SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No. _____)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as
permitted by Rule 14a-6(e)(2))
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240.14a-11(c) or
ss.240.14a-12
Surety Capital Corporation
------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-
6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction
applies: _________________________________________________
(2) Aggregate number of securities to which transaction
applies: _________________________________________________
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how
it was determined): ______________________________________
(4) Proposed maximum aggregate value of transaction: _________
(5) Total fee paid: __________________________________________
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or
Schedule and the date of its filing.
(1) Amount Previously Paid: __________________________________
(2) Form, Schedule or Registration Statement No.: ____________
(3) Filing Party: ____________________________________________
(4) Date Filed: ______________________________________________
<PAGE>
SURETY CAPITAL CORPORATION
1501 Summit Avenue
Fort Worth, Texas 76102
__________________
Notice of Annual Meeting of Stockholders
To Be Held July 12, 2000
__________________
To the Stockholders of
SURETY CAPITAL CORPORATION:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
Surety Capital Corporation, a Delaware corporation (the "Company"), will be
held at 4:00 p.m. local time at Surety Bank, National Association, 1501
Summit Avenue, Fort Worth, Texas 76102, on Wednesday, July 12, 2000, for the
following purposes:
1. To elect the eight (8) persons listed in the Proxy
Statement dated June 9, 2000, accompanying this Notice, to serve
as Directors of the Company;
2. To consider and act upon the ratification of the
appointment of Fisk & Robinson, P.C. as the Company's independent
public accountants for the 2000 fiscal year; and
3. To transact such other business as may properly come
before the Annual Meeting of Stockholders or any adjournment(s)
thereof.
The Board of Directors has fixed the close of business on May
15, 2000 as the Record Date for the determination of stockholders entitled
to notice of and to vote at this meeting and any adjournment(s) thereof.
Only stockholders of record at the close of business on the Record Date are
entitled to notice of and to vote at the meeting. A complete list of such
stockholders will be available for inspection at the offices of the Company
in Fort Worth, Texas, during regular business hours for a period of ten
days before the meeting.
All stockholders are cordially invited to attend the meeting.
Stockholders are urged, whether or not they plan to attend the meeting, to
complete, date and sign the accompanying proxy and to return it promptly in
the enclosed postage-paid return envelope. You may revoke the proxy at any
time before the proxy is exercised by delivering written notice of revocation
to the Secretary of the Company, by delivering a subsequently dated proxy, or
by attending the meeting and withdrawing the proxy.
By Order of the Board of Directors,
/s/ Lloyd W. Butts
------------------------------
Lloyd W. Butts, President
Fort Worth, Texas
June 9, 2000
<PAGE>
SURETY CAPITAL CORPORATION
1501 Summit Avenue
Fort Worth, Texas 76102
PROXY STATEMENT
for
ANNUAL MEETING OF STOCKHOLDERS
To be Held on July 12, 2000
INTRODUCTION
This Proxy Statement is furnished to the stockholders of
Surety Capital Corporation (the "Company") in connection with
the solicitation by the Board of Directors of the Company (the
"Board") of proxies to be used at the Annual Meeting of
Stockholders of the Company to be held at 4:00 p.m. local time at
Surety Bank, National Association, 1501 Summit Avenue, Fort
Worth, Texas 76102, on Wednesday, July 12, 2000 and at any
adjournment or adjournments thereof. Proxies in the form
enclosed will be voted at the meeting if properly executed,
returned to the Company prior to the meeting and not revoked.
The approximate date on which this Proxy Statement and the
accompanying proxy card are being sent to stockholders is June 9,
2000.
REVOCABILITY OF PROXY
Your proxy may be revoked at any time before it is voted by
delivering written notice of revocation to the Secretary of the
Company, by delivering a subsequently dated proxy or by attending
the meeting and withdrawing the proxy. Your attendance at the
meeting will not constitute automatic revocation of the proxy.
ACTION TO BE TAKEN AT THE MEETING
The accompanying proxy, unless the stockholder otherwise
specifies in the proxy, will be voted (1) for the election as
directors of the nominees listed under "Election of Directors,"
(2) for the ratification of the appointment of Fisk & Robinson,
P.C. as the Company's independent public accountants for the 2000
fiscal year, and (3) at the discretion of the proxy holders, on
any other matter that may properly come before the meeting or any
postponements or adjournments thereof.
Where stockholders have appropriately specified how their
proxies are to be voted, they will be voted accordingly. If any
other matter of business is brought before the meeting, the proxy
holders may vote the proxies at their discretion. The directors
do not know of any such other matter or business.
PERSONS MAKING THE SOLICITATION
The accompanying proxy is being solicited by the Board of
Directors of the Company. The cost of soliciting your proxy will
be borne entirely by the Company and no other person or persons
will bear such costs either directly or indirectly. In addition
to the use of the mails, proxies may be solicited by personal
interview, telephone and telegram by directors, officers and
employees of the Company.
OUTSTANDING SHARES AND VOTING RIGHTS
The Board has fixed the close of business on May 15, 2000 as
the record date (the "Record Date") for the determination of
stockholders entitled to notice of and to vote at the Annual
Meeting. Only stockholders of record on the Record Date are
entitled to notice of and to vote at the Annual Meeting or any
adjournment(s) thereof. At the close of business on the Record
Date, there were 5,895,235 shares of common stock, $0.01 par
value (the "Common Stock"), of the Company issued and
outstanding.
<PAGE>
QUORUM AND VOTING
The presence, in person or by proxy, of the holders of a
majority of the outstanding shares of Common Stock is necessary
to constitute a quorum at the meeting. In deciding all
questions, a holder of Common Stock is entitled to one vote, in
person or by proxy, for each share held in his or her name on the
Record Date. At all meetings of the stockholders, except where
the provision is made by law or by the Company's Certificate of
Incorporation or Bylaws, all matters shall be decided by the vote
of a majority of the votes cast by the stockholders present in
person or by proxy and entitled to vote thereon. Abstentions
will be included in vote totals and, as such, will have the same
effect on each proposal other than the election of directors as a
negative vote. Broker non-votes, if any, will not be included in
vote totals and, as such, will have no effect on any proposal.
BOARD OF DIRECTORS
It is the primary responsibility of the Company's Board of
Directors to oversee the management of the business of the
Company and its subsidiary, Surety Bank, National Association
(the "Bank"). To assist in carrying out its responsibilities,
the Board of Directors has established two standing committees
which are described below.
Audit Committee: The members of the Audit Committee are
William B. Byrd, Margaret E. Holland, Michael L. Milam, Garrett
Morris and Cullen W. Turner, who serves as chairman.
