SOUTHERN SECURITY LIFE INSURANCE COMPANY
755 Rinehart Road
Lake Mary, Florida 32746
PROXY STATEMENT
INFORMATION CONCERNING SOLICITATION AND VOTING
General
The enclosed Proxy is solicited on behalf of the Board of Directors of Southern
Security Life Insurance Company, a Florida corporation (the "Company") for use
at its 2000 Annual Meeting of Stockholders (the "Annual Meeting") to be held on
Wednesday, October 25, 2000, beginning at 10:30 a.m., Eastern Daylight Time, or
at any adjournments or postponements thereof. The purposes of the meeting are
set forth herein and in the accompanying Notice of Annual Meeting of
Stockholders. The Annual Meeting will be held at the Company's principal
executive offices at 755 Rinehart Road, Lake Mary, Florida. This Proxy Statement
and accompanying materials are being mailed on or about September 10, 2000. The
Company's telephone number is (407) 321-7113.
These proxy materials were mailed on or about September 10, 2000 to all
stockholders entitled to vote at the meeting.
Record Date; Outstanding Shares
Stockholders of record at the close of business on September 5, 2000 (the
"Record Date") are entitled to notice of and to vote at the meeting. On the
Record Date, 1,907,989 shares of the Company's common stock, $1.00 par value,
were issued and outstanding. Stockholders holding the majority of the
outstanding shares of common stock represented in person or by proxy, shall
constitute a quorum for the transaction of business at the Annual Meeting. For
information regarding holders of more than five percent of the outstanding
common stock, see "Security Ownership of Certain Beneficial Owners and
Management."
Revocability of Proxies
Stockholders may revoke any appointment of proxy given pursuant to this
solicitation by delivering to the Company a written notice of revocation or a
duly executed proxy bearing a later date or by attending the meeting and voting
in person. An appointment of proxy is revoked upon the death or incapacity of
the stockholder if the Secretary or other officer of the Company authorized to
tabulate votes receives notice of such death or incapacity before the proxy
exercises its authority under the appointment.
Voting and Solicitation
Each stockholder of record will be entitled to one vote for each share of common
stock held on the Record Date on each proposed item that comes before the
meeting. In the election of directors, each stockholder will be entitled to vote
for 10 nominees and the 10 nominees with the greatest number of votes will be
elected. Assuming a quorum is present, a plurality of votes cast by the shares
entitled to vote in the election of directors will be required to elect each
director.
The cost of this solicitation will be borne by the Company. The Company may
reimburse expenses incurred by brokerage firms and other persons representing
beneficial owners of shares for their reasonable expenses in forwarding
soliciting materials to beneficial owners. Proxies may be solicited by certain
of the Company's directors, officers and regular employees, without additional
compensation, personally, by telephone or by telefax.
<PAGE>
SOUTHERN SECURITY LIFE INSURANCE COMPANY
755 Rinehart Road
Lake Mary, Florida 32746
September 5, 2000
Dear Stockholder:
On behalf of the Board of Directors, it is my pleasure to invite you to attend
the Annual Meeting of Stockholders of Southern Security Life Insurance Company
(the "Company") to be held on October 25, 2000, at 10:30 a.m., Eastern Daylight
Time, at 755 Rinehart Road, Lake Mary, Florida.
The matters to be addressed at the meeting will include (1) to elect ten
directors; (2) to ratify the appointment of Tanner + Co. as the Company's
independent accountants for the fiscal year ending December 31, 2000; and (3) to
report on the business activities of the Company and to answer any stockholder
questions.
Your vote is very important. We hope you will take a few minutes to review the
Proxy Statement and complete, sign, and return your Proxy Card in the envelope
provided, even if you plan to attend the meeting. Please note that sending us
your Proxy will not prevent you from voting in person at the meeting, should you
wish to do so.
Thank you for your support of Southern Security Life Insurance Company. We look
forward to seeing you at the Annual Stockholders Meeting.
