Document

DEFM14A 1 a2022proxystatementspecial.htm DEFM14A Document

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

SCHEDULE 14A

(RULE 14a-101)

PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934

Filed by the Registrant ☒ Filed by a Party other than the Registrant ☐

Check the appropriate box:

☐ Preliminary proxy statement

☐ Confidential, for use of the Commission only (as permitted by Rule 14a-6(e)(2))

☒ Definitive proxy statement

☐ Definitive additional materials

☐ Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12

The National Security Group, Inc.

(Name of Registrant as Specified in Its Charter)

(Name of Person(s) Filing Proxy statement, if Other Than the Registrant)

Payment of filing fee (Check the appropriate box):

☐ No fee required

☒ Fee paid previously with preliminary materials.

☐ Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11.

661 East Davis Street, Elba, Alabama 36323

THE NATIONAL SECURITY GROUP, INC.,

A DELAWARE CORPORATION

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS

To be held on June 20, 2022

______________________

To the Stockholders of The National Security Group, Inc.:

NOTICE IS HEREBY GIVEN that a Special Meeting of the Stockholders (as defined below) of The National Security Group, Inc., a Delaware corporation (the “Company”), will be held on June 20, 2022 at 10:00 a.m., Central Daylight Time, at the principal executive offices of the Company, 661 East Davis Street, Elba, Alabama, and any adjournment thereof (the “Special Meeting”).

The purpose of the Special Meeting is to consider and vote for the following proposals:

•To approve and adopt the Agreement and Plan of Merger dated January 26, 2022, (“Plan of Merger”), by and among the Company, VR Insurance Holdings, Inc., a Delaware corporation (“Parent”), and VR Insurance Merger Sub, Inc., a Delaware corporation and wholly-owned subsidiary of Parent (“Merger Sub”), and the transactions contemplated thereby. Pursuant to the terms of the Plan of Merger, and subject to the conditions thereof, Merger Sub will merge with and into the Company, with the Company continuing as the surviving corporation and a wholly owned subsidiary of Parent (the “Merger”) and with the shares of common stock of the Company being converted into cash at a price of $16.35 per share (subject to adjustment);

•To approve, on an advisory (non-binding) basis, the compensation that may be paid or become payable to the Company’s named executive officers that is based on or otherwise relates to the Plan of Merger and the transactions contemplated by the Plan of Merger (the “Compensation Proposals”). See “Interests of the Company’s Directors and Executive Officers in the Merger; Golden Parachute Proposal” on page 57 of this proxy statement and the Golden Parachute Compensation table therein; and

•If necessary or appropriate, to adjourn the Special Meeting to solicit additional proxies if there are insufficient votes at the time of the meeting to approve and adopt the Plan of Merger (the “Adjournment Proposal”).

The Company’s Board of Directors (the “Board”) has established April 26, 2022 as the Record Date for the Special Meeting. Only holders of shares of common stock of the Company (“Stockholders”) on the Record Date are entitled to notice of the Special Meeting and to vote at the Special Meeting or any adjournment, postponement or other delay thereof.

The Company’s Board, unanimously recommends, on behalf of the Company, that you vote: (1) “FOR” the adoption of the Plan of Merger; (2) “FOR” the approval, on an advisory (non-binding) basis, of the Compensation Proposals; and (3) “FOR” the Adjournment Proposal, if applicable.

Approval of the Plan of Merger Proposal is a condition to the consummation of the Merger. If such proposal is not approved, the Merger will not be consummated.

YOUR VOTE IS IMPORTANT. IF YOU ARE A STOCKHOLDER ON THE RECORD DATE, WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING IN PERSON, PLEASE MARK, SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD PROMPTLY TO THE COMPANY IN THE ENCLOSED POSTAGE PAID REPLY ENVELOPE.

Proxies are valid only if the proxy card is properly executed and received by the Secretary of the Company prior to the commencement of the Special Meeting. If you attend the Special Meeting, you may vote personally whether or not you have previously submitted a proxy card and such vote shall be in lieu of your previously submitted proxy card.

