exhibit10cd.htm


    

      EXHIBIT
10(cd)

      


      


      


      


      


      


      


      


      


      


      


      


      


      NATIONAL
WESTERN LIFE INSURANCE COMPANY

      NON-QUALIFIED
DEFINED BENEFIT PLAN

      


      


      


      


      


      


      


      As
Amended and Restated Effective as of

      January
1, 2009

      


      


      


      


      



      
        
           


        

        
           


          
            

          

        

        
           


        

      


      NATIONAL
WESTERN LIFE INSURANCE COMPANY

      NON-QUALIFIED
DEFINED BENEFIT PLAN

      


      Table of
Contents

      


      
        	 
      	 
      	
                Page

              
	 
      	 
      	 
      
	
                ARTICLE
      I – PURPOSE, DEFINITIONS AND CONSTRUCTION

              	 
      	
                1

              
	
                1.1     Purpose
      of the Plan

              	 
      	
                1

              
	
                1.2     Definitions

              	 
      	
                1

              
	
                1.3     Construction

              	 
      	
                4

              
	 
      	 
      	 
      
	
                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     Deferred
      Vested Pension Benefit

              	 
      	
                11

              
	
                4.6     Pre-Retirement
      Death Benefit

              	 
      	
                12

              
	 
      	 
      	 
      
	
                ARTICLE
      V – DETERMINATION OF PAYMENT OF ACCOUNT

              	 
      	
                13

              
	
                5.1     Time
      of Payment

              	 
      	
                13

              
	
                5.2     Form
      of Payment

              	 
      	
                13

              
	
                5.3     Payment
      to the Participant’s Beneficiary

              	 
      	
                15

              
	
                5.4     Payments
      to an Alternate Payee

              	 
      	
                15

              
	 
      	 
      	 
      
	
                ARTICLE
      VI – MISCELLANEOUS

              	 
      	
                17

              
	
                6.1     Administration
      of the Plan

              	 
      	
                17

              
	
                6.2     Benefit
      Claims

              	 
      	
                18

              
	
                6.3     Amendment
      of the Plan

              	 
      	
                19

              
	
                6.4     Termination
      of the Plan

              	 
      	
                19

              
	
                6.5     Notices
      to Participants

              	 
      	
                19

              
	
                6.6     Non-Alienation

              	 
      	
                19

              
	
                6.7     Severability

              	 
      	
                19

              
	
                6.8     Governing
      Law

              	 
      	
                19

              
	
                6.9     Taxes

              	 
      	
                19

              
	
                6.10    Waiver

              	 
      	
                20

              
	
                6.11    Compliance
      With Code Section 409A

              	 
      	
                20

              


      

      



      
        
           


        

        
          i

          
            

          

        

        
           


        

      


      ARTICLE
I

       

      PURPOSE, DEFINITIONS AND
CONSTRUCTION

      


      1.1           Purpose of the
Plan

       

      This Plan
was established by the Employer effective as of the Original Effective Date 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 Qualified Plan (as defined below).  This Plan
is not intended to, and does not, qualify under sections 401(a) and 501(a) of
the Code (as defined below), and is designed and intended to be a plan described
in section 201(2) of ERISA (as defined below).

      


      This Plan
is subject to section 409A of the Code and is intended to provide for post-2004
benefit accruals in lieu of continued benefit accruals under the Grandfathered
Nonqualified Plan.  However, this Plan is a separate plan from the
Grandfathered Nonqualified Plan, and nothing herein shall be construed to
constitute a material modification of the Grandfathered Nonqualified Plan or to
otherwise cause the Grandfathered Nonqualified Plan to be subject to section
409A of the Code.  Benefit accruals and service crediting under the
Grandfathered Nonqualified Plan were frozen effective as of December 31,
2004.  Benefit accruals under the Qualified Plan were frozen effective
as of December 31, 2007.

      


      This Plan
is intended to comply with the requirements of Code section 409A and,
notwithstanding anything herein to the contrary, shall be administered,
operated, and interpreted in compliance with such requirements.  The
Plan is amended and restated as set forth herein effective as of the Effective
Date to make certain clarifying changes to comply with the final regulations
under Code section 409A.  For periods prior to the Effective Date,
each Participant’s benefit shall be determined in accordance with the Plan as in
effect at such time subject to any modifications necessary to satisfy a good
faith interpretation of 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 which
has accrued at any time under the provisions of the Plan.

       

      (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)           Annual
Compensation:  For a Plan Year means the sum of the
Participant’s “monthly compensation” (as defined in Section 1.2(f)) for each month of the Plan Year.

       


      
        
           


        

        
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      (d)           Beneficiary:  The
natural person or natural persons designated (or deemed designated) by a
Participant under Section 5.3 to receive any
benefits payable hereunder after the death of the Participant.