Sincerely yours,
SOUTHERN SECURITY LIFE
INSURANCE COMPANY
George R. Quist,
Chairman of the Board, President,
and Chief Executive Officer
<PAGE>
SOUTHERN SECURITY LIFE INSURANCE COMPANY
755 Rinehart Road
Lake Mary, Florida 32746
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Southern
Security Life Insurance Company (the "Company"), will be held on October 25,
2000, at 755 Rinehart Road, Lake Mary, Florida, at 10:30 a.m., Eastern Daylight
Time, to consider and act upon the following:
1. To elect a Board of Directors consisting of ten directors to serve until
the next Annual Meeting of Stockholders or until their successors
are elected and qualified;
2. To ratify the appointment of Tanner + Co. as the Company's independent
accountants for the fiscal year ending December 31, 2000;
3. To transact such other business as may properly come before the meeting
or any adjournment thereof.
The foregoing items of business are more fully described in the Proxy Statement
accompanying this Notice.
The Board of Directors has fixed the close of business on September 5, 2000, as
the record date for the determination of stockholders entitled to notice of and
to vote at the Annual Meeting.
STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING. A PROXY STATEMENT AND
PROXY CARD ARE ENCLOSED HEREWITH. WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING,
PLEASE SIGN, DATE AND RETURN THE PROXY CARD IN THE ENCLOSED POSTAGE PAID
ENVELOPE SO THAT YOUR SHARES MAY BE VOTED AT THE MEETING. THE GIVING OF A PROXY
WILL NOT AFFECT YOUR RIGHT TO VOTE IN PERSON IF YOU ATTEND THE MEETING.
By order of the Board of Directors,
William C. Sargent
Senior Vice President and Secretary
<PAGE>
Deadline for Receipt of Stockholder Proposals
Stockholder proposals which are intended to be presented at the Company's 2001
Annual Meeting must be received by the Company no later than March 31, 2001, in
order to be included in the proxy statement and form of proxy for that meeting.
ELECTION OF DIRECTORS
PROPOSAL 1
Nominees
The Company's Bylaws do not limit the number of persons serving on the Company's
Board of Directors, and it is contemplated that a board of 10 directors will be
elected at the Annual Meeting. The Board of Directors recommends that the
stockholders vote "FOR" the election of the 10 director nominees listed below.
Assuming a quorum is present, a plurality of votes cast by the shares entitled
to vote in the election of directors will be required to elect each director.
Unless otherwise instructed, the proxy holders will vote the proxies received by
them for management's 10 nominees named below, all of whom are presently
directors of the Company.
In the event that any management nominee is unable or declines to serve as a
director at the time of the Annual Meeting, the proxies will be voted for any
nominee who shall be designated by the present Board of Directors to fill the
vacancy. In the event that additional persons are nominated as directors, the
proxy holders intend to vote all proxies received by them in such a manner as
will ensure the election of as many of the nominees listed below as possible. It
is not expected that any nominee will be unable or will decline to serve as a
director. The term of office of each person elected as a director will continue
until the next annual meeting of stockholders and until such person's successor
has been elected and qualified. Officers are appointed by the Board of Directors
and serve at the discretion of the board.
The name and certain information regarding each nominee is set forth below. See
also "Certain Relationships and Related Transactions".
Director or
Name Age Officer Since Position with the Company
George R. Quist(1) 79 December 1998 Chairman of the Board,
President and Chief
Executive Officer
William C. Sargent 71 December 1998 Senior Vice President,
Secretary and Director
Scott M. Quist(1) 46 December 1998 First Vice President,
General Counsel, Treasurer
and Director
Charles L. Crittenden 80 December 1998 Director
Sherman B. Lowe 85 December 1998 Director
R.A.F. McCormick 86 December 1998 Director
H. Craig Moody 46 December 1998 Director
Robert G. Hunter, M.D. 40 December 1998 Director
Norman G. Wilbur 61 December 1998 Director
G. Robert Quist(1) 48 March 1999 Director
_____________________
(1) George Quist is the father of Scott M. Quist and G. Robert Quist.
