THE NATIONAL SECURITY GROUP, INC.
661 EAST DAVIS STREET
ELBA, ALABAMA 36323
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
APRIL 17, 1997
Notice is hereby given of the Annual Meeting of Stockholders of The
National Security Group, Inc., a Delaware corporation (the "Company"), to be
held at the principal executive offices of the Company in Elba, Alabama, on
Thursday, April 17, 1997 at 10:00 a.m. (Central Time) for the following
purposes:
1. To elect three (3) members to the Board of Directors to serve for three
year terms and until their successors are duly elected and qualified;
2. To transact such other business as may properly come before the Annual
Meeting or any adjournment thereof.
Only Stockholders of record at the close of business on March 17, 1997
shall be entitled to notice of and to vote at the Annual Meeting. Stockholders
are cordially invited to attend the Annual Meeting in person.
BY ORDER OF THE BOARD OF
DIRECTORS
/s/ Bette Ham
-------------------
Bette Ham
Secretary
Elba, Alabama
March 17, 1997
<PAGE>
THE NATIONAL SECURITY GROUP, INC.
661 EAST DAVIS STREET
Elba, Alabama 36323
PROXY STATEMENT
This document, which constitutes a Proxy Statement for The National
Security Group, Inc., (the "Company") is being furnished to the holders of
common stock of the Company in connection with the solicitation of proxies by
the Board of Directors of the Company for use at the Annual Meeting of
Stockholders of the Company to be held at 10:00 a.m. (Central Time) on April 17,
1997 at the principal executive offices of the Company (the "Annual Meeting").
At the Annual Meeting, the Company's stockholders will vote to elect three
directors to serve for three year terms and until their successors are duly
elected and qualified.
All costs in connection with the solicitation of the enclosed proxy will be
paid by the Company.
The date of this Proxy Statement is March 17, 1997.
GENERAL
This Proxy Statement is being mailed to holders of the Company Common Stock
on or about March 17, 1997 in connection with the solicitation by the Board of
Directors of the Company of proxies to be used at the Annual Meeting to be held
at the Company's principal executive offices, 661 East Davis Street, Elba,
Alabama 36323, on Thursday, April 17,1997, at 10:00 a.m. (Central Time).
At the Annual Meeting, the stockholders of the Company will elect three
directors to serve for three year terms. If the enclosed proxy is properly
signed and returned, your shares will be voted on all matters that properly come
before the Annual Meeting for a vote. If instructions are specified in your
signed proxy with respect to matters being voted upon, your shares will be voted
in accordance with your instructions. If no instructions are so specified, your
shares will be voted "FOR" the election of the persons nominated as directors in
the proxy statement. So far as is now known, there is no business to be acted
upon at the Annual Meeting other than as set forth above, and it is not
anticipated that other matters will be brought before the Annual Meeting. If
however, other appropriate matters are duly brought before the Annual Meeting,
the persons appointed as proxy agents will have discretion to vote or act
thereon according to their own judgement. A proxy may be revoked if written
notice of such revocation is received by Mrs. Bette Ham, Secretary. The National
Security Group, Inc., 661 East Davis Street, Elba, Alabama, 36323, at any time
before the taking of the vote at the Annual Meeting.
Whether or not you attend the Annual Meeting, your vote is important.
Accordingly, you are asked to sign and return the accompanying proxy, regardless
of the number of shares you own. Shares can be voted at the Annual Meeting only
if the holder is present or represented by proxy. The Board of Directors has
fixed the close of business on March 17, 1997, as the record date for the
determination of stockholders who are entitled to notice of, and to vote at the
Annual Meeting and any adjournments thereof. On the record date, the Company had
outstanding 2,319,763 shares of Company Stock, the holders of which are entitled
to one vote per share. No shares of any other class of Company stock are issued
or outstanding.
1
<PAGE>
A proxy may be revoked at any time prior to its exercise (i) by filing with
the Secretary of the Company either an instrument revoking the proxy or a duly
executed proxy bearing a later date or (ii) by attending the Annual Meeting and
voting in person. Attendance at the Annual Meeting by itself will not revoke a
proxy. Shares of Common Stock represented by a properly executed and returned
proxy will be treated as present at the Annual Meeting for purposes of
determining a quorum without regard to whether the proxy is marked as casting a
vote for or against or abstaining with respect to a particular matter. In
addition, shares of Common Stock represented by "broker non-votes" (i.e. shares
of Common Stock held in record name by brokers or nominees as to which (i)
instructions have not been received from the beneficial owners or persons
entitled to vote, (ii) the broker or nominee does not have discretionary voting
power or (iii) the record holder has indicated that it does not have authority
to vote such shares on the matter) generally will be treated as present for the
purposes of determining a quorum. The affirmative vote of the holders of a
majority of the outstanding shares of Common Stock of the Company present in
person or represented by proxy at the Annual Meeting and entitled to vote
thereon is required for the election of the nominees to the Board of Directors.