       

      (e)           Code:  The
Internal Revenue Code of 1986, as it may be amended from time to time, including
any successor.

       

      (f)           Compensation:  Twelve
(12) times the average of the Participant’s monthly compensation over the sixty
(60)-consecutive calendar months (or the period of employment, if less)
immediately prior to his Separation from Service.  “Monthly
compensation” shall be the total cash remuneration paid by the Employer during
each month of the Plan Year, as reported on Form W-2 or its subsequent
equivalent.  Notwithstanding the foregoing, “monthly compensation” (i)
shall include director’s fees; amounts deferred under Code sections 125,
132(f)(4), or 401(k); and nonqualified elective deferrals; (ii) for periods on
and after December 5, 2003, 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;
and (iii) for periods prior to January 1, 2000, shall exclude “NWAMI
compensation”.  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.

       

      (g)           Disability or
Disabled:  The inability of a Participant to engage in any
substantial gainful activity by reason of any medically determinable physical or
mental impairment that can be expected to result in death or can be expected to
last for a continuous period of not less than twelve (12) months; provided that
a Participant will be considered Disabled for purposes of the Plan if and only
if he is determined to be totally disabled by the Social Security
Administration.  A Participant’s Disability shall be considered to
have ended at such time as a determination is made by the Social Security
Administration that no further disability benefits shall be payable to the
Participant under the Social Security Act.

       

      (h)           Early Retirement
Age:  The date on which the Participant attains age fifty-five
(55)

       

      (i)           
Early Retirement
Date:  The first day of the month which is prior to a
Participant’s Normal Retirement Date, but follows his attainment of Early
Retirement Age, completion of fifteen (15) years of Service, and Separation from
Service.

       

      (j)           
Effective
Date:  January 1, 2009

       

      (k)           Eligible
Employee:  An employee of the Employer who is listed on
Schedule 1.2(k), as such Schedule may be amended
from time to time by written action of the President of the
Employer.  However, no person shall be selected as or remain 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 ERISA. 

       


      
        
           


        

        
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      (l)           
Employer:  National
Western Life Insurance Company, a corporation organized and existing under the
laws of the State of Texas, and any successor or successors.  For
purposes of Section 1.2(v), the term “Employer”
includes all persons with whom such Employer would be considered a single
employer under Code sections 414(b) and/or 414(c), determined by using the 80%
ownership threshold specified in Code sections 1563(a)(1), (2), and (3) and in
Treasury regulation section 1.414(c)-2, rather than the default 50% ownership
threshold specified in Treasury regulation 1.409A-1(h)(3).

       

      (m)          ERISA:  the
Employee Retirement Income Security Act of 1974, as it may be amended from time
to time, including any successor.

       

      (n)           Grandfathered Nonqualified
Plan:  the Grandfathered National Western Life Insurance
Company Non-Qualified Defined Benefit Plan, originally adopted effective as of
January 1, 1991 and as amended from time to time.

       

      (o)           Normal Retirement
Age:  The date on which a Participant attains age sixty-five
(65).

       

      (p)           Normal Retirement
Date:  The first day of the month coincident with or next
following a Participant’s Normal Retirement Age.

       

      (q)           Original Effective
Date:  January 1, 2005.

       

      (r)           
Participant:  An
Eligible Employee who has met the requirements of Section 2.1 hereof, and whose
participation has not been terminated.

       

      (s)           
Plan:  The
National Western Life Insurance Company Non-Qualified Defined Benefit Plan, as
set forth herein, and as it may be amended from time to time.

       

      (t)           
Plan
Year:  The twelve month period beginning on January 1 and
ending on December 31 each year.

       

      (u)           Qualified
Plan:  The National Western Life Insurance Company Pension
Plan, as it may be amended from time-to-time.

       

      (v)           Separates from Service or
Separation from Service:  A Participant’s “separation from
service” with the Employer within the meaning of Code section
409A(a)(2)(A)(i).  For this purpose, a Participant shall be considered
to have separated from service with the Employer if the facts and circumstances
indicate that the Employer and the Participant reasonably anticipated that no
further services would be performed after the date of separation or that the
level of bona fide services the Participant would perform after such date would
permanently decrease to an amount that is less than fifty percent (50%) of the
average level of bona fide services performed over the immediately preceding
thirty-six (36)-month period.

       


      
        
           


        

        
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      (w)           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.

       

      (x)           
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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      ARTICLE
II

       

      ELIGIBILITY

      


      2.1           Eligibility
Requirements

       

      Each
individual who is an Eligible Employee as of the Original Effective Date shall
become a Participant hereunder as of such date.  No individual who was
not an Eligible Employee as of the Original Effective Date shall become a
Participant hereunder.