<PAGE>
The following biographical information is furnished with respect to each of the
10 nominees:
George R. Quist has been Chairman of the Board of Directors, President and Chief
Executive Officer of the Company since December 1998. Mr. Quist has also served
as Chairman of the Board, President and Chief Executive Officer of Security
National Financial Corporation since October 1979. From 1946 to 1960, he was an
agent, District Manager and Associate General Agent for various insurance
companies. From 1960 to 1964, he was Executive Vice President and Treasurer of
Pacific Guardian Life Insurance Company. Mr. Quist served from 1981 to 1982 as
the President of The National Association of Life Companies, a trade association
of 642 life insurance companies, and from 1982 to 1983 as its Chairman of the
Board. Mr. Quist also served as a director of the National Alliance of Life
Companies from 1992 to 1996.
William C. Sargent has been Senior Vice President, Secretary and a director of
the Company since December 1998. Mr. Sargent has also served as Senior Vice
President and a director of Security National Financial Corporation since 1980
and as its Secretary since 1993. Prior to that time, he was employed by Security
National Life Insurance Company as a salesman and agency superintendent.
Scott M. Quist has been First Vice President, General Counsel, Treasurer and a
director since December 1998. Mr Quist has also served as First Vice President
of Security National Financial Corporation since 1990, its General Counsel since
1992, its Treasurer since 1993, and a director since 1986. From 1980 to 1982,
Mr. Quist was a tax specialist with Peat, Marwick, Mitchell, & Co., in Dallas,
Texas. From 1986 to 1991 he served as a director of The National Association of
Life Companies, a trade association of 642 insurance companies and its Treasurer
until its merger with the American Council of Life Companies in 1991. Mr. Quist
is a past member of the Board of Governors of the Forum 500 Section
(representing small companies) of the American Council of Life Insurance. Mr.
Quist is a past President of the Utah Life Convention and a past General counsel
of the Utah Funeral Directors' Association. Mr. Quist has also been a director
since November 1993 of Key Bank of Utah, and is currently President of the
National Alliance of Life Companies, an industry trade association.
Charles L. Crittenden has been a director of the Company since December 1998.
Mr. Crittenden is also a director of Security National Financial Corporation and
has served in this position since October 1979. Mr. Crittenden has been sole
owner Crittenden Paint & Glass Company since 1958. He is also an owner of
Crittenden Enterprises, a real estate development company, and Chairman of the
Board of Linco, Inc.
Sherman B. Lowe has been a director of the Company since December 1998. Mr. Lowe
is also a director of Security National Financial Corporation and has served in
this position since October 1979. Mr. Lowe was President and Manager of Lowe's
Pharmacy located in Salt Lake City, Utah for over 30 years. He is now retired.
He is an owner of Burton-Lowe Ranches, a general partnership.
R.A.F. McCormick has been a director of the Company since December 1998. Mr.
McCormick is also a director of Security National Financial Corporation and has
served in this position since October 1979. He is a past Vice President of Sales
of Clover Club Foods, a food processing company. He is now retired.
H. Craig Moody has been a director of the Company since December 1998. Mr. Moody
is also a director of Security National Financial Corporation and has served in
this position since September 1995. Mr. Moody is owner of Moody & Associates, a
political consulting and real estate company. He is a former Speaker and
Majority Leader of the House of Representatives of the State of Utah.
Robert G. Hunter M.D., has been a director of the Company since December 1998.
Dr. Hunter is also a director of Security National Financial Corporation and has
served in this position since October 1998. Dr. Hunter is currently a practicing
physician in private practice. Dr. Hunter created the State Wide E.N.T.
Organization (Rocky Mountain E.N.T., Inc.) where he is currently a member of the
Executive Committee. He is Chairman of Surgery at Cottonwood Hospital, a
delegate to the Utah Medical Association, a delegate representing Utah to the
American Medical Association, and a member of several medical advisory boards.
<PAGE>
Norman G. Wilbur has been a director of the Company since December 1998. Mr.
Wilbur is also a director of Security National Financial Corporation and has
served in this position since October 1998. Mr. Wilbur worked for the regional
offices of J.C. Penney Co., Inc., in budgeting and analysis. His positions with
J.C. Penny Co., Inc., included Manager of Planning and Reporting. After 36 years
with J.C. Penney's Mr. Wilbur took an option of an early retirement in 1997. He
is a past board member of a homeless organization in Plano, Texas.