With respect to this matter, an abstention will have the same effect as a
negative vote, but because shares held by brokers will not be considered
entitled to vote on matters as to which brokers would hold authority, a broker
non-vote will have no effect on the vote.
ELECTION OF DIRECTORS
The Bylaws of the Company provide that the Board of Directors shall be
divided into three classes as nearly equal in number as possible. The term of
each director is three years and the terms are staggered to provide for the
election of one class of directors each year. Three directors will be elected at
the Annual Meeting. J.R. Brunson, D.M. English, and Walter P. Wilkerson (the
"Nominees") have been nominated by the Board of Directors for election to serve
for a term of three years. All of the nominees are currently serving as
directors of the Company.
The persons named in the enclosed proxy intend to vote "FOR" the election
of the Nominees unless the proxy is marked to indicate that such authorization
is expressly withheld. Should any of the Nominees be unable to accept nomination
or election (which the Board of Directors does not expect) or should any other
vacancy have occurred in the Board, it is the intention of the persons named in
the enclosed proxy to vote for the election of the person or persons whom the
Board of Directors recommends.
The following tables set forth the names and certain information concerning
the Nominees and each other director who will continue to serve (the "Continuing
Directors") as a director of the Company after the Annual Meeting:
NOMINEES
Name Positions Held Age Director Since*
With the Company at Dec. 31, 1996
J. R. Brunson Director, President & CEO 68 1962
D.M. English Director 78 1947
Walter P. Wilkerson Director 49 1984
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR"
THE ELECTION OF THE ABOVE NOMINEES AS DIRECTORS.
2
<PAGE>
CONTINUING DIRECTORS
AGE AT DIRECTOR END OF
NAME DEC.31, 1996 SINCE* PRESENT TERM
Lewis Avinger ............ 74 1984 1998
Winfield Baird ........... 64 1964 1999
Carolyn Brunson .......... 69 1978 1998
Jerry B. Brunson ......... 62 1979 1999
Fred D. Clark, Jr ........ 36 1996 1999
M.L. Murdock ............. 54 1976 1999
Craig S. Pittman ......... 40 1992 1998
James B. Saxon ........... 62 1982 1998
*In 1990 National Security Insurance Company was reorganized as a holding
company system pursuant to a plan of change whereby The National Security Group,
Inc., (the "Company"), became the holding company for National Security
Insurance Company (the "Life Company"), and its prior subsidiaries, National
Security Fire and Casualty Company (the "Casualty Company"), and NATSCO, Inc.,
("NATSCO"). References to tenure with the Company (in the above table and in the
following biographical section) include the individual's tenure with the Life
Company prior to the reorganization.
BIOGRAPHICAL INFORMATION
The business experience of each of the Nominees and Continuing Directors is
set forth below.
NOMINEES
J.R. BRUNSON has served as President and Chief Executive Officer of the
Company and its subsidiaries since 1978. He previously held the position of
Senior Vice President. He joined the Company in 1953. Mr. Brunson is also a
director of the Life Company, the Casualty Company, SouthTrust Bank of Coffee
County, NATSCO, Inc., and NASCO, and serves on the Board of Trustees of the
University of South Alabama.
D.M. ENGLISH is a retired urban renewal administrator. He became a director
of the Company upon its founding in 1947 and currently serves as its Chairman of
the Board. He has held that position since 1987. Mr. English is also a director
of the Casualty Company and NASCO.
WALTER P. WILKERSON is a certified public accountant and partner in the
firm Barr, Brunson, Wilkerson, & Bowden in Enterprise, Alabama.
3
<PAGE>
LEWIS AVINGER is a retired Savings and Loan executive from Montgomery,
Alabama.
WINFIELD BAIRD is currently the President of Investment Counselors of
Alabama, Inc., of Birmingham, Alabama.
CAROLYN BRUNSON presently serves as the Managing Partner of Brunson
Properties (formerly the W.L. Brunson Estate), a family partnership engaged in
investments.
