SYMONS INTERNATIONAL GROUP, INC.
4720 KINGSWAY DRIVE
INDIANAPOLIS, INDIANA 46205
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held On May 31, 2000
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of
Symons International Group, Inc. ("Company") will be held at the Company's
offices, 4720 Kingsway Drive, Indianapolis, Indiana on Wednesday, May 31, 2000,
at 10:00 a.m., Indianapolis time.
The Annual Meeting will be held for the following purposes:
1. Election of Directors. Election of the directors for terms to expire
in 2003.
2. Appointment of Auditors. Ratification of the appointment of BDO
Seidman, L.L.P. as auditors for the Company for the year ending
December 31, 2000.
3. Other Business. Such other matters as may properly come before he
meeting or any adjournment thereof.
Shareholders of record as of the close of business on April 21, 2000
are entitled to vote at the meeting or any adjournment thereof.
Please read the enclosed Proxy Statement carefully so that you may be
informed about the business to come before the meeting, or any adjournment
thereof. At your earliest convenience, please sign and return the accompanying
Proxy in the postage-paid envelope furnished for that purpose.
A copy of the Company's Annual Report for the year ended December 31,
1999 is enclosed. The Annual Report is not a part of the Proxy soliciting
material enclosed with this letter.
FOR THE BOARD OF DIRECTORS
/s/ DHS
Douglas H. Symons
Chief Executive Officer
Indianapolis, Indiana
April 28, 2000
IT IS IMPORTANT THAT THE PROXIES BE RETURNED PROMPTLY. THEREFORE, WHETHER OR NOT
YOU PLAN TO BE PRESENT IN PERSON AT THE ANNUAL MEETING, PLEASE SIGN, DATE AND
COMPLETE THE ENCLOSED PROXY AND RETURN IT IN THE ENCLOSED ENVELOPE WHICH
REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
<PAGE>
SYMONS INTERNATIONAL GROUP, INC.
4720 Kingsway Drive
Indianapolis, Indiana 46205
PROXY STATEMENT
The accompanying Proxy is solicited by the Board of Directors of Symons
International Group, Inc. (the "Company") for use at the Annual Meeting of
Shareholders to be held May 31, 2000 and any adjournments thereof. When the
Proxy is properly executed and returned, the shares it represents will be voted
at the meeting in accordance with any directions noted on that Proxy. If no
direction is indicated, the Proxy will be voted in favor of the proposals set
forth in the Notice attached to this Proxy Statement.
The election of directors will be determined by a plurality of the
shares present in person or represented by proxy. All other matters to come
before the meeting will be approved if the votes cast in favor exceed the votes
cast against. Any abstention or broker non-vote on any such matter will not
change the number of votes cast for or against the matter, however, such
abstaining shares will be counted in determining whether a quorum is present
pursuant to the applicable provisions of the Indiana Business Corporation Law.
The Board of Directors knows of no matters, other than those reported
herein, which are to be brought before the meeting. However, if other matters
properly come before the meeting, it is the intention of the persons named in
the enclosed Form of Proxy to vote such Proxy in accordance with their judgment
on such matters. Any shareholder giving a proxy has the power to revoke it at
any time before it is voted by a written notice delivered to the Secretary of
the Company or in person at the meeting. The approximate date of mailing of this
Proxy Statement is April 28, 2000.
<PAGE>
19
VOTING SECURITIES AND BENEFICIAL OWNERS
Only shareholders of record as of the close of business on April 21,
2000 will be entitled to vote at the Annual Meeting. On the Record Date, there
were 10,385,399 shares of common stock outstanding, the only class of the
Company's stock which is currently outstanding.
The following table shows, as of March 20, 2000, the number and
percentage of shares of common stock of the Company held by each person known to
the Company to own beneficially more than 5% of the issued and outstanding
common stock of the Company, and the ownership interests of each of the
Company's directors and Named Executive Officers, as hereafter defined, and all
directors and executive officers of the Company as a group, in the common stock
of the Company and in the common stock of the Company's 67.2% shareholder, Goran
Capital Inc. ("Goran"). Unless otherwise indicated in a footnote to the
following table, each beneficial owner possesses sole voting and investment
power with respect to the shares owned.