Included among the functions performed by the Audit Committee
are (i) meeting with the independent public accountants of the
Company to review the annual audit and its results, (ii)
implementing internal audit controls and procedures of the
Company and the Bank, and (iii) making recommendations to the
Board as to the engagement of the independent public accountants
of the Company. The Audit Committee did not meet separately in
1999, and met once in connection with a meeting of the Board of
Directors.
Compensation Committee: The members of the Compensation
Committee are William B. Byrd, Cullen W. Turner and Margaret E.
Holland, who serves as chairman.
Included among the functions performed by the Compensation
Committee are (i) the administration of the Company's 1988, 1995
and 1998 Incentive Stock Option Plans, the 1996 Stock Option Plan
for Directors, the 1997 Non-Qualified Stock Option Plan for Non-
Employee Directors and the 1997 Non-Qualified Stock Option Plan
for Officers and Key Employees, (ii) ensuring the reasonableness
and appropriateness of senior management compensation
arrangements and levels, and (iii) overseeing director
compensation arrangements. (See "EXECUTIVE COMPENSATION AND
OTHER INFORMATION: Option Exercises and Holdings" and "BOARD OF
DIRECTORS: Directors' Fees and Compensation.") The Compensation
Committee did not meet separately in 1999, and met once in
connection with a meeting of the Board of Directors.
Directors' Fees and Compensation
In February 1997 the Company began to hold combined meetings
of the Board and the Bank Board. In January and February 1999
the Bank paid each director $1,000, and effective March 1, 1999
the Bank pays each director $500 for attendance at each combined
meeting. The total amount paid as directors' fees in the fiscal
year ended December 31, 1999 was $72,000.
-2-
<PAGE>
The Company has adopted the 1996 Stock Option Plan for
Directors (the "1996 Directors Plan") and the 1997 Non-
Qualified Stock Option Plan for Non-Employee Directors (the
"1997 Directors Plan"). Under the 1996 and 1997 Directors
Plans an aggregate of 250,000 shares of Common Stock of the
Company were set aside for issuance pursuant to the exercise of
options granted thereunder, of which 200,000 shares are subject
to outstanding options and 44,000 shares remain available for
grant. The 1996 Directors Plan is a formula plan pursuant to
which annual options are automatically granted to directors of
the Company who are not employees of the Company or the Bank at
fair market value. All options under the 1996 Directors Plan are
non-qualified stock options, and vest one year following the date
of grant. On the first business day of calendar each year, each
non-employee director is automatically granted an option to
purchase 2,000 shares of Common Stock of the Company at 100% of
fair market value on the grant date. In 1999 each non-employee
director of the Company received an option to purchase 2,000
shares of Common Stock of the Company at an exercise price of
$2.125 per share. The 1997 Directors Plan provides for the one
time grant of 25,000 non-qualified stock options to directors of
the Company who were not employees of the Company or the Bank at
fair market value. In 1997 each non-employee director of the
Company received an option to purchase 25,000 shares of Common
Stock of the Company at exercise prices ranging from $4.18 to
$5.375 per share. These options vest over five years.
Attendance at Board and Committee Meetings
During fiscal year 1999 there were sixteen (16) meetings of
the Board and no separate meetings of the Audit Committee or of
the Compensation Committee. Each director attended at least 75%
of the total number of meetings of the Board and each committee
of the Board of which he or she was a member during fiscal year
1999.
PROPOSAL NO. 1:
ELECTION OF DIRECTORS
The bylaws of the Company provide that the Board shall
consist of such number of directors as shall be determined by
resolution of the Board. By a resolution adopted by the Board on
May 1, 2000, the number of directors comprising the Board was set
at eight (8). The Board has nominated the eight (8) individuals
named below to serve as directors of the Company.
Names of the nominees for directors and other information
about them appears in the following table. All of the nominees
have consented to serve if elected. If for any unforeseen reason
a nominee is unable to serve if elected, the persons named in the
accompanying proxy may exercise their discretion to vote for a
substitute nominee selected by the Board. However, the Board has
no reason to anticipate that any of the nominees will not be able
to serve, if elected.
Name Age Position
Charles M. Ireland 52 Chairman of the Board, Chief
Executive Officer and Director
Lloyd W. Butts 59 President and Director
Richard N. Abrams 58 Director
William B. Byrd 68 Director
Margaret E. Holland 47 Director
Michael L. Milam 47 Director
Garrett Morris 84 Director
Cullen W. Turner 59 Director
-3-
<PAGE>
The business experience of each of these directors and
executive officers during the past five (5) years is set forth
below:
Charles M. Ireland has served as Chairman of the Board and
Chief Executive Officer of the Company since September 1999, and
has served as a director of the Company since August 1999. Mr.
Ireland has also served as President of the Bank since July 1999,
and has served as a director of the Bank since August 1999. He
was previously employed by Landmark Bank from August 1997 to July
1999, most recently as Senior Vice President/Senior Lender in its
Denison, Texas banking facility. From December 1985 to July 1997
Mr. Ireland served as a Senior Vice President of NationsBank,
Texas N.A.
Lloyd W. Butts has served as President and as a director of
the Company since September 1999. Mr. Butts has also served as
Vice Chairman and as a director of the Bank since September 1999.
He previously served as Senior Vice President of the Bank from
December 1994 to September 1999. Mr. Butts was previously
President, Chief Executive Officer and a director of First
National Bank, Whitesboro, Texas from its formation in 1984 until
its merger with and into the Bank in December 1994.
Richard N. Abrams has served as a director of the Company
since May 2000. He has served as Chairman of the Board and Chief
Executive Officer of Funeral Financial Systems, Ltd. (a factor to
the funeral industry) since August 1985 and of Executive Offices,
Ltd. (a shared office building) since October 1986, and as
Chairman of the Board of Funeraleasing, Ltd. (a leasing company
for the funeral industry) since December 1998 and of
EZFunerals.net (a business to business internet company) since
February 2000. Mr. Abrams is a certified public accountant. Mr.
Abrams has served as a director of the Bank since March 2000.
William B. Byrd has served as a director of the Company
since April 1993. He has been involved in personal investment
activities, real estate brokerage and management, and ranching
for the past five years. Mr. Byrd has served as a director of
the Bank since January 1994.
Margaret E. Holland has served as a director of the Company
since September 1997. She has been a partner in the law firm of
Holland, Johns & Schwartz, L.L.P. (formerly Tracy & Holland,
L.L.P.) since October 1992. Ms. Holland has served as a director
of the Bank since September 1997.
