Document:

exhibit10cf.htm

    

      EXHIBIT
10(cf)

       

      

       

      

       

      

       

      

       

      

      

      NATIONAL
WESTERN LIFE INSURANCE COMPANY

      NON-QUALIFIED
DEFERRED COMPENSATION PLAN

      

       

      

       

      

       

      As
Amended and Restated Effective as of

      January
1, 2009

      

      

      

       

      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      NATIONAL
WESTERN LIFE INSURANCE COMPANY

      NON-QUALIFIED
DEFERRED COMPENSATION 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     Initial
      Eligibility Requirements

              	  	
                5

              
	
                2.2     Loss
      of Eligible Employee Status

              	  	
                5

              
	
                2.3     Termination
      of Participation

              	 
      	
                5

              
	 
      	 
      	 
      
	
                ARTICLE
      IV – DEFERRAL ELECTIONS

              	 
      	
                6

              
	
                3.1     Deferral
      Elections

              	 
      	
                6

              
	
                3.2     Deferral
      Election for First Year of Eligibility

              	 
      	
                7

              
	
                3.3     Deferral
      Elections for Subsequent Plan years

              	 
      	
                8

              
	
                3.4     Cancellation
      of Deferral Elections

              	 
      	
                8

              
	 
      	 
      	 
      
	
                ARTICLE
      IV – CONTRIBUTIONS TO THE PLAN

              	 
      	
                9

              
	
                4.1     Participant
      Contributions

              	 
      	
                9

              
	
                4.2     Employer
      Mandatory Matching Contributions

              	 
      	
                9

              
	
                4.3     Employer
      Discretionary Matching Contributions

              	 
      	
                9

              
	
                4.4     Employer
      Mandatory Non-Matching Contributions

              	 
      	
                10

              
	
                4.5     Employer
      Additional Discretionary Contributions

              	 
      	
                10

              
	 
      	 
      	 
      
	
                ARTICLE
      V – ALLOCATION AND INVESTMENT

              	 
      	
                11

              
	
                5.1     Establishment
      of Account

              	 
      	
                11

              
	
                5.2     Allocation

              	 
      	
                11

              
	
                5.3     Establishment
      of Trust

              	 
      	
                12

              
	
                5.4     Allocation
      of Investment and Losses

              	 
      	
                12

              
	 
      	 
      	 
      
	
                ARTICLE
      VI – DETERMINATION OF PAYMENT OF ACCOUNT

              	 
      	
                14

              
	
                6.1     Vesting
      of Account

              	 
      	
                14

              
	
                6.2     Determination
      of Account

              	 
      	
                15

              
	
                6.3     Timing
      of Payment

              	 
      	
                15

              
	
                6.4     Form
      of Payment

              	 
      	
                16

              
	
                6.5     Cashout
      of Small Benefits

              	 
      	
                17

              

      

      
        
           

        

        
          i

          
            

          

        

        
           

        

      

      

       

      
        	 
      	 
      	 
      
	
                ARTICLE
      VII – MISCELLANEOUS

              	 
      	
                18

              
	
                7.1     Administration
      of the Plan

              	 
      	
                18

              
	
                7.2     Benefit
      Claims

              	 
      	
                19

              
	
                7.3     Designation
      of a Beneficiary

              	 
      	
                20

              
	
                7.4     Amendment
      of the Plan

              	 
      	
                21

              
	
                7.5     Termination
      of the Plan

              	 
      	
                21

              
	
                7.6      Notices
      to participants

              	 
      	
                21

              
	
                7.7     Non-Alienation

              	 
      	
                21

              
	
                7.8     Payments
      to Incompetents

              	 
      	
                21

              
	
                7.9     Severability

              	 
      	
                21

              
	
                7.10   Governing
      Law

              	 
      	
                22

              
	
                7.11   Taxes

              	 
      	
                22

              
	
                7.12   Waiver

              	 
      	
                22

              
	
                7.13   Compliance
      With Code Section 109A

              	 
      	
                22

              
	 
      	 
      	 
      

      

      

      
        
           

        

        
          ii

          
            

          

        

        
           

        

      

      

      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
permit certain select management employees, who are defined below, to defer the
payment of a percentage of their Compensation, and in addition thereto, to
provide for certain Employer contributions to augment such employees' retirement
income.  This Plan is not intended to, and does not, qualify under
sections 401(a) and 501(a) of the Internal Revenue Code, 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
Plan.  However, this Plan is a separate plan from the Grandfathered
Plan, and nothing herein shall be construed to constitute a material
modification of the Grandfathered Plan or to otherwise cause the Grandfathered
Plan to be subject to section 409A of the Code.  Benefit accruals and
service crediting under the Grandfathered Plan were frozen effective as of the
Freeze Date.

       

      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 on and after the Original
Effective Date and 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)           Account:  The
account established for a Participant pursuant to Section 5.1.

       

      (b)           Beneficiary:  The
person or persons designated (or deemed designated) by a Participant under
Section 7.3 to receive any benefits payable
hereunder after the death of the Participant.

       

      (c)           Code:  The
Internal Revenue Code of 1986, as it may be amended from time to time, including
any successor and including applicable Treasury regulations.

       

      (d)           Committee:  The
individuals appointed by the Board of Directors of the Employer, and known as
the Pension Committee, to manage and direct the operation and administration of
the Plan.

       

      
        
           

        

        
          1

          
            

          

        

        
           

        

      

      

       

      (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.

       

      (f)           
Deferral
Election:  An election described in Section 3.1.

       

      (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)           Effective
Date:  January 1, 2009.

       

      (i)           
Eligible
Employee:  A person (other than the Chairman of the Employer)
employed by the Employer in the position of Senior Vice President or above, or
an employee of the Employer 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 an individual whose taxable year is
the Plan Year and who is a member of the select group of management or highly
compensated employees of the Employer, as defined under section 201 of
ERISA.