<TABLE>
<CAPTION>
Symons International
Group, Inc. Goran Capital Inc.
Amount and Nature Percent Amount and Nature Percent
Name of of Beneficial Of of Beneficial of
Beneficial Owners Ownership Class Ownership Class
<S> <C> <C> <C> <C>
G. Gordon Symons1 10,000 * 2,411,645 36.4%
Alan G. Symons2 60,591 * 786,535 11.9%
Douglas H. Symons3 28,500 * 281,105 4.2%
Robert C. Whiting 44,800 * 20,000 *
Larry S. Wechter4 13,000 * 0 0
Gene S. Yerant5 0 0 100,000 1.5%
John K. McKeating6 2,000 * 6,000 *
Dennis G. Daggett7 56,500 0 37,000 *
Goran Capital Inc.8 7,074,900 67.2% 0 0
All Executive Officers and
Directors as a Group (11 215,391 2.1% 3,541,285 56.8%
persons)9
* Less than 1% of class
1 With respect to the Company 10,000 shares are owned directly. With respect to the shares of Goran, 479,111 shares are held by
trusts of which Mr. Symons is the beneficiary, 286,121are subject to option and 1,646,413 of the shares indicated are owned by
Symons International Group Ltd., of which Mr. Symons is the controlling shareholder
2 With respect to the shares of Goran, 558,965 are owned directly and 227,570 are subject to option.
3 With respect to the shares of Goran, 251,455 are owned directly and 29,650 are subject to option.
4 Mr. Wechter owns 8,000 shares directly and 5,000 are held by a foundation of which Mr. Wechter is a trustee.
5 With respect to the shares of Goran, 100,000 are subject to option.
6 With respect to shares of Goran, 2,000 shares are owned directly and 4,000 shares are subject to option.
7 With respect to shares of the Company, 56,500 shares are subject to option. With respect to shares of Goran,
37,000 are subject to option.
8 Goran's office address is 2 Eva Road, Suite 201, Toronto, Ontario Canada M9C2A8.
9 Totals and percentage numbers are calculated on a fully detailed basis.
</TABLE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's officers and directors, as well as persons who own more than 10% of
the outstanding common shares of the Company, to file reports of ownership with
the Securities and Exchange Commission. Officers, directors and greater than 10%
shareholders are required to furnish the Company with copies of all Section
16(a) forms they file. Based solely on its review of copies of such forms
received by it, or written representations from certain reporting persons that
no reports were required for those persons, the Company believes that during
1999, all filing requirements applicable to its officers, directors and greater
than 10% shareholders were met.
PROPOSAL NO. 1: ELECTION OF DIRECTORS
The directors of the Company are divided into three classes and are
elected to hold office for a three year term and until their successors are
elected and qualified. The election of each class of directors is staggered over
each three-year period.
<TABLE>
<CAPTION>
Director Term to
Name Age Present Principal Occupation Since Expire
<S> <C> <C> <C>
G. Gordon Symons 78 Chairman of the Board of Directors of the 1987 2002
Company and Goran
Alan G. Symons 53 Deputy Chairman of the Company and CEO and 1987 2000
President of Goran
Douglas H. Symons 47 President and CEO of the Company and COO of 1987 2001
Goran
John K. McKeating 64 Retired Former President, Vision 2120 1996 2002
Robert C. Whiting 67 President, Prime Advisors Ltd. 1996 2000
Gene S. Yerant1 53 Executive Vice President of the Company 2000 2001
Larry S. Wechter1 45 CEO, Monument Advisers, Inc. 2000 2002
</TABLE>
1 Mr. Wechter and Mr. Yerant were elected on January 19, 2000 by the Board of
Directors of the Company to fill vacancies. G. Gordon Symons has been
Chairman of the Board of Directors of the Company since its formation in
1987. He founded the predecessor to Goran, the 67% shareholder of the
Company, in 1964 and has served as the Chairman of the Board of Goran since
its formation in 1986. Mr. Symons also served as the President of Goran
until 1992 and the Chief Executive Officer of Goran until 1994. Mr. Symons
currently serves as a director of Symons International Group Ltd. ("SIGL"),
a federally-chartered Canadian corporation controlled by him which,
together with members of the Symons family, controls Goran. Mr. Symons also
serves as Chairman of the Board of Directors of all of the subsidiaries of
Goran. Mr. Symons is the father of Alan G. Symons and Douglas H. Symons.
