EXHIBIT 10(cc)

NATIONAL WESTERN LIFE INSURANCE COMPANY
GRANDFATHERED
NON-QUALIFIED DEFINED BENEFIT PLAN

As Amended and Restated Effective as of
December 31, 2004

 
 

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NATIONAL WESTERN LIFE INSURANCE COMPANY
GRANDFATHERED NON-QUALIFIED DEFINED BENEFIT PLAN

Contents

   
Page
     
ARTICLE I – PURPOSE, DEFINITIONS AND CONSTRUCTION
 
1
1.1     Purpose of the Plan
 
1
1.2     Definitions
 
1
1.3     Construction
 
3
1.4     Cessation of Benefit Accruals and Vesting and Early Retirement
 
4
Eligibility Service
         
ARTICLE II - ELIGIBILITY
 
5
2.1     Eligibility Requirements
 
5
2.2     Loss of Eligible Employee Status
 
5
     
ARTICLE III – FUNDING
 
6
3.1     Funding
 
6
     
ARTICLE IV – BENEFITS UNDER THE PLAN
 
7
4.1     Normal Retirement Benefit
 
7
4.2     Late Retirement Benefit
 
8
4.3     Early Retirement Benefit
 
9
4.4     Disability Retirement Benefit
 
10
4.5     Benefit at Termination of Employment
 
11
4.6     Pre-Retirement Death Benefit
 
12
4.7     In-Service Distribution Under the Qualified Plan
 
13
4.8     Supplemental Benefit for Charles D. Milos, Jr.
  13
4.9     Alternative Benefit for Chairman of the Employer
 
13
4.10    Benefit for President of the Employer
 
15
   
ARTICLE V – DETERMINATION OF PAYMENT OF ACCOUNT
 
16
5.1     Form of Payment
 
16
5.2     Special payment Provision
 
16
     
ARTICLE VI – MISCELLANEOUS
 
17
6.1     Administration of the Plan
 
17
6.2     Amendment of the Plan
 
17
6.3     Termination of the Plan
 
17
6.4     Notices to Participants
 
17
6.5     Non-Alienation
 
17

 
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ARTICLE I
 
INTRODUCTION

1.1           Purpose of the Plan
 
This Plan is established by the Employer to provide an additional benefit for
certain select management employees, who are defined below, to augment the
retirement benefit which is otherwise provided to such employees under the tax
qualified defined benefit plan maintained by the Employer.  This Plan is not
intended to, and does not, qualifies under sections 401(a) and 501(a) of the
Internal Revenue Code, and is designed to be exempt from the requirements of the
Employee Retirement Income Security Act.

The Plan is amended and restated as set forth herein effective as of the Freeze
Date solely for the purpose of incorporating prior amendments (all of which were
effective prior to January 1, 2005) and documenting the freezing of all benefits
effective as of the Freeze Date.  Nothing in this amended and restated Plan is
intended to constitute or shall be construed as constituting a material
modification of the Plan.  Because the Plan has not been materially modified
after October 3, 2004 and does not provide for any benefits not earned and
vested as of December 31, 2004, the Plan is intended to be exempt from the
requirements of Code section 409A.

1.2           Definitions
 
The following terms, when found in the Plan, shall have the meanings set forth
below:

(a)           Accrued Benefit:  The benefit determined under Article IV hereof,
payable at the Participant’s Normal Retirement Date, which has accrued at any
time under the provisions of the Plan, determined as if the Participant had then
terminated his employment with the Employer.
 
(b)           Actuarial Equivalent:  The equivalent in value of amounts expected
to be received under the Plan under different forms of payment, determined based
upon an interest assumption of eight and one-half percent (8.5%) and a mortality
assumption based on the 1984 Unisex Pension (UP84) Mortality Table.
 
(c)           Beneficiary:  The person(s) and/or the trust(s) created for the
benefit of a person or persons who are the natural object of the Participant’s
bounty, or the Participant’s estate, whichever is designated by the Participant
to receive the benefits payable hereunder upon his death.
 
(d)           Code:  The Internal Revenue Code of 1986, as it may be amended
from time to time, including any successor.
 

