ATLANTIC AMERICAN CORPORATION
4370 Peachtree Road, N.E.
Atlanta, Georgia 30319-3000
---------------
PROXY STATEMENT
FOR THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 2, 2000
---------------
GENERAL
This proxy statement is furnished in connection with the solicitation of proxies
by the Board of Directors of Atlantic American Corporation (the "Company") for
use at the Annual Meeting of Shareholders (the "Meeting") to be held at the time
and place and for the purposes specified in the accompanying Notice of Annual
Meeting of Shareholders and at any postponements or adjournments thereof. When
the enclosed proxy is properly executed and returned, the shares which it
represents will be voted at the Meeting in accordance with the instructions
thereon. In the absence of any such instructions, the shares represented thereby
will be voted in favor of the nominees for directors listed under the caption
"Election of Directors" and the ratification of the appointment of Arthur
Andersen LLP as the Company's independent public accountants for 2000.
Management does not know of any other business to be brought before the Meeting
not described herein, but it is intended that as to such other business, a vote
may be cast pursuant to the proxy in accordance with the judgment of the person
or persons acting thereunder. This proxy statement and the accompanying form of
proxy are first being mailed to the shareholders of the Company on or about
March 30, 2000.
Any shareholder who executes and delivers a proxy may revoke it at any time
prior to its use by (i) giving written notice of such revocation to the
Secretary of the Company at 4370 Peachtree Road, N.E., Atlanta, Georgia
30319-3000; (ii) executing and delivering a proxy bearing a later date to the
Secretary of the Company at 4370 Peachtree Road, N.E., Atlanta, Georgia
30319-3000; or (iii) attending the Meeting and voting in person.
Only holders of record of issued and outstanding shares of $1.00 par value
common stock of the Company ("Common Stock") as of March 10, 2000 (the "Record
Date") will be entitled to notice of and to vote at the Meeting. On the Record
Date, there were 21,010,974 shares of Common Stock outstanding. Each share of
Common Stock is entitled to one vote.
ANNUAL REPORT
The Annual Report of the Company for the year ended December 31, 1999, including
financial statements, is enclosed with this Proxy Statement. The Company's
Annual Report on Form 10-K, filed with the Securities and Exchange Commission,
provides certain additional information. Shareholders may obtain a copy of the
Form 10-K without charge upon written request addressed to: Corporate Secretary,
Atlantic American Corporation, 4370 Peachtree Road, N.E., Atlanta, Georgia
30319-3000. If the person requesting a copy of the Form 10-K is not a
shareholder of record, the request must include a representation that the person
is a beneficial owner of the Company's Common Stock.
EXPENSES OF SOLICITATION
The cost of soliciting proxies will be borne by the Company. Officers, directors
and employees of the Company may solicit proxies by telephone, telegram or
personal interview. No contract or arrangement exists for engaging specially
paid employees or solicitors in connection with the solicitation of proxies for
the Meeting. Arrangements may be made with brokerage houses and other
custodians, nominees and fiduciaries to send proxies and proxy materials to
their principals, and the Company will reimburse them for their expenses in so
doing.
VOTE REQUIRED
A majority of the outstanding shares of Common Stock must be present in person
or by proxy at the Meeting in order to have the quorum necessary for the
transaction of business. Abstentions and broker "non-votes" will be counted as
present in determining whether the quorum requirement is satisfied. Directors
are elected by the affirmative vote of a plurality of the shares of Common Stock
present in person or by proxy and actually voting at a meeting at which a quorum
is present. In order for shareholders to approve all other matters to be
presented at the Meeting, the votes cast favoring the proposal must exceed the
votes cast opposing the proposal. Abstentions and non-votes will have no effect
on the voting with respect to any proposal as to which there is an abstention or
non-vote. A "non-vote" occurs when a nominee holding shares for a beneficial
owner votes on one proposal pursuant to discretionary authority or instructions
from the beneficial owner, but does not vote on another proposal because the
nominee has not received instruction from the beneficial owner and does not have
discretionary power.