Alan G. Symons has served as a director of the Company since 1995 and served as
its Chief Executive Officer from 1996 until November 1999. Mr. Symons has
served as Deputy Chairman of the Company since November, 1999. Mr. Symons
has been a director of Goran since 1992, and has served as Goran's
President and Chief Executive Officer since 1994. Prior to becoming the
President and Chief Executive Officer of Goran, Mr. Symons held other
executive positions within Goran since its inception in 1986. Mr. Symons is
the son of G. Gordon Symons and the brother of Douglas H. Symons.
Douglas H. Symons has served as a director and as President of the Company since
its formation in 1987, as its Chief Operating Officer since July 1996 and
as its Chief Executive Officer since November 2, 1999. Mr. Symons also
served as Chief Executive Officer of the Company from 1989 until July 1996.
Mr. Symons has been a director of Goran since 1989, and has served as
Goran's Chief Operating Officer and Vice President since 1989. Mr. Symons
is the son of G. Gordon Symons and the brother of Alan G. Symons.
John K. McKeating has served as a director of the Company since 1996 and as a
director of Goran since 1995. Mr. McKeating retired in January 1996 after
serving as President and owner of Vision 2120 Optometric Clinics ("Vision
2120") for 37 years. Vision 2120, located in Montreal, Quebec, is a chain
of Canadian full-service retail clinics offering all aspects of
professional eye care.
Robert C. Whiting has served as a director of the Company since 1996. Since July
1994, Mr. Whiting has served as President of Prime Advisors, Ltd., a
Bermuda-based insurance consulting firm. From its inception until June 1994
Mr. Whiting served as President and Chairman of the Board of Jardine
Pinehurst Management Co., Ltd., a Bermuda-based insurance management and
brokerage firm.
LarryS. Wechter, C.P.A., was elected as a director of the Company on January
19, 2000. Mr. Wechter is the founder, Managing Director and Chief Executive
Officer of Monument Advisers, Inc. Prior to joining Monument Advisers,
Inc., Mr. Wechter was President and a director of ADESA Corporation, now a
wholly owned subsidiary of Minnesota Power & Light. Mr. Wechter currently
serves on the boards of directors of Crossmann Communities, Inc., Member
Data Services, Inc. and Family Auto.
Gene S. Yerant was named Executive Vice President of the Company and President
and Chief Operating Officer of Superior Insurance Group, Inc. in January
2000 and was elected as a director of the Company on January 19, 2000.
Prior to joining the Company, Mr. Yerant served as President of Transport
Insurance in Dallas, Texas. From December 1995 to April 1996 he also served
as President of Leader Insurance. From April 1998 to April 1990, Mr. Yerant
served as a director for National Interstate, a Cleveland, Ohio based
insurance company. From September 1990 to February 1997, Mr. Yerant served
as director for North American Livestock.
Unless otherwise directed, each proxy executed and returned by a
shareholder will be voted for the election of the nominees listed below. If any
person named as a nominee shall be unable or unwilling to stand for election at
the time of the Annual Meeting, the proxy holders will nominate and vote for a
replacement nominee recommended by the Board. At this time, the Board knows of
no reason why the nominees listed below may not be able to serve as directors if
elected.
<PAGE>
The Board of Directors unanimously recommends the election of the
following nominees for a three (3) year term to expire in the year 2003. Goran
owns sufficient shares of the Company to ensure their election, and Goran
presently intends to vote for the nominees listed below.
<TABLE>
<CAPTION>
Name Age Present Principal Occupation Director Since
<S> <C> <C>
Alan G. Symons 53 Deputy Chairman of the Company and CEO 1987
and President of Goran
Robert C. Whiting 67 President, Prime Advisors Ltd. 1996
</TABLE>
Meetings and Committees of the Board
During the year ended December 31, 1999, the Board of Directors of the
Company met five times, including teleconferences. Each director participated in
75% or more of the meetings of the Board including committee meetings.