G. Robert Quist has been a director of the Company since March, 1999. Mr. Quist
is also Vice President and Facility Manager of Security National Financial
Corporation and has served in this position since 1985. Mr. Quist has served as
a director and as the Secretary and Treasurer of the Utah Cemetery Association.
Mr. Quist has also served as President of Big Willow Water Company since 1987.
Executive Officers
The following table sets forth certain information with respect to the executive
officers of the Company (the business biographies for the first three
individuals are set forth above):
Name Age Title
---------------- ----- -----------------------------------
George R. Quist(1) 79 Chairman of the Board, President and Chief
Executive Officer
Scott M. Quist(1) 46 First Vice President, General Counsel
and Treasurer
William C. Sargent 71 Senior Vice President and Secretary
(1) George R. Quist is the father of Scott M. Quist.
The Board of Directors of the Company has a written procedure which requires
disclosure to the board of any material interest or any affiliation on the part
of any of its officers, directors or employees which is in conflict or may be in
conflict with the interests of the Company.
No director, officer of 5% stockholder of the Company or its subsidiaries, or
any affiliate thereof has had any transactions with the Company or its
subsidiaries during 1999 or 1998.
Each of the directors are board members of Security National Financial
Corporation (the ultimate parent of the Company) with the exception of G. Robert
Quist, which has a class of equity securities registered under the Securities
Exchange Act of 1934, as amended. In addition, Scott M. Quist is a regional
director of Key Bank of Utah. All directors of the Company hold office until the
next annual meeting of stockholders, until their successors have been elected
and qualified, or until their earlier resignation or removal.
Board Meetings and Committees
The Board of Directors of the Company held a total of six meetings during 1999.
During 1999, the Board of Directors had an Audit Committee and an Executive
Committee. In January 1999, the Board established a Compensation Committee. The
Board does not have a Nominating Committee.
The Audit Committee is responsible for reviewing the services performed by the
Company's independent public accountants and internal audit department and
evaluating the Company's accounting practices and procedures and its system of
internal accounting controls. The Audit Committee consists of Messrs. Charles L.
Crittenden, Sherman B. Lowe, H. Craig Moody and Norman G. Wilbur. During 1999,
the Audit Committee met on two occasions.
The Executive Committee reviews Company policy, major investment activities and
other pertinent transactions of the Company. The Executive Committee consists of
Messrs. George R. Quist, Scott M. Quist, William C. Sargent, and H. Craig Moody.
During 1999, the Executive Committee met on two occasions.
The Compensation Committee is responsible for recommending to the Board of
Directors for approval the annual compensation of each executive officer of the
Company and the executive officers of the Company's subsidiaries, advising
management with respect to compensation levels for key employees, developing
policy in the areas of compensation and fringe benefits, and creating employee
compensation plans. The Compensation Committee consists of Messrs. Charles L.
Crittenden, Sherman B. Lowe and George R. Quist.
<PAGE>
During 1999, no director attended fewer than 75% of the total number of meetings
of the Board of Directors or the total number of meetings held by all committees
of the Board of Directors on which he served.
Perquisites
The Company's Bylaws provide that the Board of Directors shall consist of not
less than 10 nor more than 30 members. The term of office of each director is
for a period of one year or until the election and qualification of his
successor. A director is not required to be a resident of the state of Florida.
The size of the Board of Directors of the Company for the coming year is 10
members. Unless authority is withheld by your Proxy, it is intended that the
common stock represented by your Proxy will be voted for the respective nominees
listed below. If any nominee should not serve for any reason, the Proxy will be
voted for such person as shall be designated by the Board of Directors to
replace such nominee. The Board of Directors has no reason to expect that any
nominee will be unable to serve. There is no arrangement between any of the
nominees and any other person or persons pursuant to which he was or is to be
selected as a director. There is no family relationship between or among any of
the nominees except that Scott M. Quist and G. Robert Quist are sons of George
R. Quist.
Pursuant to the Nasdaq corporate governance requirements recently made
applicable to Nasdaq SmallCap Market companies, the Company must have (i) a
minimum of two independent directors; (ii) an audit committee with a majority of
independent directors; and (iii) an annual stockholders meeting. The Company has
and can presently satisfy each of these requirements. Messrs. Crittenden, Lowe,
McCormick, Moody, Hunter and Wilbur qualify as independent directors.