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<PAGE>
1. ELECTION OF DIRECTORS
One of the purposes of the Meeting is to elect eleven directors to serve until
the next annual meeting of the shareholders and until their successors have been
elected and qualified or until their earlier resignation or removal. In the
event any of the nominees should be unavailable to serve as a director, which
contingency is not presently anticipated, proxies will be voted for the election
of such other persons as may be designated by the present Board of Directors.
Nominees for election to the Board of Directors are considered and recommended
by the Executive Committee of the Board of Directors to the shareholders. The
Company has no procedure whereby nominees are solicited or accepted from
shareholders.
All of the nominees for election to the Board of Directors are currently
directors of the Company.
The following information is set forth with respect to the eleven nominees for
director to be elected at the Meeting:
------------------------------------------------------------------
Name Age Position with the Company
------------------------------------------------------------------
J. Mack Robinson 76 Chairman of the Board
Hilton H. Howell, Jr. 38 Director, President and Chief Executive
Officer
Edward E. Elson 65 Director
Harold K. Fischer 67 Director
Samuel E. Hudgins 70 Director
D. Raymond Riddle 65 Director
Harriett J. Robinson 68 Director
Scott G. Thompson 54 Director
Mark C. West 39 Director
William H.Whaley, M.D 59 Director
Dom H. Wyant 72 Director
------------------------------------------------------------------
Mr. Robinson has served as Director and Chairman of the Board since 1974 and
served as President and Chief Executive Officer of the Company from September
1988 to May 1995. In addition, Mr. Robinson is also a Director of Bull Run
Corporation and Gray Communications Systems, Inc.
Mr. Howell has been President and Chief Executive Officer of the Company
since May 1995, and prior thereto served as Executive Vice President of the
Company from October 1992 to May 1995. He has been a Director of the Company
since October 1992. Mr. Howell is the son-in-law of Mr. and Mrs. Robinson. He
is also a Director of Bull Run Corporation and Gray Communications Systems,
Inc.
Mr. Elson is the former Ambassador of the United States of America to the
Kingdom of Denmark, serving from 1993 through 1998. He has been director of the
Company since October 1998, and previously served as a director from 1986 to
1993.
Mr. Fischer has been the President of Association Casualty Insurance Company
and Association Risk Management General Agency, Inc., subsidiaries of the
Company, since 1984. He has been a Director of the Company since July 1999.
Mr. Hudgins has been an independent consultant since September 1997 and was a
Principal in Percival, Hudgins & Company, LLC, investment bankers, from April
1992 to September 1997. He has been a Director of the Company since 1986 and
also serves as a Director of The Wachovia Funds and The Wachovia Municipal Funds
of Wachovia Corporation.
Mr. Riddle is the retired Chairman and Chief Executive Officer of National
Service Industries, Inc., a diversified holding company, a position he held
from September 1994 to February 1996, and prior thereto served as the
President and Chief Executive Officer of National Service Industries, Inc.
since January 1993. Prior thereto, he was President of Wachovia Bank of
Georgia, N.A., the President of Wachovia Corporation of Georgia and Executive
Vice President of Wachovia Corporation. He has been a Director of the
Company since 1976, and also serves as a Director of AMC, Inc., Atlanta Gas
Light Company, Equifax Inc., and Gables Residential Trust, Inc.
Mrs. Robinson, the wife of J. Mack Robinson, has been a Director of the
Company since 1989. She is also a Director of Gray Communications Systems,
Inc.
Mr. Thompson has been the President and Chief Financial Officer of American
Southern Insurance Company, a subsidiary of the Company, since 1984. He has been
a Director of the Company since February 1996.
Mr. West has been the Chairman and Chief Executive Officer of Genoa Companies
since 1990. He has been a Director of the Company since July 1997.
