary is qualified in its entirety by the detailed
information appearing elsewhere in this Proxy Statement or incorporated herein
by reference. Shareholders are urged to review the entire Proxy Statement, the
Schedule and Annexes hereto and the documents incorporated herein by reference.
Capitalized terms used and not otherwise defined in this Summary have the
meanings given to them elsewhere in this Proxy Statement.

INTRODUCTION

THE PARTIES

The Company. Bankers, a 93%-owned subsidiary of AAC, is an insurance
company that offers medicare supplement and other accident and health
insurance, as well as life insurance. During 1994 and the first nine months of
1995, accident and health insurance (which includes medicare supplement)
accounted for approximately 63.6% and 63.6%, respectively, of the Company's
total net premiums written, and life insurance accounted for approximately
36.4% and 36.4%, respectively, of such premiums. Medicare supplement insurance
accounted for 51.2% of the Company's total net premiums written in 1994, and
51.1% during the first nine months of 1995. While the Company is licensed to
do business in 22 states, approximately 68% of the Company's net premiums
written in 1994, and approximately 70% during the first nine months of 1995,
were derived from the states of Missouri, Nebraska, North Carolina, Texas and
West Virginia.

Accident and health insurance lines include medicare supplement,
medical surgical, cancer, hospital indemnity, convalescent care, disability,
and accident expense insurance. The Company also offers ordinary life
(traditional whole life and term) insurance. The Company's accident and health
and life insurance is sold by approximately 1,300 independent agents.

Prior to 1983, the Company wrote primarily ordinary life insurance.
As a result of an evaluation of additional product lines following the
Company's determination that it was not well positioned to achieve significant
growth in sales of life insurance, the Company introduced a medicare supplement
policy in May 1983 and, until 1988, focused a majority of its resources on
marketing such insurance. Beginning in 1986 and continuing through 1992, the
Company began to broaden its product base by introducing convalescent care and
new cancer benefits policies, as well as short-term disability, accident
expense and hospital/surgical policies. As legislative changes have reduced
the attractiveness of writing medicare supplement insurance, the

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Company has placed greater emphasis on offering a wide range of products to
many age groups, rather than focusing solely on the senior citizen market. In
1990, the Company began updating its life portfolio, and beginning in 1991
implemented several programs to penetrate niche markets where these products
have greater appeal and where less competition exists. Continued emphasis will
be placed on life sales at all ages. An expanded senior life portfolio, a new
cancer plan, an innovative new transitional disability product combined with an
updated hospital/surgical product will continue the Company's plans for a more
diversified portfolio.

In 1990 the Company implemented several new life products with
supporting life programs to penetrate niche markets where these products would
have greater appeal and where less competition exists. In 1992, the Company
introduced the "Debt Management Program," designed to allow insureds to
accumulate funds for the future repayment of college tuition debt. The
program's major components consist of a "10-Pay Whole Life Policy" with an
"Annuity Rider." This program updated the outdated student loan program which
had begun in 1986, and revitalized sales in this promising area. The Company
introduced a new life product for the senior market to enhance a portfolio of
products that are sold exclusively in that market. The senior market life
products portfolio was revised in 1993 with the introduction of the "Senior
Security Life" program. The revised program is comprised of whole life with
both standard and preferred underwriting and joint whole life providing
replacement of lost social security income. In 1995, new policy riders
providing for the waiver of premiums for skilled nursing facility confinement
and acceleration of benefits, up to 25% of the original face amount, for
terminal illness were added. These enhancements have allowed the Company to
remain on the cutting edge of senior market sales. The life products have
preferred and standard rates for males and females. Sales in this market have
increased substantially in 1995 and the Company expects to see continued future
growth in this market. The Company has also experienced increased sales in
other life products that are being sold along with the new senior life
products. Renewed emphasis on life sales has produced an increase in life
sales in 1992, 1993, 1994 and 1995.

The Company also started updating its current supplemental health
products in 1993. The Company introduced four new or updated health products
in 1994. The first product introduced was a short-term care product that
provides nursing home coverage for 90, 180, 270 or 360 days. This product
enhances the senior portfolio and was designed to target the individuals who
cannot afford long-term care insurance. The second product introduced was a
new cancer product to be sold on an individual basis and in the payroll market.
The benefits were designed to be flexible in order to be able to adjust
benefits for the market need. The

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third product introduced was on an individual basis and in the payroll market.
This product was designed to be flexible so benefits could be adjusted
depending on the market need. The fourth product introduced in 1994 was a dual
disability product. This product provides disability benefits if the insured
becomes disabled before age 65, and benefits for nursing facility coverage
after age 65. The Company believes this is the first product to be introduced
with those benefits. The Company expects to market this product on an
individual and payroll basis. This series of new products is part of the
Company's plans for a more diversified portfolio and assist the Company in
competing in niche markets. They are also intended to allow greater expansion
of sales in the list bill (billing for more than one insured) and payroll
deduction markets. In order to increase product revenues, the Company will
continue to place emphasis on the entire product line and not rely on any one
individual product. In 1995, the Company introduced a new "List Bill Product"
which will pay a limited doctor benefit for a limited amount of time plus a
flat $500 or $1,000 for deductible and copayments. This product is for the
list bill payroll deduction market and has been designed to enhance existing
small group voluntary products area. Also in 1995, the Company introduced a
low premium medicare product to be sold jointly with our preferred senior life
products.

In 1995, the Company designed and filed two new level term products
for the individual and payroll market which are intended to replace the old
level term product. One product is a standard level term policy, renewable and
convertible; the other provides the option to purchase additional face amounts
at the current rate for their original issue age, during the second to ninth
policy years, in addition to the standard renewable and convertible level term
policy benefits.

These added products will not only continue to assist the Company in
competing in the niche markets, but will also allow greater expansion of sales
in the list bill and payroll deduction markets.

AAC. AAC, a Georgia corporation, is a diversified holding company
which is engaged primarily in the insurance and furniture retailing businesses
through the following subsidiaries: Atlantic American Life Insurance Company,
Bankers, Georgia Casualty & Surety Company, American Southern Insurance
Company, American Safety Insurance Company, Leath Furniture, Inc., Modernage
Furniture, Inc. and Jefferson Home Furniture Company, Inc. Through the
insurance subsidiaries, AAC offers life, accident and health insurance, which
includes medicare supplement and other medical care policies, and property and
casualty insurance. Through its furniture subsidiaries, AAC operates 43 retail
home furnishings stores in seven states.

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BFAC. BFAC, a newly-formed Georgia corporation and a wholly-owned
subsidiary of AAC, has not conducted any prior business. BFAC was organized by
AAC for the sole purpose of enabling AAC, which prior to the formation of BFAC
owned approximately 93% of the outstanding shares of Common Stock, to effect
the Merger and, as a result, acquire the entire equity interest in the Company.

The principal executive offices for each of the Company, AAC and BFAC
are located at 4370 Peachtree Road, N.E., Atlanta, Georgia 30319, and the
telephone number at such address is (404) 266-5500.

THE MEETING

GENERAL

The Special Meeting will be held at 9:00 a.m., Atlanta time, on
Friday, March 29, 1996, at the Company's offices, located at 4370 Peachtree
Road, N.E., Atlanta, Georgia 30319. Only holders of record of shares of
Common Stock at the close of business on February ___, 1996 are entitled to
notice of and to vote at the Special Meeting. On that date there were _____
shares of Common Stock outstanding, with each share entitled to cast one vote
with respect to the Merger at the Special Meeting. See "The Special Meeting."

REQUIRED VOTE

Pursuant to the GBCC, the affirmative vote of the holders of at least
a majority of the shares of Common Stock outstanding as of the Record Date and
entitled to vote is required to approve the Merger Agreement and the
transactions contemplated thereby. The presence, either in person or by proxy,
of the holders of a majority of the shares of Common Stock outstanding as of
the Record Date and entitled to vote is necessary to constitute a quorum at the
Special Meeting. AAC, through BFAC, holds shares representing approximately
93% of the votes entitled to be cast at the Special Meeting and intends to
cause those shares to be voted in favor of the Merger Agreement. Approval of
the Merger Agreement is therefore assured. See "The Special Meeting -- Voting
Rights, Vote Required for Approval and Proxy Information."

The holders of shares of Common Stock will be entitled to dissenters'
rights under the GBCC. See "The Merger - - Dissenters' Rights."

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THE MERGER

EFFECT OF THE MERGER

Pursuant to Section 1.1 of the Merger Agreement, at the Effective Time
(as defined hereinbelow) of the Merger, BFAC will be merged with and into the
Company, and BFAC will cease to exist as a corporation. The Company will be
the surviving corporation in the Merger and will thereby become a wholly-owned
subsidiary of AAC. Section 3.1(A) of the Merger Agreement provides that in the
Merger, each issued and outstanding share of Common Stock, other than shares
owned by BFAC or owned by shareholders who properly perfect their dissenters'
rights under the GBCC, will be converted into the right to receive, and become
exchangeable for, $6.25 in cash, without interest. Each share of Common Stock
owned by BFAC or held by the Company as treasury shares will be cancelled
without consideration, and each BFAC Share will automatically be converted into
the right to receive one share of common stock of the Surviving Corporation. A
copy of the Merger Agreement is included as Annex A to this Proxy Statement and
is incorporated herein by reference.

EFFECTIVE TIME

After all the conditions set forth in the Merger Agreement have been
satisfied or waived, the Merger will become effective at such time as articles
of merger required under the GBCC (the "Articles of Merger") are filed with the
Secretary of State of the State of Georgia, or at such later time as may be
specified in the Articles of Merger (the "Effective Time"). It is anticipated
that such filing will be made promptly after the approval of the Merger
Agreement at the Special Meeting. See "The Merger -- Terms of the Merger
Agreement -- General."

EXCHANGE OF STOCK CERTIFICATES

From and after the Effective Time, each holder of an outstanding
certificate which immediately prior to the Effective Time represented shares of
Common Stock (the "Certificates"), other than BFAC and those holders who have
properly perfected their dissenters' rights under the GBCC, will cease to have
any rights as a shareholder of the Company and, until surrendered to
____________ (the "Exchange Agent"), each Certificate shall represent for all
purposes only the right to receive the Merger Consideration to which he is
entitled, without interest thereon. Section 3.3.1 of the Merger Agreement
provides that as soon as practicable after the Effective Time, the Exchange
Agent will mail transmittal instructions to each former shareholder of the
Company describing the procedure for surrendering the

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Certificates for the Merger Consideration. See "The Merger -- Terms of the
Merger Agreement -- Exchange of Certificates."

BACKGROUND

A special committee of the Bankers Board, consisting solely of
directors of the Company who are not otherwise affiliated with the Company or
AAC (the "Special Committee"), reviewed the terms of the Merger Agreement and
received the opinion of an independent financial advisor that the Merger
Consideration to be paid to the shareholders of the Company other than BFAC
pursuant to the Merger Agreement is fair, from a financial point of view. See
"Special Factors -- Background of the Merger."

OPINION OF FINANCIAL ADVISOR

On January 5, 1996, J.C. Bradford & Co. ("J.C. Bradford"), a
nationally recognized investment banking firm, delivered its oral opinion that,
subject to the assumptions set forth therein, the $6.25 per share of Common
Stock to be received by the holders of shares of Common Stock (other than BFAC)
(the "Unaffiliated Shareholders") is fair to such holders, from a financial
point of view. J.C. Bradford has confirmed such opinion in an opinion dated as
of the date of this Proxy Statement. The full text of J.C. Bradford's written
opinion, dated as of the date of this Proxy Statement, which sets forth the
assumptions made, procedures followed, matters considered and limits of its
review, is included as Annex B to this Proxy Statement and is incorporated
herein by reference. Holders of shares of Common Stock are urged to read such
opinion in its entirety. See "Special Factors -- Opinion of Financial
Advisor."

RECOMMENDATIONS OF THE SPECIAL COMMITTEE AND THE BANKERS BOARD, AND REASONS FOR
THE MERGER

The Special Committee has determined, based in part upon the opinion
of J.C. Bradford, that the Merger and the Merger Consideration are fair to the
Company and the Unaffiliated Shareholders. After considering the
recommendations of the Special Committee, the Bankers Board unanimously
approved and adopted the Merger Agreement and the transactions contemplated
thereby, and recommends that the Company's shareholders vote "FOR" approval of
the Merger Agreement and the transactions contemplated thereby. See "Special
Factors -- Recommendation of the Special Committee and the Board of Directors."
Shareholders should be aware that certain executive officers and directors of
the Company are also executive officers or directors of AAC or other affiliates
of AAC. See "Special Factors -- Interests of Certain

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Persons in the Merger." The recommendations of the Special Committee and the
Bankers Board are based upon their belief that the terms of the Merger
Agreement are fair from a financial point of view to the Unaffiliated
Shareholders. For a discussion of the reasons for the Merger and the factors
considered by the Special Committee and the Bankers Board in making their
recommendations, see "Special Factors - Recommendation of the Special Committee
and the Board of Directors."

INTERESTS OF CERTAIN PERSONS IN THE MERGER

In considering the recommendation of the Bankers Board with respect to
the Merger Agreement and the transactions contemplated thereby, shareholders
should be aware that certain executive officers and directors of the Company
are also executive officers or directors of AAC or other affiliates of AAC.
AAC indirectly controls approximately 93% of the outstanding shares of Common
Stock through its ownership of BFAC and intends to cause such shares to be
voted in favor of the Merger Agreement and the transactions contemplated
thereby. See "Special Factors -- Interests of Certain Persons in the Merger."

CONDITIONS TO THE MERGER

The obligations of the Company and BFAC to consummate the Merger are
subject to the satisfaction of several conditions, including the approval of
the Merger Agreement by the Company's shareholders. See "The Merger -- Terms
of the Merger Agreement -- Conditions to the Merger."

RIGHTS TO TERMINATE AND AMENDMENTS

The Merger Agreement may be terminated at any time prior to the
closing of the transactions contemplated thereby under certain circumstances.
See "The Merger -- Terms of the Merger Agreement -- Amendment and Termination."

Subject to compliance with applicable law, the Merger Agreement may be
amended at any time prior to the Effective Time by a written agreement executed
by AAC, BFAC and the Company. See "The Merger -- Terms of the Merger Agreement
-- Amendment and Termination."

CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER

The receipt of cash for shares of Common Stock pursuant to the Merger
or the exercise of dissenters' rights will be a

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taxable transaction for federal income tax purposes. See "The Merger --
Certain Federal Income Tax Consequences of the Merger."

SOURCE OF FUNDS

The funds to be used to pay the aggregate Merger Consideration, as
well as all expenses incurred in connection with the Merger, will come from the
Company's working capital, and no funds will be borrowed in order to complete
the Merger. See "The Merger -- Source of Funds."

DISSENTERS' RIGHTS

Holders of shares of Common Stock are entitled to dissenters' rights
under the GBCC in connection with the Merger. See "The Merger -- Dissenters'
Rights" and Article 13 of the GBCC included as Annex C to this Proxy Statement
and incorporated herein by reference.

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THE SPECIAL MEETING

PURPOSE OF THE SPECIAL MEETING

At the Special Meeting, the holders of Common Stock will be asked to
consider and vote upon a proposal to approve the Merger Agreement, pursuant to
which, among other things, (i) BFAC will be merged with and into the Company
with the Company being the surviving corporation, (ii) each outstanding share
of Common Stock (other than Common Stock held by BFAC or by shareholders who do
not vote in favor of the Merger Agreement and properly perfect their
dissenters' rights under Article 13 of the GBCC) will be converted into the
right to receive the Merger Consideration, (iii) each outstanding share of
Common Stock held by BFAC or shares held by the Company as treasury shares will
be cancelled without consideration, and (iv) each outstanding BFAC Share will
be converted into the right to receive one share of common stock of the
surviving corporation. A copy of the Merger Agreement is included as Annex A
to this Proxy Statement and is incorporated herein by reference.

Based upon the recommendation of the Special Committee, the Bankers
Board unanimously approved the Merger Agreement and recommends that the
Company's shareholders vote "FOR" approval of the Merger Agreement and the
transactions contemplated thereby. See "Special Factors -- Recommendation of
the Special Committee and the Board of Directors." In rendering its
recommendation to the Bankers Board, the Special Committee retained and
consulted with a financial advisor and received an opinion as to the fairness
of the Merger Consideration to the Unaffiliated Shareholders, from a financial
point of view. See "Special Factors -- Opinion of Financial Advisor." In
considering the recommendation of the Bankers Board, shareholders should be
aware that certain executive officers and directors of the Company are also
executive officers or directors of AAC or other affiliates of AAC. See
"Special Factors -- Interests of Certain Persons in the Merger."

VOTING RIGHTS, VOTE REQUIRED FOR APPROVAL AND PROXY INFORMATION

The Bankers Board has fixed the close of business on February ____,
1996 as the Record Date for the determination of shareholders entitled to
notice of and to vote at the Special Meeting and any adjournment or
postponement thereof. Accordingly, only holders of record of Common Stock at
the close of business on the Record Date are entitled to notice of and to vote
at the Special Meeting. At the close of business on the Record Date, there
were _________ shares of Common Stock outstanding and entitled to vote, held of
record by approximately ___ holders.

Each holder of record of Common Stock on the Record Date is entitled
to cast one vote per share of Common Stock in person or

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by proxy at the Special Meeting. The presence, either in person or by proxy,
at the Special Meeting of the holders of a majority of the shares of Common
Stock outstanding as of the Record Date and entitled to vote is necessary to
constitute a quorum at the Special Meeting. Abstentions and broker non-votes
(where a broker or other record holder submits a proxy but does not have
authority to vote a customer's Common Stock) will be considered present for
purposes of establishing a quorum.

The Merger Agreement requires approval of the affirmative vote of
holders of a majority of the outstanding shares of Common Stock on the Record
Date as required by the GBCC ("Statutory Approval"). On the Record Date, BFAC
beneficially owned ___________ shares, or approximately 93%, of the outstanding
shares of Common Stock. Management of AAC has indicated that it intends to
cause BFAC to vote such shares in favor of the proposal to approve the Merger
Agreement, which vote will be sufficient to obtain Statutory Approval without
the approval of any other shareholders of the Company. The Merger Agreement
does not require approval by the holders of a majority of the shares of Common
Stock other than BFAC. Approval of the Merger Agreement is, therefore,
assured.

Unless otherwise specified, all shares represented by effective
proxies will be voted in favor of approval of the Merger Agreement. Since
Statutory Approval requires the affirmative vote of a majority of the shares of
Common Stock issued and outstanding, both abstentions and broker non-votes have
the effect of a "no" vote. Any shareholder who executes and delivers a proxy
may revoke it at any time prior to its use by: (i) giving written notice of
revocation to the Secretary of the Company, (ii) executing a proxy bearing a
later date, or (iii) appearing at the Special Meeting and voting in person.

The cost of soliciting proxies will be paid by the Company. In
addition to use of the mails, proxies may be solicited in person or by
telephone or telegram by directors, officers and regular employees of the
Company or AAC, who will not receive

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additional compensation for such services. Brokerage houses, nominees,
custodians and fiduciaries will be requested to forward soliciting material to
beneficial owners of stock held of record by them, and the Company will
reimburse such persons for their reasonable expenses in doing so.

INCORPORATION OF DOCUMENTS BY REFERENCE

The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1994 (the "Form 10-K") and the Company's Quarterly Reports on Form
10-Q for the quarterly periods ended March 31, 1995, June 30, 1995 and
September 30, 1995 (the last such Quarterly Report being referred to as the
"Third Quarter Form 10-Q"), filed with the Securities and Exchange Commission
(the "Commission") by the Company pursuant to the Securities Exchange Act of
1934, as amended (the "Exchange Act"), are hereby incorporated by reference in
this Proxy Statement. Copies of the Form 10-K and the Third Quarter Form 10-Q
are being delivered herewith.