Michael L. Milam has served as a director of the Company
since May 1994. He has been president of Dallas Fire Insurance
Company, a licensed Texas stock insurance company, since December
1988. Mr. Milam has served as a director of the Bank since May
1994.
Garrett Morris has served as a director of the Company since
May 1994. He has been a practicing attorney since 1942. Mr.
Morris has served as a director of the Bank since May 1994.
Cullen W. Turner has served as a director of the Company
since March 1987. He has been involved in personal investment
activities for the past five years. Mr. Turner has served as a
director of the Bank since December 1993.
No family relationships exist among the executive officers
and directors of the Company.
No director presently holds any other directorships in
companies with a class of securities registered pursuant to
Section 12 of the Securities Exchange Act of 1934 or subject to
the requirements of Section 15 of that act.
The affirmative vote of the holders of a majority of the
issued and outstanding shares of Common Stock represented and
entitled to vote at the Annual Meeting or any adjournment(s)
thereof is necessary for the election of directors. Assuming the
receipt by each such person of the affirmative vote of at least a
majority of the shares of Common Stock represented at the Annual
Meeting, the eight (8) persons receiving the greatest number of
votes will be elected as directors.
-4-
<PAGE>
THE BOARD RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" THE
ELECTION AS DIRECTORS OF THE EIGHT (8) PERSONS NAMED UNDER
"PROPOSAL NO. 1: ELECTION OF DIRECTORS."
PROPOSAL NO. 2:
APPROVAL OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
Subject to approval by the stockholders, the Board has
selected Fisk & Robinson, P.C. as independent public accountants
of the Company for its fiscal year ending December 31, 2000.
Fisk & Robinson, P.C. has acted in such capacity for the Company
since June 1999 and has reported that neither the firm nor any of
its partners has any material direct or indirect financial
interest in the Company, other than as independent public
accountants.
Representatives of Fisk & Robinson, P.C. will be present at
the Annual Meeting of Stockholders with the opportunity to make a
statement if they desire to do so and are expected to be
available to respond to appropriate questions.
The affirmative vote of the holders of a majority of the
issued and outstanding shares of Common Stock represented and
entitled to vote at the Annual Meeting or any adjournment(s)
thereof is necessary for the approval of the appointment of Fisk
& Robinson, P.C. as independent public accountants of the Company
for its fiscal year ending December 31, 2000.
THE BOARD RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" THE
APPROVAL OF THE APPOINTMENT OF FISK & ROBINSON, P.C. AS
INDEPENDENT PUBLIC ACCOUNTANTS OF THE COMPANY FOR ITS FISCAL YEAR
ENDING DECEMBER 31, 2000.
ACTION TO BE TAKEN UNDER THE PROXY
The accompanying proxy will be voted "FOR" the election of
the eight (8) persons recommended by the Board and named under
"PROPOSAL NO. 1: ELECTION OF DIRECTORS" as nominees for
directors of the Company and "FOR" approval of the appointment
of Fisk & Robinson, P.C. as the independent accountants of the
Company for its fiscal year ending December 31, 2000, unless the
proxy is marked in such an manner as to withhold authority to so
vote.
The accompanying proxy will also be voted in connection with
the transaction of such other business as may properly come
before the Annual Meeting of Stockholders, or any adjournment or
adjournments thereof. Management knows of no other matters to be
considered at the Annual Meeting of Stockholders. If, however,
any other matters properly come before the Annual Meeting of
Stockholders, or any adjournment or adjournments thereof, the
persons named in the accompanying proxy will vote such proxy in
accordance with their best judgment on any such matter. The
persons named in the accompanying proxy will also, if in their
judgment it is deemed advisable, vote to adjourn the meeting from
time to time.
-5-
<PAGE>
STOCK OWNERSHIP
By Management
The following table shows beneficial ownership of shares of
Common Stock of the Company by all current directors, nominees
for director and executive officers of the Company named under
the caption "EXECUTIVE COMPENSATION AND OTHER INFORMATION,"
individually, and, together with all current executive officers
of the Company as a group, as of May 1, 2000:
<TABLE>
<CAPTION>
______________________________________________________________________________
Amount and
Name of Individual Nature of
or Number of Beneficial Percent
Persons In Group Ownership (1) of Class (2)
------------------------------------------------------------------------------
<S> <C> <C>
Charles M. Ireland 11,250 shares (3) *
Lloyd W. Butts 15,750 shares (4) *
John D. Blackmon 2,000 shares (5) *
Richard N. Abrams 516,800 shares (6) 8.77%
William B. Byrd 43,050 shares (7) *
Margaret E. Holland 30,500 shares (8) *
Michael L. Milam 76,250 shares (9) 1.29%
Garrett Morris 50,750 shares (10) *
Cullen W. Turner 186,600 shares (11) 3.15%
All directors and 932,950 shares (12) 15.55%
executive officers as
a group (9 persons)
-----------------------------
</TABLE>
* Less than 1% of all the issued and outstanding shares of
Common Stock.
(1) Based on information furnished by persons named and,
except as otherwise indicated below, each person has sole voting
and dispositive power with respect to all shares of Common Stock
owned by such person.
(2) Based on 5,895,235 shares of Common Stock issued and
outstanding at May 1, 2000, as adjusted for shares convertible or
exercisable within sixty (60) days which are deemed outstanding
for a specific stockholder pursuant to Rule 13d-3(d)(1) under the
Securities Exchange Act of 1934.
(3) Includes 11,250 shares of Common Stock owned of record.
(See "EXECUTIVE COMPENSATION AND OTHER INFORMATION: Option
Exercises and Holdings.")
(4) Includes 15,750 shares of Common Stock owned of record.
(5) Includes 2,000 shares of Common Stock owned of record.
-6-
<PAGE>
(6) Includes 440,000 shares of Common Stock owned of record
and 76,800 shares of Common Stock owned by Mr. Abrams' son.
(7) Includes 22,050 shares of Common Stock owned of record;
6,000 shares of Common Stock which Mr. Byrd has the right to
acquire within sixty (60) days from the date hereof pursuant to
options granted to him under the 1996 Stock Option Plan for
Directors of the Company; and 15,000 shares of Common Stock which
Mr. Byrd has the right to acquire within sixty (60) days from the
date hereof pursuant to options granted to him under the 1997
Non-Qualified Stock Option Plan for Non-Employee Directors of the
Company. (See "BOARD OF DIRECTORS: Directors' Fees and
Compensation.")