      


      2.2           Loss of Eligible Employee
Status

       

      In the
event of the demotion or Separation from Service of a participating Eligible
Employee, such that the employee is no longer an Eligible Employee within the
meaning of Section 1.2(k) herein, the employee
shall lose his status as a Participant, and no further benefit accruals for the
employee shall be allowed under the Plan.  If such an employee again
becomes an Eligible Employee, the employee shall not again become a Participant
and shall not accrue any additional benefits under the Plan.

      



      
        
           


        

        
          5

          
            

          

        

        
           


        

      


      


      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 Separates from
Service at his Normal Retirement Date shall be equal to (a) less (b) less (c)
less (d), but in no event greater than (e), where:

      


      (a)           equals
the annual single life annuity 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 annual single life annuity benefit which is payable (or which would be
payable if elected by the Participant) under the terms of the Qualified Plan at
the Participant’s Normal Retirement Date, and

       

      (c)           equals
the Actuarially Equivalent annual single life annuity which may be provided by
an accumulation of two percent (2%) of the Participant’s Annual Compensation for
each year of Service on and after January 1, 1991, accumulated at an assumed
interest rate of eight and one-half percent (8.5%) to his Normal Retirement
Date, and

       

      (d)           equals
the frozen annual single life annuity benefit which is payable (or which would
be payable if elected by the Participant) at the Participant’s Normal Retirement
Date under the terms of the Grandfathered Nonqualified Plan, but excluding any
benefit accrued under Section 4.8 of such plan, and

       

      (e)           equals
(i) the product of the following amounts determined as of the Participant’s
Normal Retirement Date (A) the Participant’s years of Service (up to a maximum
of thirty (30)) multiplied by (B) 1.66667% multiplied by (C) the excess of the
Participant’s Compensation over the Participant’s annualized “Primary Social
Security Benefit” as defined by the terms of the Qualified Plan as of December
31, 1990, as if such plan had continued without change and without regard to
limitations applicable under Code sections 401(a)(17) and 415, less (ii) the sum
of the benefits described in subsections (b) and (d) above.

       

      The
foregoing benefit shall be payable effective as of the Participant’s Separation
from Service at his Normal Retirement Date, in accordance with Article V hereof
as to the time, form, and duration of payment.  Monthly installments
under Article V shall be calculated by dividing the Participant’s annual benefit
by twelve (12).

      



      
        
           


        

        
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      4.2           Late Retirement
Benefit

       

      The
benefit to be paid pursuant to this Plan to a Participant who Separates from
Service after his Normal Retirement Date shall be equal to (a) less (b) less (c)
less (d), but in no event greater than (e), with such benefit amount adjusted
for Actuarial Equivalence to reflect commencement after the Participant’s Normal
Retirement Date, where:

      


      (a)           equals
the annual single life annuity 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 annual single life annuity benefit which is payable (or which would be
payable if elected by the Participant) under the terms of the Qualified Plan at
the Participant’s Normal Retirement Date, and  

       

      (c)           equals
the Actuarially Equivalent annual single life annuity which may be provided by
an accumulation of two percent (2%) of the Participant’s Annual Compensation for
each year of Service on and after January 1, 1991, accumulated at an assumed
interest rate of eight and one-half percent (8.5%) to his Normal Retirement
Date, and

       

      (d)           equals
the frozen annual single life annuity benefit which is payable (or which would
be payable if elected by the Participant) at the Participant’s Normal Retirement
Date under the terms of the Grandfathered Nonqualified Plan, but excluding any
benefit accrued under Section 4.8 of such plan, and

       

      (e)           equals
(i) the product of the following amounts determined as of the Participant’s
Normal Retirement Date (A) the Participant’s years of Service (up to a maximum
of thirty (30)) multiplied by (B) 1.66667% multiplied by (C) the excess of the
Participant’s Compensation over the Participant’s annualized “Primary Social
Security Benefit” as defined by the terms of the Qualified Plan as of December
31, 1990, as if such plan had continued without change and without regard to
limitations applicable under Code sections 401(a)(17) and 415, less (ii) the sum
of the benefits described in subsections (b) and (d) above.

       

      The
foregoing benefit shall be payable effective as of the Participant’s Separation
from Service, in accordance with Article V hereof as to the time, form, and
duration of payment.  Monthly installments under Article V shall be
calculated by dividing the Participant’s annual benefit by twelve
(12).