 
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(e)           Compensation:  Compensation shall be the total cash remuneration
paid by the Employer during each Plan Year, as reported on Form W-2 or its
subsequent equivalent.  Notwithstanding the foregoing, “Compensation” shall
include director’s fees; amounts deferred under Code sections 125, 132(f)(4), or
401(k); and nonqualified elective deferrals, and “Compensation” shall exclude
reimbursements or other expense allowances, moving expenses, welfare benefits,
imputed value of insurance, stock option income, commissions, bonuses, and any
other extraordinary remuneration.  Compensation hereunder shall not be subject
to any limitations applicable to tax-qualified plans, such as pursuant to Code
sections 401(a)(17) or 415.  Prior to January 1, 2000, “NWAMI compensation” was
excluded from the definition of “Compensation.”
 
(f)           Disability:  A physical or mental condition of a Participant
resulting from bodily injury, disease or mental disorder which renders him
incapable of continuing any gainful occupation.  The determination of Disability
shall be made either as a result of the Participant qualifying for a pension
under the federal Social Security Act, or based upon such evidence as is
determined to be applicable by the Employer in its sole discretion.
 
(g)           Early Retirement Date:  The first day of the month which is prior
to a Participant’s Normal Retirement Date, but follows his attainment of age
fifty-five (55), completion of fifteen (15) Years of Service, and his
termination of employment from the Employer.
 
(h)           Effective Date:  January 1, 1991.
 
(i)            Eligible Employee:  A person employed by the Employer as of
December 31, 1990, in the position of Senior Vice President or above, or a
person who has been designated by the President of the Employer, by name,
position, or in any other manner, as being in the class of persons who are
eligible to participate in the Plan.  Such latter designation shall be made in
writing by the President of the Employer.  However, no person who is an employee
of the Employer shall be selected as an Eligible Employee except a member of the
select group of management or highly compensated employees of the Employer, as
such term is defined under section 201 of the Employee Retirement Income
Security Act of 1974, and regulations and rulings promulgated thereunder by the
Department of Labor.
 
(j)            Employer:  National Western Life Insurance Company, a corporation
organized and existing under the laws of the State of Texas, and any successor
or successors.
 
(k)           Freeze Date:  December 31, 2004.
 
(l)            Normal Retirement Age:  The date on which a Participant attains
age sixty-five (65).
 
(m)          Normal Retirement Date:  The first day of the month coincident with
or next following a Participant’s Normal Retirement Age.
 

 
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(n)           Participant:  An Eligible Employee who has met the requirements of
Section 2.1 hereof, and whose participation has not been terminated.
 
(o)           Plan:  The National Western Life Insurance Company Grandfathered
Non-Qualified Defined Benefit Plan, as set forth herein, and as it may be
amended from time to time.
 
(p)           Plan Year:  The twelve month period beginning on January 1 and
ending on December 31 each year.
 
(q)           Qualified Plan:  The National Western Life Insurance Company
Pension Plan, as it may be amended from time-to-time.
 
(r)            Service:  The period of a Participant’s employment considered in
the determination of his eligibility hereunder and in the calculation of the
vested amount of his benefits.  A Participant’s Service shall be determined in
twelve (12) month periods, commencing with the twelve (12) month period that
begins on his date of hire with the Employer, and thereafter based on Plan
Years, including the Plan Year within which falls his date of hire.  During such
twelve (12) month periods, a Year of Service will be granted if the Participant
completes at least one thousand (1,000) Hours of Service.  An Hour of Service is
each hour for which the Participant is paid by virtue of his employment with the
Employer, including hours paid but not worked, and including hours completed
prior to the date he actually becomes a Participant hereunder.
 
(s)           Committee:  The individuals appointed by the Board of Directors of
the Employer, and known as the Pension Committee, to manage and direct the
administration of the Plan.
 
1.3           Construction
 
The  masculine gender, where appearing in the Plan, shall be deemed to include
the feminine gender, and the singular may indicate the plural, unless the
context clearly indicates the contrary.  The words “hereof”, “herein”,
“hereunder” and other similar compounds of the word “here” shall, unless
otherwise specifically stated, mean and refer to the entire Plan, not to any
particular provision or Section.  Article and Section headings are included for
convenience of reference and are not intended to add to, or subtract from, the
terms of the Plan.