Dr. Whaley has been a physician in private practice for more than five years. He
has been a Director of the Company since July 1992. Mr. Wyant is a retired
partner of the law firm of Jones, Day, Reavis & Pogue, which serves as counsel
to the Company. He served as a Partner with said firm from 1989 through 1994,
and as Of Counsel from 1995 through 1997. He has been a Director of the Company
since 1985, and also serves as a Director of Thomaston Mills, Inc.
2
<PAGE>
The Board of Directors recommends a vote FOR the election of each of the
nominees for Director.
Committees Of The Board Of Directors
The Board of Directors of the Company has three (3) standing committees: the
Executive Committee, the Stock Option and Compensation Committee and the Audit
Committee. The Company has no Nominating Committee. The Executive Committee is
composed of Messrs. Robinson, Howell, Hudgins and Whaley, and its function is to
act in the place and stead of the Board to the extent permitted by law on
matters which require Board action between meetings of the Board of Directors.
The Executive Committee of the Company met or acted by written consent four
times during 1999.
The Stock Option and Compensation Committee is composed of Messrs. Elson,
Riddle, Whaley and West. The Stock Option and Compensation Committee's function
is to establish the number of stock options to be granted to officers and key
employees and the annual salaries and bonus amounts payable to officers of the
Company. The Stock Option and Compensation Committee met or acted by written
consent two times during 1999.
The Audit Committee is composed of Messrs. Elson, Riddle, West, and Wyant. The
Audit Committee's functions include reviewing with the Company's independent
public accountants, their reports and audits, and reporting their findings to
the full Board. The Audit Committee held one meeting in 1999.
The Board of Directors met or acted by written consent three times in 1999. Each
of the directors named above, except for Mr. Elson, attended at least 75%
percent of the meetings of the Board and its committees of which he or she was a
member during 1999.
Compensation Of Directors
The Company's policy is to pay all Directors an annual retainer fee of $6,000,
to pay fees to Directors at the rate of $1,000 for each Board meeting attended
and $500 for each committee meeting attended, and to reimburse Directors for
actual expenses incurred in connection with attending meetings of the Board of
Directors and Committees of the Board. In addition, pursuant to the Company's
1996 Director Stock Option Plan (the "Director Plan"), all Directors who are not
employees or officers of the Company or any of its subsidiaries are entitled to
receive an initial grant of options to purchase 5,000 shares of Common Stock
upon first becoming a Director and annual grants of options to purchase 1,000
shares of Common Stock.
3
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth Common Stock ownership information as of March
10, 2000 by: (i) each person who is known to the Company to own beneficially
more than 5% of the outstanding shares of Common Stock of the Company, (ii) each
director, (iii) each executive officer named in the Summary Compensation Table,
and (iv) all of the Company's directors and executive officers as a group.
- ------------------------------------------------------------------------------
Amount and Nature
Name of Individual of Beneficial Percent
or Identity of Group Ownership(1) of Class
- ------------------------------------------------------------------------------
J. Mack Robinson.............................. 13,654,120(2) 64.65%
4370 Peachtree Road, N.E.
Atlanta, Georgia 30319
Harriett J. Robinson ......................... 8,163,053(3) 38.84%
3500 Tuxedo Road, N.W.
Atlanta, Georgia 30305
Harold K. Fischer............................. 1,334,320 (4) 6.35%
P.O. Box 9728
Austin, TX 78766
Hilton H. Howell, Jr.......................... 354,129(5) 1.66%
Edward E. Elson............................... 8,000(6) *
Samuel E. Hudgins............................. 8,000(7) *
D. Raymond Riddle............................. 17,490(7) *
Scott G. Thompson............................. 88,500(8) *
Mark C. West.................................. 182,642(9) *
William H. Whaley, M.D........................ 27,000(10) *
Dom H. Wyant.................................. 8,000(7) *
Edward L. Rand, Jr............................ 36,068(11) *
All Directors and Executive
Officers as a Group (12 persons) 15,718,269(12) 72.84%
- ------------------------------------------------------------------------------
[FN]
*Represents less than 1% of class.