JERRY B. BRUNSON is the retired immediate Past President of First Federal
Bank of Enterprise, Alabama. Since 1987 he has served as Vice Chairman of the
Company. Mr. Brunson is also a director of the Life Company, NASCO, and First
Federal Bank of Enterprise, Alabama.
FRED D. CLARK, JR., is currently President of Alabama Rural Electric
Association of Cooperatives, Montgomery, Alabama. Prior to his present
affiliation he was State Director for U.S. Senator Richard Shelby, Legislative
Representative for National Rural Electric Cooperative Association, and
Legislative Assistant to U.S. Senator Howell Heflin.
M.L. MURDOCK, C.P.A., has served as Senior Vice President, Chief Financial
Officer and Treasurer of the Company since 1982. Prior to that time he served as
Vice President and Controller of the Company. He initially joined the Company in
1970. Mr. Murdock is also director of the Life Company, NASCO, and NATSCO, Inc.
CRAIG PITTMAN is an attorney and Managing Partner in the firm of Pittman
and Pittman, Mobile, Alabama.
JAMES B. SAXON is a retired executive of Anderson Products, Square D
Company, Leeds, Alabama.
BOARD COMMITTEES AND MEETINGS
During the last full fiscal year the Board of Directors of the Company held
four regularly scheduled and special meetings. All directors attended at least
75% of the meetings of the Board of Directors and the Committees on which they
served during fiscal year 1996.
COMPENSATION COMMITTEE. The Compensation Committee, whose members have been
appointed annually by the Board of Directors, is currently compromised of
Carolyn E. Brunson, Walter P. Wilkerson, and D.M. English. The Committee is
responsible for recommending officers, the salaries of officers, directors fees
and officer bonuses to the Board of Directors for full consideration. The
Compensation Committee met once in fiscal year 1996.
4
<PAGE>
Audit Committee. The Audit Committee is comprised of Winfield Baird,
Carolyn E. Brunson, Lewis Avinger and Walter P. Wilkerson. The principal
functions of the Audit Committee include making recommendations to the Board of
Directors concerning the selection of independent auditors, approval of pro-
posed independent audit fees, review of internal, independent, and regulatory
audit results, review of proposed corrective actions and results thereof with
senior management, review and approval on internal audit functions and controls
and obtaining assurances of regulatory compliance from independent auditors. The
Audit Committee met once in fiscal year 1996.
Nominating Committee. The Nominating Committee is comprised of J.R.
Brunson, D.M. English and M.L. Murdock. This committee is responsible for the
nomination of directors. No procedure has been established by the committee for
considering nominations by the stockholders. The Nominating Committee met once
in fiscal year 1996.
DIRECTORS' REMUNERATION
Remuneration of directors is adjusted annually. Directors are currently
paid an annual fee of $3,200 ($4,468 for the Chairman), plus $610 per meeting
attended and mileage reimbursement of $.29 per mile. In addition, directors
receive $250 per year for each Board committee on which he or she serves, the
total not to exceed $500.
The Company has established an "Unfunded Plan of Deferred Compensation"
which allows Directors to defer fees otherwise payable to them for attending
Board meetings or serving on committees. Participating directors may, at their
option, elect to have the deferred fees credited to either a cash account, which
accrues interest quarterly at a prime interest rate, or to a stock account,
under which such deferred amounts are treated as if they had been invested in
shares of the Company's common stock. Stock accounts may only be distributed in
their equivalent value in cash. All accounts under the plan are unfunded and do
not represent claims against assets of the Company.
STOCK OWNERSHIP OF DIRECTORS, NOMINEES AND EXECUTIVE OFFICERS
The following table sets forth information as of March 1, 1997, as to the
number of shares of Company Common Stock beneficially owned/1/ by (a) each of
the Company's directors, (b) the nominees for director and (c) the directors and
executive officers of the Company as a group.