 
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1.4           Cessation of Benefit Accruals and Vesting and Early Retirement
Eligibility Service
 
Notwithstanding any other provision of the Plan to the contrary, no individual
(including individuals who ceased to be Employees prior to the Freeze Date)
shall become a Participant, be credited with additional Years of Service for
vesting or Early Retirement Date eligibility purposes, or accrue any benefits
under the Plan after the Freeze Date.  For purposes of the immediately preceding
sentence, an individual would be considered to accrue benefits under the Plan
after the Freeze Date if he would experience an increase in any retirement,
ancillary, or other benefit already earned or accrued under the Plan as of the
Freeze Date.  Without limiting the generality of the foregoing, an individual
would experience an increase in benefits if he, for example, is credited with
new Service, Compensation, or other remuneration taken into account under the
Plan.  Therefore, no individual shall be credited with additional Service after
the Freeze Date, and remuneration paid after the Freeze Date shall not be taken
into account under the Plan for benefit accrual purposes.  The provisions of
this Section are intended to comply with an exemption from the requirements of
Code section 409A and shall be construed in accordance therewith.  The
provisions of this paragraph shall not be considered a “material modification”
of the Plan, but shall instead be considered a cessation of future deferrals in
accordance with Treasury regulation section 1.409A-6(a)(4)(iii).

 
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ARTICLE II
 
ELIGIBILITY

2.1           Eligibility Requirements
 
An Eligible Employee shall become a Participant hereunder as of the first
January 1 or July 1 which is coincident with or next follows his completion of
one (1) Year of Service.

2.2           Loss of Eligible Employee Status
 
In the event of the demotion of a participating Eligible Employee, such that the
employee is no longer an Eligible Employee with the meaning of Section 1.2(i)
herein, the employee shall lose his status as a Participant, and no further
contributions by the employee shall be allowed under the Plan.

 
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ARTICLE III
 
FUNDING

3.1           Funding
 
The Employer is under no obligation to earmark or set aside any funds toward the
funding of this Plan.  However, the benefits to be provided to each Participant
hereunder may be paid from the assets, if any, of the National Western Life
Insurance Company Non-Qualified Plans Trust, if any, designed to be an
irrevocable grantor trust under Code section 671.  However, if the assets of
such trust are not available or are insufficient to pay such benefits or if no
such trust is established or funded, then benefits hereunder shall be paid from
the general assets of the Employer.  The rights of each Participant and any
Beneficiary hereunder shall be solely those of an unsecured general creditor of
the Employer.

 
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ARTICLE IV
 
BENEFITS UNDER THE PLAN

4.1           Normal Retirement Benefit
 
The benefit to be paid pursuant to this Plan to a Participant who retires at his
Normal Retirement Date shall be equal to a. less b. less c., but in no event
greater than d., where:

(a)           equals the benefit which would have been payable at the
Participant’s Normal Retirement Date under the terms of the Qualified Plan as of
December 31, 1990, as if that plan had continued without change, and without
regard to limitations applicable under Code sections 401(a)(17) and 415, and
 
(b)           equals the benefit which actually becomes payable under the terms
of the Qualified Plan at the Participant’s Normal Retirement Date, and
 
(c)           equals the Actuarially Equivalent life annuity which may be
provided by an accumulation of two percent (2%) of the Participant’s
Compensation for each year of Service on and after the Effective Date hereunder,
accumulated at an assumed interest rate of eight and one-half percent (8.5%) to
his Normal Retirement Date, and
 
(d)           equals the benefit which would have been payable at the
Participant’s Normal Retirement Date under the terms of the Qualified Plan as of
December 31, 1990, as if that plan had continued without change , and without
regard to limitations applicable under Code sections 401(a)(17) and 415, except
that the proration over fifteen (15) years shall instead be calculated over
thirty (30) years (i.e. the benefit shall equal fifty percent (50%) of Final
Average Compensation less fifty percent (50%) of Primary Insurance Amount as
defined under the Qualified Plan, for thirty (30) or more years of service at
Normal Retirement Date or, alternatively, each portion of the formula shall be
determined as One and two-thirds percent (1.667%) for each year of service to
the maximum thirty (30) years of service), and except that NWAMI Compensation
normally excluded by reason of Section 1.2(e) hereof shall be included, less the
benefit provided under the Qualified Plan.
 
The foregoing benefit shall be payable as of the Participant’s Normal Retirement
Date, in accordance with Article V hereof as to form and duration of payment.