Any statement contained in a document incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this Proxy
Statement to the extent that a statement contained herein supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Proxy
Statement.

The information relating to the Company contained in this Proxy
Statement should be read together with the information in the documents
incorporated by reference.

This Proxy Statement incorporates documents by reference which may not
be presented herein or delivered herewith. Any such documents (other than
exhibits to such documents unless such exhibits are specifically incorporated
by reference) can be obtained without charge by any person, including any
beneficial owner, to whom this Proxy Statement is delivered upon written or
oral request directed to Bankers Fidelity Life Insurance Company at its
principal executive offices at 4370 Peachtree Road, N.E., Atlanta, Georgia
30319, Attention: Assistant Secretary, telephone (404) 266-5500. In order to
ensure timely delivery of the documents, any such request should be made by
March 22, 1996.

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AVAILABLE INFORMATION

The Company and AAC have filed with the Commission a Statement on
Schedule 13E-3 (the "Schedule 13E-3") pursuant to Rule 13e-3 under the Exchange
Act, furnishing certain additional information with respect to the proposed
Merger.

As permitted by the rules and regulations of the Commission, this
Proxy Statement omits certain information contained in the Schedule 13E-3 and
the exhibits thereto. In addition, the Company is subject to the informational
requirements of the Exchange Act, and in accordance therewith files reports,
proxy statements and other information with the Commission. The Schedule
13E-3, as well as other reports, proxy statements and other information filed
by the Company, can be inspected and copied at the Commission's Public
Reference Room, Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington,
D.C., and at the public reference facilities maintained by the Commission at
its regional offices located at Citicorp Center, 500 West Madison Street, Suite
1400, Chicago, Illinois, and 7 World Trade Center, Suite 1300, New York, New
York. Copies of such materials can be obtained from the Commission at
prescribed rates from the Public Reference Section of the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549.

Statements contained in this Proxy Statement as to the contents of any
contract or other document referred to herein are not necessarily complete, and
in each instance reference is made to the full text of such contract or other
document included as an Annex hereto or filed as an exhibit to the Schedule
13E-3, each such statement being qualified in all respects by such references.

SPECIAL FACTORS

PURPOSE AND EFFECTS OF THE MERGER

The purpose of the Merger is to enable AAC to acquire the
approximately 7% of the equity interest of the Company that is not already
owned by AAC, while permitting the Company's public shareholders to realize
upon the value of their Common Stock, taking into account the limited market
for the Common Stock and the fact that AAC already holds in excess of 90%
thereof. AAC desires to effect the Merger in order to streamline the ownership
of the Company. In the view of the Company and AAC, the operation of the
Company as a wholly-owned subsidiary, as opposed to a publicly-held concern,
would permit

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the Company's management to effect strategic decisions without regard to their
short-term effects on reported earnings or the interests of the outside
shareholders, which could alleviate potential future conflicts of interest that
may arise between AAC and the outside shareholders. In addition, as soon as
practicable following the Effective Time, the Company will take such actions as
are necessary to suspend its obligations to file reports, proxy statements and
other information pursuant to Section 15(d) of the Exchange Act. Upon the
effectiveness of such suspension, the Company will no longer be required to
incur the reporting, public information, share transfer and other costs
associated with operating a public company, which costs are approximately
$50,000 each year.

Consummation of the Merger will terminate the equity interest in the
Company of the Company's shareholders other than AAC. Accordingly, the
Company's public shareholders will share in neither the potential future
earnings and growth of the Company nor the risks associated with achieving such
earnings and growth following the Merger. AAC will continue to have an equity
interest in the Company and will benefit from the Company's potential earnings
and growth, but will be subject to the risks associated therewith. Assuming
consummation of the Merger, AAC will have 100% of the interest in the Company's
net book value and net income, which were $19,150,000 ($6.41 per share) and
$716,000 respectively, at December 31, 1994 and for the fiscal year ended on
such date, and $23,710,000 ($7.28 per share) and $1,135,000 respectively, at
September 30, 1995 and for the nine months ended on such date.

As there is currently no established public trading market for the
Common Stock, there are only limited opportunities for the Company's
shareholders to realize upon the value of the Common Stock owned by them. The
Merger will enable the Company's public shareholders to receive a cash payment
of $6.25 per share of Common Stock held, or to exercise their dissenters'
rights as described under "The Merger -- Dissenters' Rights," as part of a
transaction that has been determined by the Special Committee and the Bankers
Board, as described under "-- Recommendation of the Special Committee and the
Board of Directors" below, to be fair to such shareholders. The Merger will
further provide for a prompt and effective transfer of ownership of the
minority interest in the Company to AAC. The receipt by any shareholder of the
Company of cash pursuant to the Merger will be a taxable transaction. See "The
Merger -- Certain Federal Income Tax Consequences of the Merger."

BACKGROUND OF THE MERGER

AAC acquired a majority of the Company's outstanding Common Stock, and
thereby obtained controlling interest in the Company, pursuant to an exchange
offer for shares of the Common Stock in 1976. Since prior to the time of that
exchange offer, there has

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been no established public trading market for the Common Stock. From time to
time thereafter, when and if solicited by shareholders of the Company, AAC
periodically increased its level of ownership of Common Stock by acquiring
additional shares of Common Stock, for which there continued to be no
established public trading market, in privately negotiated transactions with
other shareholders of the Company. See "Absence of Public Market for Common
Stock; Dividends." At various times during that period the Bankers Board
reviewed the feasibility of the Company undertaking a transaction or series of
transactions that would result in AAC or the Company acquiring the remaining
publicly-held shares of the Common Stock. The discussions were always very
preliminary in nature, and no specific transactions were ever discussed or
contemplated, because the Bankers Board thought that such a transaction would
not be economically feasible for the Company considering the costs involved in
undertaking such a transaction and the regulatory requirements that place
certain limits on the use of capital by insurance companies. Because any such
discussions were so preliminary and non-substantive in nature, the possibility
of any such transaction was not a factor in decisions made by the Bankers
Board, including the decision not to declare a dividend on the Common Stock
during 1994.

During the third quarter of 1995, as a result of the improved
financial condition of the Company, management of AAC (including Mr. Robinson
and Mr. Howell, each of whom serves as an executive officer and director of
both the Company and AAC) determined that it might be beneficial for AAC to
begin to consider methods of eliminating the minority interest in the Company
and accordingly began investigating the feasibility of causing the Company to
acquire the approximately 7% of the issued and outstanding shares of Common
Stock held by the Unaffiliated Shareholders (the "7% Interest").

At the regularly scheduled meeting of the Bankers Board on October 31,
1995, the directors considered various issues relating to the Company's
business plan and objectives. During that meeting, Mr. Howell, in his capacity
as President and Chief Executive Officer of AAC, indicated that AAC was
prepared to explore ways to cause the Company to acquire the 7% Interest, and
proposed that the Bankers Board consider whether the long-term business
objectives of the Company, as well as the interests of the Unaffiliated
Shareholders, would best be served by the Company's ceasing to be a publicly
owned corporation. Mr. Howell suggested that, in view of the Company's
relatively stable revenue from operations and the significant increase in the
Company's total assets during 1995, the Company might be able to structure a
transaction that could be consummated within the limits imposed upon the use of
capital by insurance companies. Mr. Howell also suggested that the Bankers
Board consider whether the long term cost-savings to the Company might offset
the total expenses that would be incurred in the short term in completing such
a transaction. The Bankers Board indicated that they would welcome a report
from Mr. Howell and John Hancock,

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the Senior Vice President and Treasurer of both AAC and the Company, in their
capacities as executive officers of both AAC and the Company (see "-- Interests
of Certain Persons in the Merger"), with respect to alternatives that might be
available to acquire the 7% Interest and the feasibility of pursuing any such
alternatives.

During November and December 1995, management of the Company and AAC
reviewed the operational flexibility, the long-term cost savings and financial
advantages both to the Company and to AAC, as well as the other efficiencies
that could be achieved, by causing the Company to cease to be a public company
and to become a wholly-owned subsidiary of AAC.

On December 20, 1995, the Bankers Board convened a special meeting at
which Messrs. Howell and Hancock reported on the results of their review. They
suggested to the Bankers Board that the operation of the Company as a
wholly-owned subsidiary would permit the Company's management to effect
strategic decisions without regard to their short-term effects on reported
earnings or the interests of the outside shareholders, which could alleviate
potential future conflicts of interest that may arise between AAC and the
public shareholders. They then summarized for the Bankers Board the
information that was available on the transactions in the Common Stock during
1995. Mr. Hancock then reported that an estimated $50,000 in annual cost
savings could be achieved by ceasing to be a public company. Finally, Messrs.
Howell and Hancock reported that there were two possible alternative
transactions that could be pursued: (i) a tender offer, by either AAC or the
Company, for the shares of Common Stock held by the Unaffiliated Shareholders
or (ii) a merger transaction with an affiliated company in which the
Unaffiliated Shareholders would receive cash in exchange for their shares of
Common Stock. They advised the Bankers Board that while the costs that would
be incurred, as well as the consideration that would be paid to the
Unaffiliated Shareholders, in either type of transaction would be comparable,
the second alternative seemed to present a more cost-efficient method to
achieving the goal of acquiring the publicly-held equity interest not already
owned by AAC. Mr. Howell also advised the Bankers Board that AAC had no desire
or intention to sell its interest in the Company or to vote its shares of
Common Stock in favor of any transaction involving the sale of the Company and,
therefore, the sale of the Company to a third party would not be a viable
alternative. At this point, Mr. Howell then stated that, for the foregoing
reasons, AAC was prepared to propose a transaction by which the Company would
acquire the 7% Interest through the merger of a newly-formed wholly-owned
subsidiary of AAC with and into the Company. As a result of such a merger, the
shares of Common Stock held by the Unaffiliated Shareholders would be cancelled
and such holders would each receive a to-be-determined amount of cash
consideration for each share of Common Stock. The funds to be used to pay the
cash consideration would come from the Company's working capital.

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The Bankers Board then determined that, in view of the fact that five
of the seven members of the Bankers Board also served as officers and/or
directors of AAC or other affiliates of AAC, and that certain other familial,
financial or employment relationships of such directors to AAC might cause
those directors to be deemed to have an interest in such a transaction, any
proposal by which AAC would acquire the entire equity interest in the Company
should be evaluated by members of the Bankers Board who were neither employees
nor officers of AAC, nor had any other affiliations with AAC or its affiliated
entities. Accordingly, at that meeting the Bankers Board appointed as members
of a special committee of the Bankers Board (the "Special Committee"), Messrs.
E.F. Mauldin and F.C. Parker, Jr., each of whom has served as a director of the
Company since before it became a subsidiary of AAC and is not otherwise
affiliated with the Company, the other directors or AAC. The Special Committee
was charged with reviewing, evaluating and negotiating the terms and conditions
of the proposed transaction and, after due investigation and consideration as
deemed necessary by the Special Committee in its sole discretion, to consider
the proposed transaction and to make a recommendation to the full Bankers Board
as to what action should be taken with respect to such a transaction.

The Special Committee was authorized by the Bankers Board to exercise
all the powers and authority of the Bankers Board in discharging their duties
with regard to such a transaction, including, without limitation, the authority
to hire independent legal counsel and financial advisors.

On December 20, 1995, following the meeting of the Bankers Board, the
Special Committee held its first meeting. As its first order of business, the
Special Committee concluded that it should engage independent legal counsel to
assist it in the discharge of its duties and to advise the Special Committee of
procedures that should be followed in evaluating a possible transaction with
AAC. After deliberation, the Special Committee selected the law firm of
Cashin, Morton & Mullins to serve as counsel to the Special Committee upon
confirmation that such firm had not previously rendered services to the
Company, AAC or their affiliates. Counsel to the Special Committee thereafter
(both by participation in the later stages of such meeting and in subsequent
contacts) advised the Special Committee regarding their fiduciary duties and
the exercise of independent business judgment in evaluating any proposed
transaction and the process of requesting and reviewing information from the
Company. The Special Committee then discussed the need to engage a financial
advisor to conduct a financial analysis of the Company and, in the event that a
transaction is negotiated, to render a fairness

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opinion with respect thereto, and to otherwise assist the Special Committee in
the discharge of its duties. The Special Committee thereafter discussed
various financial advisors that might be in a position to perform such
services, and determined that it was important to select a firm that had not
previously rendered financial advisory services to the Company, AAC or their
affiliates. On the basis of those discussions, the Special Committee then
determined to select J.C. Bradford, a nationally recognized investment banking
firm. Subject to written confirmation in a formal engagement letter, the
Special Committee authorized J.C. Bradford to commence an examination of the
Company and explore appropriate valuation methodologies for the purpose of
rendering an opinion regarding whether the consideration to be proposed by AAC
would be fair to the Unaffiliated Shareholders from a financial point of view.
J.C. Bradford thereafter undertook a review of the Company's business,
operations and prospects with a view toward advising the Special Committee as
to the fairness, from a financial point of view, of the transaction to be
proposed by AAC. The scope and nature of that examination is discussed in "--
Opinion of Financial Advisor" below.

On January 2, 1996, the Special Committee was informed by
representatives of AAC that AAC was prepared to make a firm offer to the
Bankers Board whereby AAC would acquire the entire equity interest in the
Company through the merger of BFAC with and into the Company, in which merger
the Unaffiliated Shareholders would receive $5.00 per share of Common Stock,
payable from the Company's working capital, all on the terms and subject to the
conditions that would be specified in a definitive merger agreement. In
connection with the proposal, counsel for AAC provided to the Special
Committee's legal counsel a draft of the proposed merger agreement. The
Special Committee thereafter requested that J.C. Bradford evaluate such
proposal and report back to the Special Committee. On January 4, the Special
Committee held a telephonic meeting, with participation by its counsel and
representatives from J.C. Bradford, in which J.C. Bradford reviewed for the
Special Committee its preliminary examination of the Company and discussed
various valuation methodologies that would be used in determining the fairness,
from a financial point of view, of the price to be paid to the Unaffiliated
Shareholders. In addition, the Special Committee, its counsel and J.C.
Bradford reviewed the limited trading history and lack of an established public
market for the Common Stock as well as the information that was available with
respect to the limited number of transactions in the Common Stock. The Special
Committee expressly authorized J.C. Bradford to communicate directly with AAC,
to share information concerning the types of financial analyses that J.C.
Bradford was conducting and the general range of valuations for the Common
Stock that such analyses yielded, and, in connection therewith, to relay the
conclusion of the Special Committee that, based upon their preliminary review,
the Special Committee would be unable to recommend the proposed transaction at
a $5.00 price.

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In response to that directive from the Special Committee, on January
4, counsel to the Special Committee and representatives of J.C. Bradford
subsequently conducted a telephone conference with representatives of AAC in
which J.C. Bradford summarized the type of financial analyses it was
conducting, the general range of valuations for the Common Stock that such
analyses yielded, and described certain of the types of comparable transactions
that it was reviewing in its analyses and the premiums paid in such
transactions. Mr. Howell, on behalf of AAC, then explained that AAC had
presented its initial proposal based principally upon the facts that $5.00 per
share represented the price paid by AAC in eight of the nine transactions in
which AAC purchased shares of Common Stock during 1995, and that the price
represented a premium above statutory book value per share (one of the
principal valuation approaches used in the insurance industry) of the Common
Stock at September 30, 1995 ($4.82), as well as a premium over the average
sales price ($4.54) for the twelve transactions in the Common Stock that did
not involve AAC, which were reported to the Company, as transfer agent, during
1995. See "Absence of Public Market for Common Stock; Dividends." Mr. Howell
also indicated that it was the position of management of AAC that certain types
of the comparable transactions referenced by J.C. Bradford, and the related
buyout premiums, were not as meaningful or applicable to the proposed
transaction for the Common Stock, principally because of (i) the illiquidity of
the shares of Common Stock due to the absence of any established trading market
and (ii) his view that acquisitions of companies where a control premium was
involved would not be as meaningful, because AAC already owns the controlling
interest in the Company. The discussions of the different financial analyses
were very general and were intended to enable AAC and the representatives of
the Special Committee to gain an understanding of the respective methods of
valuation that each was applying in negotiating the consideration to be
received by the Unaffiliated Shareholders. The discussions were not intended
to, and did not, result in any change or modification to the methodologies,
assumptions or values suggested or applied by J.C. Bradford.

Following the discussions with J.C. Bradford, subsequently on January
4, Mr. Howell indicated that AAC was willing to increase its proposal to $6.25
per share, subject to the terms and conditions contained in the draft merger
agreement that had previously been presented to the Special Committee. He
emphasized that such offer represented a multiple of approximately 1.30 times
statutory book value ($4.82 at September 30, 1995) and a premium of $2.25 over
the most recent sale of shares of Common Stock ($4.00 per share on December 12,
1995). Mr. Howell also stated that management of AAC was not prepared to
increase its proposal above that amount. Counsel to

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the Special Committee agreed to convey the new proposal to the Special
Committee as soon as possible.

Throughout the course of the discussions and negotiations relating to
the consideration to be paid to the Unaffiliated Shareholders, Mr. Howell was
acting in his capacity as Chief Executive Officer of AAC and not in an
individual capacity. Mr. Robinson was not involved nor did he play any role in
such negotiations. Neither Mr. Robinson nor Mr. Howell will receive any extra
or special benefit, in connection with or as a result of the consummation of
the Merger.

On January 5, 1996, the Special Committee met by telephone conference
with its counsel and representatives of J.C. Bradford, to discuss the $6.25 per
share price that had been proposed by AAC. During this meeting, the Special
Committee's legal counsel reported on the progress in negotiating the terms of
the merger agreement with counsel to AAC. Thereafter, J.C. Bradford reviewed
its financial analyses for the Special Committee and indicated that, based on
the various considerations and assumptions described below under "-- Opinion of
Financial Advisor," J.C. Bradford was prepared to orally advise the Special
Committee that the $6.25 per share in cash to be received by the Unaffiliated
Shareholders in connection with the proposed Merger was fair, from a financial
point of view, to said Unaffiliated Shareholders. See "-- Opinion of Financial
Advisor". The members of the Special Committee directed questions to the
representatives of J.C. Bradford primarily concerning the various financial
analyses presented, and J.C. Bradford's exercise of its independent judgment in
arriving at its conclusions. The representatives of J.C. Bradford responded by
clarifying certain information relating to the financial analyses, assuring the
Special Committee that J.C. Bradford had acted independently in arriving at its
conclusion, and assuring the Special Committee that the conclusions of J.C.
Bradford would be formally set forth in a written opinion to be dated the date
of the proxy statement relating to the Special Meeting.

Based upon the presentation and opinion of J.C. Bradford, the factors
described below under "-- Opinion of Financial Advisor", and the other
discussions during the meeting, the Special Committee unanimously adopted
resolutions (i) approving the Merger at a price of $6.25 per share and the
execution by the Company of the merger agreement substantially in the form
proposed by AAC, subject to final negotiations, (ii) that in the Special
Committee's judgment, the proposal was fair and reasonable to the Unaffiliated
Shareholders, and (iii) recommending that the full Bankers Board approve such
proposed merger agreement and the transactions contemplated thereby.

