EXHIBIT 10(c) - MATERIAL CONTRACTS
NATIONAL WESTERN LIFE INSURANCE COMPANY
NON-QUALIFIED DEFERRED COMPENSATION PLAN
Effective
April 1, 1995
Table of Contents
ARTICLE I - Purpose, Definitions and Construction
1.1 Purpose of the Plan
1.2 Definitions
1.3 Construction
ARTICLE II - Eligibility
2.1 Initial Eligibility Requirements
2.2 Eligibility Requirements for Subsequent Plan Years
ARTICLE III - Contributions to the Plan
3.1 Participant Contributions
3.2 Employer Mandatory Matching Contributions
3.3 Employer Discretionary Matching Contributions
3.4 Employer Mandatory Non-Matching Contributions
3.5 Establishment of Account
ARTICLE IV - Allocation and Investment
4.1 Allocation
4.2 Establishment of Trust
4.3 Allocation of Investment Earnings
ARTICLE V - Determination of Payment of Account
5.1 Vesting of Account
5.2 Determination of Account
5.3 Timing of Payment
5.4 Form of Payment
ARTICLE VI - Miscellaneous
6.1 Administration of the Plan
6.2 Amendment of the Plan
6.3 Termination of the Plan
6.4 Notices to Participants
6.5 Non-Alienation
ARTICLE I
PURPOSE, DEFINITIONS AND CONSTRUCTION
1.1 Purpose of the Plan
This Plan is established by the Employer 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 to be exempt from the
requirements of the Employee Retirement Income Security Act.
1.2 Definitions
The following terms, when found in the Plan, shall have the meanings set
forth below:
(a) Account Balance: At any time, the total of all amounts credited under
the terms of the Plan to a Participant, the rights to which are determined
under the Plan.
(b) Beneficiary: The person(s) and/or the trust(s) created for the benefit
of a person or persons who are the natural object of the Participant's
bounty, or the Participant's estate, whichever is designated by the
Participant to receive the benefits payable hereunder upon his death.
(c) Code: The Internal Revenue Code of 1986, as it may be amended from
time to time, including any successor.
(d) Committee: The individuals appointed by the Board of Directors of the
Employer, and know as the Administrative Committee, to manage and direct the
operation and administration of the Plan.
(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, including bonuses, fees, commissions, amounts
deferred under Code Sections 401(k) and 125, and amounts deferred under any
other non-qualified program of salary reduction. 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) Disability: A physical or mental condition of a Participant resulting
from bodily injury, disease or mental disorder which renders him incapable
of continuing any gainful occupation. The determination of Disability shall
be made either as a result of the Participant qualifying for a pension under
the federal Social Security Act, or based upon such evidence as is
determined to be applicable by the Employer in its sole discretion.
(g) Effective Date: April 1, 1995.
(h) Eligible Employee: A person employed by the Employer in the position
of Senior Vice President or above, or a person who has been designated by
the President of the Employer, by name, position, or in any other manner, as
being in the class of persons who are eligible to participate in the Plan.
Such latter designation shall be made in writing by the President of the
Employer. However, no person who is an employee of the Employer shall be
selected as an Eligible Employee except a member of the select group of
management or highly compensated employees of the Employer, as such term is
defined under Section 201 of the Employee Retirement Income Security Act of
1974, and regulations and rulings promulgated thereunder by the Department
of Labor.
(i) Employer: National Western Life Insurance Company, a corporation
organized and existing under the laws of the State of Texas, and any
successor or successors.
(j) 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.
(k) Initial Participation Period: The time period beginning when the
Eligible Employee first completes an Hour of Service until the first January
1 or July 1 which is coincident with or next follows his completion of one
(1) year of service.
(l) Normal Retirement Age: The date on which a Participant attains age
sixty-five (65).
(m) Normal Retirement Date: The first day of the month coincident with or
next following a Participant's Normal Retirement Age.
(n) Participant: An Eligible Employee who has met the requirements
Section 2.1 hereof, and whose participation has not been terminated.
(o) Plan: The National Western Life Insurance Company Non-Qulified
Deferred Compensation Plan, as set forth herein, and as it may be amended
from time to time.
(p) Plan Quarter: The three month period beginning on January 1, April 1,
July 1 or October 1 and ending on March 31, June 30, September 30 or
December 31.
(q) Plan Year: The twelve month period beginning on January 1 and ending
on December 31 each year.
(r) Valuation Date: The date as of which the Plan is valued and gains or
losses allocated, which shall be March 31, June 30, September 30 and
December 31 of each Plan Year. However, the Committee may use more frequent
Valuation Dates if it so desires.