SHARES OF
COMMON STOCK
BENEFICIALLY PERCENT OF
NAMES OWNED/1/ COMMON STOCK
Lewis Avinger ..................... 1,000 .04%
Carolyn E. Brunson ................ 319,926/2/ 13.79%
5
<PAGE>
James B. Saxon ..................... 19,260 .83%
Winfield Baird ..................... 99,758 4.30%
Jerry B. Brunson ................... 66,678 2.87%
M.L. Murdock ....................... 1,200 .06%
J.R. Brunson ....................... 108,519 4.67%
D.M. English ....................... 105,598 4.55%
Walter P. Wilkerson ................ 5,695 .24%
Craig Pittman ...................... 21,749 .94%
Fred Clark, Jr ..................... 1,000 .04%
Directors and Officers
(as a group, 13 persons
including persons named ............ 764,419 32.95%
above)
Other closely held stock
(as a group, numbering 31
including immediate family
members of some
directors, emiritus directors, and
affiliated entities) ............... 688,053 29.66%
/1/For purposes of this table, an individual is considered to "beneficially
own" any shares of the Company if he or she directly or indirectly has or shares
(i) voting power, which includes power to vote or direct voting of the shares;
or (ii) investment power, which includes the power to dispose or direct the
disposition of the shares. All amounts include stock held in a spouse's name.
/2/Includes stock held in Brunson Properties, a partnership (W.L. Brunson
Estate), Carolyn E. Brunson and William L. Brunson, Jr., Managing Partners.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The family relaitonships, not more remote than first cousin, which exist
amoung the directors and nominees are as follows:
6
<PAGE>
Mr. J.R. Brunson, and Mr. Jerry B. Brunson are brothers. Mrs. Carolyn
Brunson is the widow of their deceased brother, and mother of William L.
Brunson, Jr., Assistant Vice President and Assistant Secretary of the Company
and Assistant Vice President and Secretary of the Company's subsidiaries, Mr.
D.M. English and Mr. James B. Saxon are their first cousins as well as first
cousins of one another. Mr. J.R. Brunson is the father of Jack E. Brunson, a
Vice President of the Casualty Company. Mr. Craig Pittman is the nephew of Mr.
J.R. Brunson and Mr. Jerry B. Brunson. Mr. Pittman is a partner in Pittman &
Pittman, Attorneys at Law, which firm provided legal services to a subsidiary of
the Company during 1996. Fees paid in 1996 to Pittman & Pittman were less than
$23,000. See also the discussion under the heading "Compensation Committee
Interlocks and Insider Participaiton."
EXECUTIVE COMPENSATION
The following table sets forth the remuneration paid by the Company and its
subsidiaries during the fiscal year ended December 31, 1996, to each of its
executive officers whose annual compensation exceeds $100,000.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long Term Compensation
Annual Compensation Awards Payouts
(a) (b) (c) (d) (e) (f) (g) (h) (I)
Other
Name Annual Restricted All Other
and Compen- Stock LTIP Compen-
Principal sation Award(s) Options Payouts sation
Position Year Salary Bonus ($) ($) SARs ($) ($)
- -------- ---- ------ ----- -------- ---------- ----- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
J.R. Brunson 1996 $152,645 $0 0 0 0 0 $14,530
President & CEO 1995 147,939 40,360 0 0 0 0 15,195
1994 138,033 33,510 0 0 0 0 14,022
M.L. Murdock 1996 $100,547 $0 0 0 0 0 $11,290
Sr. Vice President 1995 96,633 26,457 0 0 0 0 12,152
</TABLE>
* "All other Compensation" includes the following for J.R. Brunson for the
years 1996, 1995, and 1994, respectively: Contributions to the 401(k) Retirement
Plan of $7,500, $8,250, and $7,500; Dollar value of benefit for term life
insurance of $890, $805, and $729; and Deferred Director's Fees of $6,140,
$6,140, and $5,793. For Mr. Murdock, the totals for the year 1995 are 401(k)
contributions of $5,027, $6,149, life insurance benefit of $123 and $113, and
Deferred Directors Fees of $6,140, and $5,890.
REPORT OF COMPENSATION COMMITTEE
The Compensation Committee of the Board of Directors is currently comprised
of Carolyn E. Brunson, Walter P. Wilkerson, and D.M. English. Mrs. Brunson and
Mr. Wilkerson are outside directors of the Company. Mr. English serves as
Chairman of the Board of Directors of the Company, which is a non-executive
position. The Committee is responsible for recommending officers, the salaries
of officers, directors' fees, and officer bonuses to the Board of Directors for
full consideration. The committee members receive director fees as described
in this Proxy Statement and do not receive any other compensation from the
Company. The Compensation Committee has provided the following report:
The goals of the Compensation Committee are 1) to create compensation
packages for executive officers which will attract and retain in the Company's
employment persons of excellent managerial ability and 2) to reward those
officers for corporate performance as measured by the Company's financial
results and business achievements and provide incentives for those officers to
make material contributions to the success of the Company, its policyholders,
and its shareholders. The Company's compensation policy is relatively simple,
utilizing annual base salaries with bonuses based upon Company performance
results. The Company does not utilize stock options, rights, or other forms, of
long-term incentives in its cimpensation scheme. Compensation has been and will
continue to be tax deductible. No executive officer will earn in excess of
$1,000,000.
