THE NATIONAL SECURITY GROUP, INC.
661 EAST DAVIS STREET
ELBA, ALABAMA 36323
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
APRIL 20, 2000
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 20, 2000 at 10:00 a.m. (Central Time) for the following
purposes:
1. To elect five (5) members to the Board of Directors, four (4) of which
are to serve for three year terms, and one (1) to serve for a two year
term, 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 20, 2000
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 20, 2000
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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 the
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 20,
2000 at the principal executive offices of the Company (the "Annual Meeting").
At the Annual Meeting, the Company's stockholders will vote to elect four
directors to serve for three year terms and one for a two year term, 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 20, 2000.
GENERAL
This Proxy Statement is being mailed to holders of the Company Common Stock
on or about March 20, 2000, 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 20, 2000, at 10:00 a.m. (Central Time).
At the Annual Meeting, the stockholders of the Company will elect four
directors to serve for three year terms, and one for a two year term. 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 20, 2000, 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 2,051,811 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.
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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. Five directors will be elected at
the Annual Meeting. J. R Brunson, D. M. English, Walter Wilkerson, J. E. Brunson
and W. L. Brunson, Jr. (the "Nominees") have been nominated by the Board of
Directors for election, four to serve for a term of three years, and one to
serve for a two year term. 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
Positions Held Age at Director
Name with the Company Dec.31,1999 Since*
J. R. Brunson ........... Director 71 1962
D. M. English ........... Director 81 1947
Walter Wilkerson ........ Director 52 1984
J. E. Brunson ........... President -Fire & Casualty Co. 43 1999
W. L. Brunson, Jr.** .... President & CEO of Group Co. &
President -Life Co. 41 1999
** Two year term
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR"
THE ELECTION OF THE ABOVE NOMINEES AS DIRECTORS.
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Continuing Directors
Age at Director End of
Name Dec.31,1999 Since* Present Term
Lewis Avinger 77 1984 2001
Winfield Baird 67 1964 2002
Carolyn Brunson 72 1978 2001
Fred Clark, Jr. 39 1996 2002
M. L. Murdock 57 1976 2002
Craig S. Pittman 43 1992 2001
James B. Saxon 65 1982 2001
*In 1990 National Security Insurance Company was reorganized as a holding
company system pursuant to a plan of exchange 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 & 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 served as President and Chief Executive Officer of the Company
from 1978 through 1999. He previously held the position of Senior Vice
President. He joined the Company in 1953.
D. M. ENGLISH is a retired urban renewal administrator. He became a director of
the Company upon its founding in 1947 and served as Chairman of the Board from
1987 to 1998.
WALTER WILKERSON is a certified public accountant and partner in the firm Barr,
Brunson, Wilkerson & Bowden in Enterprise, Alabama.
J. E. BRUNSON has served as President of the Fire and Casualty Company since
1997. He also serves on the Board of Directors of the Casualty Company, the Life
Company and Omega One.
W. L. BRUNSON, JR. is President and Chief Executive Officer and Director of the
Company, effective January 1, 2000. He previously held the position of President
of the Life Company He joined the Company in 1983. Mr. Brunson is also a
Director of the Casualty Company, NATSCO, the Life Company and Omega One.
Continuing Directors
LEWIS AVINGER is a retired Savings and Loan executive from Montgomery, Alabama.
WINFIELD BAIRD is currently the President and a director of Investment
Counselors of Alabama, Inc. of Birmingham, Alabama. He previously was a partner
in J. C. Bradford & Co.
CAROLYN BRUNSON presently serves as the Managing Partner of Brunson Properties
(formerly the W. L. Brunson Estate), a family partnership engaged in
investments.
FRED D. CLARK, JR. is currently President of The Clark Company, LLC in
Montgomery, Alabama, and serves as Executive Director of the Electric Cities of
Alabama. He was formerly Executive Director of the Alabama Farmers Federation,
President of Alabama Rural Electric Association of Cooperatives, Montgomery,
Alabama, 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 a director of the Life Company, the Fire Company,
Omega One Insurance Company, Inc., and NATSCO, Inc.
CRAIG S. PITTMAN is an attorney and Managing Partner of the firm of Pittman,
Pittman, Carwie, and Fuquay, 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
five 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 1999.
Compensation Committee. The Compensation Committee, whose members have been
appointed annually by the Board of Directors, is currently composed of Fred D.
Clark, Jr., James B. Saxon and Walter Wilkerson. 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 1999.
Audit Committee. The Audit Committee is comprised of Fred D. Clark, Jr.,
James B. Saxon, Craig Pittman 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 proposed
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 of internal audit functions and controls and
obtaining assurances of regulatory compliance from independent auditors. The
Audit Committee met once in fiscal year 1999.