(8) Includes 11,500 shares of Common Stock owned of record;
4,000 shares of Common Stock which Ms. Holland has the right to
acquire within sixty (60) days from the date hereof pursuant to
options granted to her under the 1996 Stock Option Plan for
Directors of the Company; and 15,000 shares of Common Stock which
Ms. Holland has the right to acquire within sixty (60) days from
the date hereof pursuant to options granted to her under the 1997
Non-Qualified Stock Option Plan for Non-Employee Directors of the
Company. (See "BOARD OF DIRECTORS: Directors' Fees and
Compensation.")
(9) Includes 18,250 shares of Common Stock owned of record;
35,000 shares of Common Stock held by Dallas Fire Insurance
Company, which is a wholly-owned subsidiary of a corporation in
which Mr. Milam has a 50% ownership interest; 8,000 shares of
Common Stock which Mr. Milam has the right to acquire within
sixty (60) days from the date hereof pursuant to options granted
to him under the 1996 Stock Option Plan for Directors of the
Company; and 15,000 shares of Common Stock which Mr. Milam has
the right to acquire within sixty (60) days from the date hereof
pursuant to options granted to him under the 1997 Non-Qualified
Stock Option Plan for Non-Employee Directors of the Company.
(See "BOARD OF DIRECTORS: Directors' Fees and Compensation.")
(10) Includes 31,750 shares of Common Stock owned of record;
4,000 shares of Common Stock which Mr. Morris has the right to
acquire within sixty (60) days from the date hereof pursuant to
options granted to him under the 1996 Stock Option Plan for
Directors of the Company; and 15,000 shares of Common Stock which
Mr. Morris has the right to acquire within sixty (60) days from
the date hereof pursuant to options granted to him under the 1997
Non-Qualified Stock Option Plan for Non-Employee Directors of the
Company. (See "BOARD OF DIRECTORS: Directors' Fees and
Compensation.")
(11) Includes 108,600 shares of Common Stock owned of
record; 55,000 shares of Common Stock held by a trust for which
Mr. Turner serves as trustee; 8,000 shares of Common Stock which
Mr. Turner has the right to acquire within sixty (60) days from
the date hereof pursuant to options granted to him under the 1996
Stock Option Plan for Directors of the Company; and 15,000 shares
of Common Stock which Mr. Turner has the right to acquire within
sixty (60) days from the date hereof pursuant to options granted
to him under the 1997 Non-Qualified Stock Option Plan for Non-
Employee Directors of the Company. (See "BOARD OF DIRECTORS:
Directors' Fees and Compensation.")
(12) Includes 30,000 shares of Common Stock of the Company
currently exercisable pursuant to the Company's 1996 Stock Option
Plan for Directors and 75,000 shares of Common Stock of the
Company currently exercisable pursuant to the Company's 1997 Non-
Qualified Stock Option Plan for Non-Employee Directors.
-7-
<PAGE>
By Others
The following table sets forth certain information with
respect to stockholders of the Company who were known to be
beneficial owners of more than five percent (5%) of the issued
and outstanding shares of the Common Stock of the Company as of
May 1, 2000:
<TABLE>
<CAPTION>
______________________________________________________________________________
Amount and Nature
Name and Address of Beneficial Percent
of Beneficial Owner Ownership(1) of Class(2)
------------------------------------------------------------------------------
<S> <C> <C>
Carlson Capital, L.P. 519,300 shares 8.81%
301 Commerce Street, Suite 3300
Fort Worth, Texas 76102
Pine Capital Management, Incorporated 536,672 shares(3) 9.10%
353 Sacramento Street, 10th Floor
San Francisco, California 94111
------------------------------
</TABLE>
(1) Based on information furnished by the entities named
and, except as otherwise indicated below, each entity has sole
voting and dispositive power with respect to all shares of Common
Stock owned by such entity.
(2) Based on 5,895,235 shares of Common Stock issued and
outstanding at May 1, 2000, as adjusted for shares convertible or
exercisable within sixty (60) days which are deemed outstanding
for a specific stockholder pursuant to Rule 13d-3(d)(1) under the
Securities Exchange Act of 1934.
(3) Pine Capital Management, Incorporated has shared
dispositive power with its clients, none of which own over five
percent (5%) of the issued and outstanding shares of the Company,
and no voting power with respect to these shares.
Compliance With Section 16(a)
Section 16(a) of the Securities Exchange Act of 1934, as
amended, requires the Company's directors, executive officers and
holders of more than ten percent (10%) of the Common Stock to
file with the Securities and Exchange Commission (the "SEC")
and the American Stock Exchange ("AMEX") (until April 3, 2000,
on which date the Company's Common Stock was delisted from
trading on AMEX) initial reports of ownership and reports of
changes in ownership of the Common Stock. Such persons are
required by SEC regulations to furnish the Company with copies of
all Section 16(a) reports they file with the SEC.
Based solely on the Company's review of the copies of such
forms it has received during the year, the Company believes that
during the year ended December 31, 1999, all the Company's
directors, executive officers and holders of more than ten
percent (10%) of the Common Stock complied with all Section 16(a)
filing requirements except for the late filing by Lloyd W. Butts
and Charles M. Ireland of their initial reports on Form 3. To
the best knowledge of management of the Company, during fiscal
year 1999 no director, officer or ten percent (10%) beneficial
owner of Common Stock of the Company failed to file with the SEC
and AMEX any required reports on Form 3, 4 or 5 regarding
transactions in securities of the Company.
-8-
<PAGE>
EXECUTIVE COMPENSATION AND OTHER INFORMATION
Summary of Cash and Certain Other Compensation
The following table provides certain summary information
concerning compensation paid or accrued by the Company and the
Bank to or on behalf of each individual who served as the
Company's Chairman of the Board and Chief Executive Officer
during the Company's last fiscal year and the one other most
highly compensated executive officer of the Company (determined
as of the end of the last fiscal year) (hereinafter referred to
as the "named executive officers") for the fiscal years ended
December 31, 1999, 1998 and 1997:
SUMMARY COMPENSATION TABLE
Annual Compensation
<TABLE>
<CAPTION>
__________________________________________________________________________________
All Other
Name and Compensation
Principal Position Year Salary($)(1) Bonus($) ($)(2)
----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Bobby W. Hackler 1999 $ 14,073 $0 $ 130,038(4)
Chairman of the Board and 1998 $ 137,800 $0 $ 2,500
Chief Executive Officer of 1997 $ 123,301 $0 $ 2,318
the Company; Chairman of
the Board, Chief Executive
Officer and President of
the Bank (3)
C. Jack Bean 1999 $ 85,300 $0 $ 22,693(6)
Chairman of the Board and 1998 $ 121,667 $0 $ 30,700(7)
Chief Executive Officer of 1997 $ 157,200 $0 $ 2,318
the Company; Chairman of
the Board of the Bank (5)
Robert L. Bintliff 1999 $ 37,000 $0 $ 1,988(9)
Vice Chairman, Chief
Executive Officer and Chief
Financial Officer of the
Company; Chief Executive
Officer and Chief Financial
Officer of the Bank (8)
Charles M. Ireland 1999 $ 44,250 $20,000 $ 3,000(11)
Chairman of the Board and
Chief Executive Officer of
the Company; President and
Chief Executive Officer of
the Bank (10)
Lloyd W. Butts 1999 $ 109,150 $ 5,000 $ 13,075(13)
President of the Company;
Vice Chairman of the
Bank (12)
-------------------------
</TABLE>
(1) Includes salary and directors' fees paid by the Bank,
before any salary reduction for contributions to the Bank's
Savings Plan under Section 401(k) of the Internal Revenue Code of
1986, as amended (the "Code").