(1)All such shares are owned of record and beneficially unless otherwise stated.
(2)Includes 3,381,202 shares owned by Gulf Capital Services, Ltd., 4370
Peachtree Road, N.E., Atlanta, Georgia 30319; 936,702 shares owned by Delta
Life Insurance Company; and 294,000 shares owned by Delta Fire & Casualty
Company; all of which are companies controlled by Mr. Robinson; 95,000 shares
subject to presently exercisable options held by Mr. Robinson; and 4,944
shares held pursuant to the Company's 401(k) Plan. Also includes all shares
held by Mr.Robinson's wife (see note 3 below).
(3)Harriett J. Robinson is the wife of J. Mack Robinson. Includes 7,876,748
shares of common stock held by Mrs. Robinson as trustee for her children, as
to which she disclaims beneficial ownership. Also includes 8,000 shares
issuable upon exercise of options granted under the Director Plan exercisable
within 60 days, and 6,720 shares held jointly with grandson. Does not include
shares held by Mr. Robinson (see Note 2 above).
(4)Includes 5,000 shares issuable upon exercise of options granted under the
Director Plan, exercisable within 60 days.
(5)Includes 275,000 shares subject to presently exercisable stock options held
by Mr. Howell; 12,484 shares held pursuant to the Company's 401(k) Plan;
1,025 shares owned by spouse, 1,000 shares owned by spouse as custodian for
daughter, 2,000 shares owned by spouse as custodian for son, and 6,720 shares
held in joint ownership by Mr. Howell's son and Harriett J. Robinson, as to
which he disclaims any beneficial ownership.
(6)Includes 6,000 shares issuable upon exercise of options granted under the
Director Plan, exercisable within 60 days.
(7)Includes 8,000 shares issuable upon exercise of options granted under the
Director Plan, exercisable within 60 days.
(8) Includes 87,500 shares subject to presently exercisable options.
(9) Includes 6,000 shares issuable upon exercise of options granted under
the Director Plan, exercisable within 60 days. Also includes 104,500
shares owned by Atlantis Capital LLP for which Mr. West is the President
of the General Partner, 66,142 shares owned by The West Foundation, Inc.
for which Mr. West is an officer and director and 5,000 shares owned by
the George West Mental Health Foundation, for which Mr. West is the
President. Mr. West disclaims any beneficial ownership of these
foundations.
(10)Includes 8,000 shares issuable upon exercise of options granted under the
Director Plan exercisable within 60 days and 6,000 shares owned by spouse
as custodian for daughter.
(11) Includes 34,750 shares subject to presently exercisable options held by
Mr. Rand and 1,318 shares held pursuant to the Company's 401(k) Plan.
(12)Includes 550,250 shares subject to presently exercisable options held by all
directors and executive officers as a group. Also includes shares held
pursuant to the Company's 401(k) Plan described in notes 2, 5, and 11 above.
</FN>
4
<PAGE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under the securities laws of the United States, the Company's directors,
executive officers, and any persons holding more than ten percent of a
registered class of the Company's equity securities are required to file with
the Securities and Exchange Commission initial reports of ownership and reports
of changes of ownership of Common Stock and other equity securities of the
Company, and to furnish the Company with copies of such reports. To the
Company's knowledge, all of these filing requirements were satisfied during the
year ended December 31, 1999. In making this disclosure, the Company has relied
on written representations of its directors and officers and copies of the
reports that have been filed with the Securities and Exchange Commission.