Board Compensation
During 1998, the directors of the Company received a director's fee of $6,600
per year for serving as directors. Directors of the Company also received the
sum of $275 for each committee meeting attended, if such committee meeting was
not in conjunction with a meeting of the Board of Directors held at the same
time and place. During 1999, the directors received no form of compensation from
the Company for their services as a director. However, the directors of the
Company, except for G. Robert Quist, are also directors of Security National
Financial ("SNFC"), the ultimate parent company of the Company, and are paid a
director's fee by SNFC for their services as a director of SNFC and its
subsidiaries, including serving as a director of the Company.
Executive Compensation
<TABLE>
<CAPTION>
(a) Summary Compensation. The following summary compensation table is
provided with respect to the Company's Chief Executive Officer and its
Executive Vice President, who constitute all of the executive officers of
the Company whose total annual salary and bonus exceed $100,000:
Summary Compensation Table
Annual Compensation Long-Term Compensation
Awards Payouts
Other
Annual Restricted Securities Long-Term All Other
Compen- Stock Underlying Incentive Compensa-
Name and Principal PositionYear Salary($)Bonus($) sation($) (2)Awards($)Options/SARs(#) Payout($) tion($) (3)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
George R. Quist(5) 1999 $0 $0 $0 $0 N/A N/A N/A
George R. Quist(1) 1998 $0 $0 $0 $0 N/A N/A N/A
George Pihakis 1998 $244,800 $0 $13,625(2) $0 N/A N/A $1,050,000 (3)
George Pihakis 1997 $244,800 $0 $11,674(2) $0 N/A N/A N/A
Executive Vice
President
David C. Thompson(5) 1999 $0 $0 $0 $0 N/A N/A N/A
David C. Thompson 1998 $121,275 $0 $13,313(4) $0 N/A N/A N/A
David C. Thompson 1997 $121,275 $0 $14,043(4) $0 N/A N/A N/A
(1) New officers appointed in December 1998 did not receive any
compensation in 1998. (2) During 1998 this amount included $6,350 paid in the
form of a director's fee, and $7,275 paid in the form of a car allowance.
</TABLE>
<PAGE>
During 1997 this amount included $6,600 paid in the form of a director's
fee, $550 paid in the form of an executive committee fee, and $4,524 paid in the
form of a car allowance.
(3) Payment of lump sum settlement under Executive Compensation Agreement.
See "Item (e) Employee Contracts."
(4) During 1998 this amount included $6,350 paid in the form of a
director's fee, $6,000 paid in the form of a car allowance, and $963 paid in the
form of dues at a social club used exclusively for business purposes. During
1997 this amount included $6,600 paid in the form of a director's fee, $550 paid
in the form of an executive committee fee, $6,000 paid in the form of a car
allowance, and $893 paid in the form of dues at a social club used exclusively
for business purposes.
(5) Effective January 1, 1999, the Company entered into an Administrative
Services Agreement with its ultimate parent Security National Financial
Corporation (Security National). Under the terms of the Administrative Services
Agreement, all of the Company's employees became employees of Security National.
Administrative functions previously performed by the Company are now being
furnished to the Company under this Agreement. The Company pays to Security
National $250,000 per month or $3 million per year for the Administrative
services.
Perquisites
(b) Perquisites. Executive officers of the Company who are employees of the
Company are covered under a group life, group disability, and
hospitalization plan that does not discriminate in favor of officers and
that is generally available to all salaried employees. The Company does not
have a pension, retirement or other deferred compensation plan, or any
other similar arrangement.
(c) Director's fees and other fees. Directors of the Company prior to
December 17, 1998 received a director's fee of $6,600 per year for serving
as director of the Company. Each director of the Company also received the
sum of $275 for each committee meeting attended, if such committee meeting
is not in conjunction with a meeting of the Company's Board of Directors
held at the same time and place. New directors elected in December 1998 did
not receive any compensation in 1998 or 1999.
(d) Compensation committee interlocks and insider participation. The
Executive Committee of the Company's Board of Directors makes
recommendation to the Board of Directors concerning the compensation of the
Company's executive officers. Subsequently, the Board of Directors makes
all final decisions concerning such compensation.