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Nominating Committee. The Nominating Committee is comprised of James B.
Saxon, Walter P. Wilkerson and Lewis Avinger. 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 1999.
DIRECTORS' REMUNERATION
Remuneration of directors is usually adjusted annually. Directors are
currently paid an annual fee of $3,300 ($4,622 for the Chairman), plus $635 per
meeting attended and mileage reimbursement of $.31 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 specific assets of the Company.
STOCK OWNERSHIP OF DIRECTORS, NOMINEES AND EXECUTIVE OFFICERS
The following table sets forth information as of December 31, 1999, as to
the number of shares of Company Common Stock beneficially owned' 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 .05%
Winfield Baird ......................... 98,258 4.79%
Carolyn E. Brunson ..................... 324,313 (2) 15.81%
J. E. Brunson .......................... 8,523 (1) .42%
J. R. Brunson .......................... 111,355 5.43%
W. L. Brunson, Jr ...................... 70,261 (3) 3.42%
Fred Clark, Jr ......................... 89,086 (4) 4.34%
D. M. English .......................... 92,934 4.53%
M. L. Murdock .......................... 1,202 .06%
Craig S. Pittman ....................... 22,249 1.08%
James B. Saxon ......................... 19,260 .92%
Walter P. Wilkerson .................... 5,695 .28%
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Directors and Officers
(as a group, 13 persons
including persons named
above) 851,759 41.51%
Other closely held stock
(as a group, numbering
30 including immediate
family members of some
directors, emeritus directors,
affiliated entities,and employee
retirement plan) 361,107 17.60%
(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.
(3) Includes 63,995 shares held by Estate of Jerry B. Brunson, W. L.
Brunson, Jr. and Sara Brunson, co-executors.
(4) Includes 88,086 shares held in Trust for Fred Clark, Sr. Estate
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The family relationships, not more remote than first cousin, which exist
among the directors and nominees are as follows:
Mrs. Carolyn Brunson is the widow of the deceased brother of J.R. Brunson,
and mother of William L. Brunson, Jr., President and Chief Executive Officer of
the Company, and President of the Life Company. Mr. J.R. Brunson, Mr. D. M.
English and Mr. James B. Saxon are first cousins . Mr. J. R. Brunson is the
father of Jack E. Brunson, President of the Casualty Company. Mr. Craig S.
Pittman is the nephew of Mr. J. R. Brunson. Mr. Pittman is a partner of Pittman,
Pittman , Carwie and Fuquay, Attorneys at Law, which firm provided legal
services to a subsidiary of the Company during 1999. See also the discussion
under the heading "Compensation Committee Interlocks and Insider Participation."
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, 1999. 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, 2000 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.
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth the remuneration paid by the Company and its
subsidiaries during the fiscal year ended December 31, 1999, to each of its
executive officers whose annual compensation exceeds $100,000.
- -------------------------------------------------------------------------------
Name Other Restricted All
and Principal Base Annual Stock Options LTIP Other
Position Year Salary Bonus Comp. Award(s) SARs Payouts Comp.*
- --------------------------------------------------------------------------------
J.R. Brunson
President & CEO 1999 $167,112 $0 0 0 0 0 $21,364
1998 $161,720 $11,756 0 0 0 0 $13,511
1997 $158,543 $0 0 0 0 0 $16,187
M.L. Murdock
Sr. Vice President 1999 $109,226 $0 0 0 0 0 $14,742
1998 $107,071 $7,766 0 0 0 0 $10,052
1997 $104,740 $0 0 0 0 0 $11,930
*"All Other Compensation" includes the following for J. R. Brunson for the
years 1999, 1998, and 1997, respectively: Contributions to the 401 (K)
Retirement Plan of $11,966, $4,987 and $7,929; Dollar value of benefit for term
life insurance of $2,423, $2,184 and $1,970; and Deferred Directors Fees of
$6,975, $6,340 and $6,290. For Mr. Murdock, the totals for the years 1998, 1997,
and 1996 are 401(K) contributions of $7,822, $3,272 and $5,237; life insurance
benefit of $195, $440 and $403; and Deferred Directors Fees of $6,725, $6,340
and $6,290.
REPORT OF COMPENSATION COMMITTEE
The Compensation Committee of the Board of Directors is currently composed
of Fred D. Clark, Jr., James B. Saxon and Walter Wilkerson, all of whom are
outside directors of the Company. 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 Committee considers the primary responsibility of the company's
executive officers as being to ensure the long-term health and growth of the
Company. The Company's compensation policy is relatively simple, utilizing
annual base salaries and bonuses based upon Company performance. The system
provides for moderate base salaries, but offers opportunities for executives and
supervisors to earn incentive compensation based on Company results. The Company
has not utilized stock options, rights, or other forms of long - term incentives
in its compensation scheme. Section 162(m) of the Internal Revenue Code limits
the Company's tax deduction for compensation paid to certain executive officers
that does not qualify as "performance-based" to $1 million per executive
officer. Compensation has been and will continue to be tax deductible as no
executive officer will earn in excess of $ 1 million.