-9-
<PAGE>
(2) The amounts shown in this column consist of matching
contributions under the Bank's Savings Plan under Section 401(k)
of the Code, which was adopted by the Bank in 1993, unless other-
wise indicated.
(3) Mr. Hackler served as Vice Chairman and Chief Operating
Officer of the Company and as Vice Chairman, President and Chief
Executive Officer of the Bank until August 1998, when he was
elected to the positions indicated in the table upon Mr. Bean's
retirement. Mr. Hackler resigned these positions in February
1999.
(4) Includes $129,750 representing payment in full under
the Executive Deferred Compensation Agreement between the Company
and Mr. Hackler.
(5) Mr. Bean served in these positions from 1988 to August
1998 and from February 1999 to September 1999.
(6) Includes $19,287 paid as compensation and $3,406 paid
as reimbursement of medical expenses to Mr. Bean under the Post
Retirement Services Agreement.
(7) Includes $1,200 for a matching contribution under the
Bank's Savings Plan under Section 401(k) of the Code and $29,500
representing the fair market value of an automobile gifted to Mr.
Bean by the Bank upon his retirement.
(8) Mr. Bintliff became an employee of the Company in
February 1999 and served in these positions from May 1999 to June
1999.
(9) Represents $1,500 for an automobile allowance and $488
for club membership.
(10) Mr. Ireland became an employee of the Company in July
1999 and was elected to these positions in September 1999.
(11) Represents $3,000 for an automobile allowance.
(12) Mr. Butts became an employee of the Company in December
1994 and was elected to these positions in September 1999.
(13) Includes $10,650 for an automobile allowance.
Stock Option Plans
Option Grants. The following table provides information on
stock options granted in fiscal year 1999 to the named executive
officers:
-10-
<PAGE>
<TABLE>
<CAPTION>
OPTION GRANTS IN FISCAL YEAR 1999(1)
----------------------------------------------------------------------------------
| Potential
| Realizable Value
| at Assumed Annual
| Rates of Stock
| Price Appreciation
Individual Grants | for Option Term
-------------------------------------------------------------------------------------------------------
Number of Percent |
Securities of Total |
Underlying Options Exercise |
Options Granted to or Base |
Granted Employees in Price Expiration |
Name (#) Fiscal Year ($/Sh)(2) Date | 5%($)(3) 10%($)(3)
------------------ ---------- ------------ --------- ---------- | -------- ---------
<S> <C> <C> <C> <C> | <C> <C>
Bobby W. Hackler 0 0 $0 n/a | n/a n/a
C. Jack Bean 2,000(4) 0.30% $2.125 01-04-09 | $ 2,673 $ 6,773
100,000 14.77% $1.3125 04-21-09 | $85,542 $209,179
Robert L. Bintliff 100,000 14.77% $1.3125 n/a | n/a n/a
Charles M. Ireland 100,000 14.77% $1.1875 08-24-09 | $74,681 $189,257
Lloyd W. Butts 20,000 2.95% $1.3125 04-21-09 | $16,508 $ 41,836
----------------------------
</TABLE>
(1) This table reflects incentive stock options covering
200,000 shares of Common Stock granted on April 21, 1999 under
the 1998 Incentive Stock Option Plan of Surety Capital
Corporation (the "1998 Plan"), incentive stock options covering
100,000 shares of Common Stock granted on August 24, 1999 under
the 1998 Plan, and options covering 2,000 shares of Common Stock
granted on January 4, 1999 under the 1996 Stock Option Plan for
Directors (the "1996 Plan") to the named executive officers.
The 100,000 options granted to Mr. Bintliff terminated on June
24, 1999, the date of termination of Mr. Bintliff's employment
with the Company and the Bank. Of the remaining options granted
under the 1998 Plan, 100,000 vested on the date of grant and
100,000 will vest one-third one year from the date of grant, two-
thirds two years from the date of grant, and one hundred percent
(100%) three years from the date of grant. The options granted
under the 1996 Plan vested in full one year from the date of
grant. The options have been granted for a term of ten years,
subject to earlier termination upon the occurrence of certain
events related to termination of employment.
(2) Based on 100% of the fair market value of the shares
underlying options on the date of grant.
(3) The dollar amounts under these columns are the result
of calculations of the potential realizable value under the 5%
and 10% rates set by the Securities and Exchange Commission. The
assumed appreciation rates of 5% and 10% (compounded annually on
the $2.125, $1.3125 and $1.1875 market value at the date of
grant) from the date of grant are not intended to forecast
possible future appreciation, if any, of the Company's stock
price. These amounts show potential realizable value of the
options at the end of the ten year term.
(4) These options were granted on January 4, 1999 under the
1996 Plan for Directors when Mr. Bean was not employed by the
Company or the Bank.
-11-
<PAGE>
Option Exercises and Holdings. The following table provides
information with respect to the named executive officers
concerning the exercise of incentive stock options during the
last fiscal year and unexercised incentive stock options held as
of the end of the last fiscal year under the Stock Option Plans:
AGGREGATED OPTION EXERCISES
IN LAST FISCAL YEAR
AND FY-END OPTION VALUES
<TABLE>
<CAPTION>
-----------------------------------------------
| Value of
| Number of Unexercised
| Unexercised In-the-Money
| Options at Options at
| FY-End(#) FY-End($)
| -------------- ----------------
Shares Value |
Acquired Realized| Exercisable/ Exercisable/
Name on Exercise(#) ($)(1) | Unexercisable Unexercisable(2)
----------------- -------------- --------| -------------- ----------------
<S> <C> <C> | <C> <C>
Bobby W. Hackler 0 $0 | 75,000/50,000 $0/$0
C. Jack Bean 0 $0 | 0/2,000 $0/$0
| 100,000/0 $0/$0
| 50,000/50,000 $0/$0
Robert L. Bintliff 0 $0 | 0/0 $0/$0
Charles M. Ireland 0 $0 | 0/100,000 $0/$0
--------------------------
</TABLE>
(1) No incentive stock options were exercised in 1999 by
the named executive officers.