(e) Employee contracts. As part of the acquisition by Security National
Financial Corporation ("SNFC") on December 17, 1998 of SSLIC Holding
Company (formerly Consolidare Enterprises, Inc.), SNFC caused the Company
to pay $1,050,000 to George Pihakis, President and Chief Executive Officer
of the Company prior to closing, as a lump sum settlement of the executive
compensation agreement between the Company and Mr. Pihakis.
Administrative Services Agreement
Effective December 17, 1998, the Company entered into an Administrative Services
Agreement with SNFC. Under the terms of the agreement, SNFC has agreed to
provide the Company with certain defined administrative and financial services,
including accounting services, financial reports and statements, actuarial,
policyholder services, underwriting, data processing, legal, building
management, marketing advisory services and investment services. In
consideration for the services to be provided by SNFC, the Company will pay SNFC
an administrative services fee of $250,000 per month, provided, however, that
such fee shall be reduced to zero for so long as the capital and surplus of the
Company is less than or equal to $6,000,000, unless the Company and SNFC
otherwise agree in writing and such agreement is approved by the Florida
Department of Insurance. See "Certain Relationships and Related Transactions."
<PAGE>
Certain Relationships and Related Transactions
Insuradyne Corporation, a wholly-owned subsidiary of Security National Financial
Corporation, serves as general agent for the Company, pursuant to a general
agency agreement, which is terminable by either party with 30 days notice. In
such capacity, Insuradyne receives a commission on the first year commissionable
premium on certain of the Company's policies as well as a small renewal
commission on certain other policies. In accordance with the Florida Insurance
Code, a copy of the Company's General Agency Agreement with Insuradyne
Corporation was filed with and approved by the Florida Department of Insurance.
Management of the Company believes that the terms of its General Agency
Agreement with Insuradyne are as favorable to the Company as terms which could
be obtained from independent third parties. During 1999, gross commissions in
the amount of $175,409 were earned by Insuradyne Corporation. At December 31,
1999, the Company owes $195,785 to Insuradyne as a result of commissions earned
by Insuradyne but for which Insuradyne has not yet requested payment.
The Company continues to be indebted to its parent, SNFC, in the amount of
$1,000,000, pursuant to a promissory note dated December 1988, which bears
interest at the annual rate of interest equal to the prime rate (as hereinafter
defined) plus 2%, with such interest rate not to be less than 9% nor in excess
of 11%. For purposes of this promissory note, prime rate is defined to mean the
prime rate as announced by Compass Bank, Birmingham, Alabama, from time to time,
as its prime rate (which interest rate is only a bench mark, is purely
discretionary and is not necessarily the best or lowest rate charged borrowing
customers). This promissory note is due on demand and is payable out of capital
surplus in excess of $1,900,000, pursuant to Florida Statutes Section 628.401
(1990). Interest and principal can only be repaid upon the express written
approval of the Florida Department of Insurance.
The Company entered into an Administrative Services Agreement dated December 17,
1998, with SNFC. Under the terms of the agreement, SNFC has agreed to provide
the Company with certain defined administrative and financial services,
underwriting, data processing, legal, building management, marketing advisory
services and investment services. In consideration for the services to be
provided by SNFC, the Company shall pay SNFC an administrative services fee of
$250,000 per month, which may be increased, beginning on January 1, 2001, to
reflect increases in Consumer Price Index, over the index amount as of January
1, 2000.
The Administrative Services Agreement shall remain in effect for an initial term
expiring on December 16, 2003. However, the term of the agreement may be
automatically extended for an additional one-year term unless either the Company
or SNFC shall deliver a written notice on or before September 30 of any year
stating to the other its desire not to extend the term of the agreement. SSLIC
Holding Company, a wholly owned subsidiary of Security National Life Insurance
Company, owns 71% of the outstanding shares of common stock of the Company.
Security National Life Insurance Company is a wholly owned subsidiary of SNFC.