<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 historic patterns of Company operations.
During 1999, the only executive officers of the Company whose annual
compensation exceeded $100,000 were former President J.R. Brunson (who retired
effective December 31, 1999) and Sr. Vice President M.L. Murdock. Mr. Brunson's
base salary in 1999 reflects a 3.3% increase over 1998. Mr. Murdock's base
salary reflects a 2% increase over the previous year's base level. There were no
bonuses awarded in 1999 to Mr. Brunson, Mr. Murdock, or other executive officers
and supervisors due to performance thresholds not being met in 1998.
The Company's compensation policy has basically remained unchanged for
several years. The Committee is currently in the process of reviewing the
policies and expects to be in a position to recommend to the Board certain
modifications during the present year, consistent with the Committee's and Board
of Directors' view that that the Company should place greater emphasis on
incentive-based compensation for management tied to the financial and strategic
performance of the Company. The Committee's objective is to more closely align
the interests of management with the interests of shareholders toward a mutual
goal of attaining long-term growth and profitability.
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 believes that the Company's salary and incentive compensation
programs are competitive and appropriate for National Security.
Fred Clark, Jr.
James Saxon
Walter Wilkerson
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of the Board of Directors is currently comprised
of Fred D. Clark, Jr., James B. Saxon, and Walter Wilkerson, all of whom are
outside directors. The Committee members receive director fees as described in
this Proxy Statement and do not receive any other compensation from the Company.
During 1999 Mr. Clark received director compensation of $7,800.00 Mr. Saxon
received director compensation in the amount of $7,165.00, and Mr. Wilkerson's
director compensation was deferred in the amount of $6,725.00.
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 ss.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.
<PAGE>
COMPANY PERFORMANCE
The following graph shows a five year comparison of cumulative returns for
the Company, the NASDAQ Stock Market Index (U.S.), the NASDAQ Insurance Stocks
Index and the S & P 500. The NASDAQ Stock Market Index is being replaced by the
S & P 500 for comparison purposes, the Company believing that the S & P 500 is
now a more representative indicator. The cumulative total return is based on
change in the year - end stock price plus reinvested dividends for each of the
periods shown.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
NASDAQ NASDAQ
Measurement period NATIONAL STOCK MARKET INSURANCE
(Fiscal year Covered) SECURITY (U.S.) INDEX STOCK INDEX S&P 500
1994 100.00 100.00 100.00 100.00
1995 81.09 141.33 142.05 137.59
1996 87.01 173.89 161.92 169.48
1997 126.12 213.07 237.52 226.14
1998 101.49 300.25 211.58 291.80
1999 85.93 542.43 164.29 353.74
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth those persons who beneficially owned, as of
December 31, 1999, 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 305,371 14.88%
(W.L. Brunson Estate)
Elba, Alabama 36323
SunTrust Bank as Trustee, 195,234 9.52%
National Security Retirement Savings Plan,
Chattanooga, Tennessee 37402
J.R. Brunson 111,355 5.43%
1192 Pine Circle
Elba, Alabama 36323
<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 2001, the proposal must be received by the Company at its
headquarters, 661 E. Davis Street, Elba, Alabama 36323, on or before January 12,
2001. The Board of Directors will review any stockholder proposals that are
filed to determine whether such proposals meet applicable criteria for inclusion
in the 2001 Proxy Statement for consideration at the 2001 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, 1999 accompanies this 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 20, 2000
THE NATIONAL SECURITY GROUP, INC.
W L. Brunson, Jr.
President
THE NATIONAL SECURITY GROUP, INC
PROXY MAY 20, 2000 ANNUAL MEETING OF SHAREHOLDERS PROXY
The undersigned hereby appoints W.L. Brunson, Jr. and Bette Ham, or either
of them, as Proxies, 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 shares 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 20, 2000 or any adjournment thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. This proxy,
when properly executed, will be voted 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 the directors and the proposals on the
reverse side hereof.
Signature
---------------------------
Date
---------------------------
Signature
---------------------------
Date
---------------------------
Please sign, date and return this proxy in the enclosed postage paid
envelope. (Please sign exactly as your name appears above. 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 the FIVE nominees listed below, four(4) of which
are to serve for 3-year terms expiring in 2003, and on (1) to serve for a two
year term expiring in 2002.
-- 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 J.E. BRUNSON WALTER P. WILKERSON W.L. BRUNSON, JR.*
2. In their discretion on such other business as may properly be brought before
the meeting or any adjournment thereof.
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