       

      (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.  For
purposes of Section 1.2(y), 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). 

       

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

       

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

      

       

      (l)           
Excess
Compensation:  The portion of a Participant’s Compensation that
exceeds, on a year-to-date basis, the applicable limitation under Code section
401(a)(17)(A), as adjusted in accordance with Code section
401(a)(17)(B).

       

      (m)          Freeze
Date:  December 31, 2004.

       

      (n)           Grandfathered
Plan:  The National Western Life Insurance Company
Grandfathered Non-Qualified Deferred Compensation Plan, originally adopted
effective as of April 1, 1995 and as it may be amended from time to
time.

       

      (o)           Hour of
Service:  An Hour of Service is each hour for which an Eligible
Employee 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.

       

      (p)           Initial Participation
Period:  The time period beginning when the Eligible Employee
first completes an Hour of Service until the first day of the Plan Quarter which
is coincident with or next follows the date he completes one Year of
Service.

       

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

       

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

       

      (s)           
Other
Plans:  All other plans required to be aggregated with this
Plan for purposes of determining compliance with applicable requirements of Code
section 409A.

       

      (t)           
Participant:  An
Eligible Employee who has met the requirements of Section 2.1 hereof, and whose participation has not been
terminated in accordance with Section 2.3.

       

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

       

      (v)           Plan
Quarter:  The three-month period beginning on each January 1,
April 1, July 1 or October 1 and ending, respectively, on the immediately
following March 31, June 30, September 30 or December 31.

       

      (w)           Plan
Year:  The twelve-month period beginning each January 1 and
ending the immediately following December 31.

       

      (x)           
Qualified
Plan:  The National Western Life Insurance Company 401(k) Plan,
as amended from time to time, and any successor or replacement
plan.

       

      
        
           

        

        
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      (y)           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.  To the extent permitted by Treasury
regulation section 1.409A-1(h)(5), a Participant may be considered to have such
a separation from service even if he continues to provide services as an
independent contractor or non-employee director of the
Employer.  

       

      (z)           Valuation
Date:  Each date as of which the Plan is valued and gains or
losses allocated, which shall be the last day of each Plan Quarter or such other
dates as the Committee may determine in its discretion; provided, however, that
if a date that would otherwise be a Valuation Date falls on a date on which
NASDAQ (or any successor exchange) is not open for business, the Valuation Date
shall be the immediately following date on which NASDAQ (or any successor
exchange) is open for business.

       

      (aa)         Years of
Service:  The period of an Eligible Employee's employment
considered in the calculation of the vested amount of his benefits and the
determination of the Initial Participation Period.  An Eligible
Employee's service shall be determined in twelve (12) month periods, 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 Eligible Employee completes at least one thousand (1,000)
Hours of Service.

       

      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.

       

      

       

      
        
           

        

        
          4

          
            

          

        

        
           

        

      

      

       

      ARTICLE
II

       

      ELIGIBILITY

       

      2.1           Initial Eligibility
Requirements

       

      (a)           Each
Eligible Employee who was a Participant in the Plan immediately prior to the
Effective Date shall continue as a Participant until the date participation
terminates in accordance with Section 2.2,

       

      (b)           Each
individual who becomes an Eligible Employee on or after the Effective Date shall
become a Participant hereunder on the date he first completes an Hour of Service
as an Eligible Employee.

       

      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 within the meaning of Section 1.2(i) herein, the employee shall cease to be eligible
to receive additional contributions under Sections 4.2, 4.3, 4.4, and 4.5, but except
as specifically provided in Section 3.4, such loss
of Eligible Employee status shall not result in the cancellation of a Deferral
Election under Section 4.1 prior to the end of the
Plan Year in which such demotion occurs.  No distribution shall be
permitted as a result of a loss of Eligible Employee status except to the extent
specified in Section 6.3 in connection with a
Separation from Service.

       

      2.3           Termination of
Participation

       

      An
individual who was a Participant shall cease to be a Participant when the
individual is no longer an Eligible Employee and has ceased to have an Account
balance under the Plan due to distribution and/or forfeiture.

       

      

       

      
        
           

        

        
          5

          
            

          

        

        
           

        

      

      

       

      ARTICLE
III

       

      DEFERRAL
ELECTIONS

       

      3.1           Deferral
Elections

       

      (a)           A
Deferral Election is an election to defer Compensation under Section 4.1 and/or to elect a form of payment under Section 6.4 that is made or deemed made by a Participant on a
form and in a manner approved by the Committee.  A Deferral Election
must be in writing, which may include an electronic format approved by the
Committee.

       

      A
Deferral Election is considered made on the date the completed and valid
election is received by the Committee.  A Deferral Election shall not
be effective unless made by the close of business on the latest date specified
for such election.  An initial Deferral Election under Section 3.2 shall become irrevocable for the remainder of the
Plan Year to which it applies as of the date such election is made and may not
be changed or cancelled during such Plan Year except as specified in Section 3.4.  A subsequent Deferral Election under
Section 3.3 shall become irrevocable for the Plan
Year to which it applies as of the latest date for such election and may not be
changed or cancelled during such Plan Year except as specified in Section 3.4.  Such a subsequent Deferral Election
that is made prior to such latest date may be revoked or changed prior to
becoming irrevocable by making a new Deferral Election on or before such latest
date.

       

      A
Deferral Election cannot be conditioned upon a Participant making or not making
elective deferral contributions under the Qualified Plan.  Deferral
Elections shall be independent of any elections made under the Qualified
Plan.