In addition to voting by a proxy card, you may use the Internet to transmit your voting instructions. Online voting is available at www.proxyvote.com. Have your proxy card in hand when you access the website and follow the instructions to obtain your records and to create an electronic voting instruction form to transmit your voting instructions up until 10:59 p.m., Central Daylight Time, on June 19, 2022. Telephone voting is available by calling 1-800-690-6903. Use any touch-tone telephone to transmit your voting instructions up until 10:59 p.m., Central Daylight Time, on June 19, 2022. Please have your proxy card in hand when you call or access the web page and then follow the instructions.

FOR INFORMATION REGARDING THE PROPOSALS, CONTACT:

The National Security Group, Inc.

661 East Davis Street

Elba, Alabama 36323

Attention: Laura Jordan

You will not be charged for any of the documents that you request.

To receive documents in advance of the Special Meeting, please make a request for such documents no later than June 15, 2022.

You may also obtain such documents through the SEC website at www.sec.gov. Information included on such website is not incorporated by reference into this proxy statement. We are providing the information about how you can obtain certain documents at this website only for your convenience.

By Order of the Board of Directors

Laura Williams Jordan

Secretary

May 23, 2022

Elba, Alabama

661 East Davis Street, Elba, Alabama 36323

Proxy Statement

For Special Meeting of Stockholders

June 20, 2022

This Proxy Statement (the “Proxy Statement”) is furnished in connection with the solicitation of proxies by the Board of Directors of The National Security Group, Inc. (the “Company”), to be voted at the Special Meeting of Stockholders of the Company to be held at 10:00 a.m., Central Daylight Time, on June 20, 2022, at the principal executive offices of the Company, 661 East Davis Street, Elba, Alabama, for the purposes set forth in the accompanying Notice of Special Meeting of Stockholders (“Special Meeting”). Any reference to “the Group” or any use of the terms “Company,” “we,” “us” or “our” in this proxy statement refers to The National Security Group, Inc. This Proxy Statement, dated May 23, 2022, is being mailed to holders of the Company Common Stock on or about May 23, 2022.

The Board of Directors has fixed April 26, 2022, as the record date for the determination of Stockholders who are entitled to notice of, and to vote at the Special Meeting and any adjournments thereof. On the record date, the Company had outstanding 2,532,632 shares of common stock, the holders of which are entitled to one vote per share. No shares of any other class of common stock are issued or outstanding. The Company has retained Broadridge Financial Solutions, Inc. to assist in the distribution of proxy materials and solicitation of votes. The Company bears all costs associated with the distribution and solicitation.

At the Special Meeting, the Stockholders of the Company will vote on matters noted in the proxy. The affirmative vote of the holders of more than fifty-percent (50%) of the total number of votes entitled to be cast in respect of all of the shares entitled to vote on the Plan of Merger will be required to approve the Plan of Merger. The approval of the Compensation Proposals and Adjournment Proposal requires an affirmative majority of the total votes cast “FOR” and “AGAINST” the proposals at the meeting.

Whether or not you attend the Special Meeting, your vote is important. Accordingly, you are asked to sign and return the accompanying proxy card, regardless of the number of shares you own. Shares of common stock represented by a properly executed and returned proxy card will be treated as present at the Special Meeting for purposes of determining a quorum without regard to whether the proxy card is marked as casting a vote for or against or abstaining with respect to a particular matter. If the enclosed proxy card is properly signed and returned, your shares will be voted on all matters that properly come before the Special Meeting for a vote. If instructions are specified in your signed proxy card with respect to matters being voted upon, your shares will be voted in accordance with your instructions. If no instructions are so specified, the shares represented by such proxy card will be voted in accordance with the recommendation of the Board of Directors. So far as is now known, there is no business to be acted upon at the Special Meeting other than as set forth above, and it is not anticipated that other matters will be brought before the Special Meeting. If, however, other appropriate matters are duly brought before the Special Meeting, the persons appointed as proxy agents will have discretion to vote or act thereon according to their own judgment.

In addition to voting by your proxy card, you may use the Internet to transmit your voting instructions. Online voting is available at www.proxyvote.com. Have your proxy card in hand

when you access the website and follow the instructions to obtain your records and to create an electronic voting instruction form to transmit your voting instructions up until 10:59 p.m., Central Daylight Time, on June 19, 2022. Telephone voting is available by calling 1-800-690-6903. Use any touch-tone telephone to transmit your voting instructions up until 10:59 p.m., Central Daylight Time, on June 19, 2022. Please have your proxy card in hand when you call or access the web page and then follow the instructions.