The Board of Directors of the Company has an Audit Committee, a
Compensation Committee and an Executive Committee.
The Company's Audit Committee is responsible for recommending the
appointment of the Company's independent auditors, meeting with the independent
auditors to outline the scope, and review the results of, the annual audit and
reviewing with the auditor the systems of internal control and audit reports.
The current members of this Committee are Messrs. Larry S. Wechter, Robert C.
Whiting, and John K. McKeating. The Audit Committee met twice during 1999.
During 1999, the Compensation Committee of the Company was comprised of
Messrs. John K. McKeating, Robert C. Whiting and Douglas H. Symons. The
Compensation Committee makes recommendations concerning executive compensation
and benefit levels to the Board of Directors and has the authority to approve
all specific transactions pursuant to the Symons International Group, Inc. 1996
Stock Option Plan (the "Plan").
The Executive Committee is comprised of Messrs. G. Gordon Symons, Alan G.
Symons and Douglas H. Symons. The Executive Committee is empowered by the Board
of Directors to take action on behalf of the Board when the need arises.
Directors of the Company who are not employees of the Company or its
affiliates receive an annual retainer of $10,000. In addition, the Company
reimburses its directors for reasonable travel expenses incurred in attending
Board and board committee meetings. Each director of the Company who is not also
an employee of the Company receives a meeting fee of $1,500 for each Board or
committee meeting attended, with committee chairs receiving an additional $2,500
per quarter.
<PAGE>
Compensation Committee Report
The Compensation Committee met twice during 1999. The Committee
regularly reviews the Company's executive compensation policies and practices
and approves of the compensation of executive officers. The Committee's
executive compensation policy is designed to attract, retain, and motivate
highly talented individuals at the executive level of the organization.
Executive compensation is based on the level of job responsibility, individual
performance, and Company performance. Compensation also reflects the value of
the job in the marketplace. To attract and retain highly skilled executives, the
Company must remain competitive with the pay of other premier employers who
compete with the Company for talent. The Committee believes that the Company's
executive compensation program reflects these principles and give executives
strong incentives to maximize Company performance and therefore enhance
shareholder value. The policy consists of both annual and long-term components,
which should be considered together in assessing whether the policy is attaining
its objectives.
To align the interest of employees with those of shareholders, the
Company provides employees the opportunity for equity ownership through the
Plan. The Compensation Committee makes recommendations to the Board for the
award of stock options pursuant to the Plan. The objectives of the Plan are to
align employee and shareholder long-term interests by creating a strong and
direct link between employee compensation and shareholder return and to enable
employees to develop and maintain a long-term ownership position in the
Company's common stock. A total of 1,500,000 shares of the Company's common
stock have been reserved for issuance under the Plan. As of March 20, 2000,
1,352,401 shares were available for grant of options pursuant to the Plan. There
were no grants to senior executives or other employees of the Company and its
subsidiaries during 1999.
The Company's total compensation program for officers includes base
salaries, bonuses and the grant of stock options pursuant to the Plan. The
Company's primary objective is to achieve above-average performance by providing
the opportunity to earn above-average total compensation (base salary, bonus and
value derived from stock options) for above-average performance. Each element of
total compensation is designed to work in concert. The total program is designed
to attract, motivate, reward and retain the management talent required to serve
shareholder, customer and employee interests. The Company believes that this
program also motivates the Company's officers to acquire and retain appropriate
levels of stock ownership. It is the opinion of the Compensation Committee that
the total compensation earned by Company officers during 1999 achieves these
objectives and is fair and reasonable.
The compensation of Alan G. Symons, Chief Executive Officer of the
Company until November, 1999, consisted of the same elements as the other senior
executives, namely base salary and stock options. In 1997 the Committee reviewed
and approved Alan G. Symons' employment agreement with GGS Management, Inc., a
subsidiary of the Company. During 1999, the Committee did not approve the grant
of stock options or bonuses.