       

      (b)           A
Deferral Election under Section 4.1 shall apply
only to Compensation paid after the effective date of the election for services
performed after the date the election is made.  For this purpose, (i)
Compensation with respect to the payroll period containing the last day of the
immediately preceding Plan Year (including directors fees payable with respect
to the same time period) that is paid during the immediately following Plan Year
in accordance with the Employer’s normal payroll and compensation practices is
considered Compensation for services performed in such following Plan Year and
(ii) an initial Deferral Election under Section 3.2(a) shall apply to a portion of the Compensation
that is earned based upon a specified performance period beginning prior to the
date the initial election is made.  Such portion shall equal the total
amount of such Compensation for the performance period multiplied by the ratio
of the number of days remaining in the performance period after the election to
the total number of days in the performance period.

       

      
        
           

        

        
          6

          
            

          

        

        
           

        

      

      

       

      A
Participant’s Deferral Election under Section 6.4
shall apply only to contributions (and related earnings and losses) made after
the date the election is made, and shall not affect or change the form of
payment for contributions (and related earnings and losses) made prior to such
election.  A Deferral Election under Section 6.4 shall not apply to benefits payable to a
Beneficiary after the death of a Participant.  Such benefits are
payable solely in the form of a single lump sum cash payment in accordance with
Section 6.4(a).

       

      (c)           The
balance of a Participant’s Account attributable to Employer contributions under
Sections 4.4 and 4.5
that are allocated to the Participant and that are not subject to an effective
Deferral Election under Section 6.4 shall be
payable in the default form of annual installments over a five-year period in
accordance with Section 6.4.  

       

      3.2           Deferral Election for First
Year of Eligibility

       

      (a)           For
the first Plan Year in which an Eligible Employee becomes a Participant in the
Plan, the Participant may make a Deferral Election within 30 days after becoming
a Participant.  A Deferral Election made after the end of such 30-day
period shall not be effective during such first Plan Year of
participation.

       

      If an
individual previously was a Participant in the Plan but ceased to be a
Participant following a distribution of the Participant’s entire Account, the
individual shall be treated as initially eligible to participate in the Plan as
of the first date the individual becomes a Participant after receiving such
distribution.  If an individual becomes an Eligible Employee and was
not an Eligible Employee at any time during the preceding 24 months, such
individual shall be treated as initially eligible to participate in the Plan
after completing an Hour of Service as a newly Eligible Employee notwithstanding
that such individual may already be a Participant due to an undistributed
Account balance from an earlier period of participation in the
Plan.

       

      For
purposes determining whether a Participant is initially eligible to participate
in the Plan, the Plan and all Other Plans providing for elective deferrals shall
be treated as a single plan.

       

      (b)           If
a Participant does not make an initial Deferral Election under Section 4.1 within the specified period, the Participant shall
be deemed to have elected not to make any Participant contributions for such
initial Plan Year of participation.  If a Participant does not make an
initial Deferral Election under Section 6.4 within
the specified period, the Participant shall be deemed to have elected to receive
any contributions under ARTICLE IV for such initial
Plan Year and for all future Plan Years in the default form specified in Section
3.1(c).

       

      
        
           

        

        
          7

          
            

          

        

        
           

        

      

      

       

      3.3           Deferral Elections for
Subsequent Plan Years

       

      (a)           A
Deferral Election other than an initial Deferral Election described in Section
3.2 shall be effective as of the first day of the
Plan Year that is at least 15 days after the date the election is
made.  A Deferral Election made less than 15 days before the beginning
of a Plan Year shall not apply to such immediately following Plan
Year.  A new Deferral Election shall apply prospectively and shall not
change the form of payment elected or deemed elected under Section 6.4.

       

      (b)           If
a Participant who is an Eligible Employee does not make an affirmative Deferral
Election under Section 4.1 for a Plan Year
following the initial Plan Year of participation, the Participant shall be
deemed to have made the same Deferral Election or deemed Deferral Election for
such Plan Year as was in effect for the Participant as of the last day of the
immediately preceding Plan Year.

       

      3.4           Cancellation of Deferral
Elections

       

      (a)           After
a Deferral Election becomes irrevocable in accordance with Section 3.1, the election shall remain in effect until the end
of the Plan Year to which the election applies.  If the Participant is
no longer an Eligible Employee as of the last day of such Plan Year, the
Deferral Election shall be cancelled and shall not apply to a subsequent Plan
Year notwithstanding Section 3.3(b).

       

      (b)           Notwithstanding
the foregoing, a Deferral Election shall be cancelled during a Plan Year as
follows.

       

      (i)           A
Participant’s Deferral Election under Section 4.1
shall be cancelled effective as of the date on which the Participant takes a
hardship withdrawal from the Qualified Plan.

       

      (ii)          A
Participant’s Deferral Election under Section 4.1
shall be cancelled effective as of the date that is 30 days following the date
the Participant incurs a disability.  Solely for purposes of this
subsection, the term “disability” means any medically determinable physical or
mental impairment resulting in the Participant’s inability to perform the duties
of his or her position or any substantially similar position, where such
impairment can be expected to result in death or can be expected to last for a
continuous period of not less than six months.  Determinations of
disability shall be made by the Committee in its sole discretion.

       

      A
Deferral Election that is cancelled in accordance with the foregoing shall not
be reinstated during the same Plan Year.  A cancelled election may
only be replaced by a new election under Section 3.3 that is effective as of a subsequent Plan Year,
and, in the case of a cancellation under subsection (b)(i) above, such new
election cannot apply to a Plan Year that commences earlier than six months
after the date of such hardship withdrawal.

       

      
        
           

        

        
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      ARTICLE
IV

       

      CONTRIBUTIONS TO THE
PLAN

       

      4.1           Participant
Contributions

       

      A
Participant may make a Deferral Election to reduce his Compensation subject to
such election from one-quarter percent (1/4% or 0.25%) to fifty percent (50%),
in increments of one-quarter percent (1/4% or 0.25%), and to contribute such
amount to the Plan as a Participant contribution.