The failure of any Stockholder of record to submit a signed proxy card, grant a proxy electronically or to vote by ballot at the Special Meeting will have the same effect as a vote “AGAINST” the Plan of Merger but will not have any effect on the other proposals. Abstentions will have the same effect as a vote “AGAINST” the Plan of Merger, but will not have any effect on the other proposals.

If your shares are held in street name by your bank, brokerage firm or other nominee, your bank, brokerage firm or other nominee, as applicable, will not be permitted to vote your shares without instructions from you on any of the proposals, and the failure to instruct your broker, bank or other nominee on how to vote your shares will have the same effect as a vote “AGAINST” the Plan of Merger but will not have any effect on the other proposals. You should instruct your bank, brokerage firm or other nominee as to how to vote your shares by following the procedures provided by your bank, brokerage firm or other nominee. You also will not be able to vote your shares in person at the Special Meeting or any adjournment thereof unless you obtain a legal proxy form from your broker, bank or other nominee.

You should carefully read and consider the entire proxy statement and its annexes, including, but not limited to, the Plan of Merger, along with all of the documents incorporated by reference into the accompanying proxy statement, as they contain important information about, among other things, the Merger and how it affects you. If you have any questions concerning the Plan of Merger, the Merger, the Special Meeting or the accompanying proxy statement, would like additional copies of the accompanying proxy statement or need help voting your shares of common stock, please contact our proxy solicitor:

Broadridge Financial Solutions

51 Mercedes Way

Edgewood, NY 11717

1-800-690-6903

TABLE OF CONTENTS

Page


SUMMARY			3
QUESTIONS AND ANSWERS ABOUT THE MERGER			15
FORWARD-LOOKING STATEMENTS			22
THE SPECIAL MEETING			24
Date, Time and Place			24
Purpose of the Special Meeting			24
Shares Entitled to Vote; Record Date; Quorum			24
Adjournments			24
Copies of Proxy Statement			24
Voting and Proxies			25
Shares Held by the Company’s Directors and Executive Officers			25
Solicitation of Proxies			25
Revocation of Proxies			26
Vote Required for Approval			26
THE MERGER			27
Overview			27
Parties Involved in the Merger			27
The National Security Group, Inc.			27
VR Insurance Holdings, Inc. and VR Merger Sub, Inc.			27
Background and Reasons for the Merger			27
Recommendation of the Board			36
Opinion of the Company’s Financial Advisor			39
Management's Financial Projections			49
Stockholder Action			52
Appraisal Rights			52
Vote on the Plan of Merger			55
Stockholder Support Agreements			55
Governmental Approvals			56
Effective Time of the Merger			56
Distributions to the Stockholders			57
Interests of the Company’s Directors and Executive Officers in the Merger; Golden Parachute Proposal			57
PRINCIPAL TERMS OF THE AGREEMENT AND PLAN OF MERGER			61
Structure of the Merger			61
Formation of Merger Sub			61
Funding of Plan of Merger			61
Merger Consideration and Adjustments to Merger Consideration			61


Representations and Warranties			62
Conduct of the Company’s Business Pending the Closing			63
Conduct of Parent’s Business Pending the Closing			65
No Solicitation			65
Financing Covenants and Conditions			66
Management of Surviving Entity			66
Efforts to Use to Close the Merger			67
Other Covenants and Agreements			67
Directors’ and Officers’ Indemnification and Insurance			68
Conditions to Closing			68
Governmental Approvals			70
Amendment of the Agreement and Plan of Merger			70
Limitation of Remedies; Specific Performance			70
Termination of the Agreement and Plan of Merger			70
The Termination Fee			71
Expenses of the Merger			71
Merger Effective Time			71
Governing Law			71
Distribution of Merger Consideration			72
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT			73
CERTAIN FEDERAL INCOME TAX CONSEQUENCES			75
OTHER MATTERS			75
APPENDIX 1			1-1
APPENDIX 2			2-1
APPENDIX 3			3-1
PROXY CARD

SUMMARY

This summary highlights selected information from the Proxy Statement and may not contain all information that may be important to you. Accordingly, we encourage you to carefully read this entire Proxy Statement and its appendices. The Plan of Merger is attached as Appendix 1 to this proxy statement. You should carefully read and consider the entire Plan of Merger, which is the legal document that governs the Merger.