In reaching its conclusion that the Merger Consideration was fair to
the Unaffiliated Shareholders, the Special Committee considered the following
factors: (i) the

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Merger Consideration represents a premium of 25% over the average price that
AAC has paid for shares of Common Stock in privately negotiated transactions
during 1994 and 1995, and a premium of 8% over the highest price paid by AAC
for shares of Common Stock during the past two years, (ii) the Merger
Consideration represents a premium of 34% over the average sales price for
shares of Common Stock sold in the limited number of negotiated transactions by
shareholders other than AAC, (iii) the Merger Consideration is above the
mid-point ($5.59) of the range of values ($2.84 to $8.34 per share) for the
Company, as presented by J.C. Bradford, using a discounted cash flow analysis,
(iv) the Merger Consideration is at approximately the mid-point ($6.67) of the
range of values ($2.38 to $10.97 per share) for the Company using a comparable
companies analysis, (v) the illiquidity of the shares of Common Stock due to
the absence of an established public trading market and the view that it is
unlikely such a market would develop in the future, (vi) that the transaction
represents an opportunity for the Unaffiliated Shareholders to realize upon
their investment in the Common Stock that might otherwise not be available,
(vii) the high level of certainty that the proposed transaction would be
consummated by AAC and the availability of the funds necessary for the Company
to finance the transaction, (viii) the Merger Consideration was within the
range of selected financial ratios for buyout premiums paid by majority
shareholders for remaining interests in transactions both within the insurance
industry and otherwise (which ratios resulted in implied hypothetical values
for the Common Stock ranging from $4.91 to $9.44 per share), (ix) the fact that
the terms of the Merger Agreement and the Merger Consideration were determined
through arm's length negotiations between representatives of AAC, on the one
hand, and the Special Committee on the other, (x) the lack of any other
available or foreseeable alternative for the Unaffiliated Shareholders to
realize upon the value of the 7% Interest, particularly taking into account
AAC's stated position that it had no intent or desire to sell its interest in
the Company to a third party, (xi) the Merger Consideration represented a
multiple of 1.30 times statutory net book value per share of $4.82 at September
30, 1995, and a multiple of .85 times GAAP net book value per share of $7.28 at
September 30, 1995, and (xii) the presentations and opinion of J.C. Bradford
that the Merger Consideration to be received by the Unaffiliated Shareholders
is fair, from a financial point of view, to such shareholders.

The Special Committee believed that each of the foregoing factors were
favorable to the Unaffiliated Shareholders and supported its recommendation to
the Bankers Board. Specifically, the factors in items (i) through (x) and
(xii) indicated that the Merger Consideration was fair based on the factors
listed therein. With respect to item (xi), the Special Committee, in its
discussions with J.C. Bradford, considered both GAAP book value and statutory
capital and surplus, and, following

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consultation with its financial advisor, concluded that statutory capital and
surplus is the more relevant measure for assessing the underlying economic
value of the Company. Statutory basis accounting emphasizes solvency for
purposes of ensuring sufficient reserves for paying future claims as opposed to
GAAP's emphasis on matching revenues and expenses during an accounting period,
and is therefore more reflective of value in the insurance industry. For
example, deferred acquisition costs ("DAC") of insurance policies are expensed
immediately when incurred under statutory accounting principles but capitalized
and amortized over the expected life of the related policies for GAAP purposes.
DAC accounted for $1.76, or more than 70%, of the difference between GAAP book
value per share ($7.28) and statutory capital and surplus per share ($4.82) as
of September 30, 1995. The Special Committee, following discussions with J.C.
Bradford, concluded that statutory accounting principles provided a more
accurate and meaningful basis for valuation because such a valuation process
need not make assumptions regarding the timing and amount of future revenue
streams relating to balance sheet items and insurance policy liabilities.
Accordingly, the Special Committee concluded that the measure of the Merger
Consideration as a multiple of GAAP net book value per share was not
significant for purposes of its recommendation.

At December 31, 1995, statutory book value per share and GAAP book
value per share were $4.87 and $7.83, respectively, although those year-end
figures were not available at the time the Special Committee and the Bankers
Board considered and approved the Merger Agreement.

The Special Committee recognized that because there is no established
public trading market for the Common Stock, there are only limited
opportunities for the Unaffiliated Shareholders to realize upon the value of
their shares. During 1995, approximately 8,200 shares of Common Stock were
exchanged in transactions not involving AAC and approximately 7,200 shares were
exchanged in transactions that did involve AAC. Collectively, those
transactions represented approximately 7.5% of the approximately 200,000 shares
of Common Stock not owned by AAC. See "Absence of Public Market for Common
Stock; Dividends." Despite the illiquidity of the market for the Common Stock,
the Special Committee considered market value as one of the factors in its
analyses because market value, even in the context of the limited market for
the Common Stock, is an objective indicator of value for the shares held by the
Unaffiliated Shareholders. Given AAC's stated position that it had no intent
or desire to sell its interest in the Company to a third party, the Special
Committee, upon the advice of its financial advisor, determined that market
value, such as it exists, was one, although not the only, relevant measure in
considering the fairness of the Merger Consideration.

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In light of the variety of factors considered in connection with
evaluation of the Merger, the Special Committee did not find it practical to,
and did not, quantify or otherwise attempt to assign relative weights to the
specific factors considered in reaching its determination. As there was no
intent to consider a liquidation or sale of the Company (given the stated
intentions of AAC, the Company's controlling shareholder), the valuations and
analyses considered focused on a going concern value of the Company.
Accordingly, no appraisal or valuation of the Company's assets was undertaken,
and neither J.C. Bradford nor the Special Committee attempted to determine the
liquidation value of the Company.

In its analyses, the Special Committee recognized that approval of the
Merger Agreement does not require the affirmative vote of a majority of the
shares of Common Stock held by the Unaffiliated Shareholders and that AAC
(through BFAC) owns a sufficient number of shares to ensure that the Merger
Agreement will be approved at the Special Meeting. The Special Committee
nevertheless concluded that the Merger Agreement and the transactions
contemplated thereby are procedurally fair to the Unaffiliated Shareholders,
given that shareholders are entitled to dissenters' rights under the GBCC. See
"The Merger -- Dissenters' Rights."

Immediately following the Special Committee meeting on January 5, the
Bankers Board convened a special meeting at which the terms of the proposed
transaction were outlined for all of the directors, and the Special Committee
presented its recommendation that the Bankers Board approve the $6.25 per share
price to be paid in connection with the Merger, and the other principal terms
of the Merger Agreement. Representatives of J.C. Bradford were present and
answered several questions relating to the process by which they rendered their
opinion to the Special Committee. The full Bankers Board then unanimously
approved the proposal and the terms of the Merger Agreement. See "--
Recommendation of the Special Committee and the Board of Directors" and "--
Interests of Certain Persons in the Merger."

On the date of this Proxy Statement, J.C. Bradford delivered a written
opinion, dated the date hereof, as to the fairness, from a financial point of
view, of the consideration to be paid to the Unaffiliated Shareholders pursuant
to the Merger. See "-- Opinion of Financial Advisor."

RECOMMENDATION OF THE SPECIAL COMMITTEE AND THE BOARD OF DIRECTORS

On January 5, 1996, the Special Committee recommended that the full
Bankers Board approve the Merger Agreement and the transactions contemplated
thereby. See "--Background of the Merger." The Bankers Board, based on the
recommendation of the Special Committee, unanimously approved the Merger
Agreement and

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the transactions contemplated thereby and recommended that shareholders vote
"FOR" the approval of the Merger Agreement and the transactions contemplated
thereby. The Bankers Board believes that the procedures followed in the
negotiation of the Merger, including the appointment of the Special Committee,
the authorization of the Special Committee to engage independent counsel and
financial advisors, and the fact that the Special Committee was not subject to
the direction of the Bankers Board or any other person or group in connection
with the negotiation of the terms and provisions of the Merger Agreement, were
appropriate and fair to the public shareholders. In its analysis, the Bankers
Board recognized that approval of the Merger Agreement does not require the
affirmative vote of a majority of the shares of Common Stock held by the
Unaffiliated Shareholders and that AAC (through BFAC) owns a sufficient number
of shares to ensure that the Merger Agreement will be approved at the Special
Meeting. The Bankers Board nevertheless concluded that the Merger Agreement
and the transactions contemplated thereby are procedurally fair to the
Unaffiliated Shareholders, given that shareholders are entitled to dissenters'
rights under the GBCC. See "The Merger -- Dissenters' Rights."

The Bankers Board based its determination that the Merger and the
Merger Consideration is fair to, and in the best interests of, the Unaffiliated
Shareholders primarily on the analyses and conclusions of the Special Committee
(which were adopted by the Bankers Board as its own), and voted unanimously to
approve the Merger Agreement. The Bankers Board did not find it practicable
to, and did not, quantify or otherwise attempt to assign relative weights to
the specific factors considered in reaching its determination.

Directors of the Company who are also executive officers or directors
of AAC did not participate in the Special Committee's consideration of the
Merger Agreement and the transactions contemplated thereby because of their
interests in the Merger. See "-- Interests of Certain Persons in the Merger."
AAC intends to cause BFAC to vote its shares of Common Stock, representing
approximately 93% of the issued and outstanding shares of Common Stock, in
favor of the Merger Agreement. Approval of the Merger Agreement is, therefore,
assured.

POSITION OF AAC AS TO FAIRNESS

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AAC has considered the analyses of and the factors examined by the
Special Committee and the Bankers Board, and has adopted those analyses and
conclusions as its own. See "-- Background of the Merger" and "--
Recommendation of the Special Committee and the Board of Directors." AAC
believes that these analyses and factors when considered together, and the fact
that the terms and provisions of the Merger Agreement were negotiated by the
Special Committee, provide a reasonable basis to believe that the Merger is
fair from a financial point of view to the Unaffiliated Shareholders. This
belief should not, however, be construed as a recommendation by AAC to the
Unaffiliated Shareholders to vote to approve the Merger Agreement. AAC did not
assign specific relative weight to the analyses and factors considered in
reaching its belief as to fairness.

OPINION OF FINANCIAL ADVISOR

J.C. Bradford was retained by the Special Committee to assist the
Special Committee in evaluating the proposed Merger and to render an opinion as
to the fairness from a financial point of view of the consideration to be
received by the Unaffiliated Shareholders in the Merger. J.C. Bradford is a
nationally recognized investment banking firm engaged in the valuation of
businesses and securities in connection with mergers and acquisitions,
negotiated underwritings, secondary distributions of listed and unlisted
securities, private placements and valuations for estate, corporate and other
purposes. J.C. Bradford was selected as the Special Committee's financial
advisor based upon such expertise. No limitations were imposed by the Special
Committee, the Company or AAC upon the scope of J.C. Bradford's investigation
or otherwise with respect to the opinion rendered by J.C. Bradford. J.C.
Bradford relied, with the permission of the Special Committee, on the
statements made by AAC that it would not dispose of its shares of Common Stock
or vote such shares in favor of any transaction involving the sale of the
Company to a third party, and J.C. Bradford was not requested or authorized to
solicit, and did not solicit, interest from any party with respect to an
acquisition of the Company or its assets.

On January 5, 1996, J.C. Bradford delivered its oral opinion to the
Special Committee to the effect that, as of such date, the consideration to be
received by the Unaffiliated Shareholders in the proposed Merger was fair from
a financial point of view. J.C. Bradford subsequently confirmed its oral
opinion by delivery of its written opinion dated as of the date of this Proxy
Statement. J.C. Bradford's opinion is directed only to the

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fairness from a financial point of view of the consideration to be received by
the Unaffiliated Shareholders in the Merger and does not constitute a
recommendation to any such shareholder as to whether it should vote in favor of
the Merger. The full text of J.C. Bradford's written opinion, which sets forth
the assumptions made, procedures followed, matters considered and limits of its
review, is included as Annex B and is incorporated by reference herein. The
Unaffiliated Shareholders of the Company are urged to and should read such
opinion in its entirety.

In conducting its analysis and delivering its opinions, J.C. Bradford
considered such financial and other factors as it deemed appropriate and
feasible under the circumstances including, among other things, (i) the Merger
Agreement and drafts of this Proxy Statement, (ii) the historical and current
financial position and results of operations of Bankers; (iii) certain internal
financial analyses and forecasts of the Company for the years beginning January
1, 1995 and ending December 31, 1998, prepared for the Company by its senior
management; (iv) certain financial and securities data of certain other
companies, the securities of which are publicly traded and that J.C. Bradford
believed to be comparable to the Company; (v) prices and premiums paid in
certain other acquisitions and transactions that J.C. Bradford believed to be
relevant; (vi) price and trading activity for the Common Stock; and (vii) such
other financial studies, analyses and investigations as J.C. Bradford deemed
appropriate for purposes of its opinion. J.C. Bradford also held discussions
with members of the senior management of the Company regarding the past and
current business operations, financial condition, and future prospects of the
Company. In addition, J.C. Bradford took into account its assessment of
general economic, market and financial conditions and its experience in other
transactions as well as its experience in securities valuation and its
knowledge of the insurance industry generally.

J.C. Bradford's opinions are necessarily based upon general economic,
market, financial and other conditions as they existed on their respective
dates and the information made available to J.C. Bradford through such dates.
J.C. Bradford relied upon the accuracy and completeness of all of the
financial and other information reviewed by it for purposes of its opinions and
did not assume any responsibility for independent verification of such
information. With respect to the internal financial analyses and forecasts
supplied to J.C. Bradford, J.C. Bradford has assumed, and the management of
Bankers has represented, that such analyses and forecasts were reasonably
prepared on bases reflecting the best currently available estimates and
judgments of the Company's senior management as to the recent and likely future
performance of the Company. J.C. Bradford has not made an independent
evaluation or appraisal of the assets and liabilities of the Company and has
not been furnished with any such evaluation or appraisal.

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In preparing its report to the Special Committee, J.C. Bradford
performed a variety of financial and comparative analyses, including (i)
comparable transaction analysis; (ii) comparable public company analysis; (iii)
comparable acquisition analysis; (iv) discounted cash flow analysis; and (v)
stock trading analysis. Although management of AAC indicated to J.C. Bradford
on January 4, 1996 that they believed that certain of the comparable
transactions and other factors referenced by J.C. Bradford were not as
meaningful to the proposed transaction, J.C. Bradford did not revise its
analyses or conclusions. See "-- Background of the Merger." The summary of
J.C. Bradford's analyses set forth below does not purport to be a complete
description of the analyses underlying J.C. Bradford's opinion. The
preparation of a fairness opinion is a complex process involving subjective
judgments and is not necessarily susceptible to partial analysis or summary
description. In arriving at its opinion, J.C. Bradford did not attribute any
particular weight to any analysis or factor considered by it, but rather made
qualitative judgments as to the significance and relevance of each analysis and
factor. Accordingly, J.C. Bradford believes that its analyses must be
considered as a whole and that selecting portions of its analyses and the
factors considered by it, without considering all analyses and factors, could
create a misleading or incomplete view of the processes underlying such
analyses and its opinion. With respect to the comparable public company
analysis, comparable acquisition analysis and comparable transaction analysis
summarized below, no public company, acquisition or transaction utilized as a
comparison is identical to the Company or the Merger and such analyses
necessarily involve complex considerations and judgments concerning the
differences in financial and operating characteristics of the companies and
other factors that could affect the acquisition or public trading values of the
companies concerned. In performing its analyses, J.C. Bradford made numerous
assumptions with respect to industry performance, general business, economic,
market, and financial conditions, and other matters. The analyses performed by
J.C. Bradford are not necessarily indicative of actual values or future
results, which may be significantly more or less favorable than suggested by
such analyses.

The following is a summary of the report presented by J.C. Bradford to
the Special Committee on January 5, 1996.

Comparable Transaction Analysis. J.C. Bradford analyzed certain
information relating to selected transactions involving acquisitions of
remaining interests by majority shareholders. J.C. Bradford considered ten such
transactions since 1990 that involved insurance companies and that J.C.
Bradford considered relevant to the Merger. Using publicly available
information, J.C. Bradford (a) calculated the relationship between the
consideration paid in these transactions and (i) book value (as determined in
accordance with generally accepted accounting principles or "GAAP"); (ii) GAAP
net income; (iii) GAAP pre-tax

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income; and (iv) capital and surplus (as determined in accordance with
statutory accounting ("STAT")), and (b) determined the percentage premiums
that such consideration represented when compared to the stock trading price
one day, one week and four weeks prior to the announcement of each such
transaction. J.C. Bradford derived average, adjusted average (excluding high
and low) and median multiples or percentages, as the case may be, from the
foregoing analyses and applied or compared such multiples or percentages, as
applicable, to (a) the Company's GAAP (i) book value as of September 30, 1995,
(ii) net income for the twelve months ended September 30, 1995, and (iii)
pre-tax income for the twelve months ended September 30, 1995, (b) the
Company's STAT capital and surplus as of September 30, 1995, and (c) the
prevailing prices at which the Common Stock had been purchased in privately
negotiated transactions by AAC or otherwise reported by the transfer agent
since January 1, 1995. Based on its analysis of premiums paid relative to
stock trading prices prior to announcement, J.C. Bradford calculated a range
of values for the shares of Common Stock of $6.18 to $6.88 per share.
Although certain of the values in this range exceeded the proposed Merger
Consideration of $6.25 per share, J.C. Bradford concluded the results of this
analysis, when considered in light of the other analyses, were supportive of
its conclusion that the transaction is fair to Unaffiliated Shareholders.
Based on its analysis of consideration paid relative to GAAP book value, GAAP
net income and GAAP pre-tax income, J.C. Bradford calculated a range of values
for the shares of Common Stock of $4.91 to $9.44 per share. J.C. Bradford
determined that the range of values derived from multiples of GAAP book value
were less meaningful than its other analyses, however, for several reasons,
including: (i) the projected earnings of a company, rather than its book
value, is a more accepted method of valuation, and (ii) GAAP book value can
overstate the underlying economic value of insurance companies due primarily
to the conventions of accrual accounting. Furthermore, comparison on the
basis of multiples of GAAP net income were similarly less significant as the
Company did not record income taxes in the twelve month period being
considered but recorded a tax benefit. The range of values based on the
multiples of GAAP pre-tax income was $4.91 to $5.01 per share. In addition,
J.C. Bradford reviewed the consideration paid in such transactions as a
multiple of STAT capital and surplus. Despite the relative ages of the
comparable capital and surplus data, and the wide range of values for the
shares of Common Stock ($3.02 to $14.59) resulting from the application of
such multiples, J.C. Bradford noted that there were as many transactions
consummated at multiples below that proposed by AAC as there were above it.

J.C. Bradford also considered 56 transactions since 1991, not
restricted to the insurance industry, involving acquisitions of remaining
interests by majority shareholders. Using publicly

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available information, J.C. Bradford determined the percentage premium that the
consideration paid in these transactions represented when compared to the stock
trading price one day, one week and four weeks prior to the announcement of
such transactions. J.C. Bradford derived average and median percentages from
the foregoing analyses and applied or compared such percentages, as applicable,
to the prevailing prices at which the Common Stock had been purchased in
privately negotiated transactions by AAC or otherwise reported by the transfer
agent since January 1, 1995. Based on this analysis, J.C. Bradford calculated
a range of values for the shares of Common Stock of $6.10 to $6.66 per share.
Although certain of the values in this range exceeded the proposed Merger
Consideration of $6.25 per share, J.C. Bradford concluded that the results of
this analysis, when considered in light of the other analyses, were supportive
of its conclusion that the transaction is fair to Unaffiliated Shareholders.

Comparable Public Company Analysis. J.C. Bradford reviewed and
compared certain actual and estimated financial and operating information of
the Company to the corresponding information of certain selected publicly
traded life and accident and health insurance companies (the "Comparable
Companies"). In performing the comparable public company analysis, J.C.
Bradford divided the Comparable Companies into two groups based on equity
market capitalization of less than and more than $250 million. Using publicly
available information, J.C. Bradford analyzed various relevant financial ratios
of the Comparable Companies. The ratio analysis include the public stock
prices of the Comparable Companies as of January 5, 1996, as a multiple of GAAP
(i) earnings per share for the calendar years ended 1995 and 1996; (ii) book
value per share as of September 30, 1995; and (iii) pre-tax earnings per share
for the twelve months ended September 30, 1995, adjusted to exclude realized
capital gains or losses.