       

      4.2           Employer Mandatory Matching
Contributions

       

      (a)           For
periods other than a Participant’s Initial Participation Period, the Employer
shall make an Employer mandatory matching contribution as of the last day of
each Plan Quarter equal to fifty percent (50%) of each eligible Participant's
contributions made under Section 4.1 of this Plan
during such Plan Quarter; provided, however, that the mandatory matching
contribution for a Participant shall not exceed an amount equal to two percent
(2%) of the Participant's Excess Compensation for the Plan Quarter that is
subject to a Deferral Election under Section 4.1.

       

      (b)           During
a Participant's Initial Participation Period, the Employer shall make an
Employer mandatory matching contribution as of the last day of each Plan Quarter
equal to fifty percent (50%) of each eligible Participant's contributions made
under Section 4.1 during such Plan Quarter;
provided, however, that the mandatory matching contribution for a Participant
shall not exceed an amount equal to two percent (2%) of the Participant's
Compensation for the Plan Quarter that is subject to a Deferral Election under
Section 4.1. 

       

      4.3           Employer Discretionary
Matching Contributions

       

      The Employer may make an additional
discretionary matching contribution as of the last day of each Plan Quarter
equal to fifty percent (50%) of each eligible Participant's contributions made
under Section 4.1 during such Plan Quarter;
provided, however, that the discretionary matching contribution for a
Participant shall not exceed an amount equal to two percent (2%) of the
Participant's Compensation for the Plan Quarter that is subject to a Deferral
Election under Section 4.1.

       

      The
determination as to whether an Employer discretionary matching contribution
shall be made to the Plan is in the sole discretion of the President of the
Employer, determined on a quarterly basis.

       

      
        
           

        

        
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      4.4           Employer Mandatory
Non-Matching Contributions

       

      (a)           For
periods other than a Participant’s Initial Participation Period, the Employer
shall make an Employer mandatory non-matching contribution as of the last day of
each Plan Quarter equal to two percent (2%) of each eligible Participant's
Excess Compensation for the Plan Quarter.

       

      (b)           During
an eligible Participant's Initial Participation Period, the Employer shall make
an Employer mandatory non-matching contribution as of the last day of each Plan
Quarter equal to two percent (2%) of the Participant's Compensation for the Plan
Quarter.

       

      4.5           Employer Additional
Discretionary Contributions

       

      The
Employer may make an additional discretionary contribution as of the last day of
each Plan Quarter.  The determination as to which Participant(s)
receives the contribution, the amount of the contribution and the timing of the
contribution is in the sole discretion of the President of the Employer,
determined on a quarterly basis.

       

      

       

      
        
           

        

        
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      ARTICLE
V

       

      ALLOCATION AND
INVESTMENT

       

      5.1           Establishment of
Account

       

      (a)           Each
Participant herein shall have maintained in his name an Account, to which shall
be credited his Participant contributions, as well as his share of Employer
contributions allocable under Section 5.2.  A Participant's Account shall reflect
his share of such contributions, including his allocable share of any gains and
losses pursuant to Section 5.4.  All
distributions and forfeitures from the Account pursuant to Section 6.2 shall be charged against the Account as of the
date of such distribution or forfeiture.

       

      (b)           If
a Participant had a nonvested account balance under the Grandfathered Plan as of
the Freeze Date, an amount equal to such nonvested account balance shall be
credited to the Participant’s Account under this Plan as of the Original
Effective Date.  Such balance shall be considered a contribution other
than a Participant contribution and shall be subject to the vesting rules of
Section 6.1(c) and 6.1(d), as applicable.

       

      5.2           Allocation

       

      (a)           Contributions
made pursuant to Section 4.1 hereof shall be
allocated to the Account of the Participant from whose Compensation such amounts
were reduced, as soon as administratively practicable following the date of
actual salary reduction.

       

      (b)           Any
contribution made pursuant to Section 4.2, or 4.3 shall be allocated to each Participant (i) who
made matched Participant Contributions during the Plan Quarter and (ii) who is
an Eligible Employee as of the last day of the Plan Quarter for which such
contribution was made or ceased to be an Eligible Employee during such Plan
Quarter due to death, Disability, or Separation from Service after attainment of
Normal Retirement Age.

       

      (c)           Any
contribution made pursuant to Section 4.4 shall be
allocated to each Participant who is an Eligible Employee as of the last day of
the Plan Quarter for which such contribution was made or who ceased to be an
Eligible Employee during such Plan Quarter due to death, Disability, or
Separation from Service after attainment of Normal Retirement Age.

       

      (d)           Any
contribution made pursuant to Section 4.5 shall be
allocated to the Participant or Participants designated by the Employer in
accordance with such Section, provided, however, that no contribution shall be
allocated to a Participant unless the Participant is an Eligible Employee as of
the last day of the Plan Quarter for which such contribution was made or ceased
to be an Eligible Employee during such Plan Quarter due to death, Disability, or
Separation from Service after attainment of Normal Retirement Age.

       

      
        
           

        

        
          11

          
            

          

        

        
           

        

      

      

       

      5.3           Establishment of
Trust

       

      The
Employer may establish a trust fund with regard to the Accounts hereunder,
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.