Except as otherwise specifically noted in this proxy statement, the terms “Company,” “Surviving Corporation,” “we,” “our,” “ours” and “us” refer to The National Security Group, Inc. and the term “you” refers to each beneficial owner of shares of common stock of the Company. Throughout the proxy statement, we refer to VR Insurance Holdings, Inc. as “Parent” and VR Insurance Merger Sub, Inc. as “Merger Sub.” In addition, throughout this proxy statement we refer to the Agreement and Plan of Merger, dated January 26, 2022, by and among the Company, Parent and Merger Sub as the “Plan of Merger.” Unless indicated otherwise, any other capitalized term used herein but not otherwise defined herein has the meaning assigned to such term in the Plan of Merger.


Proposed Transaction or “Merger” See “The Merger” on p. 27.			The Company and Parent and its subsidiary Merger Sub have entered into the Plan of Merger which provides for the acquisition of the Company by Parent, by the merger of Merger Sub with and into the Company, with the Company surviving the Merger and thereby becoming a wholly-owned subsidiary of Parent.
The Parties involved in the Merger			The National Security Group, Inc. Headquartered in Elba, Alabama, the Company, through its property & casualty and life insurance subsidiaries, is a specialty underwriter of property, casualty, life, accident and health insurance in ten states. The Company’s property and casualty insurance subsidiary writes primarily personal lines property coverage including dwelling fire and windstorm, homeowners, and mobile homeowners’ products. The Company’s life insurance subsidiary also offers life, accident and health, supplemental hospital and cancer insurance products. The principal executive offices of the Company are located at 661 East Davis Street, Elba, Alabama 36323, and its telephone number is 334-897-2273. VR Insurance Holdings, Inc. VR Insurance Holdings, Inc. (“Parent”) is a Delaware corporation and wholly owned subsidiary of VR Insurance SPV, LLC, a Delaware limited liability company owned by Vivek Ranadivé and a group of family office and strategic investors. VR Insurance Merger Sub, Inc. VR Insurance Merger Sub, Inc. is a Delaware corporation and wholly owned subsidiary of VR Insurance Holdings, Inc. Merger Sub was formed to facilitate the Merger and will merge with the Company upon the closing of the Merger.


Structure of the Merger See “The Merger” on p. 27, and “Principal Terms of the Agreement and Plan of Merger” on p. 61.			The Plan of Merger requires Merger Sub, a newly formed subsidiary of Parent, to merge with and into the Company, with the Company surviving the Merger. Parent will provide the funds to be distributed for the Merger Consideration pursuant to the Plan of Merger. The Closing or the Effective Time for the Merger is expected to occur in the second or third quarter of 2022. At the Effective Time, as a result of the Merger and without any action on the part of Parent, Merger Sub, or the Company or the holder of any capital stock of Parent, Merger Sub, or the Company, each share of Company Common Stock issued and outstanding immediately prior to the Effective Time (other than the shares of Company Common Stock that are owned by Parent or the Company (as treasury stock or otherwise) or any of their respective direct or indirect wholly-owned subsidiaries as of immediately prior to the Effective Time (“Cancelled Shares”)) will be converted into the right to receive cash, without interest, in the amount of $16.35 per share subject to adjustments in Section 2.06 of the Plan of Merger and as detailed in Principal Terms of the Agreement and Plan of Merger, p. 61 (the “Merger Consideration”). At or immediately prior to the closing of the Merger, Parent will deposit, or cause to be deposited, sufficient funds to pay the aggregate Merger Consideration with the Paying Agent for payment of each share of common stock owned by each stockholder. After the Merger is completed, you will have the right to receive the Merger Consideration, but you will no longer have any rights as a stockholder (except that stockholders who properly exercise their appraisal rights may have the right to receive payment for the “fair value” of their shares determined (“Dissenting Shares”) pursuant to an appraisal proceeding, as contemplated by Section 262 of the Delaware General Corporation Law (“DGCL”)). At the Effective Time, each share of common stock of Merger Sub issued and outstanding immediately prior to the Effective Time shall be converted into and become one newly issued, fully paid, and non-assessable share of common stock of the Surviving Corporation with the same rights, powers, and privileges as the shares so converted and shall constitute the only outstanding shares of capital stock of the Surviving Corporation.