 
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4.2           Late Retirement Benefit
 
The benefit to be paid pursuant to this Plan to a Participant who retires after
his Normal Retirement Date shall be equal to a. less b. less c., but in no event
greater than d., where:

(a)           equals the Actuarial Equivalent of the benefit which would have
been payable at the Participant’s Normal Retirement Date under the terms of the
Qualified Plan as of December 31, 1990, as if that plan had continued without
change, and without regard to limitations applicable under Code sections
401(a)(17) and 415, and
 
(b)           equals the benefit which actually becomes payable under the terms
of the Qualified Plan at the Participant’s Late Retirement Date, and
 
(c)           equals the Actuarially Equivalent life annuity which may be
provided by an accumulation of two percent (2%) of the Participant’s
Compensation for each year of Service on and after the Effective Date hereunder,
accumulated at an assumed interest rate of eight and one-half percent (8.5%) to
his Late Retirement Date, and
 
(d)           equals the benefit which would have been payable at the
Participant’s Late Retirement Date under the terms of the Qualified Plan as of
December 31, 1990, as if that plan had continued without change , and without
regard to limitations applicable under Code sections 401(a)(17) and 415, except
that the proration over fifteen (15) years shall instead be calculated over
thirty (30) years (i.e. the benefit shall equal fifty percent 50%) of Final
Average Compensation less fifty percent (50%) of Primary Insurance Amount as
defined under the Qualified Plan, for thirty (30) or more years of service at
Late Retirement Date or, alternatively, each portion of the formula shall be
determined as One and two-thirds percent (1.667%) for each year of service to
the maximum thirty (30) years of service), and except that NWAMI Compensation
normally excluded by reason of Section 1.2(e) hereof shall be included, less the
benefit provided under the Qualified Plan.
 
The foregoing benefit shall be payable as of the first day of the month
following the Participant’s termination of employment from the Employer, in
accordance with Article V hereof as to form and duration of payment.

 
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4.3           Early Retirement Benefit
 
The benefit to be paid pursuant to this Plan to a Participant who retires on or
after his Early Retirement Date and before his Normal Retirement Date shall be
equal to a. less b. less c., but in no event greater than d., where:

(a)           equals the benefit which would have been payable at the
Participant’s Normal Retirement Date under the terms of the Qualified Plan as of
December 31, 1990, as if that plan had continued without change, and without
regard to limitations applicable under Code sections 401(a)(17) and 415,
multiplied by a fraction, the numerator of which is his years of Service as of
his Early Retirement Date, and the denominator of which is his years of Service
he would have earned had his employment continued uninterrupted to his Normal
Retirement Date, and
 
(b)           equals the benefit which would be payable under the terms of the
Qualified Plan if his retirement under such plan were effective as of the same
date, and
 
(c)           equals the Actuarially Equivalent life annuity which may be
provided by an accumulation of two percent (2%) of the Participant’s
Compensation for each Year of Service on and after the Effective Date hereunder,
accumulated at an assumed interest rate of eight and one-half percent (8.5%) to
his Early Retirement Date, and
 
(d)           equals the benefit which would have been payable at the
Participant’s Normal retirement Date under the terms of the Qualified Plan as of
December 31, 1990, as if that plan had continued without change , and without
regard to limitations applicable under Code Sections 401(a)(17) and 415, except
that the proration over fifteen (15) years shall instead be calculated over
thirty (30) years (i.e. the benefit shall equal fifty percent 50%) of Final
Average Compensation less fifty percent (50%) of Primary Insurance Amount as
defined under the Qualified Plan, for thirty (30) or more years of service at
Early Retirement Date or, alternatively, each portion of the formula shall be
determined as One and two-thirds percent (1.667%) for each year of service to
the maximum thirty (30) years of service), and except that NWAMI Compensation
normally excluded by reason of Section 1.2(e) hereof shall be included, less the
benefit provided under the Qualified Plan.  Such benefit shall then be
multiplied by a fraction, the numerator of which is his years of Service as of
his Early Retirement Date, and the denominator of which is his years of Service
he would have earned had his employment continued uninterrupted to his Normal
Retirement Date.
 
The foregoing benefit shall be payable as of the Participant’s Early Retirement
Date, in accordance with Article V hereof as to form and duration of
payment.  Such benefit shall be reduced to reflect earlier commencement, by one
fifteenth (1/15th) for each of the first five (5) years and one thirtieth
(1/30th) for each of the next five (5) years by which the Early Retirement Date
precedes the Participant’s Normal Retirement Date, with such reduction
interpolated between whole years of completed months.