       

      5.4           Allocation of Investment
Earnings and
Losses

       

      (a)           As
of each Valuation Date, the Committee shall credit to each Participant's Account
the deemed income or losses attributable thereto, as provided in Section 5.4(b) below, as well as any other credits to or
charges against such Account, including any withdrawals or other distributions
made to or on behalf of the Participant.  All payments from an Account
between Valuation Dates shall be charged against the Account as of the preceding
Valuation Date.  Contributions to a Participant’s Account shall not be
adjusted for deemed investment experience for periods prior to the Valuation
Date on which the Contributions are credited to the Account (even if the
Contribution amount is known prior to such date).  No amount shall be
adjusted for deemed investment experience after the Valuation Date coincident
with or immediately preceding the date on which the amount is distributed from
the Participant’s Account.

       

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

       

       

      (b)          Each
Participant, upon becoming a Participant in the Plan, may, on a form prescribed
by the Committee, designate the manner in which he wishes his Account to be
deemed invested among the various options designated by the Committee for this
purpose.  The Committee shall not be obligated to follow such deemed
investment election in the event such action on the part of the Committee would
result in a failure of the Plan or Trust to be considered unfunded for purposes
of the Code or ERISA.  Such designation may be changed as of any
Valuation Date, with respect to future contributions and transfers among
investment options, by making a new deemed election, in the method prescribed by
the Committee, and within the period of time prior to such Valuation Date as is
established by the Committee.  The Participant must designate, in such
minimum percentages or amounts as may be prescribed by the Committee, that
portion of his Account which the Participant deems allocated to each investment
option offered hereunder.  The investment designation will continue
until changed by the timely submission of a new deemed investment election,
which change will be effective within the time period established by the
Committee.  In the absence of any such deemed investment designation,
a Participant's Account shall be deemed to be invested in such property as the
Committee, in its sole and absolute discretion, shall determine.  The
Committee shall be authorized at any time and from time to time to modify,
alter, delete or add to the deemed investment options hereunder.  In
the event a modification occurs, the Committee shall notify those Participants
whom the Committee, in its sole and absolute discretion, determines are affected
by the change, and shall give such persons such additional time as is determined
necessary by the Committee to designate the manner and percentage in which
amounts thereby affected shall be deemed invested.  The Committee
shall not be obligated to substitute investment options with similar deemed
investment criteria for existing investment options, nor shall it be obligated
to continue the types of deemed investment options presently available to the
Participants.

       

      (c)           The
crediting of earnings and losses under the Plan does not mean and shall not be
construed to mean that the Account of a Participant is actually invested in any
security, fund or other investment, and no Participant or Beneficiary shall have
any security or other interest in any security, fund or investment, even if the
Employer maintains actual investments that mirror or are substantially similar
to liabilities under the Plan.

       

      

       

      
        
           

        

        
          13

          
            

          

        

        
           

        

      

      

       

      ARTICLE
VI

       

      DETERMINATION OF PAYMENT OF
ACCOUNT

       

      6.1           Vesting of
Account

       

      (a)           The
portion of a Participant's Account derived from contributions made under Section
4.1 hereof shall be one hundred percent (100%)
vested and non-forfeitable at all times.

       

      (b)           As
to a Participant who is at the level of Executive Vice President or above of the
Employer, his total Account shall be one hundred percent (100%) vested and
non-forfeitable at all times.

       

      (c)           As
to all other Participants, and as to the amount of such a Participant's Account
other than that derived from contributions made pursuant to Section 4.1, such Account shall become one hundred percent
(100%) vested and non-forfeitable upon the first to occur of the
following:

       

      (i)           the
Participant’s Separation from Service upon or after reaching Normal Retirement
Age;

       

      (ii)          the
Participant’s Disability, as determined in accordance with Section 1.2(f);

       

      (iii)         the
death of the Participant; and

       

      (iv)         the
Participant’s promotion to a position described in Section 6.1(b).

       

      (d)           Prior
to the occurrence of any of the foregoing, a Participant shall become vested in
the portion of his Account other than that derived from contributions made
pursuant to Section 4.1 in accordance with the
following schedule:

       

      
        
          
            
              
                
                  	
                          Years
      of Service

                        	 	 
	
                          With
      the Employer

                        	 
      	
                          Vested
      Percentage

                        
	
                          Less
      than 3

                        	 
      	
                              0%

                        
	
                          3

                        	 
      	
                            20%

                        
	
                          4

                        	 
      	
                            40%

                        
	
                          5

                        	 
      	
                            60%

                        
	
                          6

                        	 
      	
                            80%

                        
	
                          7
      or more

                        	 
      	
                          100%

                        

                

              

            

          

        

        

          
            
               

            

            
              14

              
                

              

            

            
               

            

          

      

      

       

      6.2           Determination of
Account

       

      As of the
date of a Participant's Separation from Service with the Employer (including
termination due to any of the events specified under Section 6.1 hereof), his vested Account balance shall be
determined in accordance with the provisions of Section 6.1 above.  Thereafter, as of the Valuation
Date coincident with or next following the Participant’s Separation from
Service, the nonvested portion of his Account shall be
forfeited.  Such forfeited amount shall be used first to reduce any
Employer contributions specified under Sections 4.2, 4.3, and 4.4 hereof and any remaining amounts shall be
reallocated among all Participants eligible to receive Employer contributions as
of such date under Section 5.2(c) hereof, in the
proportion that each such eligible Participant’s Compensation for the Plan
Quarter bears to the Compensation for the Plan Quarter of all other Participants
eligible to receive an allocation of such forfeiture.

       

      6.3           Timing of
Payment

       

      (a)           Payment
of the vested Account balance of a Participant shall commence on or as soon as
administratively practicable after the first Valuation Date that is at least 30
days after the earlier to occur of (i) the Participant’s Separation from
Service, subject to subsection (b) below and (ii)
the Participant’s death.  Such payment shall in any event be made
within 90 days after such Valuation Date, and no Participant or Beneficiary
shall have a right to designate the taxable year of such payment.  A
Participant may not subsequently elect to defer the date of such
distribution.  