EXECUTIVE COMPENSATION
There is shown below information concerning the annual and long-term
compensation for services in all capacities to the Company for the fiscal years
ended December 31, 1999, 1998 and 1997, of those persons who were: (i) chief
executive officer and (ii) the only other executive officers of the Company, at
December 31, 1999, whose salary and bonus exceeded $100,000 ("the Named
Officers"):
<TABLE>
Summary Compensation Table
Long-Term
Annual Compensation
Compensation -------------
--------------- Awards
Name and --------------- All Other
Principal Position Year Salary(s) Bonus(s) Options/SARs(#) Compensation(s)
- ------------------- ----- --------- -------- --------------- ---------------
<S><C> <C> <C> <C> <C> <C>
Hilton H. Howell, Jr. 1999 $280,000 $105,000 -0- $14,050 (1)
President and CEO 1998 255,000 98,000 200,000 12,800
1997 225,000 89,250 100,000 13,100
J. Mack Robinson 1999 140,000 35,000 -0- $13,275 (2)
Chairman of the Board 1998 140,000 35,000 100,000 8,000
1997 138,902 35,000 -0- 12,500
Edward L. Rand, Jr. 1999 118,000 32,500 -0- 3,564(3)
Vice President and CFO 1998 103,512 29,700 31,000 1,716
</TABLE>
[FN]
(1)Consists of (i) contributions to Mr. Howell's account under the Company's
401(k) Plan of $4,450 in 1999; and (ii) fees paid for serving as a director
of the Company of $9,600 in 1999.
(2)Consists of (i) contributions to Mr. Robinson's account under the Company's
401(k) Plan of $3,675 in 1999; and (ii) fees paid for serving as a director
of the Company of $9,600 in 1999.
(3)Consists of contributions to Mr. Rand's account under the Company's 401(k)
Plan in 1999.
</FN>
Option/SAR Grants In Last Fiscal Year
No options or stocks appreciation rights were granted to the named executive
officers during fiscal 1999.
Aggregated Option/SAR Exercises In Last Fiscal Year
and FY-End Option/SAR Values
The following table provides information related to the number and value of
options held by the named executive officers at fiscal year-end.
<TABLE>
Number of Securities
Underlying Unexcercised Value of Unexcercised
Options / SAR Money Options / SARs
Shares at Year-End (#) at Year-End ($) (1)
Acquired on ------------------------- --------------------------
Name Excersise (#) Value Realized ($) Exercisable/Unexercisable Exercisable / Unexercisable
- ----- ----------- ------------------ ------------------------- ----------------------------
<S><C> <C> <C> <C> <C>
Hilton H. Howell,
Jr. 20,000 $11,250(2) 275,000 /25,000 $0 / $0
J. Mack Robinson 0 0 95,000 / 25,000 $0 / $0
Edward L. Rand, Jr. 0 0 34,750 / 6,250 $0 / $0
</TABLE>
[FN]
(1)Value is calculated on the difference between the option exercise price and
the closing price for the Company's Common Stock as reported by the Nasdaq
National Market on December 31, 1999, which was $2.3125, multiplied by the
number of shares of Common Stock underlying the option.
(2)Value realized is calculated on the difference between the option exercise
price, which was $1.875, and the closing price for the Company's Common Stock
as reported by the Nasdaq National Market on September 23, 1999, which was
$2.4375, multiplied by the number of shares of Common Stock underlying the
option.
</FN>
5
<PAGE>
PERFORMANCE GRAPH
The graph below compares the cumulative total return to shareholders on the
Common Stock for the period from December 31, 1994 through December 31, 1999,
with (i) the Russell 2000 Index, (ii) the Nasdaq Insurance Index and (iii) a
peer group of various insurance companies (the "Insurance Peer Group").