      



      
        
           


        

        
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      4.3           Early Retirement
Benefit

       

      The
benefit to be paid pursuant to this Plan to a Participant who Separates from
Service on or after his Early Retirement Date and before his Normal Retirement
Date shall be equal to (a) less (b) less (c) less (d), but in no event greater
than (e) and shall be adjusted as provided in (f), where:

      


      (a)           equals
the annual single life annuity 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 he not Separated from Service prior to his Normal
Retirement Date, and

       

      (b)           equals
the annual single life annuity benefit which is payable (or which would be
payable if elected by the Participant) under the terms of the Qualified Plan at
the Participant’s Normal Retirement Date, and

       

      (c)           equals
the Actuarially Equivalent annual single life annuity commencing at the
Participant’s Normal Retirement Date which may be provided by an accumulation of
two percent (2%) of the Participant’s Annual Compensation for each year of
Service on and after January 1, 1991, accumulated at an assumed interest rate of
eight and one-half percent (8.5%) to his Early Retirement Date, and

       

      (d)           equals
the frozen annual single life annuity benefit which is payable (or which would
be payable if elected by the Participant) at the Participant’s Normal Retirement
Date under the terms of the Grandfathered Nonqualified Plan, but excluding any
benefit accrued under Section 4.8 of such plan, and

       

      (e)           equals
(i) the product of the following amounts determined as of the Participant’s
Normal Retirement Date (A) the Participant’s years of Service (up to a maximum
of thirty (30)) multiplied by (B) 1.66667% multiplied by (C) the excess of the
Participant’s Compensation over the Participant’s annualized “Primary Social
Security Benefit” as defined by the terms of the Qualified Plan as of December
31, 1990, as if such plan had continued without change and without regard to
limitations applicable under Code sections 401(a)(17) and 415, less (ii) the sum
of the benefits described in subsections (b) and (d) above.  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 he not Separated from Service prior to his Normal
Retirement Date.

       

      (f)           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 Participant’s Early Retirement Date
precedes his Normal Retirement Date, with such reduction interpolated between
whole years of completed months.

       


      
        
           


        

        
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      The
foregoing benefit shall be payable effective as of the Participant’s Early
Retirement Date, in accordance with Article V hereof as to the time, form, and
duration of payment.  Monthly installments under Article V shall be
calculated by dividing the Participant’s annual benefit by twelve
(12).

      


      4.4           Disability Retirement
Benefit

       

      If a
Participant who has completed five (5) years of Service Separates from Service
prior to his Normal Retirement Date (or prior to his Early Retirement Date if he
has completed fifteen (15) years of Service upon such separation) due to
Disability, the benefit to be paid pursuant to this Plan shall be equal to (a)
less (b) less (c) less (d), but in no event greater than (e),
where:

      


      (a)           equals
the annual single life annuity 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 annual single life annuity benefit which is payable (or which would be
payable if elected by the Participant) under the terms of the Qualified Plan at
the Participant’s Normal Retirement Date, and

       

      (c)           equals
the Actuarially Equivalent annual single life annuity commencing at the
Participant’s Normal Retirement Date which may be provided by an accumulation of
two percent (2%) of the Participant’s Annual Compensation for each year of
Service on and after January 1, 1991, accumulated at an assumed interest rate of
eight and one-half percent (8.5%) to his Separation from Service,
and

       

      (d)           equals
the frozen annual single life annuity benefit which is payable (or which would
be payable if elected by the Participant) at the Participant’s Normal Retirement
Date under the terms of the Grandfathered Nonqualified Plan, but excluding any
benefit accrued under Section 4.8 of such plan, and

       

      (e)           equals
(i) the product of the following amounts determined as of the Participant’s
Normal Retirement Date (A) the Participant’s years of Service (up to a maximum
of thirty (30)) multiplied by (B) 1.66667% multiplied by (C) the excess of the
Participant’s Compensation over the Participant’s annualized “Primary Social
Security Benefit” as defined by the terms of the Qualified Plan as of December
31, 1990, as if such plan had continued without change and without regard to
limitations applicable under Code sections 401(a)(17) and 415, less (ii) the sum
of the benefits described in subsections (b) and (d) above.

       

      The
foregoing benefit shall be payable effective as of the Participant’s Normal
Retirement Date, in accordance with Article V hereof as to the time, form, and
duration of payment.  Monthly installments under Article V shall be
calculated by dividing the Participant’s annual benefit by twelve
(12).