J.C. Bradford derived average, adjusted average (excluding high and
low) and median multiples from the foregoing analysis and applied or compared
such multiples, as applicable, to the Company's GAAP (i) earnings per share for
the calendar years ended 1995 and 1996; (ii) book value per share as of

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September 30, 1995; and (iii) pre-tax earnings per share for the twelve months
ended September 30, 1995, adjusted to exclude realized capital gains or losses.
Based on this analysis for the Comparable Companies with equity market
capitalizations of less than $250 million, J.C. Bradford calculated a range of
values for the shares of Common Stock of $1.98 to $7.47 per share. Based on
this analysis for the Comparable Companies with equity market capitalizations
of more than $250 million, J.C. Bradford calculated a range of values for the
shares of Common Stock of $2.38 to $10.97 per share.

In conducting the comparable company analysis, the only values derived
that exceeded the proposed Merger Consideration of $6.25 per share resulted
from the application of multiples of GAAP book value. For the reasons
discussed above, J.C. Bradford determined GAAP book value to be less
significant than other measurements. In contrast, all values derived from the
application of multiples of GAAP earnings (operating, pre-tax, and net) were
below the $6.25 per share. Such values ranged from $1.98 to $5.66 per share.
J.C. Bradford concluded that the results of this analysis when considered in
light of the other analyses, were supportive of its conclusion that the
transaction is fair to Unaffiliated Shareholders.

Comparable Acquisition Analysis. J.C. Bradford analyzed certain
information relating to selected transactions involving 100% acquisitions of
life and accident and health insurance companies. J.C. Bradford considered 11
such transactions since 1994. Using publicly available information, J.C.
Bradford (a) calculated the relationship between the consideration paid in
these transactions and GAAP (i) book value; (ii) net income; and (iii) pre-tax
income, and (b) determined the percentage premium that such consideration
represented when compared to the stock trading price one day, one week and four
weeks prior to the announcement of such transaction. J.C. Bradford derived
average, adjusted average (excluding high and low) and median multiples or
percentages, as the case may be, from the foregoing analysis and applied or
compared such multiples or percentages, as applicable, to (a) the Company's
GAAP (i) book value as of September 30, 1995, (ii) net income for the twelve
months ended September 30, 1995, and (iii) pre-tax income for the twelve months
ended September 30, 1995, and (b) the prevailing prices at which the Common
Stock had been purchased in privately negotiated transactions by AAC or
otherwise reported by the transfer agent since January 1, 1995. Based on its
analysis of premiums paid relative to stock trading prices prior to
announcement, J.C. Bradford calculated a range of values for the shares of
Common Stock of $5.86 to $6.45 per share. Although certain of the values in
this range exceeded the proposed Merger Consideration of $6.25 per share, J.C.
Bradford concluded that the results of this analysis were supportive of its
conclusion that the transaction, when considered in light of the other
analyses, is fair to Unaffiliated Shareholders. Based on its analysis of
consideration paid relative to GAAP book value, GAAP net income and GAAP
pre-tax income, J.C. Bradford calculated a range of values for the Common Stock
of $4.57 to $10.99 per share. For the reasons described above, J.C. Bradford
believed GAAP book value and GAAP net income to be less significant than other
measurements. The range of values based on the multiples of GAAP pre-tax
income were $4.57 to $4.95 per share. J.C. Bradford concluded that the
results of this analysis, when considered in light of the other analyses, were
supportive of its conclusion that the transaction is fair to Unaffiliated
Shareholders.

Discounted Cash Flow. J.C. Bradford also performed a discounted cash
flow analysis of the Company. In conducting its analysis, J.C. Bradford relied
on certain internal forecasts provided by the Company's senior management to
determine a valuation range for the Company. This analysis assumed that the
Company would pay a cash dividend of $0.35 per share to its shareholders each
year for the next three years, and, at the end of three years, the Company
would be sold for (i) a multiple of trailing GAAP earnings ranging from 8x to
12x (the "Net Income Exit Multiple") and (ii) a multiple of GAAP book value
ranging from 0.75x to 1.25x (the "Book Value Exit Multiple"). These dividends
and sale proceeds, representing cash flows attributable to Common Stock, were
then discounted back to the present at various discount rates ranging from 10%
to 20% (the "Discount Rates"). During calendar years 1990-1995, the Company
paid cash dividends per share of $.35, $.35, $.30, $.35, $0, and $.35
respectively. For purposes of the discounted cash flow analysis, the range of
Discount Rates selected was intended to account for the following risks to a
shareholder: (i) general equity risk

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(which, alone, represents a 10% discount rate), (ii) small company risk, (iii)
illiquidity risk, and (iv) risk associated with deteriorating business lines.
Based on the ranges of Net Income Exit Multiples, Book Value Exit Multiples and
Discount Rates, J.C. Bradford derived a total of 30 values, which ranged from
$2.84 to $8.34 per share. Of the 30 values in this range, seven exceeded the
proposed Merger Consideration of $6.25. These higher values resulted from the
application of highest Book Value Multiples and the lowest Discount Rates.
Because J.C. Bradford emphasized future earnings rather than book value in its
analysis, the results of this analysis, when considered in light of the other
analyses, were supportive of its conclusion that the transaction is fair to
Unaffiliated Shareholders.

Stock Trading Analysis. J.C. Bradford reviewed and analyzed the
historical trading volume and prices at which the Common Stock had been
purchased in privately negotiated transactions by AAC or otherwise reported by
the transfer agent since January 1, 1995. J.C. Bradford noted that trading
activity was intermittent and that the trading market was relatively illiquid.
J.C. Bradford also noted that the highest traded price was $5.75, which
occurred in May 1995, and the lowest traded price was $4.00, which occurred
throughout the year including in December 1995. J.C. Bradford concluded that
the results of this analysis, when considered in light of the other analyses,
were supportive of its conclusion that the transaction is fair to Unaffiliated
Shareholders.

Pursuant to the terms of an engagement letter dated January 2, 1996,
the Company agreed to pay J.C. Bradford a fee of $20,000 for acting as
financial advisor to the Special Committee in connection with the Merger. In
addition, the Company has agreed to reimburse J.C. Bradford for up to $10,000
of its reasonable out-of-pocket expenses, including the fees and disbursements
of its counsel, and to indemnify J.C. Bradford and certain related persons
against certain liabilities relating to or arising out of its engagement,
including certain liabilities under the federal securities laws. In the
ordinary course of its business, J.C. Bradford has traded, and may in the
future trade, securities of AAC for its own account and for the accounts of its
customers and, accordingly, may at any time hold a long or short position in
such securities.

INTERESTS OF CERTAIN PERSONS IN THE MERGER

The Company is a 93%-owned subsidiary of BFAC, which is a wholly-owned
subsidiary of AAC. Approximately 70.19% of the outstanding voting securities
of AAC are owned beneficially or of record by Mr. Robinson, his wife and other
affiliates. See "Security Ownership of Certain Beneficial Owners and
Management."

Since AAC acquired a controlling interest in the Company in 1976, the
Company and AAC have operated under common management.

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As a result, certain of the directors of the Company also serve as executive
officers or directors of AAC or other affiliates of AAC. Mr. Robinson, the
Company's Chairman, also serves as Chairman of the Board of AAC. Mr. Howell,
the son-in-law of Mr. Robinson, serves as Executive Vice President and a
director of the Company and as President, Chief Executive Officer and a
director of AAC. Dom H. Wyant and Samuel E. Hudgins both serve as directors of
the Company and as directors of AAC. Mr. Wyant is Of Counsel to the law firm
of Jones, Day, Reavis & Pogue, which acts as general counsel to AAC and its
subsidiaries, including in connection with the Merger. Mr. Hudgins is a party
to a consulting agreement with the Company, which provides for payment of an
hourly fee. Mr. Hudgins also owns 200,000 shares of the common stock,
representing approximately 4% of the outstanding shares, of Leath Furniture,
Inc., an 83%-owned subsidiary of AAC. Eugene Choate, the President and a
director of the Company, also serves as President of Atlantic American Life
Insurance Company, a wholly-owned subsidiary of AAC. None of such persons
served on the Special Committee of the Bankers Board, which, in consultation
with its independent advisors, reviewed, negotiated and approved the terms of
the Merger Agreement and unanimously recommended that the Bankers Board approve
the Merger Agreement and the transactions contemplated thereby. See "--
Recommendation of the Special Committee and the Board of Directors."

The Company subleases approximately 25,789 square feet of space for
its principal offices from AAC. The Company paid total annual rent to AAC of
$383,000 and $360,365 in 1994 and 1995, respectively, and expects to pay a
comparable amount in 1996. Such amounts consist of base rent and a pro rata
share of all real estate taxes and certain other expenses and insurance costs
with respect to the office building. Delta Life Insurance Company, the owner
of the building, is controlled by Mr. Robinson. The terms of the lease are
believed by management of the Company to be comparable to terms which could be
obtained by the Company from unrelated parties for comparable rental property.

For a discussion of other transactions between the Company and AAC (or
certain affiliates of AAC), see Note 7 to the Company's audited financial
statements, included in the Form 10-K delivered herewith and incorporated
herein by reference.

CERTAIN FINANCIAL PROJECTIONS

The following sets forth certain financial information and
projections regarding the Company. The Company does not in the ordinary course
publicly disclose projections as to future revenues or earnings. The Company's
independent accountants have not examined or compiled any of the following
projections or expressed any conclusion or provided any other form of assurance
with respect to such projections and accordingly assume no

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responsibility for such projections. These projections were delivered to J.C.
Bradford solely in connection with its due diligence investigation of the
Company in order for it to render its fairness opinion to the Special
Committee, were prepared with a limited degree of precision, and were not
prepared with a view to compliance with the guidelines established by the
American Institute of Certified Public Accountants regarding projections, which
would require a more complete presentation of data than as shown below. The
Company believes that there is a reasonable basis for presenting the
information set forth below and is not aware of any misleading influences which
may have resulted from the exclusion of any items from the projections. While
presented with numerical specificity, the projections were prepared prior to
January 5, 1996, and are based upon a variety of estimates and hypothetical
assumptions, which, although considered reasonable by the Company at the time
the projections were prepared, may not or may no longer be accurate, may not be
realized, and are also inherently subject to significant business, economic and
competitive uncertainties, most of which are beyond the control of the Company.
Accordingly, there can be no assurance that any of the projections will be
realized, and the actual result for 1995, and for the later years, may vary
materially from those shown. The projections were not prepared with a view to
public disclosure and inclusion of the projections herein shall not be regarded
as a representation by the Company or any other person that the projected
results will be achieved.

The projections reflect the following assumptions:

(1) Life insurance premiums would increase 20% per year for the
years 1996-1998. Premiums related to all other lines of business would follow
trends based on prior years.

(2) Realized investment gains would be $250,000 in each of years
1996, 1997 and 1998.

(3) Expenses would follow trends based on prior years, except that
general expenses would be reduced to 30%, 27% and 23% of premiums for 1996,
1997 and 1998, respectively.

(4) Total operating income was used rather than net income, as net
income is affected by tax loss carryforwards and the tax sharing agreement
between the Company and certain of its affiliates.

(5) Retained earnings reflects a dividend of $.35 per share or
$1,045,480.

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BANKERS FIDELITY LIFE INSURANCE COMPANY
1996 - 1998 PROJECTED ANNUALIZED PREMIUM

[Enlarge/Download Table]

ORD MM CANCER A&H TSA A&H S/ACC HOSP

Nov-95 3,542,941 1,238,769 402,500 55,235 4,980 6,124 17 6,615

EST 12/95 3,800,000 1,228,058 401,370 53,638 4,980 6,124 17 6,615

EST 12/96 4,750,000 1,105,252 421,438 37,546 4,980 6,124 0 6,615

EST 12/97 5,937,500 994,726 463,581 26,282 4,980 6,124 0 6,615

EST 12/98 7,400,000 895,253 533,118 18,397 4,980 6,124 0 6,615

M/SURG H/SURG MCARE CCARE AEXP DIS COVDALE TOTAL

Nov-95 66,534 4,582 5,463,011 702,537 152,048 14,409 11,660,302

EST 12/95 65,531 4,530 5,393,639 540,000 151,064 14,340 120,965 11,790,871

EST 12/96 52,424 9,060 4,962,148 459,000 158,617 15,057 110,000 12,098,261

EST 12/97 41,940 18,120 5,000,000 390,150 174,478 16,562 110,000 13,191,058

EST 12/98 33,552 36,240 5,000,000 331,628 200,649 19,046 90,000 14,575,602

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BANKERS FIDELITY LIFE INSURANCE COMPANY
INCOME STATEMENT

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1995 1996 1997 1998
---- ---- ---- ----

REVENUE:
Insurance premiums 10,948,846 11,148,261 12,003,558 13,113,102
Investment income 2,351,043 2,405,306 2,525,571 2,651,849
Realized investment gains 455,957 250,000 250,000 250,000
---------- ---------- ---------- ----------
Total revenue 13,755,846 13,803,567 14,779,129 16,014,951

BENEFITS AND EXPENSES:
Insurance benefits and losses incurred * 5,776,062 6,674,378 7,165,564 8,141,282
Commissions and underwriting expenses ** 6,769,681 5,861,301 6,137,650 6,066,381
Other
---------- ---------- ---------- ----------
Total benefits and expenses 12,545,743 12,535,679 13,303,214 14,207,663
---------- ---------- ---------- ----------

Total operating income 1,210,103 1,267,888 1,475,915 1,807,288
Income tax expense (217,372) 316,972 368,979 451,822
---------- ---------- ---------- ----------
Net income 1,427,475 950,916 1,106,936 1,355,466
========== ========== ========== ==========

* Benefit Expense 6,411,718 6,047,414 6,216,873 6,325,363
Change in Benefit Reserve (635,656) 626,964 948,691 1,815,919
---------- ---------- ---------- ----------
5,776,062 6,674,378 7,165,564 8,141,282

** Commisisons 3,165,306 2,591,400 3,060,217 3,644,875
General Expenses 3,671,635 3,304,472 3,139,249 2,982,287
Taxes 395,108 401,337 432,128 472,072
DAC (462,368) (435,909) (493,944) (1,032,853)
---------- ---------- ---------- ----------
6,769,681 5,861,300 6,137,650 6,066,381

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BANKERS FIDELITY LIFE INSURANCE COMPANY
BALANCE SHEET

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ASSETS 1995 1996 1997 1998
------ ---- ---- ---- ----

Cash 3,135,371 3,139,486 3,181,911 3,271,746
Bonds 19,989,528 20,015,761 20,286,244 20,858,986
Stocks 11,824,909 11,840,427 12,000,433 12,339,241
Mortgage Loans 2,184,165 2,187,031 2,216,586 2,279,167
Policy Loans 1,015,111 1,016,144 1,030,178 1,059,264
---------- ---------- ---------- ----------
38,149,084 38,199,149 38,715,352 39,808,404

DAC 6,098,229 6,534,138 7,028,082 8,060,935
Other Assets 2,678,119 2,724,545 2,724,545 2,724,545
---------- ---------- ---------- ----------

46,925,432 47,457,832 48,467,979 50,593,884
========== ========== ========== ==========

LIABILITIES AND SHAREHOLDER'S EQUITY
------------------------------------

Future policy benefits 17,634,270 18,261,234 19,209,925 21,025,844
Unearned premiums 905,173 905,173 905,173 905,173
Losses and claims 2,237,142 2,237,142 2,237,142 2,237,142
Other policy liabilities 1,511,686 1,511,686 1,511,686 1,511,686
Accounts payable and accrued expenses 337,434 337,434 337,434 337,434
Deferred income taxes 820,000 820,000 820,000 820,000
---------- ---------- ---------- ----------

Total policy liabilities 23,445,705 24,072,669 25,021,360 26,837,279

Shareholders' equity
Common stock 3,010,000 3,010,000 3,010,000 3,010,000
Additional paid-in capital 5,547,000 5,547,000 5,547,000 5,547,000
Retained earnings 10,363,769 10,269,205 10,330,661 10,640,647
Net unrealized investment gains 4,719,349 4,719,349 4,719,349 4,719,349
Treasury stock (160,391) (160,391) (160,391) (160,391)
---------- ---------- ---------- ----------

Total shareholders' equity 23,479,727 23,385,163 23,446,619 23,756,605
---------- ---------- ---------- ----------

46,925,432 47,457,832 48,467,979 50,593,884
========== ========== ========== ==========

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BANKERS FIDELITY LIFE INSURANCE COMPANY

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1996 ORD MM CANCER A&H TSA A&H S/ACC HOSP

EARNED PREMIUM 3,800,000 1,105,252 421,438 37,546 4,980 6,124 0 6,615

INVESTMENT INCOME 649,433 1,082,388 48,106 0 120,265 9,621 0 0
REALIZED GAINS
--------------------------------------------------------------------------------
TOTAL INCOME 4,449,433 2,187,640 469,544 37,546 125,245 15,745 0 6,615

BENEFITS PAID 836,000 1,271,040 160,146 28,160 150,000 4,593 0 4,961

COMMISSIONS 1,824,000 0 96,931 375 35 61 0 66

CHG IN RSV 1,187,500 (90,656) 17,058 (5,272) (110,000) 0 0 0

GENERAL EXPENSE 1,126,363 327,609 124,919 11,129 1,476 1,815 0 1,961

TAXES 136,800 39,789 15,172 1,352 179 220 0 238

DAC (1,068,750) 186,852 (11,038) 0 0 0 0 0

--------------------------------------------------------------------------------
TOTAL EXPENSE 4,041,913 1,734,634 403,188 35,744 41,690 6,690 0 7,226

--------------------------------------------------------------------------------
TOTAL INCOME 407,519 453,006 66,356 1,802 83,555 9,055 0 (611)

M/SURG H/SURG MCARE CCARE AEXP DIS COVDALE TOTAL

EARNED PREMIUM 52,424 9,060 4,962,148 459,000 158,617 15,057 110,000 11,148,261

INVESTMENT INCOME 4,330 241 337,368 144,318 6,254 1,203 1,780 2,405,306
REALIZED GAINS 250,000 250,000
----------------------------------------------------------------------------------------------
TOTAL INCOME 56,754 9,301 5,299,516 603,318 164,871 16,260 111,780 250,000 13,803,567

BENEFITS PAID 47,182 1,812 2,977,289 436,050 76,136 12,046 42,000 6,047,414

COMMISSIONS 4,194 1,721 545,836 41,310 39,654 4,216 33,000 2,591,400

CHG IN RSV (1,087) (440,640) 69,106 755 200 0 626,964

GENERAL EXPENSE 15,539 2,685 1,470,837 136,053 47,016 4,463 32,605 3,304,472

TAXES 1,887 326 178,637 16,524 5,710 542 3,960 401,337

DAC 5,374 (1,473) 458,592 0 (5,035) (431) 0 (435,909)

----------------------------------------------------------------------------------------------
TOTAL EXPENSE 73,089 5,072 5,190,552 699,043 164,237 21,036 111,565 0 12,535,679

----------------------------------------------------------------------------------------------
TOTAL INCOME (16,335) 4,228 108,964 (95,724) 634 (4,776) 215 250,000 1,267,888

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BANKERS FIDELITY LIFE INSURANCE COMPANY

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1997 ORD MM CANCER A&H TSA A&H S/ACC HOSP

EARNED PREMIUM 4,750,000 994,726 463,581 26,282 4,980 6,124 0 6,615

INVESTMENT INCOME 681,904 1,136,507 50,511 0 126,279 10,102 0 0
REALIZED GAINS
-----------------------------------------------------------------------------------
TOTAL INCOME 5,431,904 2,131,233 514,092 26,282 131,259 16,226 0 6,615

BENEFITS PAID 1,045,000 1,143,935 176,161 19,712 150,000 4,593 0 4,961

COMMISSIONS 2,280,000 0 106,624 263 35 61 0 66

CHG IN RSV 1,387,500 9,344 35,822 (3,772) (110,000) 0 0 0

GENERAL EXPENSE 1,242,251 260,147 121,239 6,873 1,302 1,602 0 1,730

TAXES 171,000 35,810 16,689 946 179 220 0 238

DAC (1,110,000) 186,852 (23,179) 0 0 0 0 0

-----------------------------------------------------------------------------------
TOTAL EXPENSE 5,015,751 1,636,088 433,355 24,022 41,517 6,476 0 6,996