In last year's Proxy Statement, the Company compared its stock performance to
that of the Insurance Peer Group, which was comprised of the following insurance
companies : Atlantic American Corporation, Berkley W R Corporation, Cincinnati
Fin. Corporation, Ohio Casualty Corporation, Safeco Corporation, Seibu's Bruce
Group Inc., Selective Ins Group, Unitrin, Inc.. The Company has determined that
the market capitalization of the companies in the Insurance Peer Group are
generally not comparable to that of the Company, and that comparison of
shareholder return with that index is not meaningful. Accordingly, the Company
has elected to change its peer group comparison to an index comprised of all
insurance companies listed on the Nasdaq National Market. The Company believes
that a comparison to that peer group is more meaningful for shareholders.
6
<PAGE>
Atlantic American Corporation, Russell 2000 Index and Nasdaq Insurance
Index ( Performance Results Through 12/31/99)
Atlantic American Russell 2000 Nasdaq Insurance
Corporation Index Index
------------------- -------------- ----------------
1994 $100.00 $100.00 $100.00
1995 $102.78 $128.44 $142.05
1996 $136.13 $149.55 $161.92
1997 $225.02 $182.75 $237.52
1998 $216.67 $177.76 $211.58
1999 $102.80 $209.46 $164.29
7
<PAGE>
EXECUTIVE COMPENSATION
Report of the Stock Option and Compensation Committee on Executive Compensation
Compensation Philosophy
The Committee believes that compensation of executives should be designed to
motivate those persons to perform at their potential over both the short and the
long term. The Committee believes that equity-based incentives can benefit the
Company by increasing the retention of executives while aligning their long-term
interests with those of the Company's shareholders. Compensation determinations
are primarily based on the performance of the Company and the individual
executive officer during a particular year, and expectations and objectives for
performance in the succeeding year. The Committee also believes that
compensation packages for executives must be structured to take into account the
nature and the growth of the Company's lines of business in appropriate
circumstances.
Cash Compensation. The compensation packages for the executive officers
consist of three components: base salaries, cash bonuses and equity
incentives.
The Chairman annually reviews executive officer compensation and recommends to
the Committee proposed salaries and bonuses for himself and for each of the
other executive officers. Factors considered by the Chairman and the Committee
are based upon the growth of the Company with regard to net income, total
assets, premiums and shareholders' equity. All of these factors were considered
in establishing salary levels for each of the executive officers, as were their
individual duties and the growth and effectiveness of each in performing those
duties. In establishing compensation levels for the executive officers for 1999,
the Committee sought to structure compensation packages that were designed both
to achieve the objective of the Committee's compensation philosophy and to be
competitive with those offered by similarly situated companies. For 1999, the
Chairman elected not to recommend an increase in his own salary, and the
Committee did not implement an increase. The Committee did increase the base
salary for the other named executive officers for 1999, having taken into
consideration the factors identified above. Upon the Chairman's recommendation,
the Committee awarded cash bonuses to each of the named executive officers,
including to the Chief Executive Officer as described below. The bonuses are
generally determined as a percentage of the executive officer's base salary for
the succeeding fiscal year. The bonuses, which were actually paid in the first
quarter of 2000, reflect an evaluation of the individual performance of the
officers, as well as the performance of the Company as a whole during 1999.
Equity-Based Compensation. The Committee believes that equity-based compensation
in the form of stock options or other stock awards serves to motivate executives
to seek to improve the Company's short- and long-term prospects and to align the
interests of the Company's executives with those of the shareholders. During
1999, the Committee determined not to make any additional grants of stock
options to the executive officer of the Company; however, the Committee is in
the process of considering the grant of stock options, or other stock awards
permitted under the Company's 1992 Incentive Plan, that would be designed to
reward the executive officers for their contributions in 1999 and be structured
to provide the long-term incentive contemplated by the Committee's philosophy.
Chief Executive Officer. Mr. Howell's compensation is generally evaluated on
the same basis as the Company's other executive officers. The Committee
approved an increase of 10% in Mr. Howell's base salary for 1999, and in 2000
awarded Mr. Howell a cash bonus of $105,000. Mr. Howell's cash bonus has
represented the same percentage of his succeeding year's base salary for each
of the last three fiscal years.