(continued)
7
<PAGE>
Executive salary levels within the Company reflect a number of factors
including the size and location of the Company, and the length of service of the
executives. Bonuses are discretionary with the Board, and require as a
precondition that Company results for a given year reach a threshold level of
return on shareholders' equity. The threshold is determined by the Executive
Committee and takes into consideration a number of factors including current
financial markets and historical patterns of Company operations.
The base salary of the Company's President and Chief Executive Officer, Mr.
J. R. Brunson, results from a base amount set many years ago and has been
adjusted for annual raises. Mr. Brunson has served as President since 1978 and
has been employed by the Company since 1953. The 1996 base salary reflects a 3%
raise over the 1995 base amount. This increase is in response to the increase in
cost of living as well as recognition of Mr. Brunson's overall performance and
leadership. Bonuses are based on prior year results and therefore there was no
bonus paid in 1996 due to the Company's disappointing operating results in 1995.
Sr. Vice President M.L. Murdock's base salary reflects a 4% increase over the
1995 base amount.Mr. Murdock likewise received no bonus in 1996. It is
anticipated that the Company's 1996 operating results, while much improved over
the 1995 results, will not meet the minimum threshold and therefore will not
warrant the awarding of bonuses in 1997 to the Company's President, Sr. Vice
President, and other executive officers. Mr. Brunson and Mr. Murdock were the
only executive officers of the Company whose compensation exceeded $100,000 in
1996.
Contributions to executive officers under the Company's 401(K) Retirement
Plan are made on the same basis as are contributions to all other participants
in the Plan.
The Committee does not anticipate any significant changes in the Company's
executive compensation during 1997. There are no plans to integrate options,
rights or other forms of long-term incentives. The Company does not provide for
long-term employment contracts or severance agreements. Base salaries will
continue to be modified annually as warranted. Bonuses will continue to be
performance-based.
The Committee believes that compensation levels in 1996 adequately reflect
the Company's compensation goals and policies.
Carolyn Brunson
Walter P. Wilkerson
D.M. English
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of the Board of Directors is currently comprised
of Carolyn E. Brunson, D.M. English, and Walter P. Wilkerson. Mrs. Brunson and
Walter P. Wilkerson are outside directors. Mr. English serves as Chairman of the
Board of Directors, which is a non-executive position. The Committee members
receive director fees as described in this Proxy Statement and do not receive
any other compensation from the Company. During 1996, Mrs. Brunson received
director compensation of $6,140.00; Mr. Wilkerson's director compensation in the
amount of $6,140.00 was deferred; and Mr. English received $6,798.00.
EMPLOYEE BENEFITS
401 (K) Plan
The Company contributes an amount equal to twice the employees' salary
deferral amounts, not exceeding 5% of total compensation of all eligible
employees, to a Retirement Savings Plan established under Sec.401 K of the
Internal Revenue Service Code of 1986 (the "Company 401 (K) Plan"). All
full-time employees who have completed 1,000 hours of service on either January
1 or July 1 are eligible to participate. The Company contributions are annually
allocated among the participants' plan accounts based on compensation received
during the year for which contribution is made. Amounts allocated vest as
scheduled in the Company 401 (K) Plan. Benefits are generally payable only upon
termination, retirement, disability, or death.
8
<PAGE>
COMPANY PERFORMANCE
The following table shows a five year comparision of cumulative returns of
the Company, the NASDAQ STOCK MARKET INDEX (U.S.) and the NASDAQ Insurance
Stocks Index. The cumulative total return is based on change in the year-end
stock price plus reinvested dividends for each of the periods shown.
<TABLE>
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
NASDAQ NASDAQ
Measurement period STOCK MARKET INSURANCE
(Fiscal year Covered) NATIONAL SECURITY (U.S.) INDEX STOCK INDEX
<S> <C> <C> <C>
1991 100.00 100.00 100.00
1992 135.90 116.38 135.34
1993 175.98 133.59 144.76
1994 177.39 130.59 136.26
1995 143.84 184.67 193.56
1996 154.34 227.16 220.57
</TABLE>
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth those persons who beneficially owned, as of
March 1, 1997, five percent or more of the Company Common Stock. Unless
otherwise noted, each beneficial owner has sole voting and investment powers.