(2) Market value of underlying securities as of the fiscal
year end ($0.75), minus the exercise or base price. This price
was in effect on November 8, 1999 when AMEX halted trading in the
Company's Common Stock.
Termination of Employment and Change in Control Agreements
The Company has entered into termination of employment and
change in control agreements with certain of its executive
officers, as more fully described below. While these agreements
were not adopted to deter takeovers, they may have an incidental
anti-takeover effect by making it more expensive for a bidder to
acquire control of the Company.
Change in Control Agreements. The Company and the Bank have
entered into change in control agreements with the following
executive officers of the Company and of the Bank: Charles M.
Ireland, Lloyd W. Butts and John D. Blackmon. The change in
control agreements provide for the payment under certain
circumstances of benefits to these officers in the event of a
change in control of the Company followed by the termination of
employment of the officers. A "change in control" is deemed to
have occurred if (i) any person becomes the beneficial owner,
directly or indirectly, of fifteen percent (15%) or more of the
Common Stock of the Company; or (ii) during any period of two (2)
consecutive years during the term of the change in control
agreements, individuals who at the beginning of such period
constitute the Board of Directors cease for any reason to
constitute at least a majority thereof, unless the election of
each director who was not a director at the beginning of such
period has been approved in advance by directors representing at
least a majority of the directors then in office who were
directors at the beginning of the period; or (iii) a merger or
consolidation occurs in which the Company is a party, whether or
not the Company is the surviving corporation, in which
outstanding shares of Common Stock are converted into shares of
the successor corporation or a holding company thereof
representing fifty percent (50%) or less of the voting power of
all capital stock thereof outstanding immediately after the
merger or consolidation) or other securities (of either the
Company or another company) or cash or other property; or (iv)
the sale of all, or substantially all, of the Company's or Bank's
assets occurs; or (v) the stockholders of the Company approve a
plan of complete liquidation of the Company or the Bank.
-12-
<PAGE>
Under the change in control agreements, officers who, during
the period commencing on the effective date of a change of
control and ending two (2) years thereafter, are terminated by
the Company for any reason other than for cause or who terminate
their employment with the Company with good reason are entitled
to receive a change in control payment at the time of such
termination. The change in control payment payable under the
change in control agreements may, at the election of the
officers, be either in the form of a lump sum cash payment or in
the form of Common Stock of the Company. The amount of the lump
sum cash payment is equal to each officer's annual base salary
rate as an employee of the Company and the Bank (but excluding
all other compensation, such as bonuses and fringe benefits) in
effect immediately before the effective date of the change in
control. The stock payment consists of shares of Common Stock of
the Company in an amount equal to the result obtained by dividing
the cash payment the officer would otherwise be entitled to
receive by the market value of the Common Stock on the effective
date of the change in control.
The change in control agreements continue in effect through
December 1, 2000. On each successive December 1, the terms of
the change in control agreements will be automatically extended
for one (1) additional year, unless not later than by April 30 of
such year the Company shall have given notice to the officers (on
behalf of the Company and on behalf of the Bank) that it does not
wish to extend such change in control agreements.
Stock Option Plans. The Board has adopted the 1988, 1995 and
1998 Incentive Stock Option Plans of Surety Capital Corporation
and the 1997 Non-Qualified Stock Option Plan for Officers and Key
Employees of Surety Capital Corporation (the "Stock Option
Plans") for officers and/or key employees of the Company. The
1988, 1995 and 1998 Stock Option Plans have been approved by the
stockholders of the Company. The 1997 Stock Option Plan was
adopted by the Board on January 2, 1997 and is not subject to
stockholder approval. The purpose of the Stock Option Plans is
to attract and retain capable employees and provide an incentive
to such employees to remain in the employ of the Company.
Options for the purchase of Common Stock under the Stock
Option Plans may be granted to officers or key employees selected
from time to time by the Compensation Committee of the Board.
The exercise price for any options granted pursuant to the Stock
Option Plans must be at least equal to the fair market value of
the Common Stock on the date the options are granted. Under the
Stock Option Plans an aggregate of 1,200,000 shares of Common
Stock of the Company were set aside for issuance pursuant to the
exercise of options granted thereunder, of which 975,000 shares
are subject to outstanding options and 67,158 shares remain
available for grant. To exercise the options, grantees must pay
the exercise price in cash or Common Stock, or any combination of
cash and Common Stock. Options granted under the 1988, 1995 and
1998 Stock Option Plans are incentive stock options and options
granted under the 1997 Stock Option Plan are non-qualified stock
options.
The Stock Option Plans contain certain "change in control"
provisions designed to attract and retain valued employees of the
Company and to ensure that such employees' performance is not
undermined by the possibility, threat or occurrence of a change
in control. The 1988 and 1995 Plans provide that in the event of
a change in control of the Company (in the form of a dissolution
or liquidation of the Company or a merger or consolidation in
which the Company is not the surviving corporation) any options
granted under the plans become fully exercisable, notwithstanding
any vesting schedule relating to such options to the contrary.
The 1997 and 1998 Plans provide for the acceleration of any
applicable vesting schedule upon a "change in control," which
definition not only includes the dissolution or liquidation of
the Company or a merger or consolidation in which the Company is
not the surviving corporation, but also the acquisition by a
person or group of 20% or more of the combined voting power of
the Company's capital stock or under certain circumstances a
change in the constitution of the Board.
-13-
<PAGE>
Post Retirement Services Agreement. The Company and the
Bank have entered into a post retirement services agreement with
C. Jack Bean in recognition of his activities as a founder of the
Company and of his long tenure as the principal executive officer
of the Company and the Bank. The purposes of the agreement are
to provide Mr. Bean with compensation and benefits for certain
consulting services Mr. Bean is providing to the Company and the
Bank on a part-time basis after his retirement as a full-time
employee of the Company on August 31, 1998. Upon Mr. Bean's
retirement the Company (to the extent of 25% thereof) and the
Bank (to the extent of 75% thereof) began making payments to Mr.
Bean in the amount of $53,825 per year, in addition to providing
certain other benefits, including health insurance coverage and
reimbursement for certain expenses incurred in connection with
his post retirement consulting services to the Company and the
Bank.
