AGREEMENT AND PLAN OF COMPLETE LIQUIDATION OF
SOUTHERN SECURITY LIFE INSURANCE COMPANY
INTO
SECURITY NATIONAL LIFE INSURANCE COMPANY
THIS AGREEMENT AND PLAN OF COMPLETE LIQUIDATION (this "Agreement") is made
and entered into effective the 12th day of December, 2005, by and between
SOUTHERN SECURITY LIFE INSURANCE COMPANY, a Florida corporation (hereinafter
sometimes referred to as "SSLIC"), and SECURITY NATIONAL LIFE INSURANCE COMPANY,
a Utah corporation (hereinafter sometimes referred to as "SNLIC").
WITNESSETH:
WHEREAS, pursuant to a transaction dated February 4, 2005, and effective
January 1, 2005, SSLIC became a wholly owned subsidiary of SNLIC. Prior to such
transaction SNLIC owned 77% of the issued and outstanding shares of stock of
SSLIC; and
WHEREAS, both corporations are involved in the same line of business, and
it has been determined by the Boards of Directors of both SSLIC and SNLIC that
it will be more efficient and profitable to have SSLIC liquidated into SNLIC;
and
WHEREAS, the Boards of Directors of both SSLIC and SNLIC do for said
reasons and for the general welfare of said corporations and their stockholders,
deem it advisable that SSLIC be liquidated into SNLIC; and
WHEREAS, this Agreement has been approved and authorized by resolutions
adopted by the sole shareholder of SSLIC and the directors of each corporation;
NOW, THEREFORE, in consideration of the premises and for the purposes of
setting forth and prescribing the terms and conditions of such complete
liquidation and the manner of carrying the same into effect, the parties hereto
do hereby adopt the following plan of complete liquidation and agree as follows:
Section 1.
It is intended that SSLIC be liquidated into SNLIC in essentially the same
manner as the liquidation described in Private Letter Ruling 9847027 in order to
achieve the same tax treatment and consequences under ss.332 of the Internal
Revenue Code of 1986 and other applicable provisions described in said Letter
Ruling.
Section 2.
The liquidation of SSLIC and transfer of its business to SNLIC shall be
accomplished as follows:
(1) Prior to December 31, 2005, but after the date of adoption of this
Agreement, SNLIC and SSLIC shall enter into a coinsurance agreement under which
SNLIC will become primarily liable for the liabilities of SSLIC on insurance
contracts and annuities issued by SSLIC to its policyholders. SSLIC will
transfer to SNLIC assets with a fair market value equal to the assumed
liabilities. The coinsurance agreement will provide that SSLIC shall have no
right to recapture the insurance business transferred to SNLIC.
(2) Simultaneously with the transfer made pursuant to the proposed
coinsurance agreement, all of the other assets of SSLIC not transferred in such
proposed coinsurance agreement, as they exist at that time (except for SSLIC's
corporate charter, insurance licenses, and the minimum capital, if any,
including cash and investments necessary to preserve its corporate existence
("Retained Assets")), shall be distributed by SSLIC to SNLIC, and SNLIC shall
assume all of the liabilities of every kind and description of SSLIC existing at
that time. SNLIC has no plan or intention to dispose of such assets. The fair
market value of SSLIC's assets will exceed its liabilities (including any amount
owed to SNLIC) immediately prior to the First Liquidating Distribution. After
this distribution, SNLIC will continue to own 100 percent of the stock of SSLIC,
and SSLIC will be a corporate shell holding only the Retained Assets.
(3) The simultaneous distributions described in paragraphs (1) and (2)
shall constitute the "First Liquidating Distribution." Within twelve months of
the First Liquidating Distribution, SNLIC will either (a) sell the SSLIC stock
to an unrelated party or (b) distribute the remaining assets to SNLIC in
complete liquidation of SSLIC.
(4) Both SNLIC and SSLIC will file the statement described in Treas. Reg.
ss.381(b)-1(b)(3), and SNLIC will file the statement described in Treas. Reg.
ss.332-6(b).
(5) In implementing this Agreement and plan of liquidation, SNLIC and SSLIC
shall each be responsible to comply with all regulatory requirements applicable
to it.