 
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4.4           Disability Retirement Benefit
 
If a Participant who has completed five (5) years of Service becomes Disabled,
the benefit to be paid pursuant to this Plan shall be equal to a. less b. less
c., but in no event greater than d., where:

(a)           equals the benefit which would have been payable at the
Participant’s Normal Retirement Date under the terms of the Qualified Plan as of
December 31, 1990, as if that plan had continued without change, and without
regard to limitations applicable under Code sections 401(a)(17) and 415, and
 
(b)           equals the benefit which actually becomes payable under the terms
of the Qualified Plan at the Participant’s Disability Retirement Date, and
 
(c)           equals the Actuarially Equivalent life annuity which may be
provided by an accumulation of two percent (2%) of the Participant’s
Compensation for each year of Service on and after the Effective Date hereunder,
accumulated at an assumed interest rate of eight and one-half percent (8.5%) to
his Normal Retirement Date, and
 
(d)           equals the benefit which would have been payable at the
Participant’s Normal Retirement Date under the terms of the Qualified Plan as of
December 31, 1990, as if that plan had continued without change , and without
regard to limitations applicable under Code Sections 401(a)(17) and 415, except
that the proration over fifteen (15) years shall instead be calculated over
thirty (30) years (i.e. the benefit shall equal fifty percent 50%) of Final
Average Compensation less fifty percent (50%) of Primary Insurance Amount as
defined under the Qualified Plan, for thirty (30) or more years of service at
Normal Retirement Date or, alternatively, each portion of the formula shall be
determined as One and two-thirds percent (1.667%) for each year of service to
the maximum thirty (30) years of service), and except that NWAMI Compensation
normally excluded by reason of Section 1.2(e) hereof shall be included, less the
benefit provided under the Qualified Plan.
 
The foregoing benefit shall be payable as of the Participant’s Normal Retirement
Date, in accordance with Article V hereof as to form and duration of payment.

 
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4.5           Benefit at Termination of Employment
 
The benefit to be paid pursuant to this Plan to a Participant who terminates his
employment at a time when he is not entitled to a Normal Retirement, Late
Retirement, Early Retirement, Disability Retirement, or Death Benefit shall be
equal to a. less b. less c., but in no event greater than d., multiplied by e.
where:

(a)           equals the benefit which would have been payable at the
Participant’s Normal Retirement Date under the terms of the Qualified Plan as of
December 31, 1990, as if that plan had continued without change, and without
regard to limitations applicable under Code sections 401(a)(17) and 415,
multiplied by a fraction, the numerator of which is his years of Service as of
his date of termination of employment with the Employer, and the denominator of
which is his years of Service he would have earned had his employment continued
uninterrupted to his Normal Retirement Date, and
 
(b)           equals the benefit which would be payable under the terms of the
Qualified Plan if his retirement under such plan were effective as of the same
date, and
 
(c)           equals the Actuarially Equivalent life annuity which may be
provided by an accumulation of two percent (2%) of the Participant’s
Compensation for each Year of Service on and after the Effective Date hereunder,
accumulated at an assumed interest rate of eight and one-half percent (8.5%) to
his date of termination of employment with the Employer.
 
(d)           equals the benefit which would have been payable at the
Participant’s Normal retirement Date under the terms of the Qualified Plan as of
December 31, 1990, as if that plan had continued without change , and without
regard to limitations applicable under Code sections 401(a)(17) and 415, except
that the proration over fifteen (15) years shall instead be calculated over
thirty (30) years (i.e. the benefit shall equal fifty percent 50%) of Final
Average Compensation less fifty percent (50%) of Primary Insurance Amount as
defined under the Qualified Plan, for thirty (30) or more years of service at
Early Retirement Date or, alternatively, each portion of the formula shall be
determined as One and two-thirds percent (1.667%) for each year of service to
the maximum thirty (30) years of service), less the benefit provided under the
Qualified Plan, and except that NWAMI Compensation normally excluded by reason
of Section 1.2(e) hereof shall be included, such benefit multiplied by a
fraction, the numerator of which is his years of Service as of his date of
termination of employment with the Employer, and the denominator of which is his
years of Service he would have earned had his employment continued uninterrupted
to his Normal Retirement Date, and
 

 
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(e)           is one hundred percent (100%) if the Participant is at a level
equal to or higher than Executive Vice President, and in all other cases is
determined based on the following:
 

Years of Service
 
Percent
Less than 3 years
 
    0%
3 years
 
  20%
4 years
 
  40%
5 years
 
  60%
6 years
 
  80%
7 years or more
 
 100%

The foregoing benefit shall be payable as of the Participant’s Normal Retirement
Date, unless at his date of termination of employment with the Employer he had
completed at least fifteen (15) years of Service, in which event it shall be
payable as of the first day of the month coincident with or following his
fifty-fifth birthday, reduced in accordance with the provisions of Section 4.3
hereof.  The benefit shall be paid in accordance with Article V hereof as to
form and duration of payment.