<PAGE>
The compensation of Douglas H. Symons, Chief Executive Officer of the
Company beginning in November, 1999 was approved by the Compensation Committee
at the time Douglas H. Symons' employment agreement with the Company was entered
into in March, 1999. The Committee has not reviewed the compensation of Douglas
H. Symons subsequent to the date he became Chief Executive Officer.
Federal income tax law disallows corporate deductibility for
"compensation" paid in excess of $1 million, unless such compensation is payable
solely on account of achievement of an objective performance goal. As part of
its on-going responsibilities with respect to executive compensation, the
Compensation Committee will monitor this issue to determine what actions, if
any, should be taken as a result of the limitation on deductibility.
COMPENSATION COMMITTEE
John K. McKeating, Chair
Robert C. Whiting
Douglas H. Symons
Compensation Committee Interlocks And Insider Participation
During 1999, the Company's Compensation Committee consisted of Messrs. John
K. McKeating, Robert C. Whiting and Douglas H. Symons. Neither Mr. Whiting nor
Mr. McKeating have any interlocks reportable under Item 402(j)(3) of Regulation
S-K. Douglas H. Symons has served as a director and executive officer of the
Company since its formation in 1987 and as a director and executive officer of
Goran since 1989. Douglas H. Symons is also an executive officer of each of the
Company's subsidiaries. Since Alan G. Symons, Deputy Chairman of the Company, is
a director of each of the Company's subsidiaries and is empowered to determine
the compensation of the managers of the Company's subsidiaries, Douglas H.
Symons and Alan G. Symons have reportable interests under Item 402(j)(3)
(i)-(iii) of Regulation S-K for 1999.
Remuneration Of Executive Officers
The following table sets forth the compensation awarded to, earned by
or paid to the Chief Executive Officer and the four most highly compensated
executive officers of the Company other than the Chief Executive Officer
(collectively, the "Named Executive Officers") during the last three (3) years.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long Term
Compensation
Awards
Securities
Name and Principal Annual Compensation Underlying
-------------------
Position Options
Year Salary Bonus
<S> <C> <C> <C> <C>
Alan G. Symons, 1999 $254,032 $0 0
Deputy Chairman1 1998 $300,000 $0 56,000
1997 $278,230 $200,000 64,900
Douglas H. Symons, 1999 $375,000 $0 0
Chief Executive Officer and President 1998 $300,000 $0 35,000
1997 $200,000 $82,971 17,800
Dennis G. Daggett, 1999 $189,000 $0 0
Chief Executive Officer, IGF Insurance Company 1998 $198,439 $270,000 30,000
1997 $195,618 $150,000 6,500
Roger C. Sullivan,2 1999 $232,623 $0 0
Executive Vice President, Superior Insurance 1998 $204,451 $0 30,000
Group, Inc. 1997 $169,612 $169,612 8,000
David L. Bates, 3 1999 $142,403 $0 0
Executive Vice President, Chief Legal Officer 1998 $113,385 $41,461 10,000
and Secretary 1997 $107,307 $87,076 3,750
Carl F. Schnaufer4 1999 $147,661 $0 0
Vice President, Chief Information Officer 1998 $113,710 $6,061 10,000
1997 $30,308 $0 0
1 Alan G. Symons served as Chief Executive Officer of the Company until November, 1999.
2 Mr. Sullivan resigned in January, 2000.
3 Mr. Bates resigned in October, 1999.
4 Mr. Schnaufer resigned in January, 2000.
</TABLE>
<PAGE>
STOCK OPTION GRANTS
There were no grants of stock options to the Company's Named
Executive Officers in 1999.
OPTION EXERCISES AND YEAR-END VALUES
The following table shows stock options held by the Company's
Named Executive Officers as of December 31, 1999. In addition, this table
includes the number of shares covered by both exercisable and non-exercisable
stock options. Also reported are the value of unexercised in-the-money options
as of December 31, 1999.
AGGREGATED OPTIONS EXERCISES IN
LAST FISCAL YEAR END AND FISCAL YEAR END OPTIONS VALUES
<TABLE>
<CAPTION>
Value Number of Value of
Shares Realized Shares Unexercised
Acquired at Underlying In-the-Money
Name on Exercise Unexercised Options Options
Exercise Date at 12-31-99 at 12-31-991
Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C> <C> <C>
Alan G. 0 $0.00 0 0 0 0
Symons
Douglas 0 $0.00 0 0 0 0
H. Symons
Dennis G. 0 $0.00 34,290 22,210 0 0
Daggett
Roger C. 0 $0.00 25,280 22,720 0 0
Sullivan
David 0 $0.00 0 0 0 0
L.