       

      (b)           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(j)), any payments which the Participant is
otherwise entitled to receive under Section 6.2 and
this Section 6.3 during the six (6)-month period
beginning on the date the Participant Separates from Service for any reason
other than death shall be accumulated and paid effective as of the earlier to
occur of (i) the first Valuation Date that occurs on or after the date that is
six (6) months after the date the Participant so Separates from Service and (ii)
the first Valuation Date that is at least 30 days after the date of the
Participant’s death.  This subsection (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.

       

      
        
           

        

        
          15

          
            

          

        

        
           

        

      

      

       

      6.4           Form of
Payment

       

      (a)           In
the event of the Participant’s death the Participant’s entire Account shall be
paid to his Beneficiary in the form of a single lump sum payment in
cash.  If a Participant dies after commencing installment payments,
the Participant’s entire remaining Account shall be paid to his Beneficiary in
the form of a single lump sum payment in cash in accordance with Section 6.3(a) as to the time of payment.

       

      (b)           By
making a Deferral Election (including a deemed Deferral Election), a Participant
may select from among the following optional forms of payment for the portion of
the Participant’s Account subject to such election and not payable in accordance
with subsection (a), above:

       

      (i)           A
single cash lump sum payment; and

       

      (ii)          Annual
cash installments over a period of two to ten years.

       

      Payment
of the portion of a Participant’s Account subject to a Deferral Election or
deemed Deferral Election shall occur in the form specified by such
election.  If a Participant does not specify an optional form of
payment on a Deferral Election or if a Participant’s Account is not subject to a
Deferral Election or deemed Deferral Election that designates an optional form
of payment under this Section, the Participant shall be deemed to have elected
payment in the form of annual installments over a period of five
years.  A Participant may not subsequently elect to change the
optional form of payment elected or deemed elected with respect to contributions
subject to the Deferral Election.  Once made or deemed made, a
Deferral Election under this Section may not be changed with respect to prior or
future contributions for so long as the individual remains a
Participant.

       

      Each
installment under an installment form of payment shall be calculated by dividing
the Account balance subject to such form of payment as of the preceding
Valuation Date by the total number of installments remaining to be
paid.  Annual installments shall be paid on the payment commencement
date under Section 6.3 and each anniversary of that
date.  For purposes of Code section 409A, the entitlement to a series
of installment payments is treated as the entitlement to a single
payment.

       

      
        
           

        

        
          16

          
            

          

        

        
           

        

      

      

       

      6.5           Cashout of Small
Benefits

       

      If
payment has commenced or is to commence under this ARTICLE VI, then notwithstanding any contrary Deferral
Election under Section 6.4, all remaining payments
shall be accelerated and paid in the form of a single lump sum if the following
requirements are satisfied as of the date of payment:

       

      (a)           the
value of the aggregate benefit of the Participant under this Plan and all Other
Plans does not exceed the applicable dollar amount under Code section
402(g)(1)(B) (as adjusted from time to time); and

       

      (b)           the
accelerated lump sum payment (and payments made at the same time under any Other
Plans) results in the termination and liquidation of the entirety of the
Participant’s benefits under this Plan and all Other Plans.

       

      

       

      
        
           

        

        
          17

          
            

          

        

        
           

        

      

      

       

      ARTICLE
VII

       

      MISCELLANEOUS

       

      7.1           Administration of the
Plan

       

      (a)           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.

       

      (b)           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.

       

      (c)           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.

       

      (d)           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.

       

      (e)           No
member of the Board of Directors of the Employer or of the Committee, or any
employee of the Employer acting on behalf of either, 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 willful neglect or willful
misconduct.  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.

       

      (f)           The
members of the Committee shall serve without bond or security for the
performance of their duties hereunder unless applicable law makes the furnishing
of such bond or security mandatory or unless required by the
Company.

       

      
        
           

        

        
          18

          
            

          

        

        
           

        

      

      

       

      (g)           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.

       

      7.2           Benefit
Claims

       

      The
Committee shall administer the claims procedures set forth in this Section 7.2 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

       

      
        
           

        

        
          19

          
            

          

        

        
           

        

      

      

       

      (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.

       

      7.3           Designation of a
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 revoke or change a prior beneficiary designation 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 received by the Committee prior to
the date of the Participant’s death.

       

      (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.  Any designation of a trust as a Beneficiary shall be invalid
if the trust is not in existence 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.

       

      (c)           If
a Participant does not make an effective beneficiary designation prior to death
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 Beneficiary.

       

      
        
           

        

        
          20

          
            

          

        

        
           

        

      

      

       

      7.4           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.

       

      7.5           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, to
the extent not funded, full vesting of his Account, and Plan benefits shall be
payable solely as provided under Section 6.3 and,
if applicable, Section 7.13(c)(iv).

       

      7.6           Notices to
Participants

       

      From
time-to-time, the Employer shall provide a Participant with an accounting of the
value of his Account.  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.

       

      7.7           Non-Alienation

       

      Except as
required by ERISA, the right of any Participant or Beneficiary in his 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.

       

      7.8           Payments to
Incompetents

       

      Whenever
any benefit which shall be payable under the Plan is to be paid to or for the
benefit of any person who is then a minor or determined by the Committee, on the
basis of qualified medical advice, to be incompetent, the Committee need not
require the appointment of a guardian or custodian, but shall be authorized to
cause the same to be paid over to the person having custody of the minor or
incompetent, or to cause the same to be paid to the minor or incompetent without
the intervention of a guardian or custodian, or to cause the same to be paid to
a legal guardian or custodian of the minor or incompetent, if one has been
appointed, or to cause the same to be used for the benefit of the minor or
incompetent.

       

      7.9           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.