-----------------------------------------------------------------------------------
TOTAL INCOME 416,153 495,145 80,737 2,260 89,742 9,750 0 (381)

1997 M/SURG H/SURG MCARE CCARE AEXP DIS COVDALE TOTAL

EARNED PREMIUM 41,940 18,120 5,000,000 390,150 174,478 16,562 110,000 12,003,558

INVESTMENT INCOME 4,546 253 354,237 151,534 6,566 1,263 1,869 2,525,571
REALIZED GAINS 250,000 250,000

------------------------------------------------------------------------------------------
TOTAL INCOME 46,486 18,373 5,354,237 541,684 181,044 17,825 111,869 250,000 14,779,129

BENEFITS PAID 37,746 3,624 3,125,000 370,643 83,749 13,250 38,500 6,216,873

COMMISSIONS 3,355 3,443 550,000 35,114 43,620 4,637 33,000 3,060,217

CHG IN RSV (871) (440,611) 69,106 1,586 587 948,691

GENERAL EXPENSE 10,968 4,739 1,307,633 102,035 45,631 4,331 28,768 0 3,139,249

TAXES 1,510 652 180,000 14,045 6,281 596 3,960 432,128

DAC 5,242 458,618 0 (10,574) (903) (493,944)

-------------------------------------------------------------------------------------------
TOTAL EXPENSE 57,950 12,458 5,180,640 590,942 170,293 22,499 104,228 0 13,303,214

-------------------------------------------------------------------------------------------
TOTAL INCOME (11,464) 5,915 173,597 (49,258) 10,752 (4,674) 7,641 250,000 1,475,915

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BANKERS FIDELITY LIFE INSURANCE COMPANY

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1998 ORD MM CANCER A&H TSA A&H S/ACC HOSP

EARNED PREMIUM 5,937,500 895,253 533,118 18,397 4,980 6,124 0 6,615

INVESTMENT INCOME 715,999 1,193,332 53,037 0 132,592 10,607 0 0
REALIZED GAINS
--------------------------------------------------------------------------------
TOTAL INCOME 6,653,499 2,088,585 586,155 18,397 137,572 16,731 0 6,615

BENEFITS PAID 1,306,250 1,029,541 202,585 13,798 150,000 4,593 0 4,961

COMMISSIONS 2,850,000 0 122,617 184 35 61 0 66

CHG IN RSV 1,687,500 109,344 59,107 (110,000) (1,972)

GENERAL EXPENSE 1,350,354 203,606 121,246 4,184 1,133 1,393 0 1,504

TAXES 213,750 32,229 19,192 662 179 220 0 238

DAC (1,181,250) 186,852 (38,245) 0

--------------------------------------------------------------------------------
TOTAL EXPENSE 6,226,604 1,561,572 486,502 18,828 41,347 4,295 0 6,770

--------------------------------------------------------------------------------
TOTAL INCOME 426,895 527,013 99,653 (431) 96,226 12,436 0 (155)

1998 M/SURG H/SURG MCARE CCARE AEXP DIS COVDALE TOTAL

EARNED PREMIUM 33,552 36,240 5,000,000 331,628 200,649 19,046 90,000 13,113,102

INVESTMENT INCOME 4,773 265 371,948 159,111 6,895 1,326 1,962 2,651,849
REALIZED GAINS 250,000 250,000

------------------------------------------------------------------------------------------
TOTAL INCOME 38,325 36,505 5,371,948 490,738 207,544 20,372 91,962 250,000 16,014,950

BENEFITS PAID 30,197 344 3,125,000 315,046 96,312 15,237 31,500 6,325,363

COMMISSIONS 2,684 6,886 550,000 29,846 50,162 5,333 27,000 3,644,875

CHG IN RSV (694) 0 69,106 2,617 911 1,815,919

GENERAL EXPENSE 7,631 8,242 1,137,140 75,421 45,633 4,332 20,469 2,982,287

TAXES 1,208 1,305 180,000 11,939 7,223 686 3,240 472,072

DAC 3,774 0 0 (2,494) (1,490) (1,032,853)

------------------------------------------------------------------------------------------
TOTAL EXPENSE 44,799 16,777 4,992,140 501,359 199,453 25,008 82,209 0 14,207,663

------------------------------------------------------------------------------------------
TOTAL INCOME (6,474) 19,729 379,808 (10,620) 8,090 (4,636) 9,754 250,000 1,807,287

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THE MERGER

GENERAL

The following information with respect to the Merger, insofar as it
relates to matters contained in the Merger Agreement, is qualified in its
entirety by reference to the complete text thereof, a copy of which is included
as Annex A to this Proxy Statement and which is incorporated herein by
reference.

TERMS OF THE MERGER AGREEMENT

General. Pursuant to the Merger Agreement, the Merger will become
effective when both (i) the Merger Agreement has been approved by the
shareholders of Bankers and BFAC and (ii) the Articles of Merger are filed with
the Secretary of State of Georgia, or such later date and time as may be
specified in such Articles of Merger. It is anticipated that the Articles of
Merger will be filed promptly after the approval of the Merger Agreement at the
Special Meeting. Such filing will be made, however, only upon satisfaction or
waiver of all conditions to the Merger contained in the Merger Agreement. AAC,
as sole shareholder of BFAC, has already approved the Merger Agreement.

Section 1.1 of the Merger Agreement provides that, at the Effective
Time, BFAC will be merged with and into the Company, and BFAC will cease to
exist as a corporation. The Company will be the surviving corporation in the
Merger and will become a wholly-owned subsidiary of AAC.

Section 3.1 of the Merger Agreement provides that from and after the
Effective Time, each issued and outstanding share of Common Stock, other than
shares of Common Stock owned by BFAC or shares of Common Stock owned by
shareholders who perfect their dissenters' rights under Article 13 of the GBCC,
will be converted into the right to receive, and become exchangeable for, $6.25
in cash, without interest. Each share of Common Stock owned by BFAC or held by
the Company as treasury shares will be cancelled without consideration, and
each BFAC Share will automatically be converted into the right to receive one
share of common stock of the Surviving Corporation.

The Surviving Corporation. Article II of the Merger Agreement
provides that the Articles of Incorporation and the By-Laws of the Company,
each as in effect immediately prior to the Effective Time of the Merger, will
become the Articles of Incorporation and By-Laws of the Surviving Corporation
upon the Effective Time. In addition, the officers and directors of the
Company in office immediately prior to the Effective Time will become the
officers and directors of the Surviving Corporation

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upon the Effective Time, and will serve until their successors are elected or
appointed.

Exchange of Certificates. Section 3.3.1 of the Merger Agreement
provides that from and after the Effective Time, each holder of a Certificate,
other than BFAC and those holders who properly perfect their dissenters' rights
under the GBCC, will cease to have any right as a shareholder of Bankers and,
until surrendered to the Exchange Agent, each Certificate shall represent for
all purposes only the right to receive the Merger Consideration to which such
holder is entitled, without any interest thereon. The Company, or an agent
designated by it, will act as Exchange Agent in connection with the Merger. As
soon as practicable after the Effective Time, the Exchange Agent will mail
transmittal instructions and a form of letter of transmittal (which will
specify that delivery shall be effected, and risk of loss and title to the
Certificates shall pass, only upon proper delivery of the Certificates to the
Exchange Agent) to each shareholder of the Company, other than BFAC, to be used
in forwarding his or her Certificates for surrender and exchange for the Merger
Consideration. Upon surrender to the Exchange Agent of a Certificate, together
with such letter of transmittal duly executed, and any other required
documents, the holder of such Certificate shall be entitled to receive in
exchange therefor the Merger Consideration to which he is entitled, and such
Certificate shall forthwith be cancelled. No interest will be paid or accrued
on the cash payable upon the surrender of the Certificates.

If payment is to be made to a person other than the person in whose
name the Certificate surrendered is registered, it shall be a condition of
payment that the Certificate so surrendered shall be properly endorsed or
otherwise in proper form for transfer and that the person requesting such
payment shall pay any transfer or other taxes required by reason of the payment
to a person other than the registered holder of the Certificate surrendered or
establish to the satisfaction of the Company that such tax has been paid or is
not applicable.

Certain Covenants and Agreements. Pursuant to Article IV of the
Merger Agreement, (i) Bankers has agreed to prepare and file a Rule 13e-3
Transaction Statement on Schedule 13E-3 and proxy statement on Schedule 14A,
all in accordance with the Exchange Act and the rules and regulations
thereunder, (ii) Bankers has agreed to use its best efforts to obtain the
approval by its shareholders of the Merger Agreement, (iii) Bankers and BFAC
have agreed to file the Articles of Merger upon the satisfaction or waiver of
the conditions to the Merger, and (iv) Bankers, BFAC and AAC have agreed to use
their reasonable best efforts to obtain any governmental waivers or consents
necessary to consummate the Merger and the transactions contemplated thereby.

Conditions to the Merger. The respective obligations of Bankers and
BFAC to effect the Merger are subject to certain

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conditions described in Article V of the Merger Agreement, including among
others: (i) the absence of any pending or proposed action, proceeding,
application, claim or counterclaim by any government or governmental authority
or agency that would restrain or prohibit the consummation of the Merger or the
performance of the Merger Agreement, (ii) approval of the Merger Agreement and
the transactions contemplated thereby by all regulatory authorities whose
approvals are required by law, (iii) approval of the Merger Agreement and the
transactions contemplated thereby by the Bankers shareholders, (iv) clearance
of this Proxy Statement by the Commission, and (v) the consummation of the
transactions contemplated by the Merger Agreement on or before June 30, 1996.

Amendment and Termination. Article VI of the Merger Agreement
provides that it may be terminated and abandoned at any time prior to the
Effective Time, whether before or after the Special Meeting, unilaterally by
either Bankers or BFAC, including, without limitation, if any condition to the
obligation of a party is not satisfied other than by reason of a breach by that
party of its obligations under the Merger Agreement and it reasonably appears
that the condition cannot be satisfied by June 30, 1996.

In the event of termination of the Merger Agreement by either Bankers
or BFAC, the Merger Agreement will become void and there will be no further
obligation on the part of Bankers, BFAC or AAC or their respective officers and
directors. The Merger Agreement does not provide for the payment of any
termination or break-up fee in the event that the transactions contemplated
thereby are terminated.

Subject to applicable law, the Merger Agreement may be amended by the
written agreement of Bankers, BFAC and AAC.

REGULATORY MATTERS

The Company is subject to regulation by the Insurance Commissioner of
the State of Georgia (the "Insurance Commission") and is therefore required to
comply with certain notice and approval procedures in connection with the
Merger, or obtain an applicable exemption therefrom. The Company has applied
for an exemption from such procedures from the Insurance Commission. Other
than the foregoing, the Company is not aware of any approval or other action by
any state, federal or foreign governmental, administrative or regulatory agency
that is required for the Merger.

ACCOUNTING TREATMENT

The transactions to be accomplished as a result of the Merger will be
accounted for as a purchase transaction.

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CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER

The Company has been advised by Jones, Day, Reavis & Pogue with
respect to certain of the expected federal income tax consequences applicable
to shareholders of the Company who receive cash in exchange for their shares of
Common Stock pursuant to the Merger or the exercise of dissenters' rights.
This summary discusses only certain tax consequences to United States persons
(i.e., citizens or residents of the United States and domestic corporations)
who hold shares as capital assets. It does not discuss the tax consequences
that might be relevant to shareholders who acquired their shares through the
exercise of options or otherwise as compensation. In addition, it does not
discuss the tax consequences that might be relevant to shareholders entitled to
special treatment under the federal income tax law, such as life insurance
companies, tax exempt organizations, S corporations and taxpayers subject to
alternative minimum tax.

The receipt of cash for shares of Common Stock pursuant to the Merger
or the exercise of dissenters' rights will be a taxable transaction for federal
income tax purposes. A shareholder will recognize taxable gain or loss for
federal income tax purposes equal to the difference, if any, between the amount
of cash received and such shareholder's tax basis in the shares of Common Stock
surrendered in exchange therefor. In general, such gain or loss will be
capital gain or loss if such shares of Common Stock are capital assets in the
hands of such shareholder at the time of the exchange and will be long-term
capital gain or loss if, at the time of the exchange, such shareholder's
holding period for the shares of Common Stock is more than one year.

Under the federal income tax backup withholding rules, unless an
exemption applies, the Exchange Agent will be required to withhold, and will
withhold, 31% of all cash payments to which a shareholder or other payee is
entitled pursuant to the Merger, unless the shareholder or other payee provides
a tax identification number (social security number, in the case of an
individual, or employer identification number in the case of other Company
shareholders) and certifies that such number is correct. Each shareholder,
and, if applicable, each other payee, should complete and sign the Substitute
Form W-9 which will be included as part of the letter of transmittal to be
returned to the Exchange Agent in order to provide the information and
certification necessary to avoid backup withholding, unless an applicable
exception exists and is proved in a manner satisfactory to the Exchange Agent.
The exceptions provide that certain shareholders (including, among others, all
corporations and certain foreign individuals) are not subject to these backup
withholding and reporting requirements. In order for a foreign individual to
qualify as an exempt recipient, however, he or she must submit a signed
statement (i.e., Certificate of Foreign

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Status on Form W-8), attesting to his or her exempt status. Any amounts
withheld will be allowed as a credit against the shareholder's federal income
tax liability, and, in general, refunded by the Internal Revenue Service if and
to the extent that the amounts withheld exceed the shareholder's federal income
tax liability assuming that the appropriate procedures are followed.

The consummation of the Merger is not expected to have any material
tax effects on either the Company or AAC.

THE FEDERAL INCOME TAX CONSEQUENCES SET FORTH ABOVE ARE FOR GENERAL
INFORMATION ONLY. EACH SHAREHOLDER IS URGED TO CONSULT HIS OR HER OWN TAX
ADVISOR TO DETERMINE THE PARTICULAR TAX CONSEQUENCES TO SUCH SHAREHOLDER OF THE
MERGER (INCLUDING THE APPLICABILITY AND EFFECT OF FOREIGN, STATE, LOCAL AND
OTHER TAX LAWS).

SOURCE OF FUNDS

Assuming consummation of the Merger, based upon the number of shares
of Common Stock outstanding on the Record Date, an aggregate of approximately
$1,264,000 will be required to make cash payments to the Unaffiliated
Shareholders. The Company estimates that additional expenses of approximately
$225,253 will be incurred in connection with the Merger, as follows: (i)
estimated SEC filing fees of $253; (ii) estimated legal and accounting fees and
expenses of $175,000; (iii) estimated financial advisor fees and expenses of
$30,000; (iv) estimated printing and solicitation costs of $15,000; and (v)
miscellaneous other costs estimated at $5,000. The source of funds for the
foregoing expenses will be the Company's working capital, and no funds will be
borrowed in order to complete the Merger.

DISSENTERS' RIGHTS

Set forth below is a summary of the procedures relating to the
exercise of dissenters' rights under the GBCC. The following summary does not
purport to be a complete statement of the provisions of Article 13 of the GBCC
("Article 13") and is qualified in its entirety by reference to Annex C hereto
and to any amendments to such provisions as may be adopted after the date of
this Proxy Statement. The provisions for demanding appraisal are complex and
must be complied with precisely. Any shareholder intending to dissent from the
proposed Merger should consult carefully the text of Annex C and is also
advised to consult legal counsel.

The GBCC provides dissenters' rights for Bankers shareholders
who object to the Merger and meet the requisite statutory requirements
contained in Article 13. Under the GBCC, any Bankers shareholder who (i)
delivers written notice of his intent to demand payment for his shares if the
Merger is consummated and becomes effective, which notice is actually

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received by the Company before the vote is taken at the Special Meeting and
(ii) does not vote his shares at the Special Meeting in favor of the proposal
to approve the Merger, shall be entitled, if the Merger is approved and
effectuated, to receive payment of the fair value of such shareholder's shares
of Common Stock upon compliance with the applicable procedural requirements.
The Georgia Supreme Court has stated that "any facts which shed light on the
value of the dissenting shareholders' interests are to be considered in
arriving at 'fair value'." These factors have included, without limitation,
market, earnings or investment, and asset value. Such payment shall be made by
the "Surviving Corporation" which, for purposes of this dissenters' rights
summary, shall mean Bankers.

Any written notice of a Bankers shareholder's intent to demand
payment for such shareholder's shares of Common Stock if the Merger is
consummated must be received by the Company at: 4370 Peachtree Road, N.E.,
Atlanta, Georgia 30319, Attn: Corporate Secretary, prior to the shareholder
vote at the Special Meeting. A shareholder who votes for the Merger will have
no dissenters' rights. A shareholder who does not satisfy each of the
aforementioned requirements is not entitled to payment for such shareholder's
shares of Common Stock under the dissenters' rights provisions of the GBCC and
will be bound by the terms of the Merger Agreement. In the event that a
shareholder initially votes his proxy in favor of the Merger and later properly
revokes such proxy and does not vote in favor of the Merger at the Special
Meeting, such shareholder shall be entitled to exercise dissenters' rights
under the GBCC, subject to compliance with the provisions of the GBCC required
to perfect such rights.

No later than 10 days after the Effective Time, the Surviving
Corporation must send a written dissenters' notice to all shareholders who have
given written notice and did not vote in favor of the Merger as described
above. The dissenters' notice will: (i) state where the payment demand must
be sent and where and when certificates for Common Stock ("Dissenting
Certificates") must be deposited, (ii) set a date by which the Surviving
Corporation must receive the payment demand, which date may not be fewer than
30 nor more than 60 days after the dissenters' notice is mailed, and (iii) be
accompanied by a copy of Article 13. A shareholder who is sent a dissenters'
notice and who wishes to assert dissenters' rights must demand payment and
deposit his Dissenting Certificates in accordance with the terms of the notice.
Prior to the Effective Time, a shareholder exercising dissenters' rights
retains all other rights of a shareholder. From and after the Effective Time,
dissenting shareholders will no longer be entitled to any rights of a Company
shareholder, including, but not limited to, the right to receive notice of
meetings, to vote at any meetings, or to receive dividends, and will only be
entitled to such rights or appraisal as provided by the GBCC. If any such
holder of Common Stock shall have failed to perfect or shall have effectively
withdrawn or lost such right, his shares of Common Stock shall

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thereupon be deemed to have been converted into the right to receive cash
pursuant to the Merger Agreement.

Within 10 days of the later of (i) the date the Merger is
consummated or (ii) receipt of a payment demand, the Surviving Corporation must
offer to pay each dissenting shareholder who complied with the requirements of
Article 13 the amount the Surviving Corporation estimates to be the fair value
of such shareholder's shares of Common Stock, plus interest accrued from the
Effective Time to the date of payment. The offer of payment must be
accompanied by certain financial data relating to the Company, a statement of
the Surviving Corporation's estimate of the fair value of the shares, an
explanation of how the interest was calculated, a statement of the dissenting
shareholder's right to demand payment under Article 13 and a copy of Article
13. The Surviving Corporation must pay the amount stated in the offer of
payment to each dissenting shareholder who agrees in writing to accept such
payment in full satisfaction of his demand. If the dissenting shareholder
accepts the Surviving Corporation's offer by written notice to the Surviving
Corporation within 30 days after the offer is made, or is deemed to have
accepted such offer by failure to respond within said 30 days, payment for his
shares shall be made within 60 days after the making of the offer or the
consummation of the Merger, whichever is later. If the Merger is not effected
within 60 days after the date set for demanding payment and depositing
Dissenting Certificates, the Surviving Corporation will return the deposited
Dissenting Certificates and, if the Merger is subsequently effected, the
Surviving Corporation will deliver a new notice and repeat the payment demand
procedure.