Stockholder Support Agreement See “The Merger – Stockholder Support Agreements” on p. 55.			On the same date as the execution of the Plan of Merger, certain directors who are Stockholders (individually and with respect to shares over which such person may have sole voting control), entered into separate Stockholder Support Agreements (the “Support Agreements”), pursuant to which and subject to the terms thereof, among other things, each such Stockholder, individually, agreed to vote the shares owned by him in favor of the approval of the Merger and Plan of Merger, and to take certain other actions in furtherance of the transactions contemplated by the Plan of Merger. Such Stockholders did not receive any additional consideration for entering into the Support Agreement. The execution of the Support Agreements was not a condition to the execution of the Plan of Merger nor the consummation of the transactions pursuant to the Plan of Merger. The Support Agreement by its terms does not limit the Stockholder from fulfilling his fiduciary duties as a director of the Company and voting shares consistent with such fiduciary duty.
The Special Meeting See “The Special Meeting” on p. 24.			Place, Date and Time. The Special Meeting of Stockholders will be held on June 20, 2022 at 10:00 a.m., Central Daylight Time, at the principal executive offices of the Company, 661 East Davis Street, Elba, Alabama. Who is Eligible to Vote. If you were the record owner of shares of common stock of the Company on the Record Date, you are eligible to vote at the Special Meeting. If your shares are held in “street name,” you may direct your nominee how to vote your shares if your nominee owned the shares on the record date and you follow the instructions provided by your nominee. Purpose. Stockholders will be asked to consider and vote upon a proposal to approve the Plan of Merger and a proposal to, if necessary or appropriate, adjourn the Special Meeting to solicit additional proxies if there are insufficient votes at the time of the meeting to approve the Plan of Merger. In addition, Stockholders will be asked to consider and vote, on an advisory basis, upon a Compensation Proposal. Record Date. The Board of the Company has established April 26, 2022 as the Record Date for the Special Meeting. As of the Record Date, there were 2,532,632 Shares outstanding. Vote Required for Approval of the Plan of Merger. Each Stockholder is entitled to one vote for each share on each of the matters to be voted on at the Special Meeting. The affirmative vote of the holders of more than fifty percent (50%) of the total number of votes entitled to be cast in respect of all of the shares entitled to vote on the Plan of


See “The Merger - Background of the Merger” on p. 27 and “Recommendation of the Board” on p. 36.			Merger will be required to approve the Plan of Merger. If you do not vote at the Special Meeting, your failure to vote will have the same effect as a vote against the Merger. Vote Required for Compensation Proposals. The votes cast in favor of the Compensation Proposals must exceed the votes cast against the Compensation Proposals. Your vote on this item is advisory and will not be binding on the Company. Therefore, if the Plan of Merger is approved by the Company Stockholders, the Compensation Proposals will still be paid to those contemplated if and to the extent required or allowed under applicable law even if Company Stockholders do not approve the Compensation Proposals. For more information regarding the Compensation Proposals, see Interests of the Company’s Directors and Executive Officers in the Merger; Golden Parachute Proposal, p. 57. Vote Required for Adjournment. The votes cast in favor of adjournment must exceed the votes cast against the adjournment. Procedure for Voting. If you are a record owner of the Company Common Stock, you may vote your shares by attending the meeting and voting in person or you may appoint a proxy to vote your shares on matters properly presented at the Special Meeting in any of the three following ways: (i) by signing and returning the enclosed proxy card in the enclosed envelope; (ii) by using the internet in accordance with instructions on the enclosed proxy card; or (iii) by using the internet in accordance with instructions on the enclosed proxy card. If you hold shares in “street name” (that is, through a bank, broker, or other nominee), your shares must be voted in accordance with instructions provided by the nominee. If your shares are held in the name of a nominee and you would like to attend the Special Meeting and vote in person, you may contact the person in whose name your shares are registered and obtain a proxy from that person and bring it to the Special Meeting. A Stockholder may revoke its proxy at any time before the vote is taken at the Special Meeting. You may revoke your proxy prior to the Special Meeting by either (i) submitting to the Company a properly executed proxy bearing a later date; (ii) by providing different telephone or internet instructions at a later date; or (iii) by giving written notice of revocation to the Secretary of the Company. The mailing address of the Company is 661 East Davis Street, Elba, Alabama 36323. You may also revoke your proxy by voting your shares at the Special Meeting. Merely attending the Special Meeting without voting will not constitute revocation of an earlier proxy.