If the Company or the Bank defaults in the performance of
any provisions of the agreement or the occurrence of a change in
control of the Company, the Company (to the extent of 25%
thereof) and the Bank (to the extent of 75% thereof) will pay Mr.
Bean an accelerated payment calculated as follows: (1) the annual
payment will be equal to the discounted present value of $53,825
per year for the number of years equal to eighty-five (85) minus
Mr. Bean's age at the time of the default or change in control,
and (2) the insurance coverage payment will be equal to the
insurance cost times the number of years equal to eighty-five
(85) minus Mr. Bean's age at the time of the default or change in
control. The discount interest rate for purposes of clause (a)
in the preceding sentence will be five percent (5%) per year; the
insurance cost for purposes of clause (b) in the preceding
sentence will be the cost of the coverage and reimbursement
provided in the immediately preceding twelve (12) calendar month
period.
A "change in control" for purposes of the agreement is
deemed to occur if (1) any person becomes the beneficial owner,
directly or indirectly, of securities of the Company representing
twenty percent (20%) or more of the combined voting power of the
Company's then outstanding voting securities; (2) during any
period of two consecutive years during the term of the agreement,
individuals who at the beginning of such period constitute the
Company's Board of Directors cease for any reason to constitute
at least a majority thereof, unless the election of each director
who was not a director at the beginning of such period has been
approved in advance by directors representing at least two-thirds
(2/3rds) of the directors then in office who were directors at
the beginning of the period; (3) the Company sells or otherwise
transfers more than fifty percent (50%) of the voting control of
the Bank; or (4) there is a sale of substantially all of the
assets of the Bank.
Compensation Committee Interlocks and Insider Participation
The Company and the Bank currently have a joint Compensation
Committee. The members of the Compensation Committee are William
B. Byrd, Cullen W. Turner, and Margaret E. Holland, who serves as
chairman, none of whom are or have been employees of the Company
or the Bank. Margaret E. Holland is a partner in the law firm of
Holland, Johns & Schwartz, L.L.P. (formerly Tracy & Holland,
L.L.P.). During 1999 the Company paid $119,046.50 for legal
services to such firm.
-14-
<PAGE>
Compensation Committee Report on Executive Compensation
The named executive officers of the Company receive no
salary or fees from the Company. All compensation paid to the
named executive officers is paid by the Bank, and the
Compensation Committee is responsible for determining these
salaries. The Compensation Committee is also responsible for
reviewing performance and awarding stock options to the executive
officers and key employees of the Company.
The Compensation Committee regularly monitors the
performance of the executive officers through its review of the
Bank's performance. The Compensation Committee establishes and
approves executive compensation as part of its annual budgeting
process. Base salaries for 1999 for the named executive officers
were based upon a review of comparable positions in the banking
industry. The Federal Reserve Bank's Eleventh District survey of
salaries was the primary source used for such comparison. Also,
individual performance of each named executive officer was
considered in determining compensation. The Compensation
Committee may also, in its discretion, award bonuses to executive
officers based upon individual and corporate performance. Other
than a signing bonus paid to Mr. Ireland in connection with his
employment and a bonus paid to Mr. Butts for assuming additional
responsibilities in connection with a promotion, the Compensation
Committee voted to not award bonuses to the named executive
officers for 1999. In connection with the employment of Messrs.
Bintliff, Bean (who had previously retired) and Ireland, the
Compensation Committee recommended stock option grants to each of
such individuals (100,000 shares of Common Stock per grant).
(See "EXECUTIVE COMPENSATION AND OTHER INFORMATION: Stock Option
Plans - Option Grants.")
A significant portion of the Company's and the Bank's
executive compensation is linked directly to individual and
corporate performance. The Compensation Committee will continue
to review all elements of executive compensation to ensure that
the total compensation program, and each element thereof, meets
the Company's objectives and philosophy.
Compensation Committee of
Surety Capital Corporation and
Surety Bank, National Association
Margaret E. Holland, Chairman
William B. Byrd
Cullen W. Turner
Performance Graph
The following graph compares the cumulative total
stockholder return on the Common Stock of the Company with that
of the MG Industry Group 415 - Regional-Southwest Banks Index, a
bank stock index published by Media General Financial Services,
Inc., and the American Stock Exchange Index, a broad market index
published by the American Stock Exchange. The comparison for
each of the periods assumes that $100 was invested on December
31, 1994 in each of the Common Stock of the Company, the stocks
included in the MG Industry Group 415 - Regional-Southwest Banks
Index, and the stocks included in the American Stock Exchange
Index. These indexes, which reflect formulas for dividend
reinvestment and weighting of individual stocks, do not
necessarily reflect returns that could be achieved by individual
investors.
-15-
<PAGE>
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
AMONG THE COMPANY, THE MG INDUSTRY GROUP 415 -
REGIONAL-SOUTHWEST BANKS INDEX,
AND THE AMERICAN STOCK EXCHANGE INDEX
1994 1995 1996 1997 1998 1999
------- ------- ------- ------- ------- -------
Company $100.00 $112.00 $130.00 $224.00 $ 64.00 $ 24.00
MG Industry Group 415 $100.00 $139.63 $175.54 $278.51 $245.03 $220.65
American Stock Exchange $100.00 $128.90 $136.01 $163.66 $161.44 $201.27
CERTAIN TRANSACTIONS
Certain Relationships and Related Transactions
The Certificate of Incorporation of the Company limits the
liability of directors to the full extent permitted by Delaware
law. The Certificate of Incorporation also provides that the
Company will indemnify directors and officers to the full extent
provided by Delaware law.
On January 18, 2000 the Company and the Bank entered into
indemnification agreements with all members of the Board of
Directors and one executive officer. The agreements provide that
in consideration of each indemnitee's service as an officer or
director after the date of the agreement, the Company or the Bank
will hold harmless and indemnify the indemnitee to the full
extent authorized or permitted by law if he or she is made a
party to or a participant in certain proceedings by reason of his
or her service as director, officer, employee or agent or
fiduciary of the Company or the Bank or of any other corporation,
partnership, joint venture, trust, employee benefit plan or other
enterprise which such person is or was serving at the express
written request of the Company or the Bank, as further specified
in the agreements.
-16-
<PAGE>
From time to time, the Bank makes loans to officers,
directors and principal stockholders (and their affiliates) of
the Company or the Bank. All loans to such persons are made in
the ordinary course of business; are made on substantially the
same terms, including interest rates and collateral, as those
prevailing at the time for comparable transactions with other
persons; and do not involve more than the normal risk of
collectibility or present other unfavorable features.
Additionally, the Company extends loans to various insurance
premium finance customers to finance premiums related to
insurance policies underwritten by Dallas Fire Insurance Company.