A dissenting shareholder may notify the Surviving Corporation
in writing of his own estimate of the fair value of such shares and the amount
of any interest due, and demand payment of such estimate if:

(i) the dissenting shareholder believes that the
amount offered by the Surviving Corporation is less than the
fair value of his shares or that any interest due is
incorrectly calculated; or

(ii) the Surviving Corporation, having failed to
take the proposed action, does not return the deposited
Dissenting Certificate within 60 days after the date set for
demanding payment.

A dissenting shareholder waives his right to demand payment
under subparagraphs (i) and (ii) above and is deemed to have accepted the
Surviving Corporation's offer unless he notifies the Surviving Corporation of
his demand in writing within 30 days after the Surviving Corporation offered
payment of his shares.

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If a demand for payment remains unsettled, the Surviving
Corporation shall commence a proceeding within 60 days after receiving the
payment demand and petition the court to determine the fair value of the shares
and accrued interest. If the Surviving Corporation does not commence the
proceeding within the 60 day period, it shall pay each dissenter whose demand
remains unsettled the amount demanded.

A shareholder of record may assert dissenters' rights as to
fewer than all the shares registered in such shareholder's name only if he
dissents with respect to all shares beneficially owned by any one beneficial
shareholder and notifies the Company in writing of the name and address of each
person on whose behalf he asserts dissenters' rights. The rights of such a
partial dissenting shareholder are determined as if the shares as to which he
dissents and his other shares were registered in the names of different
shareholders.

ABSENCE OF PUBLIC MARKET FOR COMMON STOCK; DIVIDENDS

TRADING OF THE COMMON STOCK

There is presently no established public trading market for the Common
Stock. The Company, in its capacity as transfer agent, is aware of a limited
number of privately negotiated transactions involving the Common Stock. During
1995, the Company, as transfer agent, received notice of twelve separate
transactions in which an aggregate of 8,191 shares were purchased at prices
ranging from $4.00 per share to $5.00 per share. The most recent transaction
was reported to the Company on December 12, 1995, and involved the purchase of
92 shares of Common Stock at a price of $4.00 per share. In addition to those
transactions, AAC has from time to time purchased shares directly from
shareholders of the Company who have submitted written offers to AAC and
specified the price at which they were willing to sell such shares. It is
AAC's policy not to solicit offers to sell or make offers to purchase shares of
the Common Stock. However, AAC and the Company periodically receive inquiries
from shareholders who are seeking a way to sell their shares of Common Stock.
When those requests are received, the Company notifies the shareholder in
writing (i) that there is no readily apparent market, (ii) that shares of
Common Stock are periodically traded in negotiated transactions, and (iii) of
the approximate price at which recent sales (regardless of whether such sales
involved AAC or not) have been effected. The Company also encourages the
shareholder to seek the assistance of a broker/dealer to effect a sale.
Finally, the Company advises the shareholder that in the event that he or she
is unsuccessful in finding a buyer, then AAC will entertain an offer to
purchase the stock, provided that such an offer states a price at which the
shareholder is willing to sell the shares.

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When AAC receives written offers from shareholders of the Company, AAC
makes a determination as to whether to accept the offer at the requested price.
It is AAC's policy not to attempt to dictate the price for the transaction or
to submit counter-offers with respect to the price. If the price requested is
not acceptable, AAC would reject the offer. AAC has been willing to engage in
this type of private transaction in order to provide the public shareholders
with a source of liquidity for the Common Stock, given that there is no
established public trading market.

Since January 1, 1994, AAC has made the following purchases on the
dates indicated:

[Download Table]

Number of Price per
Date Shares Share
---- --------- ---------

1/12/94 294 $5.00
2/11/94 55 5.00
6/1/94 33 5.00
11/7/94 832 5.00
12/7/94 164 5.00
2/7/95 1,803 5.00
2/16/95 1,377 5.00
4/3/95 57 5.00
4/14/95 128 5.00
5/9/95 2,743 5.75
5/19/95 78 5.00
5/31/95 385 5.00
6/27/95 453 5.00
8/01/95 215 5.00

The average purchase price paid by AAC for each quarterly period since
January 1, 1994 was $5.00 per share, except for the second quarter of 1995 in
which such price was $5.54 per share. Neither AAC nor the Company has any
information as to how the price that is paid for shares of Common Stock in
transactions that do not involve AAC is established or why it has remained
relatively stagnant. During 1995, the average price paid in such transactions
was $4.54 per share. Neither AAC nor the Company is aware of any trends or
other factors that may impact how those prices are determined, although
management believes that the absence of any established trading market and the
fact that AAC holds approximately 93% of the outstanding shares of Common Stock
may have some effect thereon.

DIVIDENDS

In accordance with the Insurance Code of the State of Georgia,
dividend payments are limited to accumulated statutory

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earnings of the Company, which were $6.0 million at September 30, 1995. The
Company paid cash dividends of $.30 per share in 1995 and did not pay cash
dividends in 1994.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information as of January 5, 1996
regarding the beneficial ownership of Common Stock of the Company and of AAC by
(i) each person known by the Company to own 5% or more of the outstanding
shares of the Company's Common Stock, (ii) each Director of the Company, (iii)
the executive officers of the Company whose total annual compensation exceeded
$100,000, and (iv) by all Directors and executive officers as a group.

[Enlarge/Download Table]

Company Common Stock AAC Common Stock
-------------------- ----------------

Name of Beneficial Owner Number of Shares Percent Number of Shares Percent
------------------------ ---------------- ------- ---------------- -------

Atlantic American 2,784,924 93.2% N/A N/A
Corporation

J. Mack Robinson -- -- 13,733,444 (1) 70.19%

Eugene Choate -- -- 42,190 (2) *

Hilton H. Howell, Jr. -- -- 90,842 (3) *

John W. Hancock -- -- 33,138 (4) *

Samuel E. Hudgins -- -- 3,750 *

E.F. Mauldin -- -- -- --

F.C. Parker, Jr. -- -- -- --

Dom H. Wyant -- -- -- --

Directors and Executive -- -- 14,129,628 (5) 71.64%
Officers as a group

* Represents less than 1%.

(1) As of January 5, 1996, the only persons who owned of record or were
known to own beneficially as much as 5% of the outstanding voting securities of
AAC were J. Mack Robinson, his wife Harriett J. Robinson, and certain of their
affiliates, who owned an aggregate of approximately 70.19% of the voting
securities of AAC. Mr. J. Mack Robinson beneficially owned 13,733,444 shares
of AAC common stock (70.19% of class), which includes 3,381,202 shares owned by
Gulf Capital Services, Ltd., 4370 Peachtree Road, N.E., Atlanta, Georgia 30319;
936,702 shares owned by Delta Life Insurance Company; and 294,000 shares owned
by Delta Fire & Casualty Company; all of which are companies controlled by Mr.
Robinson; 50,000 shares subject to presently exercisable options held by Mr.
Robinson; and 88,026 shares issuable pursuant to convertible notes and 250,751
shares issuable pursuant to convertible preferred stock which is owned
beneficially by Mr. Robinson, and 828 shares held pursuant to AAC's 401(k)
plan. Also includes all shares held by Mr. Robinson's wife, Harriett J.
Robinson, who beneficially owned 8,044,691 shares of AAC common stock (41.95%
of class), which includes 7,536,793 shares of common stock and 501,500 shares

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issuable pursuant to convertible preferred stock held by Mrs. Robinson as
trustee for her children, as to which she disclaims beneficial ownership, and
6,398 shares issuable pursuant to convertible notes.

(2) Includes 27,500 shares subject to presently exercisable options and
1,190 shares held pursuant to AAC's 401(k) plan.

(3) Includes 80,000 shares subject to presently exercisable options and
2,917 shares held pursuant to AAC's 401(k) plan. Also includes 1,025 shares
held by Mr. Howell's wife, as to which he disclaims beneficial ownership.

(4) Includes 27,500 shares subject to presently exercisable options and
5,638 shares held pursuant to AAC's 401(k) plan.

(5) Includes 185,000 shares subject to presently exercisable options,
shares issuable upon conversion of convertible securities described in note
(1), and 10,573 shares held pursuant to AAC's 401(k) plan.

SELECTED FINANCIAL DATA

The following table sets forth selected historical financial
information for the Company for each of the five years in the five-year period
ended December 31, 1994 and for the nine months ended September 30, 1995 and
1994. The following financial information should be read in conjunction with
the historical financial statements and notes thereto of the Company included
in the Form 10-K delivered herewith and incorporated herein by reference. The
interim unaudited information for the Company for the nine months ended
September 30, 1995 and 1994 reflect, in the opinion of management, all
adjustments (consisting only of normal recurring adjustments) necessary for a
fair presentation of the information provided for such interim periods. The
results of operations for such interim periods are not necessarily indicative
of results that may be expected for any other interim period or for the year as
a whole.

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[Enlarge/Download Table]

NINE MONTHS ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
-------------------------------------------------------- -----------------
1994 1993 1992 1991 1990 1995 1994
---- ---- ---- ---- ---- ---- ----
(IN THOUSANDS, EXCEPT PER SHARE DATA)

STATEMENT OF OPERATIONS DATA:
Insurance premiums . . . . . . . . . . $11,947 $11,219 $11,630 $12,646 $14,864 $ 8,193 $ 8,514
Investment income . . . . . . . . . . 2,243 2,180 2,599 2,820 4,031 1,775 1,609
Realized investment gains (losses) . . 206 62 1,640 (2,874) (513) 387 206
------- ------- ------- ------- ------- ------- -------
Total revenue . . . . . . . . . . . 14,396 13,461 15,869 12,592 18,382 10,355 10,329
------- ------- ------- ------- ------- ------- -------

Insurance benefits and losses
incurred . . . . . . . . . . . . . . 7,245 6,753 7,770 7,588 8,403 4,351 5,606
Commissions and underwriting
expenses . . . . . . . . . . . . . . 6,251 5,586 6,181 7,277 9,133 5,087 4,269
Other . . . . . . . . . . . . . . . . - - (320) - 714 - -
------- ------- ------- ------- ------- ------- -------
Total benefits and expenses . . . . 13,496 12,339 13,631 14,865 18,250 9,438 9,875
------- ------- ------- ------- ------- ------- -------

Income (loss) before tax provision,
extraordinary item and cumulative
effect of change in accounting
principle . . . . . . . . . . . . . 900 1,122 2,238 (2,273) 132 917 454

(Provision) credit for income
taxes . . . . . . . . . . . . . . . (184) (291) (646) - - 217 (63)
------- ------- ------- ------- ------- ------- -------
Income (loss) before extraordinary
item and cumulative effect of
change in accounting principle . . . 716 831 1,592 (2,273) 132 1,134 391
Extraordinary item - utilization of
tax operating loss carry forward . . - - 646 - - - -
------- ------- ------- ------- ------- ------- -------
Income (loss) before cumulative
effect of change in accounting
principle . . . . . . . . . . . . . 716 831 2,238 (2,273) 132 1,134 391
Cumulative effect of change
in accounting principle for
income taxes . . . . . . . . . . . . - 6,114 - - - - -
------- ------- ------- ------- ------- ------- -------
Net income (loss) . . . . . . . . $ 716 $ 6,945 $ 2,238 $(2,273) $ 132 $ 1,134 $ 391
======= ======= ======= ======= ======= ======= =======

Shares of common stock
outstanding . . . . . . . . . . . . 2,987 2,987 2,987 2,987 2,987 2,987 2,987
======= ======= ======= ======= ======= ======= =======

Income (loss) per share before
extraordinary item and cumulative
effect of change in accounting
principle . . . . . . . . . . . . . $ .24 $ .28 $ .53 $ (.76) $ .04 $ .38 $ .13
Extraordinary item . . . . . . . . . . - - .22 - - - -
Cumulative effect of change in
accounting principle for
income taxes . . . . . . . . . . . . - 2.04 - - - -
------- ------- ------- ------- ------- ------- -------
-
Net income (loss) per share . . . $ .24 $ 2.32 $ .75 $ (.76) $ .04 $ .38 $ .13
======= ======= ======= ======= ======= ======= =======

Dividends paid per share . . . . . . . - $ .35 $ .30 $ .35 $ .35 $ .35 -
======= ======= ======= ======= ======= ======= =======

BALANCE SHEET DATA:
Total assets . . . . . . . . . . . . . . $43,895 $44,940 $45,202 $44,920 $48,830 $47,722 $43,342
======= ======= ======= ======= ======= ======= =======

Liabilities and shareholders' equity:
Total liabilities . . . . . . . . . . $24,745 $24,542 $31,067 $32,366 $34,759 $25,979 $23,719
Total shareholders' equity . . . . . . 19,150 20,398 14,135 12,554 14,071 21,743 $19,623
------- ------- ------- ------- ------- ------- -------
Total liabilities and shareholders'
equity . . . . . . . . . . . . . . $43,895 $44,940 $45,202 $44,920 $48,830 $47,722 $43,342
======= ======= ======= ======= ======= ======= =======

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EXPERTS

The audited financial statements and the related financial statement
schedule of the Company incorporated by reference in this Proxy Statement have
been audited by Arthur Andersen LLP, independent public accountants, as
indicated in their report with respect thereto, and are incorporated by
reference herein in reliance upon the authority of said firm as experts in
giving said reports.

OTHER MATTERS THAT MAY COME BEFORE THE MEETING

The Bankers Board knows of no matters other than those stated herein
which are to be brought before the Special Meeting, and under the GBCC only
business within the purposes of the Special Meeting as described in the notice
thereof may be conducted at the Special Meeting. However, if any such other
matters should be presented for consideration and voting, it is the intention
of the persons named in the accompanying proxy to vote thereon in accordance
with their judgment.

INDEPENDENT AUDITORS

Representatives of Arthur Andersen LLP, the Company's independent
auditors, are expected to be present at the Special Meeting and will have the
opportunity to make a statement if they desire to do so and are expected to be
available to respond to appropriate questions.

SHAREHOLDER PROPOSALS

Pursuant to Rule 14a-8 under the Exchange Act, shareholders of the
company may present proper proposals for inclusion in the Company's proxy
statement. Assuming consummation of the Merger, no annual meeting will be held
in 1996. In the event that shareholder approval of the Merger is not obtained,
an annual meeting will be held no later than May 31, 1996. Proposals by
shareholders intended to be presented at the 1996 annual meeting must have been
forwarded in writing and received at the principal executive office of the
company not later than December 8, 1995 directed to the attention of the
Secretary, for consideration for inclusion in the Company's proxy statement for
the 1996 annual meeting of shareholders. No such proposals were received by
the Company.

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SCHEDULE I

CERTAIN INFORMATION CONCERNING
BANKERS AND AAC

The following tables set forth the name, business address, principal
occupation or employment at the present time and during the last five years and
the name, principal business or other organization in which such occupation or
employment is or was conducted, of the executive officers and directors of AAC
and Bankers. Unless otherwise indicated, all occupations, offices or positions
of employment listed opposite an individual's name were held by such individual
in the course of the last five years. Unless otherwise indicated, the business
address of each individual listed below is 4370 Peachtree Road, N.E., Atlanta,
Georgia 30319. All persons listed below are citizens of the United States of
America. None of the persons listed below owns any shares of Common Stock.

DIRECTORS AND EXECUTIVE OFFICERS OF BANKERS

[Enlarge/Download Table]

Present Principal Occupation or
Employment and Five-Year Employment
Name and Business Address History
------------------------- ---------------------------------

J. Mack Robinson Mr. Robinson is Chairman of the Board of Directors of
Bankers. *

Eugene Choate Mr. Choate is President and a Director of Bankers. *

Hilton H. Howell, Jr. Mr. Howell has served as Executive Vice President and a
Director of Bankers since October 1992. *

Samuel E. Hudgins Mr. Hudgins is a Director of Bankers. *
3100 Cumberland Circle, N.W.
Suite 1525
Atlanta, Georgia 30339

Edward F. Mauldin Mr. Mauldin is a Director of Bankers and Chairman of the
210 South Pine Street Board of Bank Independent, Sheffield, Alabama.
Florence, Alabama 35630

Frank C. Parker, Jr. Mr. Parker is a Director of Bankers and Owner, Parker
215 South Main Street Apartments, Statesboro, Georgia.
Statesboro, Georgia 30459

Dom H. Wyant Mr. Wyant is a Director of Bankers.*
3500 One Peachtree Center
303 Peachtree Street
Atlanta, Georgia 30308

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John W. Hancock Mr. Hancock has served Bankers as Senior Vice President and
Treasurer since September 1993. Prior thereto, he served as
Vice President and Treasurer. *

* Additional biographical information included below.

DIRECTORS AND EXECUTIVE OFFICERS OF AAC

[Enlarge/Download Table]

Present Principal Occupation or
Employment and Five-Year Employment
Name and Business Address History
------------------------- ----------------------------------

J. Mack Robinson Mr. Robinson is Chairman of the Board of Directors of AAC. He
served as President and CEO of AAC from September 1988 to May,
1995. He is Chairman of the Board of Atlantic American Life
Insurance Company, Georgia Casualty & Surety Company and Leath
Furniture, Inc., subsidiaries of AAC. In addition, Mr.
Robinson is Chairman of the Board of Bull Run Corporation, a
Director of Gray Communications Systems, Inc., the General
Partner of Gulf Capital Services, Ltd. and the Chairman and
President of Delta Life Insurance Company and Delta Fire &
Casualty Insurance Company.

Hilton H. Howell, Jr. Mr. Howell has served as a Director of AAC since October 1992
and President and CEO of AAC since May, 1995. Prior thereto,
he served as Executive Vice President of AAC since October
1992. In addition, he has been Executive Vice President of
Delta Life Insurance Company and Delta Fire & Casualty Company
since March 1994. Prior thereto, he was Vice President and
General Counsel of Delta Life Insurance Company since November
1991. Prior thereto, he was an attorney with Liddell, Sapp,
Zivley, Hill and LaBoon.

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Samuel E. Hudgins Mr. Hudgins is a Director of AAC and has been a Partner in
Percival, Hudgins & Company, Inc. (and its predecessor),
investment bankers, since April l992 and an independent
consultant prior thereto. He has also served as Vice Chairman
and Secretary of Leath Furniture, Inc. since April 1991. He
is a Director of The Biltmore Funds (12 funds) and The
Biltmore Municipal Funds (3 funds) advised by Wachovia
Investment Management Group.

D. Raymond Riddle Mr. Riddle is a Director of AAC. He served as the Chairman
191 Peachtree Street, N.W. and CEO of National Service Industries, Inc., a diversified
21st Floor holding company, from September l994 until his retirement in
Atlanta, Georgia 30303 February 1996. Prior thereto, he served as the President and
CEO of National Service Industries, Inc. since January l993.
Prior thereto, he was President of Wachovia Bank of Georgia,
N.A., the President of Wachovia Corporation of Georgia and
Executive Vice President of Wachovia Corporation. He is a
Director of National Service Industries, Inc., Atlanta Gas
Light Company, Equifax Inc., Munich American Reassurance
Company, Wachovia Bank of Georgia and Vista Resources.

Harriett J. Robinson Mrs. Robinson is a Director of AAC.

Robert H. Tharpe Mr. Tharpe is a Director of AAC and is a private investor.
3750 Peachtree Road, N.E.
Atlanta, Georgia 30319

Charles B. West Mr. West is a Director of AAC and is Chairman of West Lumber
1100 Circle 75 Parkway Company, and he also serves in various capacities for a number
Suite 760 of its related businesses.
Atlanta, Georgia 30339

William H. Whaley, M.D. Dr. Whaley has served as a Director of AAC since October 1992
3250 Howell Mill Road, N.W. and is a physician in private practice.
Suite 305
Atlanta, Georgia 30327

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Dom H. Wyant Mr. Wyant is a Director of AAC and is Of Counsel to the law
3500 One Peachtree Center firm of Jones, Day, Reavis & Pogue. Prior to January l995, he
303 Peachtree Street was a partner in Jones, Day, Reavis & Pogue. Mr. Wyant also
Atlanta, Georgia 30308 serves as a director of Thomaston Mills, Inc.