      
        
           


        

        
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      4.5           Deferred Vested Pension
Benefit

       

      The
benefit to be paid pursuant to this Plan to a Participant who Separates from
Service at a time when he (or his Beneficiary) is not entitled to a benefit
under Section 4.1, 4.2, 4.3, 4.4, or 4.6 shall be
equal to (a) less (b) less (c) less (d), but in no event greater than (e),
where:

      


      (a)           equals
the annual single life annuity 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 Separation from Service, and the denominator of which is his years of
Service he would have earned had he not Separated from Service prior to his
Normal Retirement Date, and

       

      (b)           equals
the annual single life annuity benefit which is payable (or which would be
payable if elected by the Participant) to or with respect to the Participant
under the terms of the Qualified Plan, and

       

      (c)           equals
the Actuarially Equivalent annual single life annuity commencing at the
Participant’s Normal Retirement Date which may be provided by an accumulation of
two percent (2%) of the Participant’s Annual Compensation for each year of
Service on and after January 1, 1991, accumulated at an assumed interest rate of
eight and one-half percent (8.5%) to his Normal Retirement Date,
and

       

      (d)           equals
the frozen annual single life annuity benefit which is payable (or which would
be payable if elected by the Participant) at the Participant’s Normal Retirement
Date under the terms of the Grandfathered Nonqualified Plan, but excluding any
benefit accrued under Section 4.8 of such plan, and

       

      (e)           equals
(i) the product of the following amounts determined as of the Participant’s
Normal Retirement Date (A) the Participant’s years of Service (up to a maximum
of thirty (30)) multiplied by (B) 1.66667% multiplied by (C) the excess of the
Participant’s Compensation over the Participant’s annualized “Primary Social
Security Benefit” as defined by the terms of the Qualified Plan as of December
31, 1990, as if such plan had continued without change and without regard to
limitations applicable under Code sections 401(a)(17) and 415, less (ii) the sum
of the benefits described in subsections (b) and (d) above.  Such net benefit shall be
multiplied by a fraction, the numerator of which is the Participant’s years of
Service as of his Separation from Service, and the denominator of which is his
years of Service he would have earned had he not Separated from Service prior to
his Normal Retirement Date.

       


      
        
           


        

        
          11

          
            

          

        

        
           


        

      


      


      If the
Participant had completed at least fifteen (15) years of Service upon his
Separation from Service such benefit shall be payable effective as of the date
the Participant attains his Early Retirement Age, but shall be reduced for early
commencement in accordance with Section 4.3(f).  If the Participant had not
completed at least fifteen (15) years of Service upon his Separation from
Service, such benefit shall be payable effective as of the Participant’s Normal
Retirement Date.  In either case, such benefit shall be paid in
accordance with Article V hereof as to time, form, and duration of
payment.  Monthly installments under Article V shall be calculated by
dividing the Participant’s annual benefit by twelve (12).

      


      4.6           Pre-Retirement Death
Benefit

       

      (a)           If
a Participant dies prior to Separating from Service, his Beneficiary shall be
entitled to receive the Actuarial Equivalent of his Accrued Benefit that would
have been payable at his Normal Retirement Date (or at the date of his
Separation from Service if the Participant dies after his Normal Retirement
Date), determined as if the Participant Separated from Service on his date of
death and, if such date is prior to the Participant’s Normal Retirement Date,
survived until his Normal Retirement Date.

       

      (b)           If
the Participant dies following his Separation from Service due to Disability and
prior to the commencement of a disability pension benefit under Section 4.4, his Beneficiary shall be entitled to receive the
Actuarial Equivalent of his Accrued Benefit that would have been payable at his
Normal Retirement Date under Section 4.4.

       

      (c)           If
the Participant dies following his Separation from Service described in Section
4.5, but prior to the commencement of a deferred
vested pension benefit under such Section, his Beneficiary shall be entitled to
receive the Actuarial Equivalent of his Accrued Benefit that would have been
payable at his Early Retirement Date or his Normal Retirement Date, whichever
would have been applicable under Section 4.5.

       

      (d)           The
pre-retirement death benefit payable to the Participant’s Beneficiary shall be
payable effective 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 the time, form, and duration of payment.  Monthly
installments under Article V shall be calculated by dividing the Beneficiary’s
annual benefit by twelve (12).

       

      



      
        
           


        

        
          12

          
            

          

        

        
           


        

      


      


      ARTICLE
V

       

      DETERMINATION OF PAYMENT OF
BENEFIT

      


      


      5.1           Time of
Payment

       

      (a)           Payment
to a Participant (or his Beneficiary) shall commence on the date that is ninety
(90) days following the first applicable effective date of payment under Article
IV, with the first payment to include all benefits payable from the effective
date of payment to the date of the first payment.  Neither the
Participant nor his Beneficiary shall have the right to designate the taxable
year of such payment.  Notwithstanding anything herein to the
contrary, a change in the operation of the Qualified Plan or the Grandfathered
Nonqualified Plan (including an election under Section 7.7 of the Qualified Plan
or a change in the time or form of payment under the Qualified Plan or the
Grandfathered Nonqualified Plan) shall not change the time or form of payment
under this Plan.