Bates
Carl 0 $0.00 3,333 6,667 0 0
F.
Schnaufer
1 Based on the December 31, 1999 closing NASDAQ stock price which was $1.4375
per share.
</TABLE>
<PAGE>
CERTAIN EMPLOYMENT AGREEMENTS
Certain of the Company's officers have entered into employment
contracts with the Company or one of its subsidiaries.
Alan G. Symons was Chief Executive Officer of the Company
until November 1999 and became Deputy Chairman of the Company in November 1999.
During 1999, Alan G. Symons was subject to an employment agreement, with such
agreement calling for a base salary of not less than $300,000 per year. This
agreement became effective on April 30, 1996 for an initial period of five years
and contained customary restrictive covenants respecting confidentiality and
non-competition during the term of the employment and for a period of two years
after the termination of the agreement. In addition to annual salary, the
agreement stipulated that Alan G. Symons may earn a bonus in an amount ranging
from 25% to 100% of base salary. In November 1999, Alan G. Symons became subject
to an employment arrangement with Goran. Pursuant to an agreement between Goran
and the Company, Alan G. Symons may provide services on an hourly basis to the
Company for which the Company pays Goran directly.
Douglas H. Symons, Chief Executive Officer of the Company, is
subject to an employment agreement, with such agreement calling for a base
salary of not less than $375,000 per year. This agreement became effective on
March 8, 1999 and continues in effect for an initial period of two years. Upon
the expiration of the initial two year period, the term of the agreement is
automatically extended from year to year thereafter and is cancelable (after the
expiration of the initial two year term) upon six months' notice. This agreement
contains customary restrictive covenants respecting confidentiality and
non-competition during the term of employment and for a period of two years
after the termination of the agreement. In addition to annual salary, Douglas H.
Symons may earn a bonus in an amount ranging from 0 to 100% of base salary. At
the discretion of the Board, bonus awards may be greater than the amounts
indicated if agreed upon financial targets are exceeded.
The Company has entered into an employment agreement with
Dennis G. Daggett pursuant to which Mr. Daggett has agreed to serve as the Chief
Executive Officer of IGF Insurance Company. Pursuant to the terms of the
agreement, Mr. Daggett is entitled to a base salary of not less than $180,000
per year and may earn a bonus in an amount ranging from 0 to 150% of his base
salary, or a greater amount as may be approved by the Board.
PROPOSAL NO. 2 - APPOINTMENT OF AUDITORS
The Board of Directors proposes the ratification by the
shareholders at the Annual Meeting of the appointment of the accounting firm of
BDO Seidman, L.L.P. ("BDO") as independent auditors for the Company's year
ending December 31, 2000. A representative of BDO is expected to be present at
the Annual Meeting with the opportunity to make a statement if he or she so
desires. This individual will also be available to respond to any appropriate
questions the shareholders may have.
<PAGE>
<TABLE>
<CAPTION>
CERTAIN RELATIONSHIPS / RELATED PARTY TRANSACTIONS
The Company has made the following personal loans to Alan G.
Symons, which were outstanding during 1999:
Largest Loan
Balance During 1999 Balance As of
Date of Loan April 1, 2000 Interest Rate
<S> <C> <C> <C>
June 30, 1986 $19,772 $6,617 None
January 16, 1998 $102,051 $-0- None
February 24, 1988 $27,309 $27,309 None
March 19, 1998 $887,444 $-0- 5.85%
October 15, 1998 $562,413 $-0- 7.25%
The Company has made the following personal loans to Douglas
H. Symons, which were outstanding during 1999:
</TABLE>
<TABLE>
<CAPTION>
Largest Loan
Balance During 1999 Balance As of
Date of Loan April 1, 2000 Interest Rate
<S> <C> <C> <C>
June 30, 1986 $15,000 $9,798 None
February 24, 1988 $2,219 $2,219 None
November 1, 1990 $68,050 $-0- Prime +1%
April 20, 1998 $260,358 $-0- 5.85%
October 15, 1998 $594,517 $-0- 7.25%
February 27, 1998 $22,533 $-0- None
April 14, 1999 $35,000 $-0- None
September 29, 1999 $100,000 $100,000 6.5%
</TABLE>
<PAGE>
On October 24, 1997, the Company guaranteed a loan from an
unrelated third party to Dennis G. Daggett. The $290,000 loan is due February
10, 2001 and carries a 7.75% interest rate. The largest amount outstanding
during 1999 was $290,000 and the balance as of April 1, 2000 was $290,000.