Amount and Nature
of Beneficial Percentage
Ownership of of
Name and Address Company Common Stock Class
Brunson Properties, a partnership ...... 302,547 13%
(W.L. Brunson Estate)
Elba, Alabama 36323
Trustees-National Security Retirement
Savings Plan, Elba, Alabama 36323 ...... 233,938 10%
Franklin Resources, Inc. ............... 227,407 9.8%
777 Mariners Island Blvd
San Mateo, CA 94403
INDEPENDENT ACCOUNTANTS
The firm of Dudley, Hopton-Jones, Sims & Freeman, certified public
accountants, is the independent accountant for the Company and its subsidiaries
and has performed the audit function for the year ending December 31, 1996. The
independent accountant is appointed by the Board of Directors after receiving
the recommendation of the Audit Committee. Such appointment is customarily made
in July of each year. Consequently, the independent accountant for the fiscal
year ending December 31, 1997 has not yet been appointed. No plans have been
made for a representative of Dudley, Hopton-Jones, Sims & Freeman to be present
at the Annual Meeting.
9
<PAGE>
DIRECTOR AND OFFICER SECURITIES REPORTS
The Federal Securities laws require the Company's directors and executive
officers to file with the Securities and Exchange Commission initial reports of
ownership and reports of changes in ownership of the Company's common stock. To
the best of the Company's knowledge, all persons subject to these reporting
requirements filed the required reports on a timely basis.
STOCKHOLDERS' PROPOSALS
In order for a proposal by a stockholder of the Company to be eligible to
be included in the proxy statement and proxy form for the Annual Stockholders'
Meeting to be held in 1998, the proposal must be received by the Company at its
headquarters, 661 E. Davis Street, Elba, Alabama 36323, on or before December
17, 1997. The Board of Directors will review any stockholder proposals that are
filed to determine whether such proposals meet applicable criteria for inclusion
in the 1998 Proxy Statement for consideration at the 1998 Annual Meeting.
TRANSFER AGENT AND REGISTRAR
The Company is the Transfer Agent and Registrar for the Company Common
Stock.
ANNUAL REPORTS AND FINANCIAL STATEMENT
A copy of the Company's Annual Report to Stockholders for the fiscal year
ended December 31, 1996 accompanies the Proxy Statement. Additional copies of
the Company's Annual Report to Stockholders, and/or a copy of the Company's
annual report on Form 10-K filed with the Securities and Exchange Commission may
be obtained by written request to the Chief Financial Officer of the Company at
the address indicated above.
OTHER MATTERS
The Board of Directors of the Company does not know any other matters to be
brought before the meeting. If any other matters, not now known, properly come
before the Meeting or any adjournments thereof, the persons named in the
enclosed proxy, or their substitutes, will vote the proxy in accordance with
their judgement in such matters.
Date: March 17, 1997
THE NATIONAL SECURITY
GROUP, INC.
J.R. Brunson
President
10
<PAGE>
THE NATIONAL SECURITY GOURP, INC.
PROXY APRIL 17, 1997 ANNUAL MEETING OF SHAREHOLDERS PROXY
The undersigned hereby appoints J.R. Brunson, and Bette Ham, or either of
them, each with power to appoint his substitute, and hereby authorizes them to
represent and to vote, as designated hereon, and in their discretion with
respect to any other business properly brought before the meeting, all the share
of stock of The National Security Group, Inc., which the undersigned is entitled
to vote at the annual meeting of shareholders to be held on April 17, 1997 or
any adjournment thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. This proxy,
when properly executed, will be in the manner directed herein by the undersigned
shareholder(s). If no direction is made, the Proxy will be voted "FOR" the
election of all nominees for directors and the proposals on the reverse side
hereof.
Signature -------------------
Date -------------------
Signature -------------------
Date -------------------
Please sign exactly as your name appears on stock certificate. If shares
are held jointly, each shareholder should sign. If signing as attorney,
executor, administrator, trustee, or guardian, please give full title.
1. The election as directors of THREE nominees listed below to serve for
3-year terms expiring in 2000.
( ) For all nominees listed below (except as marked to the contrary below)
( ) Withhold authority to vote for all nominees listed below
INSTRUCTION: To withhold authority to vote for any individual nominee,
strike through the nominee's name on the list below:
J.R. Brunson D.M. English Walter P. Wilkerson
2. In their discretion on such other business as may properly be brought
before the meeting or any adjournment thereof.
<PAGE>