       

      (b)           Notwithstanding
the foregoing, payment to a Participant shall be delayed to the extent required
by Code section 409A(a)(2)(B)(i).  Accordingly, if a Participant is a
“specified employee” as defined by Code section 409A(a)(2)(B)(i) (determined by
applying the default rules applicable under such Code section except to the
extent such rules are modified by a written resolution that is adopted by the
Board of Directors of the Employer and that applies for purposes of all
applicable nonqualified deferred compensation plans of the Employer and its
affiliates described in the second sentence of Section 1.2(l)), any payments which the Participant is
otherwise entitled to receive under Section 4.1, 4.2, 4.3, 4.4, or 4.5 and this
Section 5.1 during the six (6)-month period
beginning on the date the Participant Separates from Service shall be
accumulated and paid effective as of the date that is six (6) months after the
date the Participant Separates from Service.  This Section 5.1(b) is intended to satisfy the minimum requirements
of Code section 409A(a)(2)(B)(i) and shall not be construed to accelerate or
defer or otherwise apply to distributions to the extent those distributions are
not subject to the requirements of such Code section.

       

      (c)           Notwithstanding
anything herein to the contrary, the payment of benefits hereunder shall not be
accelerated in a manner that would not be permissible under Code section
409A.

       

      5.2           Form of
Payment

       

      (a)           With
respect to benefits payable under Sections 4.1
through 4.5, the Participant shall receive his
vested Accrued Benefit payable in the form of a single life annuity payable in
monthly installments unless the Participant elects an alternative form of
payment pursuant to subsection (c)
below.

       


      
        
           


        

        
          13

          
            

          

        

        
           


        

      


      


      (b)           With
respect to benefits payable under Section 4.6, the
Participant’s Beneficiary shall receive the Actuarial Equivalent of the
Beneficiary’s portion of the Participant’s Accrued Benefit in the form of a
single life annuity payable in monthly installments unless the Beneficiary
elects an alternative form of payment pursuant to subsection (c) below.

       

      (c)           A
Participant or Beneficiary may elect an optional form of annuity payment that is
Actuarially Equivalent to and has the same scheduled date for the first annuity
payment as the normal form of payment specified in subsections (a) and (b)
above.  Such election may be made on a written form acceptable to the
Committee at any time that is at least thirty (30) days prior to the date on
which payment would otherwise commence in such normal form.  The
optional forms of annuity payment available under the Plan are  as
follows:

       

      (i)           An
annuity for the life of the Participant (or the life of the Beneficiary in the
case of benefits payable pursuant to Section 4.6)
with one hundred twenty (120) monthly payments guaranteed, to be paid to the
Participant’s Beneficiary (or to the estate of the Beneficiary in the case of
benefits payable pursuant to Section 4.6) in the
event of the Participant's (or Beneficiary’s, if applicable) death prior to
payment of the total number of guaranteed payments.

       

      (ii)           Any
other form of annuity providing substantially equal periodic payments, payable
not less frequently than annually, based upon the life expectancy of the
Participant (or the Beneficiary in the case of benefits payable pursuant to
Section 4.6) or the joint life expectancies of the
Participant and his Beneficiary (or of the Beneficiary and another natural
person designated by the Beneficiary in the case of benefits payable pursuant to
Section 4.6).

       

      The
provisions of this subsection (c) are intended to
comply with the provisions of Treasury regulation section 1.409A-2(b)(2)(ii) and
shall be construed in accordance therewith.  Notwithstanding anything
herein to the contrary, a Participant or Beneficiary may not elect an optional
form of payment under this subsection (c) to the
extent such election would result in any additional tax under Code section
409A.

      


      (d)           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 an annuity contract; provided that in no event shall any
action be taken to cause the Plan to be considered funded for purposes of the
Code or Title I of ERISA.

       


      
        
           


        

        
          14

          
            

          

        

        
           


        

      


      


      5.3           Payment to a Participant’s
Beneficiary

       

      (a)           A
Participant may designate one or more Beneficiaries to receive any benefits
payable under the Plan after the death of the Participant.  A
Participant may not designate a non-natural person as a
Beneficiary.  A Participant may revoke or change a prior beneficiary
designation at any time by filing a new beneficiary designation with the
Committee.  To be effective, any beneficiary designation or revocation
of a beneficiary designation must be on a form acceptable to the Committee and
must be filed with and received by the Committee prior to the latest applicable
designation date.  The latest applicable designation date is the date
of the participant’s death with respect to benefits payable under Section 4.6 or to benefits payable under an annuity form of
payment with a guaranteed term and is the date benefits commence in the case of
a joint and survivor annuity form of payment.