4.6           Pre-Retirement Death Benefit
 
If a Participant dies while in the active service of the Employer, his
Beneficiary shall be entitled to receive the Actuarial Equivalent of his Accrued
Benefit that would have been payable at his Normal Retirement Date (if the
Participant dies on or before his Normal Retirement Date) or at his Late
Retirement Date (if the Participant dies after his Normal Retirement
Date).  Such benefit shall be payable as of the first day of the month
coinciding with or next following the date of the Participant’s death, in
accordance with Article V hereof as to form and duration of payment.

If a Participant dies following his termination of employment at a time when he
is entitled to a deferred benefit under Section 4.5 hereof, his Beneficiary
shall be entitled to receive the Actuarial Equivalent of his vested Accrued
Benefit that would have been payable at his Normal Retirement Date.  Such
benefit shall be payable as of the first day of the month coinciding with or
next following the date of the Participant’s death, in accordance with Article V
hereof as to form and duration of payment.

 
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4.7           In-Service Distribution Under the Qualified Plan
 
If a Participant elects to receive an in-service Pension under Section 7.7 of
the Qualified Plan, such Participant shall not be eligible to receive a benefit
under this Plan until the Participant otherwise becomes eligible to receive a
benefit hereunder pursuant to Section 4.1, 4.2, 4.6, or 4.9.

4.8           Supplemental Benefit for Charles D. Milos, Jr.
 
(a)           Any benefit which Charles D. Milos, Jr. may be entitled to receive
under the preceding provisions of this Article IV shall be increased by the
Actuarial Equivalent Value of the excess of (i) the benefit which he would have
received under the Qualified Plan had he been credited with service under such
plan for the period from February 28, 1981 to January 1, 1983 and (ii) the
benefit which actually becomes payable to such Participant under the terms of
the Qualified Plan.
 
(b)           Any benefit which Charles D. Milos, Jr. may be entitled to receive
under Sections 4.1 through 4.7 hereof shall be determined as if such Participant
had been credited with Service for purposes of this Plan and service for
purposes of the Qualified Plan for the period from February 28, 1981 to January
1, 1983.
 
(c)           Notwithstanding any provision hereof to the contrary, this Section
4.8 is not intended to duplicate and shall not be construed to duplicate any
benefit which Charles D. Milos, Jr. is entitled to receive under the terms of
the Qualified Plan.
 
4.9           Alternative Benefit for Chairman of the Employer
 
The provisions of this Section 4.9 shall apply solely to Robert L. Moody, the
Chairman of the Employer as of the effective date of this Section.  The benefit
payable to such Participant under this Section 4.9 shall be in lieu of any other
benefit payable to such Participant under the Plan.

(a)           The benefit payable to such Participant under the Plan as of such
Participant’s Normal Retirement Date shall be equal to (i) less (ii) less (iii),
where:
 
(i)           equals (A) such Participant’s years of Service (up to a maximum of
forty-five (45)) multiplied by (B) 1.66667% multiplied by (C) the excess of such
Participant’s “Plan Compensation” over such Participant’s “Primary Social
Security Benefit” as defined by the terms of the Qualified Plan as of December
31, 1990, as if that Plan had continued without change, and without regard to
limitations applicable under Code sections 401(a)(17) and 415, and
 
(ii)           equals the benefit which actually becomes payable to such
Participant under the terms of the Qualified Plan at the Participant’s Normal
Retirement Date, and
 

 
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(iii)           equals the Actuarially Equivalent life annuity which may be
provided by an accumulation of two percent (2%) of such Participant’s
Compensation for each year of Service on and after the Effective Date hereunder,
accumulated at an assumed interest rate of eight and one-half percent (8.5%) to
his Normal Retirement Date.
 