In addition, George R. Quist, the Company's President and Chef Executive Officer
is the President and Chief Executive Officer of SNFC; Scott M. Quist, the
Company's First Vice President, General Counsel and Treasurer is the First Vice
President, General Counsel and Treasurer of SNFC; and William C. Sargent, the
Company's Senior Vice President and Secretary is the Senior Vice President and
Secretary of SNFC. Finally, the directors of the Company also serve as the
directors of SNFC.
On December 28, 1998, the Company entered into a Loan Funding and Fee Agreement
and Agency Agreement (the "Agreement") with Security National Mortgage Company
("SNMC"), a subsidiary of SNFC. Under the terms of the Agreement SNMC assigns
their interest in residential mortgage loans that have been pre-sold to third
party investors to the Company. The Company purchases these loans and holds them
as short-term investments until it receives the proceeds from the third-party
investors. The Company receives fee income from SNMC based upon how long the
loans were outstanding. At December 31, 1999 and 1998, the Company had
outstanding loan purchases of $8,595,093 and $3,941,020, respectively. Included
in investment income was $457,861 and $534 for the years ended December 31, 1999
and 1998, respectively.
<PAGE>
The Company received for the year ended December 31, 1999, $219,684 as rental
income from SNFC for a lease of office space in the Company's building under the
terms of the Administrative Services Agreement.
The Company received for the year ended December 31, 1999, $230,639 in interest
income from SNFC for short-term loans of which none were outstanding as of
December 31, 1999.
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth certain information with respect to beneficial
ownership of the Company's Common Stock as of August 31, 2000 for (i) each
executive officer of the Company, (ii) each director, (iii) each person known to
the Company to be the beneficial owner of more than 5% of the outstanding
shares, and (iv) all directors and officers as a group.
Percent of
Name and Address(1) Number of Shares Ownership
SSLIC Holding Company(2)(3) 1,363,266 57.4%
Security National Life Insurance Company(2)(3) 267,770 14.0%
George R. Quist(3) 0 *
William C. Sargent(3) 0 *
Scott M. Quist(3) 0 *
Charles L. Crittenden(3) 0 *
Sherman B. Lowe(3) 0 *
R.A.F. McCormick(3) 0 *
H. Craig Moody(3) 0 *
Robert G. Hunter, M.D.(3) 0 *
Norman G. Wilbur(3) 0 *
G. Robert Quist 0 *
All executive officers and directors
as a group (10 persons)(3) 1,363,266 71.4%
_____________________________
*Represents less than 1% of the outstanding shares of common stock.
(1) The address for SSLIC Holding Company ("SSLIC") is 5300 South 360 West,
Suite 200, Salt Lake City, Utah 84123. The address for George Quist is 4491
Wander Lane, Salt Lake City, Utah 84117. The address for Mr. Sargent is
4974 Holladay Blvd., Salt Lake City, Utah 84117. The address for Scott
Quist is 7 Wanderwood Way, Sandy, Utah 84092. The address for Mr.
Crittenden is 2334 Filmore Avenue, Ogden, Utah 84401. The address for Mr.
Lowe is 2197 South 2100 East, Salt Lake City, Utah 84109. The address for
Mr. McCormick is 400 East Crestwood Road, Kaysville, Utah 84037. The
address for Mr. Moody is 1782 East Faunsdale Drive, Sandy, Utah 84092. The
address for Mr. Wilbur is 2520 Horseman Drive, Plano, Texas 75025. The
address for Dr. Hunter is 2 Ravenwood Lane, Sandy, Utah 84092. The address
for Robert Quist is 2678 South Cave Hollow Way, Bountiful, Utah 84010.
(2) SSLIC is a wholly owned subsidiary of Security National Life Insurance
Company ("Security National Life").
(3) Each of the directors of the Company, except for G. Robert Quist, are
directors of SSLIC and Security National Life, and accordingly, exercise
shared voting and investment power with respect to the shares of the
Company's common stock beneficially owned by SSLIC and Security National
Life, respectively.
RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
PROPOSAL 2
The Company retained Tanner + Co. as its independent auditors and replaced Ernst
& Young LLP effective December 1, 1999. The Company retained Ernst & Young LLP
as its independent auditors and replaced KPMG Peat Marwick LLP effective
February 21, 1999. No report of KPMG Peat Marwick LLP or Ernst & Young LLP on
the financial statements of the Company for either of the past two years
contained an adverse opinion, or disclaimer of opinion, or was qualified
<PAGE>
or modified as to uncertainty, audit scope, or accounting principles. Since the
engagement of KPMG Peat Marwick LLP and Ernst & Young, LLP for the Company's two
most recent fiscal years and through the date of replacement, there were no
disagreements between the Company and KPMG Peat Marwick LLP and Ernst and Young,
LLP on any matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure. The change in independent
accountants was approved by the Company's Board of Directors and disclosed in a
Form 8-K, which was filed with the Securities and Exchange Commission on
December 21, 1999. Reference is made to current reports on Forms 8-K dated
December 21, 1999.
ADDITIONAL INFORMATION
The Company will provide without charge to any person from whom a Proxy is
solicited by the Board of Directors, upon the written request of such person, a
copy of the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1999, excluding certain exhibits thereto, as filed with the
Securities and Exchange Commission. Written requests for such information should
be directed to William C. Sargent, Senior Vice President and Secretary, Southern
Security Life Insurance Company, 755 Rinehart Road, Lake Mary, Florida 32746.
OTHER MATTERS
As of the date of this Proxy Statement, the Company knows of no business that
will be presented for consideration at the Annual Meeting other than the items
referred to above. However, if any other matters are properly brought before the
meeting, it is the intention of the persons named as proxies in the accompanying
Proxy to vote the shares they represent on such business in accordance with
their best judgment. In order to assure the presence of the necessary quorum and
to vote on the matters to come before the Annual Meeting, please indicate your
choices on the enclosed Proxy and date, sign and return it promptly in the
postage pre-paid envelope provided. The signing and delivery of a Proxy by no
means prevents you from attending the Annual Meeting.
By order of the Board of Directors,
William C. Sargent
Senior Vice President
and Corporate Secretary
September 10, 2000
<PAGE>
PROXY - SOUTHERN SECURITY LIFE INSURANCE COMPANY - PROXY
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
COMMON STOCK
The undersigned Common Stockholder of Southern Security Life Insurance Company
(the "Company") acknowledges receipt of the Notice of Annual Meeting of the
Stockholders to be held on October 25, 2000, at 755 Rinehart Drive, Lake Mary,
Florida, at 10:30 a.m. Eastern Daylight Time, and hereby appoints Messrs. George
R. Quist, William C. Sargent and Scott M. Quist, or any of them, each with full
power of substitution, as attorneys and proxies to vote all the shares of the
undersigned at said Annual Meeting of Stockholders and at all adjournments or
postponements thereof, hereby ratify and confirm all that said attorneys and
proxies may do or cause to be done by virtue hereof. The above-named attorneys
and proxies are instructed to vote all of the undersigned's shares as follows:
1. To elect ten directors to be voted upon by the common stockholders together:
[ ]- FOR all nominees listed below (except as marked to the contrary below)
[ ]- WITHHOLD AUTHORITY to vote for all nominees listed below.
(INSTRUCTION: to withhold authority to vote for any individual nominee, strike a
line through that nominee's name in the list below.)
Charles L. Crittenden, Robert G. Hunter, Sherman B. Lowe, R.A.F. McCormick,
H. Craig Moody, George R. Quist, G. Robert Quist, Scott M. Quist, William C.
Sargent and Norman G. Wilbur
[ ] FOR [ ] AGAINST
2. To ratify the appointment of Tanner + Co. as the Company's independent
accountants for the fiscal year ending December 31, 2000;
[ ] FOR [ ] AGAINST
3. To transact such other business as may properly come before the meeting or
any adjournment thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED HEREIN BY THE
UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR
THE NOMINEES LISTED IN PROPOSAL 1 AND FOR PROPOSAL 2.
Dated __________________, 2000
__________________________________________________
Signature of Stockholder
__________________________________________________
Signature of Stockholder
Please sign your name exactly as it appears on your share certificate. If shares
are held jointly, each holder should sign. Executors, trustees, and other
fiduciaries should so indicate when signing. Please sign, date, and return this
Proxy Card immediately.
NOTE: Securities dealers or other representatives please state the number of
shares voted by this Proxy.