       

      (b)          Any
designation of a person as a Beneficiary shall be deemed to be contingent upon
the person’s surviving the Participant.  Any designation of a class or
group of Beneficiaries shall be deemed to be a designation of only those members
of the class or group who are living at the time of the Participant’s
death.  A Participant may designate (in the manner provided in
subsection (a), above) one or more persons as a
contingent Beneficiary or Beneficiaries to receive, upon the Participant’s
death, the benefit that the primary Beneficiary would have received had the
primary Beneficiary survived the Participant.  If more than one
primary Beneficiary or, if applicable, more than one contingent Beneficiary is
designated by a Participant, Sections 5.2(b) and (c) shall be applied separately to each Beneficiary
with respect to the portion of the Participant’s Accrued Benefit awarded to the
Beneficiary.

       

      (c)           If
a Participant does not make an effective beneficiary designation prior to the
latest applicable designation date or if no designated Beneficiary survives the
Participant, the Participant’s estate shall be deemed to be his
Beneficiary.

       

      (d)          References
hereunder to a benefit payable to or with respect to a Participant include any
benefit payable to the Participant’s designated Beneficiary or
estate.

       

      5.4           Payments to an Alternate
Payee

       

      (a)          The
Committee may establish a procedure for the Plan to administer qualified
domestic relations orders.  Such procedure shall comply with the
applicable requirements of ERISA sections 206(d)(3) and
514(b)(7).

       

      (b)          The
Committee may approve payment to an alternative payee, pursuant to the terms of
a qualified domestic relations order, as defined under ERISA
sections 206(d)(3) and 514(b)(7); provided that payment to an alternate
payee may not commence prior to the Participant’s “earliest retirement age” as
defined by ERISA section 206(d)(3)(E)(ii).  Any such payment shall not
be prohibited by Section 6.6 or, to the extent
permitted under Code section 409A, Section 5.1(c).

       


      
        
           


        

        
          15

          
            

          

        

        
           


        

      


      


      (c)           Any
benefits payable to a Participant’s alternate payee(s) under the Qualified Plan
shall be included as a benefit payable to or with respect to the Participant for
purposes of determining the Qualified Plan offset under Sections 4.1(b), 4.2(b), 4.3(b), 4.4(b), and 4.5(b), (as applicable).

       

      



      
        
           


        

        
          16

          
            

          

        

        
           


        

      


      


      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.

      


      (a)           The
Employer shall appoint the members of the Committee and may terminate a
Committee member at any time by providing written notice of such termination to
the member.  Any member of the Committee may resign by delivering his
written resignation to the Employer and to the other members of the
Committee.

       

      (b)           The
Committee shall perform any act which the Plan authorizes.  The
Committee may, by a writing signed by a majority of its members, appoint any
member of the Committee to act on behalf of the Committee.

       

      (c)           The
Committee may designate in writing other persons to carry out its
responsibilities under the Plan, and may remove any person designated to carry
out its responsibilities under the Plan by notice in writing to that
person.  The Committee may employ persons to render advice with regard
to any of its responsibilities.  All usual and reasonable expenses of
the Committee shall be paid by the Employer.  The Employer shall
indemnify and hold harmless each member of the Committee from and against any
and all claims and expenses (including, without limitation, attorney's fees and
related costs), in connection with the performance by such member of his duties
in that capacity, other than any of the foregoing arising in connection with the
willful neglect or willful misconduct of the person so acting.

       

      (d)           The
Committee shall establish rules, not contrary to the provisions of the Plan, for
the administration of the Plan and the transaction of its
business.  The Committee shall have the authority to interpret the
Plan in its sole and absolute discretion, and shall determine all questions
arising in the administration, interpretation and application of the Plan,
including all claims for benefit hereunder.  All determinations of the
Committee shall be conclusive and binding on all concerned.

       


      
        
           


        

        
          17

          
            

          

        

        
           


        

      


      


      6.2           Benefit
Claims

       

      The
Committee shall administer the claims procedures set forth in this Section 6.2 in accordance with section 503 of
ERISA.  The Committee shall automatically direct the distribution of
all benefits to which a Participant is entitled hereunder.  In the
event that a Participant believes that he has been denied benefits to which he
is entitled under the provisions of the Plan, the Committee shall, upon the
request of the Participant, provide to the Participant written notice of the
denial which shall set forth:

      


      (a)           the
specific reason or reasons for the denial;

       

      (b)           specific
references to pertinent Plan provisions on which the Committee based its
denial;

       

      (c)           a
description of any additional material or information needed for the Participant
to perfect the claim and an explanation of why the material or information is
needed;

       

      (d)           a
statement that the Participant or his authorized representative may (i) request
a review upon written application to the Committee; (ii) review pertinent Plan
documents; and (iii) submit issues and comments in writing;

       

      (e)           a
statement that any appeal the Participant wishes to make of the adverse
determination must be made in writing to the Committee within sixty (60) days
(one hundred eighty (180) days in the case of a claim relating to Disability
benefits) after receipt of the Committee's notice of denial of benefits and that
failure to appeal the initial determination to the Committee in writing within
such sixty (60)-day period (one hundred eighty (180)-day period in the case of a
claim relating to Disability benefits) will render the Committee's determination
final, binding, and conclusive; and

       

      (f)           
the address to which the Participant must forward any request for
review.