(b)           Subsequent to such Participant’s Normal Retirement Date, the net
benefit payable at such Participant’s Normal Retirement Date shall be increased
for additional Service and changes in Plan Compensation as follows.  The gross
benefit, defined as (a)(i) less (a)(iii) above, shall be increased (i) by the
ratio of such Participant’s then current years of Service (up to a maximum of
forty-five (45)) to his years of Service credited as of his Normal Retirement
Date and (ii) by the ratio of such Participant’s then current Plan Compensation
to his Plan Compensation as of his Normal Retirement Date.  The net benefit
shall be equal to the gross benefit so increased, less the current benefit then
payable under the terms of the Qualified Plan.
 
(c)           For purposes of calculating the benefit payable to such
Participant under (b) above, such Participant’s (i) Plan Compensation and
Service and (ii) resulting pension benefit under this Plan shall be redetermined
on a monthly basis; provided that the Participant’s Compensation for a Plan Year
may be projected on an average, level monthly basis for the year, with any
benefit attributable to actual Compensation not taken account in such projection
paid after the end of the Plan Year in a single lump sum equal to the cumulative
monthly difference.
 
(d)           The benefit payable under this Section 4.9 (i) shall be payable in
accordance with Article V hereof as to form and duration of payment and (ii)
shall be reduced by the amount of any benefits paid hereunder to such
Participant prior to the date of adoption of the Seventh Amendment to the Plan.
 
The benefit payable to such Participant under this Section 4.9 with respect to
periods prior to the adoption of the Seventh Amendment to the Plan (after
reduction pursuant to (d) above), shall be paid to such Participant as soon as
practicable after the date of adoption of such Plan amendment in a single lump
sum equal to the cumulative monthly difference.

Notwithstanding anything herein to the contrary, the benefit payable to such
Participant under this Section 4.9 shall be frozen effective as of December 31,
2004 and shall not increase on account of additional Service or Plan
Compensation after such date.  The provisions of this paragraph are intended to
comply with the requirements of Code section 409A and shall be construed in
accordance therewith.  The provisions of this paragraph shall not be considered
a “material modification” of the Plan, but shall instead be considered a
cessation of future deferrals in accordance with Q&A-18(c) of Internal Revenue
Service Notice 2005-1.

 
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4.10           Benefit for President of the Employer
 
(a)           The individual who is the President of the Employer on December 1,
2002 shall be considered an Eligible Employee and shall retroactively become a
Participant in the Plan effective as of April 1, 1991; provided that Section 5.2
of the Plan shall not apply to such Participant.
 
(b)           For purposes of determining the benefit which such Participant
shall be entitled to receive under Sections 4.1 through 4.6 hereof, as
applicable, Sections 4.1(c), 4.2(c), 4.3(c), 4.4(c), and 4.5(c) shall be applied
by substituting April 1, 1991 for the Effective Date.
 
(c)           For purposes of determining the benefit which such Participant
shall be entitled to receive under Sections 4.1 through 4.6 hereof, as
applicable, Sections 4.1(a), 4.1(d), 4.2(a), 4.2(d), 4.3(a), 4.3(d), 4.4(a),
4.4(d), 4.5(a), and 4.5(d) shall be applied by determining a benefit for such
Participant under the terms of the Qualified Plan as of December 31, 1990 (using
the Participant’s service and compensation from and after April 1, 1991) even
though such Participant did not become a participant in the Qualified Plan until
after December 31, 1990.
 
(d)           Notwithstanding any provision hereof to the contrary, this Section
4.10 is not intended to duplicate and shall not be construed to duplicate any
benefit which such Participant is entitled to receive under the terms of the
Qualified Plan.
 
(e)           Notwithstanding anything herein to the contrary, the benefit
payable to such Participant under this Section 4.10 shall be frozen effective as
of December 31, 2004 and shall not increase on account of additional Service or
Plan Compensation after such date.  Because the present value of such benefit
was zero as of December 31, 2004, the effect of the preceding sentence is to
completely eliminate and terminate such Participant’s entitlement to any benefit
under this Plan.  Accordingly, effective as of December 31, 2004 such
Participant shall have no right to any benefit under this Section 4.10 or any
other provision of this Plan.  The provisions of this paragraph are intended to
comply with the requirements of Code section 409A and shall be construed in
accordance therewith.  The provisions of this paragraph shall not be considered
a “material modification” of the Plan, but shall instead be considered a
cessation of future deferrals and termination of the Plan with respect to such
Participant in accordance with Internal Revenue Service Notice 2005-1 and
Proposed Treasury Regulation section 1.409A-6(a)(4).
 

