X0304 5 2011-12-31 0 0 0 0000865058 NATIONAL SECURITY GROUP INC NSEC 0001239478 BAIRD WINFIELD 3536 VICTORIA ROAD BIRMINGHAM AL 35223 1 0 0 0 Phantom Stock Units 8.75 2012-02-14 5 J 0 270 8.75 A Phantom Stock Units 270 7357 D The phantom stock units were awarded under the nonqualified deferred compensation plan in which directors could elect to defer their directors' fees by receiving phantom stock units payable in cash upon separation from service from the board. The plan was frozen on 12/31/2004. These shares were acquired during the fiscal year pursuant to the dividend reinvestment component of the nonqualified deferred compensation plan which was frozen on 12/31/2004. Pursuant to a plan adopted by the Board in 2010 to terminate the old phantom stock plan, the remaining balance will be distributed in cash during 2012. Pertains to phantom stock plan in which election to defer fees is not a reportable event under Section 16, however acquisitions of phantom stock pursuant to the election are reportable. These deferrals are exempt transactions for purposes of Section 16b-3(d). Brian R. McLeod, Attorney-in-fact 2012-02-14