John W. Hancock Mr. Hancock has served as Senior Vice President and Treasurer
of AAC and Atlantic American Life Insurance Company since
November 1993. Prior thereto, he served as Vice President and
Treasurer of AAC and Atlantic American Life Insurance Company.
Eugene Choate Mr. Choate is President of Atlantic American Life Insurance
Company, a wholly-owned subsidiary of AAC.

Ronald D. Phillips Mr. Phillips is President of Leath Furniture, Inc., an 83%-
owned subsidiary of AAC.

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ANNEX A

AGREEMENT OF MERGER

THIS AGREEMENT OF MERGER (this "Agreement"), made this 5th day of
January, 1995, by and among ATLANTIC AMERICAN CORPORATION, a Georgia
corporation ("Parent"), BF ACQUISITION CORPORATION, a Georgia corporation and a
wholly owned subsidiary of Parent ("BFAC"), and BANKERS FIDELITY LIFE INSURANCE
COMPANY, a Georgia corporation and 93.23% subsidiary of BFAC ("Bankers").

W I T N E S S E T H:

WHEREAS, Parent is the sole shareholder of BFAC, and in connection
with the formation of BFAC transferred to BFAC all of the shares of capital
stock of Bankers that Parent had owned, such that BFAC now owns 93.23% of the
outstanding capital stock of Bankers;

WHEREAS, Parent proposes to acquire the entire equity interest in
Bankers upon the terms and subject to the conditions set forth herein; and

WHEREAS, the Boards of Directors of Bankers and BFAC deem it advisable
and in the best interests of their respective shareholders that BFAC merge with
and into Bankers, and, on or prior to the date hereof, such Boards of Directors
have approved such merger upon the terms and subject to the conditions set
forth herein;

NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein, the
receipt, sufficiency and adequacy of which are hereby acknowledged, and
intending to be legally bound hereby, the parties hereto agree as follows:

ARTICLE I. THE MERGER

1.1 Terms and Effects of the Merger. Upon the terms and
subject to the conditions set forth in this Agreement, and in accordance with
the provisions of Section 14-2-1101 of the Georgia Business Corporation Code
(the "GBCC"), at the Effective Time (as defined hereinbelow) BFAC shall be
merged with and into Bankers (the "Merger"). Following the Merger, Bankers
shall continue as the surviving corporation (the "Surviving Corporation") and
the separate corporate existence of BFAC shall cease. The Merger shall have
the effects set forth in the GBCC.

1.2 Effective Time. The Merger shall become effective when
both (i) this Agreement shall be adopted and approved by the respective
shareholders of Bankers and BFAC in accordance with

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the applicable provisions of the GBCC and (ii) Articles of Merger (the
"Articles of Merger"), executed in accordance with the relevant provisions of
the GBCC, are filed with the Secretary of State of the State of Georgia, or
such later date and time as may be specified in the Articles of Merger (the
time the Merger becomes effective being referred to as the "Effective Time").
Such filing shall be made as soon as practicable after the satisfaction or
waiver of the conditions set forth in Article V hereof.

ARTICLE II. SURVIVING AND PARENT CORPORATIONS

2.1 Articles of Incorporation and Bylaws. The Articles of
Incorporation of Bankers as in effect immediately prior to the Effective Time
shall be the Articles of Incorporation of the Surviving Corporation, until duly
amended in accordance with the terms thereof and of the GBCC. The Bylaws of
Bankers as in effect immediately prior to the Effective Time shall be the
Bylaws of the Surviving Corporation, until duly amended in accordance with the
terms thereof and of the GBCC.

2.2 Directors. The directors of Bankers immediately prior
to the Effective Time shall be the directors of the Surviving Corporation and
shall hold office from the Effective Time until their respective successors are
duly elected or appointed and qualified in the manner provided in the Articles
of Incorporation and Bylaws of the Surviving Corporation, or as otherwise
provided by law.

2.3 Officers. The officers of Bankers immediately prior to
the Effective Time shall be the officers of the Surviving Corporation and shall
hold office from the Effective Time until their respective successors are duly
elected or appointed and qualified in the manner provided in the Articles of
Incorporation and Bylaws of the Surviving Corporation, or as otherwise provided
by law.

2.4 Further Action. If, at any time after the Effective
Time, Parent shall consider that any further deeds, assignments, conveyances,
agreements, documents, instruments or assurances in law or any other things are
necessary or desirable to vest, perfect, confirm or record in the Surviving
Corporation the title to any property, rights, privileges, powers and
franchises of BFAC or Bankers by reason of, or as a result of, the Merger, or
otherwise to carry out the provisions of this Agreement, the board of directors
and officers of BFAC or Bankers, as the case may be, last in office shall
execute and deliver, upon Parent's reasonable request, any instruments or
assurances in law, and do all other things necessary or proper to vest,
perfect, confirm or record title to such property, rights, privileges, powers
and franchises in the Surviving Corporation, and otherwise to carry out the
provisions of this Agreement.

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ARTICLE III. CONVERSION OF SHARES

3.1 Conversion of Bankers Shares in the Merger.

(A) Each share of common stock, $1.00 par
value, of Bankers (a "Bankers Share") issued and outstanding immediately prior
to the Effective Time (other than outstanding Bankers Shares held by BFAC and
other than Dissenting Shares (as defined below)), shall, at the Effective Time,
by virtue of the Merger and without any action on the part of the holder
thereof, be converted into the right to receive $6.25 in cash (the "Merger
Consideration"), payable to the holder thereof, without interest thereon, upon
the surrender of the certificate formerly representing such outstanding Bankers
Share.

(B) Each Bankers Share held in the treasury
of Bankers and each outstanding Bankers Share held by BFAC immediately prior to
the Effective Time shall, at the Effective Time, by virtue of the Merger and
without any action on the part of the holder thereof, be cancelled and retired
and cease to exist.

3.2 Conversion of BFAC Shares in the Merger. Each share of
BFAC common stock, $1.00 par value (a "BFAC Share"), issued and outstanding
immediately prior to the Effective Time shall, at the Effective Time, by virtue
of the Merger and without any action on the part of the holder thereof, be
converted into one (1) share of common stock of the Surviving Corporation,
which shares thereafter will constitute all of the issued and outstanding
shares of capital stock of the Surviving Corporation.

3.3 Delivery of Merger Consideration.

3.3.1. Exchange Agent; Surrender of
Certificates and Payment. The Surviving Corporation or an agent designated by
the Surviving Corporation will act as exchange agent in connection with the
Merger (the "Exchange Agent"). Promptly after the Effective Time, the Exchange
Agent shall mail to each record holder (as of the Effective Time) of an
outstanding certificate or certificates that immediately prior to the Effective
Time represented outstanding Bankers Shares to be converted into the right to
receive the Merger Consideration pursuant to Section 3.1(A) hereof, (the
"Certificates"), a form letter of transmittal (which shall specify that
delivery shall be effected, and risk of loss and title to the Certificates
shall pass, only upon proper delivery of the Certificates to the Exchange
Agent) and instructions for use in effecting the surrender of the Certificates
for payment therefor. Upon surrender to the Exchange Agent of a Certificate,
together with such letter of transmittal duly executed, and any other required
documents, the holder of such Certificate shall be entitled to receive in
exchange therefor the Merger Consideration, and such Certificate shall
forthwith be cancelled. No interest will be paid or accrued on the cash
payable upon the surrender of the

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Certificates. If payment is to be made to a person other than the person in
whose name the Certificate surrendered is registered, it shall be a condition
of payment that the Certificate so surrendered shall be properly endorsed or
otherwise in proper form for transfer and that the person requesting such
payment shall pay any transfer or other taxes required by reason of the payment
to a person other than the registered holder of the Certificate surrendered or
establish to the satisfaction of the Surviving Corporation that such tax has
been paid or is not applicable. From and after the Effective Time, each holder
of a Certificate shall cease to have any right as a shareholder of Bankers and,
until surrendered in accordance with the provisions of this Section 3.3, each
Certificate (other than Certificates representing Dissenting Shares) shall
represent for all purposes only the right to receive the Merger Consideration,
without any interest thereon.

3.3.2. Transfers After Effective Time. After
the Effective Time, there shall be no transfers on the stock transfer books of
Bankers of the Bankers Shares that were outstanding immediately prior to the
Effective Time. If, after the Effective Time, Certificates representing
Bankers Shares that were outstanding immediately prior to the Effective Time
are presented to the Surviving Corporation, they shall be cancelled and
exchanged for the Merger Consideration in accordance with the procedures set
forth in this Section 3.3.

3.4 Dissenting Shares. Notwithstanding anything in this
Agreement to the contrary, Bankers Shares that are issued and outstanding
immediately prior to the Effective Time and that are held by shareholders who
have complied with the procedures for appraisal set forth in the GBCC (the
"Dissenting Shares") shall not be converted into or be exchangeable for the
right to receive the Merger Consideration, unless and until such holder shall
have failed to perfect or shall have effectively withdrawn or lost his, her or
its right to appraisal and payment under the GBCC. If such holder shall have
so failed to perfect or shall have effectively withdrawn or lost such right,
his, her or its outstanding Bankers Shares shall thereupon be deemed to have
been converted into and to have become exchangeable for, as of the Effective
Time, the right to receive the Merger Consideration, without any interest
thereon.

ARTICLE IV. ADDITIONAL AGREEMENTS

4.1 Proxy Statement. As promptly as practicable, Bankers
shall prepare and file a Rule 13e-3 Transaction Statement on Schedule 13E-3 in
accordance with the Securities Exchange Act of 1934, as amended (together with
the rules and regulations related thereto referred to as the "Exchange Act"),
and Bankers shall prepare a preliminary proxy statement relating to the Merger
(the "Proxy Statement") on Schedule 14A in accordance with the Exchange Act.
Bankers shall use its reasonable best efforts

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to respond to any comments that the Securities and Exchange Commission (the
"SEC") may have to such documents and to cause such documents to be mailed to
Bankers' shareholders at the earliest practicable time.

4.2 Shareholders' Meeting. Bankers shall promptly take
such action as may be appropriate to obtain approval by the holders of the
Bankers Shares of this Agreement and the transactions contemplated hereby, and
shall use its best efforts to obtain such shareholder approval and adoption of
this Agreement and the transactions contemplated hereby as soon as practicable
following the date upon which the Proxy Statement is cleared by the SEC.

4.3 Filing of Articles of Merger. Upon the terms and
subject to the conditions hereof, as soon as practicable following the
satisfaction or waiver of the conditions set forth in Article V hereof, Bankers
and BFAC shall execute and file the Articles of Merger referred to in Section
1.1.2 in the manner required by the GBCC and the parties hereto shall take all
such other and further actions as may be required by law to make the Merger
effective.

4.4 Expenses. All costs and expenses incurred in
connection with this Agreement and the transactions contemplated hereby shall
be paid by the party incurring such expenses.

4.5 Consents and Approvals. The parties shall use their
reasonable best efforts (without requiring the payment of money) to obtain the
waiver, consent and approval of all persons whose waiver, consent or approval
(i) is required in order to consummate the transactions contemplated by this
Agreement (including, but not limited to, any required approvals from the
Office of the Insurance Commissioner of the State of Georgia) or (ii) is
required by any agreement, lease, instrument, arrangement, judgment, decree,
order or license to which Bankers is a party or subject on the Effective Time
and (a) that would prohibit or require the waiver, consent or approval of any
person to such transactions or (b) under which, without such waiver, consent or
approval, such transactions would constitute an occurrence of default under the
provisions thereof, result in the acceleration of any obligation thereunder or
give rise to a right of any party thereto to terminate its obligations
thereunder.

ARTICLE V. CONDITIONS PRECEDENT TO RESPECTIVE
OBLIGATIONS OF THE PARTIES

The obligations of Bankers and BFAC to consummate, or
cause to be consummated, the Merger shall be contingent upon and subject to the
satisfaction, at or before the Effective Time, of each and every one of the
following conditions, any one or more of which may be waived in writing by such
parties.

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5.1 Actions of Governmental Authorities. There shall not
have been instituted or pending any action, proceeding, application, claim or
counterclaim by any government or governmental authority or agency, domestic or
foreign, and neither Bankers nor BFAC shall have been notified by any such
government, governmental authority or agency (or a representative thereof) of
its present intention to commence, or recommend the commencement of, such an
action or proceeding, that restrains or prohibits or seeks to restrain or
prohibit the making or consummation of the Merger or restrains or prohibits or
seeks to restrain or prohibit the performance of this Agreement.

5.2 Legal Approvals. The execution and the delivery of
this Agreement and the consummation of the transactions contemplated hereby
shall have been approved by all regulatory authorities whose approvals are
required by law.

5.3 Shareholder Approval. This Agreement and the Merger
shall have been adopted and approved by the affirmative vote or written consent
of the holders of the outstanding Bankers Shares by the vote or written consent
required by, and in accordance with, the GBCC.

5.4 Clearance of Proxy Statement. The Proxy Statement
shall have been cleared by the SEC for dissemination to the Company's
shareholders.

5.5 Consummation. The consummation of the transactions
contemplated by this Agreement shall have occurred on or before June 30, 1996.

ARTICLE VI. TERMINATION, AMENDMENT AND WAIVER

6.1 Termination. This Agreement may be terminated at any
time prior to the Effective Time, whether before or after approval by the
stockholders of the Company, unilaterally by Parent or Bankers for any reason,
including, without limitation, if any condition to the obligations of that
party is not satisfied (other than by reason of a breach by that party of its
obligations hereunder), and it reasonably appears that the condition cannot be
satisfied prior to June 30, 1996.

6.2 Effect of Termination. In the event of termination of
this Agreement by either Parent or Bankers, as provided in Section 6.1, this
Agreement shall forthwith become void and there shall be no further obligation
on the part of either Bankers, Parent, BFAC or their respective officers or
directors (except as set forth in this Section 6.2 and in Section 4.4 which
shall survive such termination). Nothing in this Section 6.2 shall relieve any
party from liability for any breach of this Agreement.

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6.3 Amendment. This Agreement may only be amended by an
instrument in writing signed on behalf of each of the parties hereto and in
compliance with applicable law.

6.4 Waiver. At any time prior to the Effective Time, the
parties hereto may (i) extend the time for the performance of any of the
obligations or other acts of the other parties hereto and (ii) waive compliance
with any of the agreements or conditions contained herein. Any agreement on
the part of a party hereto to any such extension or waiver shall be valid if
set forth in an instrument in writing signed on behalf of such party.

ARTICLE VII. GENERAL PROVISIONS

7.1 Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be delivered by hand, mailed by
certified mail, return receipt requested, first class postage prepaid, sent by
Federal Express or similar overnight delivery service with receipt
acknowledged, or sent via facsimile to the parties at the following addresses
(or at such other address for a party as shall be specified by like notice):

7.1.1. If to Parent or BFAC:

Atlantic American Corporation
4370 Peachtree Road, N.E.
Atlanta, Georgia 30319
Attn: Hilton H. Howell, Jr.

and to:

Jones, Day, Reavis & Pogue
3500 One Peachtree Center
303 Peachtree Street, N.E.
Atlanta, Georgia 30308
Attn: Dom H. Wyant, Esq.

7.1.2. If to Bankers:

Bankers Fidelity Life Insurance
Company
4370 Peachtree Road, N.E.
Atlanta, Georgia 30319
Attn: Eugene Choate

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and to the Special Committee of the
Board of Directors of Bankers:

c/o Cashin, Morton & Mullins
Two Midtown Plaza, Suite 1900
1360 Peachtree Street, N.E.
Atlanta, Georgia 30309
Attention: D. Tully Hazell, Esq.

7.1.3. If delivered personally, the date on
which a notice, request, instruction or document is delivered shall be the date
on which such delivery is made and, if delivered by mail or by overnight
delivery service, the date on which such notice, request, instruction or
document is received shall be the date of delivery. In the event any such
notice, request, instruction or document is mailed or shipped by overnight
delivery service to a party in accordance with this Section 7.1 and is returned
to the sender as nondeliverable, then such notice, request, instruction or
document shall be deemed to have been delivered or received on the fifth day
following the deposit of such notice, request, instruction or document in the
United States mails or the delivery to the overnight delivery service.

7.2 Further Assurances. Each party covenants that at any
time, and from time to time, after the Effective Time, it will execute such
additional instruments and take such actions as may be reasonably requested by
the other parties to confirm or perfect or otherwise to carry out the intent
and purposes of this Agreement.

7.3 Waiver. Any failure on the part of any party hereto to
comply with any of its obligations, agreements or conditions hereunder may be
waived by any other party to whom such compliance is owed. No waiver of any
provision of this Agreement shall be deemed, or shall constitute, a waiver of
any other provision, whether or not similar, nor shall any waiver constitute a
continuing waiver.

7.4 Binding Effect. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective heirs,
legal representatives, executors, administrators, successors and assigns.

7.5 Headings. The section and other headings in this
Agreement are inserted solely as a matter of convenience and for reference, and
are not a part of this Agreement.

7.6 Entire Agreement. This Agreement and all agreements
referenced specifically in this Agreement and executed as required by this
Agreement constitute the entire agreement among the parties hereto and
supersede and cancel any prior agreements, representations, warranties, or
communications, whether oral or written, among the parties hereto relating to
the transactions contemplated hereby or the subject matter herein.

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Neither this Agreement nor any provision hereof may be changed, waived,
discharged or terminated orally, but only by an agreement in writing signed by
the party against whom or which the enforcement of such change, waiver,
discharge or termination is sought.

7.7 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Georgia.

7.8 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

7.9 Pronouns. All pronouns used herein shall be deemed to
refer to the masculine, feminine or neuter gender as the context requires.

7.10 Time of Essence. Time is of the essence in this
Agreement.

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IN WITNESS WHEREOF, each party hereto has executed or caused this
Agreement to be executed on its behalf, all on the day and year first above
written.

"BANKERS"

BANKERS FIDELITY LIFE INSURANCE
COMPANY

By:/s/ Eugene Choate
-----------------------------------------
Title: President

"BFAC"

BF ACQUISITION CORPORATION

By:/s/ Hilton Howell
-----------------------------------------
Title: President

"PARENT"

ATLANTIC AMERICAN CORPORATION

By:/s/ Hilton Howell
-----------------------------------------
Title: President and
Chief Executive Officer

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ANNEX B

[Form of Opinion of J.C. Bradford]

_____________, 1996

Special Committee of The Board of Directors
Bankers Fidelity Life Insurance Company
4370 Peachtree Road, N.E.
Atlanta, Georgia 30319

Gentlemen:

You have requested our opinion as to the fairness, from a financial
point of view, to the shareholders of Bankers Fidelity Life Insurance Company
("Bankers Fidelity" or the "Company") other than BF Acquisition Corporation
("BFAC") (such shareholders being collectively referred to herein as the
"Unaffiliated Shareholders") of the consideration to be received by such
Unaffiliated Shareholders in the proposed merger (the "Merger") of BFAC with
and into the Company in accordance with the Agreement of Merger, dated January
5, 1996 (the "Merger Agreement") by and among Atlantic American Corporation,
BFAC and the Company. The terms and conditions of the Merger are more fully
set forth in the Merger Agreement. Capitalized terms used but not defined
herein have the meanings ascribed to such terms in the Merger Agreement.

J.C. Bradford & Co., as part of its investment banking business,
engages in the valuation of businesses and securities in connection with
mergers and acquisitions, negotiated underwritings, secondary distributions of
listed and unlisted securities, private placements, and valuations for estate,
corporate, and other purposes. We have acted as financial advisor to the
Special Committee of the Board of Directors of Bankers Fidelity in connection
with the proposed Merger and will receive a fee from Bankers Fidelity for our
services.