Section 3.
SSLIC will make all deeds, conveyances, assignments, bills of sale or
assurances as are necessary or desirable to vest in SNLIC the title to any
property or rights of SSLIC (other than the Retained Assets) or to evidence such
vesting, and will do all things as may be necessary, proper or appropriate to
accomplish same. It is agreed and intended by the parties that all such deeds,
conveyances, assignments, bills of sale and assurances will be executed and
delivered as part of the First Liquidating Distribution.
Section 4.
This Agreement shall be signed on behalf of each party hereto by its
President. Each party to this Agreement agrees to comply with laws applicable to
it in connection with this Agreement.
Section 5.
WITNESS, the signatures and seals of said parties the day and year first
herein above written, each hereunto set by its President, pursuant to resolution
of its Board of Directors.
SOUTHERN SECURITY LIFE INSURANCE COMPANY
ATTEST:
By /s/ Scott M. Quist
------------------
Scott M. Quist,
President and
Chief Operating Officer
/s/ G. Robert Quist
---------------
G. Robert Quist, First Vice
President and Secretary
SECURITY NATIONAL LIFE INSURANCE COMPANY
ATTEST:
By /s/ Scott M. Quist
------------------
Scott M. Quist,
President and
Chief Operating Officer
/s/ G. Robert Quist
- --------------------
G. Robert Quist, First Vice
President and Secretary
RESOLUTIONS TO BE ADOPTED BY THE BOARDS OF DIRECTORS
OF
SOUTHERN SECURITY LIFE INSURANCE COMPANY
AND
SECURITY NATIONAL LIFE INSURANCE COMPANY
December 12, 2005
RESOLVED: That the Corporation enter into that certain "Agreement and Plan
of Complete Liquidation of Southern Security Life Insurance Company, a Florida
Corporation, into Security National Life Insurance Company, a Utah corporation,"
dated the 12th day of December, 2005, a copy of which is attached hereto and
made a part hereof, and that the said Agreement and Plan of Complete Liquidation
is hereby adopted, confirmed, ratified and approved.
RESOLVED FURTHER: The President of the Corporation is hereby authorized to
execute and deliver the said Agreement and Plan of Complete Liquidation and to
take any further actions and execute any additional documents that may be
necessary or desirable to place in effect and carry out the intent of the
foregoing resolution.
WRITTEN CONSENT
OF THE SOLE SHAREHOLDER OF
SOUTHERN SECURITY LIFE INSURANCE COMPANY
December 12, 2005
The undersigned, being the sole Shareholder of Southern Security Life
Insurance Company, a Florida business corporation (the "Corporation"), acting
pursuant to the provisions of Sections 607.0704 of the Florida Statutes, as
amended, and waiving any and all notice to which it might otherwise be entitled,
does hereby consent to, approve of and take the actions discussed herein.
The following resolution having been recommended and adopted by the Board
of Directors of the Corporation, the undersigned sole shareholder of the
Corporation hereby also adopts the same:
RESOLVED: That the Corporation enter into that certain "Agreement and Plan
of Complete Liquidation of Southern Security Life Insurance Company, a Florida
corporation, into Security National Life Insurance Company, a Utah corporation,"
dated the 12th day of December, 2005, a copy of which is attached hereto and
made a part hereof, and that the said Agreement and Plan of Complete Liquidation
is hereby adopted, confirmed, ratified and approved.
It is expressly understood by the undersigned sole Shareholder that this
Written Consent of the Sole Shareholder constitutes and has the same legal
effect as the vote of the Shareholders of the Corporation at duly called,
convened and held meetings of the Shareholders of the Corporation, and it shall
be filed with the minutes of the proceedings of shareholders.
IN WITNESS WHEREOF, the sole Shareholder of Southern Security Life
Insurance Company has signed this Written Consent as of the day and year first
above written.
SOUTHERN SECURITY LIFE INSURANCE COMPANY
ATTEST:
By /s/ Scott M. Quist
------------------
Scott M. Quist,
President and
Chief Operating Officer
/s/ G. Robert Quist
- --------------------
G. Robert Quist, First Vice
President and Secretary