       

      
        
           

        

        
          21

          
            

          

        

        
           

        

      

      

       

      7.10           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

       

      7.11           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.

       

      7.12           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.

       

      7.13           Compliance With Code Section
409A

       

      (a)           To
the extent any provision of this Plan or any omission from the Plan would
(absent this Section 7.13(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 7.13(a) shall not
apply and shall not be construed to amend any provision of the Plan to the
extent this Section 7.13(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.

       

      (c)           Except
as provided in this Section and Section 6.5 and
notwithstanding anything herein to the contrary, the payment of benefits under
the Plan shall not be accelerated in a manner that would cause such benefits to
be includable in income under Code section 409A.

       

      
        
           

        

        
          22

          
            

          

        

        
           

        

      

      

       

      (i)           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).  The Committee may approve immediate payment to an
alternative payee (who is not the Participant) pursuant to the terms of a
qualified domestic relations order, as defined under ERISA
sections 206(d)(3) and 514(b)(7).  Any such payment shall not be
prohibited by Section 7.7 and shall not be
subject to the six-month delay requirement under Section 6.3(b).

       

      (ii)          If
a benefit hereunder is required to be included in the income of a Participant
under Code section 409A as a result of the failure to comply with the
requirements of Code section 409A, the benefit amount so includable shall be
paid to the Participant as of the Valuation Date next following such compliance
failure.  This subsection shall not accelerate the payment of a
benefit that is subject to the six-month delay requirement under Section 6.3(b).

       

      (iii)         The
Committee may accelerate the payment of amounts credited to a Participant's
Account (i) to the extent necessary for any Federal officer or employee in the
executive branch to comply with an ethics agreement with the Federal government
and (ii) to the extent reasonably necessary to avoid the violation of an
applicable Federal, state, local, or foreign ethics law or conflicts of interest
law.  Any such payment shall be made in a single lump sum cash payment
to the Participant on or as soon as administratively practicable after the first
Valuation Date that occurs on or after the Committee’s
determination.  Any such payment shall not be subject to the six-month
delay requirement under Section 6.3(b).

       

      (iv)         The
entire amount credited to a Participant’s Account shall be paid to the
Participant if the Plan is terminated in accordance with Section 7.5 and the Committee determines that the requirements
of Treasury regulation 1.409A-3(j)(4)(ix) have been and will be satisfied in
connection with such termination.  Any such payment shall be made in a
single lump sum cash payment to the Participant on or as soon as
administratively practicable after the first Valuation Date that occurs on or
after the Plan termination and the Committee’s determination.  This
subsection shall not accelerate the payment of a benefit that is subject to the
six-month delay requirement under Section 6.3(b).

       

      

       

      

       

      
        
           

        

        
          23

          
            

          

        

        
           

        

      

      IN
WITNESS WHEREOF, and as conclusive evidence of the adoption of the foregoing
instrument comprising the National Western Life Insurance Company Non-Qualified
Deferred Compensation Plan as amended and restated effective as of the Effective
Date, 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

              
	 
      	 
      	 
      

      

      

       

      

       

      
        
           

        

        
          24exhibit10cg.htm

    EXHIBIT
10(cg)

    

    FIRST
AMENDMENT TO THE

    NATIONAL
WESTERN LIFE INSURANCE COMPANY PENSION PLAN

    (As
Amended and Restated Effective January 1, 2007)

    

    

    This
First Amendment to the National Western Life Insurance Company Pension Plan (as
amended, the “Plan”) is hereby made and entered into as of the date last set
forth below by National Western Life Insurance Company (the
“Company”).

    

    WITNESSETH:

    

    WHEREAS,
the Plan was originally established effective January 1, 1973, was subsequently
amended several times, and was most recently amended and restated effective
January 1, 2007; and

    

    WHEREAS,
Section 13.1 of the Plan permits the Company to amend the Plan at any time;
and

    

    WHEREAS,
the Plan must be amended to comply with applicable requirements of the Pension
Funding Equity Act of 2004 and the final regulations under section 415 of the
Internal Revenue Code of 1986, as amended (the “Code”);

    

    NOW
THEREFORE, the Plan is hereby amended as follows effective as of January 1, 2008
except as otherwise provided in the amendments below:

    

    1.           Plan
Section 8.1(a) is hereby amended by restating the first paragraph of such
Section to read in its entirety as follows:

    

    Notwithstanding
any other provision of this Plan, the Pension payable to or on behalf of any
Participant under this Plan shall be limited in accordance with Code
section 415, as follows.  The provisions of this Article VIII
supersede and control any other provisions of the Plan in conflict therewith;
provided, however, that nothing herein shall affect Section 1.4 or shall be
construed to require the crediting of additional benefit accruals, Benefit
Service, or Compensation after the Freeze Date.  Subject to any
specific optional elections made in this Article VIII, the provisions of Code
section 415 are hereby incorporated by reference and shall control over any
provision in the Plan in conflict therewith.  The provisions of this
Article VIII are intended to constitute good-faith compliance with the final
Treasury regulations under Code section 415 published on April 5, 2007 and shall
be construed and applied in accordance therewith.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    2.           Plan
Section 8.1(a)(i) is hereby amended by inserting the following sentence at the
end of such Section, such sentence to read in its entirety as
follows:

    

    Adjustments
under Code section 415(d) shall apply to years after a Participant’s severance
from employment or, if earlier, annuity starting date.

    

    3.           Plan
Section 8.1(a)(ii) is hereby amended by inserting the following sentence at the
end of such Section, such sentence to read in its entirety as
follows:

    

    The
defined benefit compensation limitation shall be adjusted under Code section
415(d) for years after a Participant’s severance from employment or, if earlier,
annuity starting date.