Three of the Company's insurance subsidiaries, Superior
Insurance Company ("Superior"), IGF Insurance Company ("IGF") and Pafco General
Insurance Company ("Pafco"), engaged in reinsurance transactions with Granite
Reinsurance Company Ltd. ("Granite Re") during 1999. Granite Re is a
wholly-owned subsidiary of Goran, and G. Gordon Symons, Alan G. Symons and
Douglas H. Symons are directors and executive officers of Goran.
<PAGE>
Effective January 1, 1999, Granite Re and Pafco commuted an
existing quota share reinsurance treaty that had covered certain nonstandard
automobile business of Pafco written during 1998. In connection with the
termination, Granite Re returned approximately $11,161,000 of previously ceded
premiums to Pafco.
On an ongoing basis, IGF and Superior reinsure certain crop
business written by them with a group of reinsurers that includes Granite Re.
The other reinsurers in that group are not affiliated with the Company or Goran,
and Granite Re's participation is on the same basis as those other reinsurers.
During 1999, IGF and Superior ceded $6,017,000 in premiums to Granite Re with
respect to various reinsurance treaties for crop business.
Also on an ongoing basis, Pafco reinsures with Granite Re
non-automobile business written by Pafco and originated through Symons
International Group, Inc. - Florida, a subsidiary of Goran. Under this
reinsurance arrangement, Pafco ceded approximately $875,000 in premiums to
Granite Re in 1999. Those reinsurance arrangements have been continued for 2000.
The Company paid $3,206,222 in 1999 for consulting and other
services relative to the conversion to the Company's non-standard automobile
operating system. Approximately 90% of these payments were for services provided
by consultants and vendors unrelated to the Company. Stargate Solutions Group,
Inc., owned by Kirk Symons, son of G. Gordon Symons and brother of Alan G.
Symons and Douglas H. Symons, managed the work of such unrelated consultants and
vendors and, as compensation for such work, retained approximately 10% of the
payments referred to above in return for the management services provided.
Superior Insurance Group, Inc., a wholly owned subsidiary of the Company,
acquired a less than 1% limited partnership interest in Monument Capital
Partners I during 1999. The amount of the investment was $100,000. Larry S.
Wechter, a director of the Company as of January 19, 2000, is Managing Director
and Chief Executive Officer of Monument Advisers, Inc. and Alan G. Symons, a
director of the Company, is a director of Monument Advisers, Inc. Monument
Advisers, Inc. is the general partner of Monument Capital Partners I.
<PAGE>
PERFORMANCE GRAPH
The following performance graph compares the cumulative total
shareholder return on the Company's common stock with Standard & Poor's 500
Stock Index and the Peer Group for the years 1996 through 1999.
[Graph Omitted]
Notwithstanding anything to the contrary set forth in any of
the Company's previous filings under the Securities Act of 1993, as amended, or
the Securities Exchange Act of 1934, as amended, that may incorporate future
filings (including this Proxy Statement, in whole or in part), the preceding
Compensation Committee Report and the stock price Performance Graph shall not be
incorporated by reference in any such filings.
SHAREHOLDER PROPOSALS AND NOMINATIONS
Any shareholder of the Company wishing to have a proposal
considered for inclusion in the Company's 2001 proxy solicitation materials must
set forth such proposal in writing and file it with the Secretary of the Company
on or before December 11, 2000. In order to be considered in the 2001 Annual
Meeting, shareholder proposals not included in the Company's 2001 proxy
solicitation materials, as well as shareholder nominations for directors, must
be submitted in writing to the Secretary of the Company at least sixty (60) days
before the date of the 2001 Annual Meeting, or, if the 2001 Annual Meeting is
held prior to March 31, 2001, within ten (10) days after notice of the Annual
Meeting is mailed to shareholders. The Board of Directors of the Company will
review any shareholder proposals that are filed as required, and will determine
whether such proposals meet applicable criteria for inclusion in its 2001 proxy
solicitation materials or consideration at the 2001 Annual Meeting.