In conducting our analysis and arriving at our opinion, we have
considered such financial and other facts as we deemed appropriate and feasible
under the circumstances including, among other things, the following: (i) the
Merger Agreement and the Proxy Statement of Bankers Fidelity, dated
_____________, 1996, relating to the Merger; (ii) the historical and current
financial position and results of operations of Bankers Fidelity; (iii)

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certain internal financial analyses and forecasts of Bankers Fidelity for the
years beginning January 1, 1995 and ending December 31, 1998, prepared for
Bankers Fidelity by its senior management; (iv) certain financial and
securities data of certain other companies, the securities of which are
publicly traded, that we believed to be comparable to Bankers Fidelity; (v)
prices and premiums paid in certain other acquisitions and transactions that we
believed to be relevant; (vi) reported price and trading activity for the
Common Stock; and (vii) such other financial studies, analyses, and
investigations as we deemed appropriate for purposes of its opinion. We also
have held discussions with members of the senior management of Bankers Fidelity
regarding the past and current business operations, financial condition, and
future prospects of the Company.

We have taken into account our assessment of general economic, market
and financial and other conditions and our experience in other transactions, as
well as our experience in securities valuation and our knowledge of the
insurance industry generally. Our opinion is necessarily based upon the
information made available to us and conditions as they exist and can be
evaluated as of the date hereof.

We have relied upon the accuracy and completeness of all of the
financial and other information reviewed by us for purposes of our opinion and
have not assumed any responsibility for, nor undertaken an independent
verification of, such information. With respect to the internal financial
analyses and forecasts supplied to us, we have assumed that such analyses and
forecasts were reasonably prepared on bases reflecting the best currently
available estimates and judgments of Bankers Fidelity's senior management as to
the recent and likely future performance of Bankers Fidelity. Accordingly, we
express no opinion with respect to such analyses or forecasts or the
assumptions on which they are based. We were not asked to consider and our
opinion does not address the relative merits of the proposed Merger as compared
to any alternative business strategies that might exist for Bankers Fidelity or
the effect of any other transactions in which Bankers Fidelity might engage.
Furthermore, we have not made an independent evaluation or appraisal of the
assets and liabilities of the Company and have not been furnished with any such
evaluation or appraisal.

Based upon and subject to the foregoing, and based upon such other
matters as we consider relevant, it is our opinion that, as of the date hereof,
the consideration to be received by the Unaffiliated Shareholders in the
proposed Merger is fair to the Unaffiliated Shareholders from a financial point
of view.

Very truly yours,

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ANNEX C

DISSENTERS' RIGHTS PROVISIONS
OF THE GEORGIA BUSINESS CORPORATION CODE

14-2-1301. DEFINITIONS.

As used in this article, the term:

(1) "Beneficial shareholder" means the person who is a
beneficial owner of shares held in a voting trust or by a nominee as the record
shareholder.

(2) "Corporate action" means the transaction or other
action by the corporation that creates dissenters' rights under Code Section
14-2-1302.

(3) "Corporation" means the issuer of shares held by a
dissenter before the corporate action, or the surviving or acquiring
corporation by merger or share exchange of that issuer.

(4) "Dissenter" means a shareholder who is entitled to
dissent from corporate action under Code Section 14-2-1302 and who exercises
that right when and in the manner required by Code Sections 14-2-1320 through
14-2- 1327.

(5) "Fair value," with respect to a dissenter's shares,
means the value of the shares immediately before the effectuation of the
corporate action to which the dissenter objects, excluding any appreciation or
depreciation in anticipation of the corporate action.

(6) "Interest" means interest from the effective date of
the corporate action until the date of payment, at a rate that is fair and
equitable under all the circumstances.

(7) "Record shareholder" means the person in whose name
shares are registered in the records of a corporation or the beneficial owner
of shares to the extent of the rights granted by a nominee certificate on file
with a corporation.

(8) "Shareholder" means the record shareholder or the
beneficial shareholder.

14-2-1302. RIGHT TO DISSENT.

(a) A record shareholder of the corporation is entitled to dissent
from, and obtain payment of the fair value of his shares in the event of, any
of the following corporate actions:

(1) Consummation of a plan of merger to which the
corporation is a party:

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(A) If approval of the shareholders of the
corporation is required for the merger by Code Section
14-2-1103 or the articles of incorporation and the shareholder
is entitled to vote on the merger; or

(B) If the corporation is a subsidiary that is
merged with its parent under Code Section 14-2-1104;

(2) Consummation of a plan of share exchange to which
the corporation is a party as the corporation whose shares will be
acquired, if the shareholder is entitled to vote on the plan;

(3) Consummation of a sale or exchange of all or
substantially all of the property of the corporation if a shareholder
vote is required on the sale or exchange pursuant to Code Section
14-2-1202, but not including a sale pursuant to court order or a sale
for cash pursuant to a plan by which all or substantially all of the
net proceeds of the sale will be distributed to the shareholders
within one year after the date of sale;

(4) An amendment of the articles of incorporation that
materially and adversely affects rights in respect of a dissenter's
shares because it:

(A) Alters or abolishes a preferential right of
the shares;

(B) Creates, alters, or abolishes a right in
respect of redemption, including a provision respecting a
sinking fund for the redemption or repurchase, of the shares;

(D) Excludes or limits the right of the shares to
vote on any matter, or to cumulate votes, other than a
limitation by dilution through issuance of shares or other
securities with similar voting rights;

(E) Reduces the number of shares owned by the
shareholder to a fraction of a share if the fractional share
so created is to be acquired for cash under Code Section
14-2-604; or

(F) Cancels, redeems, or repurchases all or part
of the shares of the class; or

(5) Any corporate action taken pursuant to a shareholder
vote to the extent that Article 9 of this chapter, the articles of
incorporation, bylaws, or a

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resolution of the board of directors provides that voting or nonvoting
shareholders are entitled to dissent and obtain payment for their
shares.

(b) A shareholder entitled to dissent and obtain payment for his
shares under this article may not challenge the corporate action creating his
entitlement unless the corporate action fails to comply with procedural
requirements of this chapter or the articles of incorporation or bylaws of the
corporation or the vote required to obtain approval of the corporate action was
obtained by fraudulent and deceptive means, regardless of whether the
shareholder has exercised dissenter's rights.

(c) Notwithstanding any other provision of this article, there
shall be no right of dissent in favor of the holder of shares of any class or
series which, at the record date fixed to determine the shareholders entitled
to receive notice of and to vote at a meeting at which a plan of merger or
share exchange or a sale or exchange of property or an amendment of the
articles of incorporation is to be acted on, were either listed on a national
securities exchange or held of record by more than 2,000 shareholders, unless:

(1) In the case of a plan of merger or share exchange,
the holders of shares of the class or series are required under the
plan of merger or share exchange to accept for their shares anything
except shares of the surviving corporation or another publicly held
corporation which at the effective date of the merger or share
exchange are either listed on a national securities exchange or held
of record by more than 2,000 shareholders, except for scrip or cash
payments in lieu of fractional shares; or

(2) The articles of incorporation or a resolution of the
board of directors approving the transaction provides otherwise.

14-2-1303. DISSENT BY NOMINEES AND BENEFICIAL OWNERS.

A record shareholder may assert dissenters' rights as to fewer than
all the shares registered in his name only if he dissents with respect to all
shares beneficially owned by any one beneficial shareholder and notifies the
corporation in writing of the name and address of each person on whose behalf
he asserts dissenters' rights. The rights of a partial dissenter under this
Code section are determined as if the shares as to which he dissents and his
other shares were registered in the names of different shareholders.

14-2-1320. NOTICE OF DISSENTERS' RIGHTS.

(a) If proposed corporate action creating dissenters' rights under
Code Section 14-2-1302 is submitted to a vote at a shareholders' meeting, the
meeting notice must state that

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shareholders are or may be entitled to assert dissenters' rights under this
article and be accompanied by a copy of this article.

(b) If corporate action creating dissenters' rights under Code
Section 14-2-1302 is taken without a vote of shareholders, the corporation
shall notify in writing all shareholders entitled to assert dissenters' rights
that the action was taken and send them the dissenters' notice described in
Code Section 14-2-1322 no later than ten days after the corporate action was
taken.

14-2-1321. NOTICE OF INTENT TO DEMAND PAYMENT.

(a) If proposed corporate action creating dissenters' rights under
Code Section 14-2-1302 is submitted to a vote at a shareholders' meeting, a
record shareholder who wishes to assert dissenters' rights:

(1) Must deliver to the corporation before the vote is
taken written notice of his intent to demand payment for his shares if
the proposed action is effectuated; and

(2) Must not vote his shares in favor of the proposed
action.

(b) A record shareholder who does not satisfy the requirements of
subsection (a) of this Code section is not entitled to payment for his shares
under this article.

14-2-1322. DISSENTERS' NOTICE.

(a) If proposed corporate action creating dissenters' rights under
Code Section 14-2-1302 is authorized at a shareholders' meeting, the
corporation shall deliver a written dissenters' notice to all shareholders who
satisfied the requirements of Code Section 14-2-1321.

(b) The dissenters' notice must be sent no later than ten days
after the corporate action was taken and must:

(1) State where the payment demand must be sent and
where and when certificates for certificated shares must be deposited;

(2) Inform holders of uncertificated shares to what
extent transfer of the shares will be restricted after the payment
demand is received;

(3) Set a date by which the corporation must receive the
payment demand, which date may not be fewer than 30 nor more than 60
days after the date the notice required in subsection (a) of this Code
section is delivered; and

(4) Be accompanied by a copy of this article.

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14-2-1323. DUTY TO DEMAND PAYMENT.

(a) A record shareholder sent a dissenters' notice described in
Code Section 14-2-1322 must demand payment and deposit his certificates in
accordance with the terms of the notice.

(b) A record shareholder who demands payment and deposits his
shares under subsection (a) of this Code section retains all other rights of a
shareholder until these rights are canceled or modified by the taking of the
proposed corporate action.

(c) A record shareholder who does not demand payment or deposit
his share certificates where required, each by the date set in the dissenters'
notice, is not entitled to payment for his shares under this article.

14-2-1324. SHARE RESTRICTIONS.

(a) The corporation may restrict the transfer of uncertificated
shares from the date the demand for their payment is received until the
proposed corporate action is taken or the restrictions released under Code
Section 14-2- 1326.

(b) The person for whom dissenters' rights are asserted as to
uncertificated shares retains all other rights of a shareholder until these
rights are canceled or modified by the taking of the proposed corporate action.

14-2-1325. OFFER OF PAYMENT.

(a) Except as provided in Code Section 14-2-1327, within ten days
of the later of the date the proposed corporate action is taken or receipt of a
payment demand, the corporation shall by notice to each dissenter who complied
with Code Section 14-2-1323 offer to pay to such dissenter the amount the
corporation estimates to be the fair value of his or her shares, plus accrued
interest.

(b) The offer of payment must be accompanied by:

(1) The corporation's balance sheet as of the end of a
fiscal year ending not more than 16 months before the date of payment,
an income statement for that year, a statement of changes in
shareholders' equity for that year, and the latest available interim
financial statements, if any;

(2) A statement of the corporation's estimate of the
fair value of the shares;

(3) An explanation of how the interest was calculated;

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(4) A statement of the dissenter's right to demand
payment under Code Section 14-2-1327; and

(5) A copy of this article.

(c) If the shareholder accepts the corporation's offer by written
notice to the corporation within 30 days after the corporation's offer or is
deemed to have accepted such offer by failure to respond within said 30 days,
payment for his or her shares shall be made within 60 days after the making of
the offer or the taking of the proposed corporate action, whichever is later.

14-2-1326. FAILURE TO TAKE ACTION.

(a) If the corporation does not take the proposed action within 60
days after the date set for demanding payment and depositing share
certificates, the corporation shall return the deposited certificates and
release the transfer restrictions imposed on uncertificated shares.

(b) If, after returning deposited certificates and releasing
transfer restrictions, the corporation takes the proposed action, it must send
a new dissenters' notice under Code Section 14-2-1322 and repeat the payment
demand procedure.

14-2-1327. PROCEDURE IF SHAREHOLDER DISSATISFIED WITH PAYMENT OR OFFER.

(a) A dissenter may notify the corporation in writing of his own
estimate of the fair value of his shares and amount of interest due, and demand
payment of his estimate of the fair value of his shares and interest due, if:

(1) The dissenter believes that the amount offered under
Code Section 14-2-1325 is less than the fair value of his shares or
that the interest due is incorrectly calculated; or

(2) The corporation, having failed to take the proposed
action, does not return the deposited certificates or release the
transfer restrictions imposed on uncertificated shares within 60 days
after the date set for demanding payment.

(b) A dissenter waives his or her right to demand payment under
this Code section and is deemed to have accepted the corporation's offer unless
he or she notifies the corporation of his or her demand in writing under
subsection (a) of this Code section within 30 days after the corporation
offered payment for his or her shares, as provided in Code Section 14-2-1325.

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(1) The shareholder may demand the information required
under subsection (b) of Code Section 14- 2-1325, and the corporation
shall provide the information to the shareholder within ten days after
receipt of a written demand for the information; and

(2) The shareholder may at any time, subject to the
limitations period of Code Section 14-2-1332, notify the corporation
of his own estimate of the fair value of his shares and the amount of
interest due and demand payment of his estimate of the fair value of
his shares and interest due.

14-2-1330. COURT ACTION.

(a) If a demand for payment under Code Section 14-2-1327 remains
unsettled, the corporation shall commence a proceeding within 60 days after
receiving the payment demand and petition the court to determine the fair value
of the shares and accrued interest. If the corporation does not commence the
proceeding within the 60 day period, it shall pay each dissenter whose demand
remains unsettled the amount demanded.

(b) The corporation shall commence the proceeding, which shall be
a nonjury equitable valuation proceeding, in the superior court of the county
where a corporation's registered office is located. If the surviving
corporation is a foreign corporation without a registered office in this state,
it shall commence the proceeding in the county in this state where the
registered office of the domestic corporation merged with or whose shares were
acquired by the foreign corporation was located.

(c) The corporation shall make all dissenters, whether or not
residents of this state, whose demands remain unsettled parties to the
proceeding, which shall have the effect of an action quasi in rem against their
shares. The corporation shall serve a copy of the petition in the proceeding
upon each dissenting shareholder who is a resident of this state in the manner
provided by law for the service of a summons and complaint, and upon each
nonresident dissenting shareholder either by registered or certified mail or by
publication, or in any other manner permitted by law.

(d) The jurisdiction of the court in which the proceeding is
commenced under subsection (b) of this Code section is plenary and exclusive.
The court may appoint one or more persons as appraisers to receive evidence and
recommend decision on the question of fair value. The appraisers have the
powers described in the order appointing them or in any amendment to it.
Except as otherwise provided in this chapter, Chapter 11 of Title 9, known as
the "Georgia Civil Practice Act," applies to any proceeding with respect to
dissenters' rights under this chapter.

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(e) Each dissenter made a party to the proceeding is entitled to
judgment for the amount which the court finds to be the fair value of his
shares, plus interest to the date of judgment.

14-2-1331. COURT COSTS AND COUNSEL FEES.

(a) The court in an appraisal proceeding commenced under Code
Section 14-2-1330 shall determine all costs of the proceeding, including the
reasonable compensation and expenses of appraisers appointed by the court, but
not including fees and expenses of attorneys and experts for the respective
parties. The court shall assess the costs against the corporation, except that
the court may assess the costs against all or some of the dissenters, in
amounts the court finds equitable, to the extent the court finds the dissenters
acted arbitrarily, vexatiously, or not in good faith in demanding payment under
Code Section 14-2-1327.

(b) The court may also assess the fees and expenses of attorneys
and experts for the respective parties, in amounts the court finds equitable:

(1) Against the corporation and in favor of any or all
dissenters if the court finds the corporation did not substantially
comply with the requirements of Code Sections 14-2-1320 through
14-2-1327; or

(2) Against either the corporation or a dissenter, in
favor of any other party, if the court finds that the party against
whom the fees and expenses are assessed acted arbitrarily,
vexatiously, or not in good faith with respect to the rights provided
by this article.

(c) If the court finds that the services of attorneys for any
dissenter were of substantial benefit to other dissenters similarly situated,
and that the fees for those services should not be assessed against the
corporation, the court may award to these attorneys reasonable fees to be paid
out of the amounts awarded the dissenters who were benefitted.

14-2-1332. LIMITATION OF ACTIONS.

No action by any dissenter to enforce dissenters' rights shall be
brought more than three years after the corporate action was taken, regardless
of whether notice of the corporate action and of the right to dissent was given
by the corporation in compliance with the provisions of Code Section 14-2-1320
and Code Section 14-2-1322.

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Preliminary Copies

BANKERS FIDELITY LIFE INSURANCE COMPANY

PROXY SOLICITED BY THE BOARD OF DIRECTORS OF BANKERS FIDELITY LIFE INSURANCE
COMPANY FOR THE SPECIAL MEETING OF SHAREHOLDERS TO BE HELD MARCH 29, 1996

The undersigned hereby appoints _________________ and _______________,
or either of them, with full power of substitution as proxyholders to represent
and to vote, as designated herein, the Common Stock of the undersigned at the
Special Meeting of shareholders of the Company to be held on March 29, 1996 and
any postponement or adjournment thereof.

The Board of Directors Recommends a Vote "For" the Proposal:

To approve the Agreement of Merger dated January 5, 1996:

[ ] FOR [ ] AGAINST [ ] ABSTAIN

The shares represented by this proxy card will be voted as directed.
If NO DIRECTION IS GIVEN AND THE PROXY CARD IS VALIDLY EXECUTED, THE SHARES
WILL BE VOTED FOR THE ABOVE PROPOSAL. IN THEIR DISCRETION, THE PROXYHOLDERS
ARE AUTHORIZED TO VOTE UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE
MEETING.

Signature of Shareholder(s)

-----------------------------------------------

Dated: , 1996
---------------------------------

IMPORTANT: Sign exactly as your name(s) appears
at left. Give full title of executor,
administrator, trustee, guardian, etc. Joint
owners should each sign personally.

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Dates Referenced Herein and Documents Incorporated by Reference

		Referenced-On Page
This ‘PRE13E3/A’ Filing	Date	First	Last	Other Filings

	12/31/98	40	82
	6/30/96	56	76
	5/31/96	66
	3/29/96	8	91
	3/22/96	26
Filed on:	2/23/96			PRER14A
	2/22/96	6
	1/10/96	1		PRE13E3, PREM14A, PRES14A
	1/5/96	2	91
	1/4/96	41
	1/2/96	32	45
	12/31/95	36
	12/20/95	30	31
	12/12/95	33	61
	12/8/95	66
	10/31/95	29
	9/30/95	5	64	10-Q
	6/30/95	26
	3/31/95	26
	1/1/95	40	82
	12/31/94	5	64
	9/30/94	64
	1/1/94	62
				List all Filings

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Filing Submission 0000950144-96-000661 – Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)

Bankers Fidelity Life Insurance Co – ‘PRE13E3/A’ on 2/23/96 re: Bankers Fidelity Life Insurance Co

As of: Friday, 2/23/96 · Accession #: 950144-96-661 · File #: 5-44637

Previous ‘PRE13E3’: ‘PRE13E3’ on 1/10/96 · Next & Latest: ‘PRE13E3/A’ on 3/4/96

Amendment to Preliminary Proxy Solicitation Material — Going-Private Transaction Statement — Schedule 13E-3Filing Table of Contents

Document Table of Contents

Dates Referenced Herein and Documents Incorporated by Reference

Amendment to Preliminary Proxy Solicitation Material — Going-Private Transaction Statement — Schedule 13E-3
Filing Table of Contents