			Determination and Recommendation of the Board on the Merger. On January 26, 2022, the Board, including all of the disinterested members of the Board, unanimously approved the Plan of Merger. The Board believes the Merger will benefit the Company and the Stockholders. The Board recommends that the Stockholders vote “FOR” the approval of the Plan of Merger and “FOR” the approval, on an advisory basis, of the Compensation Proposals. Additionally, the Board recommends that the Stockholders vote “FOR” the adjournment of the Special Meeting, if necessary or appropriate to solicit additional proxies. Therefore, if you are a Stockholder and are in favor of the Plan of Merger, you are encouraged to vote in favor of the Plan of Merger either in person or by proxy at the Special Meeting. If you do not vote at the Special Meeting, your failure to vote will have the same effect as a vote against the Merger.
The Plan of Merger See “Principal Terms of the Agreement and Plan of Merger” on p. 61.			The Plan of Merger provides for Merger Sub, a newly formed Parent subsidiary, to be merged into Company with Company surviving the merger. At the Merger Effective Time, the shares of the Merger Sub will be converted into shares of Common Stock of the Surviving Corporation so that the Surviving Corporation will become a wholly owned subsidiary of Parent. Upon the Effective Time, the Surviving Corporation shall amend and restate its certificate of incorporation as provided for in the Certificate of Merger and make all other filings or recordings required by Delaware law in connection with the Merger. Merger Effective Time. The Merger will be effective at such time as the Certificate of Merger is duly filed with the Secretary of State of the State of Delaware (or at such later time as may be agreed by the Company and Parent and specified in the Certificate of Merger). Merger Consideration. At the Merger Effective Time, all shares of Common Stock of the Company (other than the Cancelled or Dissenting Shares and referred to as “Shares”) will be canceled and converted into the right to receive cash in the amount of $16.35 per shares. The Merger Consideration is subject to a downward adjustment if the combined statutory capital and surplus of the Company’s insurance subsidiaries is less than $43,000,000 according to the financial statements most recently filed with the insurance regulators prior to closing. If the combined statutory capital and surplus is less than $43,000,000 and not less than $38,700,000, the per share price will be subject to a downward adjustment in an amount up to 10% of the per


			share price. In such event, the Merger Consideration will be an amount equal to $16.35 multiplied by a fraction in which the sum of the combined statutory capital and surplus is the numerator and $43,000,000 is the denominator. If the combined statutory capital and surplus is less than $38,700,000, the Merger Consideration will not be reduced below 90% of $16.35, but Parent will have the right to terminate the Plan of Merger.
Effect of the Merger			Upon the terms and subject to the conditions of the Plan of Merger, Merger Sub will merge with and into the Company, with the Company continuing as the Surviving Corporation and a wholly owned subsidiary of Parent. As a result of the Merger, the Company’s common stock will no longer be publicly traded, and will be delisted from NASDAQ. In addition, the Company’s common stock will be deregistered under the Securities Exchange Act of 1934, as amended, and the Company will no longer file periodic reports with the United States Securities and Exchange Commission. If the Merger is completed, you will not own any shares of the capital stock of the Surviving Corporation.
Interests of Directors and Executive Officers in the Merger See “Interest of Directors and Executive Officers in the Merger; Golden Parachute Proposal” on p. 57.			Certain of the Company’s executive officers and directors may have interests in the merger that may be different from or in addition to those of the Stockholders generally. The Company’s Board was aware of and considered these interests to the extent such interests existed at the time, among other matters, in evaluating and negotiating the Plan of Merger, in approving the Plan of Merger and the Merger and in recommending that the Plan of Merger be approved by the Stockholders. As described in more detail below, these interests potentially include: •Payments Following Change in Control. ▪Certain executive officers and directors are entitled to supplemental retirement payments pursuant to a Supplemental Executive Retirement Plan if there is a change in control. The change in control payments under the Supplemental Executive Retirement Plan are described later in this proxy statement. ▪Certain executive officers and directors are entitled to accelerated payments under the Company’s Non-Qualified Deferred Compensation Plan on a change of control as described later in this proxy statement.


			•Employment and Consulting Arrangements. In connection with the Plan of Merger, the Company’s subsidiary, National Security Insurance Company, entered into an employment a