OTHER MATTERS
Management is not aware of any business to come before the
Annual Meeting other than those matters described in the Proxy Statement.
However, if any other matters should properly come before the Annual Meeting, it
is intended that the proxies solicited hereby will be voted with respect to
those matters in accordance with the judgment of the persons voting the proxies.
The cost of solicitation of proxies will be borne by the Company. The Company
will reimburse brokerage firms and other custodians, nominees and fiduciaries
for reasonable expenses incurred by them in sending proxy material to the
beneficial owners of common stock of the Company. In addition to solicitation by
mail, directors, officers and employees of the Company may solicit proxies
personally or by telephone without additional compensation.
<PAGE>
Each shareholder is urged to complete, date and sign the proxy
and return it promptly in the enclosed return envelope. Insofar as any of the
information in this Proxy Statement may rest peculiarly within the knowledge of
persons other than the Company, the Company relies upon information furnished by
others for the accuracy and completeness thereof.
Signed by Order of the Board of Directors
/s/ DHS
Douglas H. Symons
Chief Executive Officer
<PAGE>
SYMONS INTERNATIONAL GROUP, INC.
FORM OF PROXY
PROXY SOLICITED BY MANAGEMENT OF THE CORPORATION FOR THE
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON WEDNESDAY, MAY 31, 2000
The undersigned shareholder of Symons International Group, Inc. (the
"Corporation") hereby appoints G. Gordon Symons, or Douglas H. Symons or either
of them, as Proxy for the undersigned, to attend, vote and act for and on behalf
of the undersigned at the Annual Meeting of the Shareholders of the Corporation
to be held at the City of Indianapolis on May 31, 2000, and at any adjournment
thereof, in the same manner, to the same extent and with the same power as if
the undersigned were present at the Meeting or any adjournment thereof, and the
undersigned hereby revokes any former instrument appointing a Proxy for the
undersigned at the said Meeting or at any adjournment thereof.
The Shares represented by this Proxy are to be:
1. Election of Directors
" VOTED FOR all Nominees listed below
(except as marked to the contrary below)
" WITHHOLD AUTHORITY to vote for all
Nominees listed below:
Alan G. Symons, Robert C. Whiting
INSTRUCTION: To withhold authority to vote for any individual Nominee,
write that Nominee's name on the space provided below:
2. VOTED FOR ______ VOTED AGAINST______
ABSTAINED______ in the appointment of the Auditor.
3. In their discretion, the Proxies are authorized to vote upon such other
matters (none known at this time) as may properly come before the Annual Meeting
or any postponement or adjournment thereof.
DATED this day of , 2000.
---------------- -----------------------------------
.............................................................................
Signature of Shareholder
Notes:
1. This Form of Proxy should be dated and signed by the shareholder or his
attorney authorized in writing. If this Form of Proxy is not dated in the
space provided, it will be deemed to bear the date on which it was mailed to
shareholders.
2. Unless otherwise specified the shares represented by this proxy will be
voted. If a choice is specified with respect to any or all of the matters to
be dealt with at the Meeting referred to above, such shares will be voted in
accordance with the specification made. If no choice is specified, it is
intended to vote such shares in favor of the election of Directors and the
reappointment of the Corporation's Auditor. This proxy confers authority to
do so.
3. This Proxy confers discretionary authority upon the person or persons
specified above with respect to amendments or variations to matters
identified in the notice of Annual Meeting accompanying this Proxy and other
matters as may properly come before the Meeting.
4. This Proxy should be voted, dated and signed and returned in the enclosed
envelope to National City Bank, Department 53552, P.O. Box 92301, Cleveland,
Ohio 44193-0900, or presented in person at the Annual Meeting to be held May
31, 2000 at 4720 Kingsway Drive, Indianapolis, Indiana, at 10:00 a.m.
Indianapolis time.