 
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ARTICLE V
 
DETERMINATION OF PAYMENT OF ACCOUNT

5.1           Form of Payment
 
A Participant or Beneficiary entitled to payment shall receive his vested
Accrued Benefit payable in the form of a single life annuity.  Alternatively, a
Participant or Beneficiary may elect, in writing and in such form as the
Committee may direct, to receive his vested Accrued Benefit in the form of an
Actuarially Equivalent annuity under any of the specific annuity forms permitted
under Section 7.3 of the Qualified Plan.  To be effective, such election must be
made at least thirteen (13) months prior to the date the Participant or
Beneficiary first becomes entitled to receive a benefit hereunder.  If a
Participant or Beneficiary does not choose an alternative method of payment, or
fails to elect the payment option prior to the beginning of the thirteen
(13)-month period described above, payment shall be made in the normal, single
life annuity form described above.  Any benefit payable hereunder may be paid
directly by the Employer (or its delegate) or by any funding vehicle established
pursuant to Section 3.1.  At the discretion of the Committee or, as applicable,
the trustee of any trust established pursuant to Section 3.1, payment of such
benefit may be facilitated through purchase of annuity contract; provided that
in no event shall any action be taken to cause the Plan to be considered funded
for purposes of Title I of the Employee Retirement Income Security Act of 1974,
as amended.

5.2           Special Payment Provision
 
As to the Participants whose position with the Employer is that of either
Chairman of the Board or President, an election shall be made available to such
person, as of the date of execution of this Plan, relative to the payment of his
benefit in the form of an Actuarially Equivalent single sum value.  Such
election shall provide that payment of the Participant’s benefit, at whatever
date it becomes payable, shall either be made as permitted under Section 5.1
hereof, or in the alternative lump sum.  Further, such election shall allow such
Participants to elect to receive payment, notwithstanding any other provisions
of this Plan, either at the earlier of date of termination of employment from
the Employer or Normal Retirement Date, or the later of date of termination of
employment from the Employer or Normal Retirement Date.  The election shall be
provided only one time, shall be made in writing, and shall be irrevocable.

 
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ARTICLE VI
 
MISCELLANEOUS

6.1           Administration of the Plan
 
The Plan shall be administered by the Committee.  The books and records of the
Plan shall be maintained by the Employer at its expense, and no member of the
Board of Directors of the employer, or any employee of the Employer acting on
its behalf, shall be liable to any person for any action taken or omitted in
connection with the administration of the Plan, unless attributable to his own
fraud or willful misconduct.

6.2           Amendment of the Plan
 
The Plan may be amended, in whole or in part, from time-to-time, by the Board of
Directors of the Employer, without the consent of any other party.

6.3           Termination of the Plan
 
The Plan may be terminated, at any time, by action of the Board of Directors,
without the consent of any other party.  The termination of this Plan shall not
result in the granting of any additional rights to any Participant, such as full
vesting of his Account, except as already provided under the terms of Article IV
hereof.

6.4           Notices to Participants
 
From time-to-time, the Employer shall provide a Participant with a statement
regarding his Accrued Benefit.  Further, a Participant will be provided written
notice of any amendment of the Plan that affects his rights herein, and of the
termination of the Plan.

6.5           Non-Alienation
 
To the extent permitted by law, the right of any Participant or Beneficiary in
any Account balance hereunder shall not be subject in any manner to attachment
or other legal process for the debts of such Participant or Beneficiary, and any
such Account balance shall not be subject to anticipation, alienation, sale,
transfer, assignment or encumbrance.

 
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IN WITNESS WHEREOF, and as conclusive evidence of the adoption of the foregoing
instrument comprising the National Western Life Insurance Company Grandfathered
Non-Qualified Defined Benefit Plan, NATIONAL WESTERN LIFE INSURANCE COMPANY, as
the Employer, has caused its seal to be affixed hereto and these presents to be
duly executed in its name and behalf by its proper officers thereunto authorized
this 18th day of December, 2008.

ATTEST:
 
NATIONAL WESTERN LIFE
   
INSURANCE COMPANY
           
/S/Margaret M. Simpson
 
/S/James P. Payne
Asst. Secretary
       
Name:  James P. Payne
   
Title:  Senior VP-Secretary
     

 
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