    

    4.           Section
8.1(a)(iv) is hereby amended by adding the following new subsection (E)
immediately following subsection (D), such subsection to read in its entirety as
follows:

    

    (E)           Other
items of remuneration that are similar to any of the items listed in subsections
(A) through (D) of this Section 8.1(a)(iv).

    

    5.           Section
8.1(a)(iv) is hereby amended by adding the following new paragraph and related
subsections at the end of such Section, such paragraph and subsections to read
in their entirety as follows:

    

    To be
taken into account for a year, earnings must be actually paid or made available
to a Participant during such year and must be paid or treated as paid prior to
the Participant’s “severance from employment” with the Employer as such term is
defined in Treasury regulation section
1.415(a)-1(f)(5).  Notwithstanding the foregoing, “earnings” shall
also include the following:

    

     (F)           amounts
paid by the later of 21⁄2 months after a Participant’s severance from employment
with the Employer or the end of the year that includes the date of such
severance from employment, provided that such amounts (I) constitute regular
compensation for services during regular working hours or for services outside
regular working hours (such as overtime or shift differential), commissions,
bonuses, or other similar payments, and (II) would have been paid to the
individual prior to the severance from employment if the individual had
continued in the Employer's employment.

    

    (G)           amounts
paid by the later of 21⁄2 months after a Participant’s severance from employment
with the Employer or the end of the year that includes the date of such
severance from employment, provided that such amounts represent payment for
unused, accrued bona fide sick, vacation, or other leave that the individual
would have been entitled to use if employment had continued.

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    

    (H)           payments
to a participant who is permanently and totally disabled (as defined in Code
section 22(e)(3)) during a year in which such Participant is credited with a
year of Benefit Service or deemed credited with a year of Benefit Service under
Section 6.4.

    

    (I)           payments
to an individual who does not currently perform services for the Employer by
reason of qualified military service, as defined in section 414(u)(1) of the
Code, to the extent that such payments do not exceed the amount that the
individ­ual would have received had he or she continued in the Employer's
employment instead of enter­ing qualified military service.

    

    6.           Section
8.1(b) is hereby amended by restating the first two paragraphs of such Section,
such paragraphs to read in their entirety as follows:

    

    If an
annual Pension payable to a Participant hereunder (including Pensions payable
under any other defined benefit plans of the Employer) is greater than Ten
Thousand Dollars ($10,000) or if the Participant has ever participated in a
defined contribution plan maintained by the Employer, the Participant’s Pension
shall automatically be limited to the maximum permissible benefit in accordance
with Code section 415.

    

    The
limitations of this Section apply to a Pension payable in the form of a
straight life annuity with no ancillary benefits.  If payment is in a
different form, the amount thereof shall be adjusted to be the actuarial
equivalent of a single life annuity and the limitations shall be applied to such
adjusted amount; provided that survivor benefits payable to a surviving spouse
under a qualified joint and survivor annuity shall not be taken into account to
the extent that such benefits would not be payable if the participant’s benefits
were not paid in the form of a qualified joint and survivor annuity and further
provided that actuarial equivalence shall be determined as follows:

    

    (i)           For
purposes of benefits paid in a form to which Code section 417(e)(3) does not
apply, the actuarial equivalent straight life annuity is the greater of (A) the
annual amount of the straight life annuity payable to the Participant under the
terms of the Plan commencing at the same annuity starting date as the form of
benefit actually payable to the Participant and (B) the annual amount of the
straight life annuity commencing at the same annuity starting date that has the
same actuarial present value as the particular form of benefit payable, computed
using a 5% interest assumption and the “Applicable Mortality Table” described in
Section 2.2(a)(ii).

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    

    (ii)           For
purposes of benefits paid in a form to which Code section 417(e)(3) applies and
with an annuity starting date occurring in 2004 or 2005, the actuarial
equivalent straight life annuity is the greater of (A) the annual amount of the
straight life annuity commencing at the annuity starting date that has the same
actuarial present value as the particular form of benefit payable, computed
using the interest and mortality factors set forth in Section 2.2(b) and (B) the
annual amount of the straight life annuity commencing at the annuity starting
date that has the same actuarial present value as the particular form of benefit
payable, computed using an interest rate of 5.5% and the “Applicable Mortality
Table” described in Section 2.2(a)(ii).

    

    (iii)           
For purposes of benefits paid in a form to which Code section 417(e)(3) applies
and with an annuity starting date occurring after 2005, the actuarial equivalent
straight life annuity is the greatest of (A) the annual amount of the straight
life annuity commencing at the annuity starting date that has the same actuarial
present value as the particular form of benefit payable, computed using the
interest and mortality factors set forth in Section 2.2(b); (B) the annual
amount of the straight life annuity commencing at the annuity starting date that
has the same actuarial present value as the particular form of benefit payable,
computed using an interest rate of 5.5% and the “Applicable Mortality Table”
described in Section 2.2(a)(ii); and (C) the annual amount of the straight life
annuity commencing at the annuity starting date that has the same actuarial
present value as the particular form of benefit payable, computed using the
“Applicable Interest Rate” and the “Applicable Mortality Table” described in
Section 2.2(a)(ii), divided by 1.05.

    

    7.           Except
as hereinabove amended, the Plan, as previously amended, shall remain in full
force and effect.

    

    IN WITNESS WHEREOF, the Company has
executed this First Amendment to the Plan as of this 18th day of December,
2008.

    

    

    
      
        
          	 
      	 
      	
                  NATIONAL
      WESTERN LIFE INSURANCE COMPANY

                
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                  By:

                	
                  /S/James
      P. Payne

                
	 
      	 
      	 
      
	 
      	
                  Its:

                	
                  Senior
      VP-Secretary

                
	 
      	 
      	 
      

        

      

    

    

    
      
         

      

      
        4

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