       

      If a
Participant should appeal to the Committee, he, or his duly authorized
representative, may submit, in writing, whatever issues and comments he, or his
duly authorized representative, feels are pertinent.  The Committee
shall re-examine all facts related to the appeal and make a final determination
as to whether the denial of the claim is justified under the
circumstances.  The Committee shall advise the Participant in writing
of its decision on appeal, the specific reasons for the decision, and the
specific Plan provisions on which the decision is based.  The notice
of the decision shall be given within sixty (60) days (forty-five (45) days in
the case of a claim relating to Disability benefits) after the Participant's
written request for review is received, unless special circumstances (such as a
hearing) would make the rendering of a decision within such sixty (60)-day
period (forty-five (45)-day period in the case of a claim relating to Disability
benefits) impracticable.  In such case, notice of an extension shall
be provided to the Participant within the original sixty (60)-day period
(forty-five (45)-day period in the case of a claim relating to Disability
benefits), and notice of a final decision regarding the denial of a claim for
benefits will be provided within one hundred twenty (120) days (ninety (90) days
in the case of a claim relating to Disability benefits) after receipt of the
original request for review.


      
        
           


        

        
          18

          
            

          

        

        
           


        

      


      


      6.3           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; provided that no amendment that reduces the Accrued
Benefit of a Participant may be adopted without the consent of such Participant
while he is an employee of the Employer.

      


      6.4           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, and Plan benefits shall be payable solely as provided
under Articles IV and V.

      


      6.5           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.

      


      6.6           Non-Alienation

       

      Except as
required by ERISA, the right of any Participant or Beneficiary in his Accrued
Benefit 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
benefit shall not be subject to anticipation, alienation, sale, transfer,
assignment or encumbrance.

      


      6.7           Severability

       

      In the
event that any provision of this Plan shall be declared illegal or invalid for
any reason, said illegality or invalidity shall not affect the remaining
provisions of this Plan but shall be fully severable and this Plan shall be
construed and enforced as if said illegal or invalid provision had never been
inserted herein.

      


      6.8           Governing
Law

       

      The validity and effect of this Plan
and the rights and obligations of all persons affected hereby shall be construed
and determined in accordance with the internal laws of the State of Texas except
to the extent superseded by federal law

      


      6.9           Taxes

       

      All
amounts payable hereunder shall be reduced by any and all federal, state and
local taxes imposed upon the Participant which are required to be paid or
withheld by the Employer or any other payor of Plan benefits.


      
        
           


        

        
          19

          
            

          

        

        
           


        

      


      


      6.10           Waiver

       

      Neither
the failure nor any delay on the part of the Employer or the Committee to
exercise any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise or waiver of any such right,
power or privilege preclude any other or further exercise thereof, or the
exercise of any other right, power or privilege available to the Employer or the
Committee at law or in equity.

      


      6.11           Compliance With Code Section
409A

       

      (a)           To
the extent any provision of this Plan or any omission from the Plan would
(absent this Section 6.11(a)) cause amounts to be includable in income under
Code section 409A(a)(1), the Plan shall be deemed amended to the extent
necessary to comply with the requirements of Code section 409A; provided, however, that this
Section 6.11(a) shall
not apply and shall not be construed to amend any provision of the Plan to the
extent this Section 6.11(a) or any amendment required thereby would itself
cause any amounts to be includable in income under Code section
409A(a)(1).

       

      (b)           If
any provision of this Plan would cause a Participant to occur any additional tax
under Code section 409A, the parties will in good faith attempt to reform the
provision in a manner that maintains, to the extent possible, the original
intent of the applicable provision without violating the provisions of Code
section 409A.

       

      


      



      
        
           


        

        
          20

          
            

          

        

        
           


        

      


      IN WITNESS WHEREOF, and as conclusive
evidence of the adoption of the foregoing instrument comprising the National
Western Life Insurance Company 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

              
	 
      	 
      	 
      


      

      


      



      
        
           


        

        
          21

          
            

          

        

        
           


        

      


      SCHEDULE
1.2(k)

      


      ELIGIBLE
EMPLOYEES

      


      


      


      


      Charles
D. Milos, Jr.

      


      


      


      



      
        
           


        

        
          22