Edward E. Elson
D. Raymond Riddle
Mark C. West
Dr. William Whaley
8
<PAGE>
2. RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTANTS
One of the purposes of the Meeting is to ratify the selection by the Board of
Directors of Arthur Andersen LLP, independent public accountants, to audit the
books, records, and accounts of the Company and its subsidiaries for the year
ending December 31, 2000. This firm has audited the financial statements of the
Company since 1974.
A representative from Arthur Andersen LLP is expected to be present at the
Meeting and will have the opportunity to make a statement if they desire to do
so and will be available to respond to appropriate questions.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company leases space for its principal offices, as well as the principal
offices of certain of its subsidiaries, in an office building located at 4370
Peachtree Road, N.E., Atlanta, Georgia, from Delta Life Insurance Company, a
corporation owned by Mr. Robinson and members of his immediate family, under
leases expiring May 31, 2002 and July 2005. Under the terms of the lease, the
Company occupies approximately 65,489 square feet of office space as well as
covered parking garage facilities at an annual rental of approximately $611,000,
plus a pro rata share of all real estate taxes, general maintenance, and service
expenses and insurance costs with respect to the office building and other
facilities. The terms of the lease are believed by management of the Company to
be comparable to terms which could be obtained by the Company from unrelated
parties for comparable rental property.
Effective December 31, 1995, an aggregate of $13.4 million in principal amount
of 8% and 9 1/2% demand notes issued by the Company were canceled in exchange
for the issuance by the Company of an aggregate of 134,000 shares of a new
series of preferred stock (the "Series B Preferred Stock"), which has a stated
value of $100 per share and accrues interest at 9% per year. At December 31,
1999, the Company had accrued but unpaid dividends on the Series B Preferred
Stock totaling $4,824,000. All shares of Series B Preferred Stock are owned
directly or indirectly by affiliates of Mr. Robinson, Mrs. Robinson or Mr.
Howell.
Certain of the Company's subsidiaries have made loans, in an aggregate principal
amount of approximately $6.4 million, to Leath Furniture, LLC ("Leath"), which
is owned by Gulf Capital Services, Ltd. ("Gulf Capital"). The loans are secured
by mortgages on certain properties owned by Leath. The loans bear interest at 9
1/4% per annum, are payable in monthly installments, and mature on December 1,
2016. During 1999, Leath made principal and interest payments on such notes to
the Company's subsidiaries in the aggregate amount of $557,151. Gulf Capital is
a partnership in which Mr. Robinson is the general partner and certain of his
affiliates are the limited partners.
Mr. Wyant, a director of the Company, is a retired Partner of the law firm of
Jones, Day, Reavis & Pogue, which firm serves as counsel to the Company.
The Company has entered into a consulting agreement with Dr. Whaley, pursuant to
which Dr. Whaley provides certain medical consulting and advisory services to
the Company's subsidiaries. Pursuant to the agreement, Dr. Whaley receives
$10,000 per year for such services.
OTHER BUSINESS
Management of the Company knows of no other matters than those stated above
which are to be brought before the Meeting. However, if any such other matters
should be presented for consideration and voting, it is the intention of the
persons named in the proxies to vote thereon in accordance with their best
judgment.
SHAREHOLDER PROPOSALS
Shareholder proposals to be presented at the next annual meeting must be
received by the Company no later than December 1, 2000, in order to be
considered for inclusion in the proxy statement and proxy for the 2001 annual
meeting of shareholders. Any such proposal should be addressed to the Company's
president and mailed to 4370 Peachtree Road, N.E., Atlanta, Georgia 30319-3000.
In accordance with the rules of the Securities and Exchange Commission, the
Company may exercise discretionary authority to vote proxies with respect to any
shareholder proposal to be presented at the Company's 2000 annual meeting but
not included in the Company's proxy statement for such meeting if the
shareholder has not given notice to the Company by February 11, 2000.
10