Michael L. Milam, a director of the Company, is president of
Dallas Fire Insurance Company and, as such, derives indirect
benefit from these financing transactions.
During 1999 the Company paid $119,046.50 for legal services
to Holland, Johns & Schwartz, L.L.P. (formerly Tracy & Holland,
L.L.P.), a law firm in which Margaret E. Holland is a partner.
Ms. Holland is a director of the Company.
On October 29, 1999 the Company sold $60,000 in aggregate
principal amount of redeemable convertible promissory notes (the
"Notes") to certain officers and directors of the Company. The
Notes were issued subject to redemption by the Company and
convertible into shares of Common Stock of the Company at an
initial conversion price of $0.50 per share. The proceeds from
the sale of the Notes were used by the Company to pay in part the
September 30, 1999 interest payment on the 9% Convertible
Subordinated Notes Due 2008. In addition, for each $1,000 of
principal amount of Notes the holder received a warrant entitling
the holder to purchase 250 shares of Common Stock at $0.01 per
share (the "Warrants"). All Notes were converted and all
Warrants were exercised on November 1, 1999.
PROPOSALS FOR NEXT ANNUAL MEETING
Any proposals from stockholders to be presented for
consideration for inclusion in the proxy material in connection
with the 2001 annual meeting of stockholders of the Company must
be submitted in accordance with the rules of the SEC and received
by the Secretary of the Company at the Company's principal
executive offices no later than the close of business on February
10, 2001.
GENERAL
The accompanying proxy is being solicited on behalf of the
Board of Directors of the Company. Costs of solicitation will be
borne by the Company. In addition to the use of the mails,
proxies may be solicited by personal interview, telephone, and
telegram by directors, officers and employees of the Company.
Arrangements have also been made with brokerage houses, banks and
other custodians, nominees, and fiduciaries for the forwarding of
soliciting materials to the beneficial owners of the Common Stock
held of record by such persons, and the Company will reimburse
them for reasonable out-of-pocket expenses incurred by them in
connection therewith.
All information contained in this Proxy Statement relating to
the occupations, affiliations, and securities holdings of
directors and officers of the Company and their relationship and
transactions with the Company is based upon information received
from the individual directors and officers. All information
relating to any beneficial owner of more than five percent (5%)
of the Common Stock is based upon information contained in
reports filed by such owner with the SEC.
-17-
<PAGE>
The Annual Report to stockholders of the Company for the
fiscal year ended December 31, 1999, which includes financial
statements, accompanying this Proxy Statement, does not form any
part of the material for the solicitation of proxies.
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE
FISCAL YEAR ENDED DECEMBER 31, 1999, INCLUDING FINANCIAL
STATEMENTS AND SCHEDULES THERETO, MAY BE OBTAINED WITHOUT CHARGE
(EXCEPT FOR EXHIBITS TO SUCH REPORT, WHICH WILL BE FURNISHED UPON
PAYMENT OF THE COMPANY'S REASONABLE EXPENSES IN FURNISHING SUCH
EXHIBITS) TO ANY PERSON TO WHOM A PROXY STATEMENT IS DELIVERED,
UPON ORAL OR WRITTEN REQUEST OF SUCH PERSON AND BY FIRST CLASS
MAIL OR OTHER EQUALLY PROMPT MEANS WITHIN ONE BUSINESS DAY OF
RECEIPT OF SUCH REQUEST. ANY PERSON DESIRING A COPY OF THE ANNUAL
REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999,
OR THE EXHIBITS THERETO, SHOULD ADDRESS HIS REQUEST TO MR. JOHN D.
BLACKMON, 1501 SUMMIT AVENUE, FORT WORTH, TEXAS 76102.
By Order of the Board of Directors,
/s/ Lloyd W. Butts
------------------
June 9, 2000 Lloyd W. Butts, President
-18-
<PAGE>
SURETY CAPITAL CORPORATION
Proxy Solicited on Behalf of the Board of Directors of the Corporation
For Annual Meeting of Stockholders
July 12, 2000
The undersigned hereby constitutes and appoints Charles M. Ireland and
Lloyd W. Butts, and each of them, proxies with full power of substitution, to
vote, as directed below, all the shares of common stock of Surety Capital
Corporation (the "Corporation") held of record by the undersigned at the
close of business on May 15, 2000, at the Annual Meeting of Stockholders to
be held at Surety Bank, National Association, 1501 Summit Avenue, Fort
Worth, Texas 76102, at 4:00 p.m. on July 12, 2000, and at any adjournment or
adjournments thereof.
1. ELECTION OF DIRECTORS - Nominees: Charles M. Ireland, Lloyd W.
Butts, Richard N. Abrams, William B. Byrd, Margaret E. Holland, Michael L.
Milam, Garrett Morris, and Cullen W. Turner.
MARK ONLY ONE BOX ___ VOTE FOR all nominees listed above, except
vote to be withheld from the following nominees, if any:
--------------------------------------------------------
___ VOTE TO BE WITHHELD from all nominees.
2. APPROVAL OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS.
Proposal to approve the appointment of Fisk & Robinson, P.C. as independent
public accountants of the Corporation for the fiscal year ending
December 31, 2000. FOR ___ AGAINST ___ ABSTAIN ___
3. OTHER BUSINESS. In their discretion upon such other
business as may properly come before the meeting, or any adjournment or
adjournments thereof.
FOR ___ AGAINST ___ ABSTAIN ___
This proxy when properly executed will be voted as directed herein
by the undersigned. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR
all the nominees listed above and FOR proposal 2, and, in the discretion of
the persons named herein as proxies, upon such other business as may come
before the meeting and any adjournment or adjournments thereof. The
undersigned hereby revokes any proxy or proxies heretofore given and hereby
confirms all that said attorneys and proxies, or any of them, or their
substitutes may do by virtue hereof. In addition, receipt of the 1999
Annual Report, the Notice of Annual Meeting and the Proxy Statement of
Surety Capital Corporation dated June 9, 2000 is hereby acknowledged.
SHARES OF COMMON STOCK: _____________ DATED ________________, 2000
_____________________________
_____________________________
Signature of Shareholder(s)
_____________________________
Street Address
Please date this proxy and sign your _____________________________
name exactly as it appears hereon, and City State Zip Code
mail today. When signing on behalf of
a corporation, partnership, estate,
trust, or the like, indicate title of
persons signing. For joint accounts,
each joint owner should sign.
NOTE:
I ___ WILL ___ WILL NOT ATTEND THE STOCKHOLDERS' MEETING ON JULY 12, 2000.