(s) Years of Service: The period of an Eligible Employee's employment
considered in the calculation of the vested amount of his benefits. 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.
ARTICLE II
ELIGIBILITY
2.1 Initial Eligibility Requirements
An Eligible Employee may elect to become a Participant hereunder on the date
the Eligible Employee first completes an Hour of Service for the Employer.
An election to become a Participant shall be made no later than 30 days
after the date the Eligible Employee first completes an Hour of Service for
the Employer.
2.2 Eligibility Requirements for Subsequent Plan Years
An Eligible Employee who does not become a Participant when first eligible
under the provisions of Section 2.1 may elect to become a Participant
hereunder as of the first day of any subsequent Plan Year by executing an
enrollment form at least 30 days prior to the beginning of such Plan Year.
ARTICLE III
CONTRIBUTIONS TO THE PLAN
3.1 Participant Contributions
Each Employee who becomes a Participant in accordance with Article II hereof
may elect to make contributions to the Plan on a pre-tax basis equal to full
percentage increments of his Compensation for the quarter, from one percent
(1%) to fifty percent (50%).
Each Participant's pre-tax salary deferral agreement shall be made in
writing on such forms as the Committee shall prescribe, and shall be
effective on a Plan Year basis, or until changed in accordance with
subsequent provisions of this Section 3.1. A Participant's election
hereunder may be completely discontinued at any time, and may be changed as
of any Valuation Date, provided that notice of such change is received at
least thirty (30) days prior to such Valuation Date for Compensation to be
earned for services rendered following such date, or within such time frame
as is approved by the Committee. If, as of any Valuation Date, a
Participant does not submit a new election, his previous election shall be
deemed to continue.
3.2 Employer Mandatory Matching Contributions
The Employer shall make an Employer mandatory matching contribution each
Plan Quarter equal to fifty percent (50%) of the Participant's contributions
made under Section 3.1 of this Plan, limited to no more than two percent
(2%) of the Participant's Compensation for the quarter, that exceeds, on a
year to date basis, the OBRA'93 annual compensation limit ($150,000 in
1995), as adjusted by the Commissioner for increases in the cost of living
in accordance with Section 401(a)(17)(B) of the Code.
However, during any Participant's Initial Participation Period, the Employer
shall make an Employer mandatory matching contribution each Plan Quarter
equal to fifty percent (50%) of the Participant's contributions made under
Section 3.1 of this Plan, limited to no more than two percent (2%) of the
Participant's Compensation for the quarter.
3.3 Employer Discretionary Matching Contributions
The Employer may make an additional matching contribution each Plan Quarter,
to be known as an Employer discretionary matching contribution, equal to
fifty percent (50%) of the Participant's contributions made under Section
3.1 of this Plan, limited to no more than two percent (2%) of the
Participant's Compensation for the quarter.
The determination as to whether an Employer discretionary matching
contribution shall be made is in the sole discretion of the President of the
Employer, determined on an quarterly basis.
3.4 Employer Mandatory Non-Matching Contributions
The Employer shall make an Employer mandatory non-matching contribution each
Plan Quarter equal to two percent (2%) of the participant's Compensation for
the quarter that exceeds, on a year to date basis, the OBRA'93 annual
compensation limit ($150,000 in 1995), as adjusted by the Commissioner for
increases in the cost of living in accordance with Section 401(a)(17)(B) of
the Code.
However, during any Participant's Initial Participation Period, the Employer
shall make an Employer mandatory non-matching contribution each Plan Quarter
equal to two percent (2%) of the Participant's Compensation for the quarter.
3.5 Establishment of Account
Each Participant herein shall have maintained in his name an Account, to
which shall be credited his salary reduction contributions, as well as his
allocable share of Employer contributions made under the terms of this
Article. A Participant's Account shall reflect his share of such
contributions, including his allocable share of any gains and losses
pursuant to Section 4.3 hereof.
ARTICLE IV
ALLOCATION AND INVESTMENT
4.1 Allocation
Contributions made pursuant to Section 3.1 hereof shall be allocated to the
Account of the Participant from whose Compensation such amounts were
reduced, as soon as practicable following the date of actual salary
reduction.
Any contribution made pursuant to Section 3.2, 3.3 and 3.4 hereof shall be
allocated to each participant who is in the active employ of the Employer as
of the last day of the Plan Quarter for which such contribution was made,
unless that Participant's termination of employment is as a result of his
death, Disability, attainment of Normal Retirement Age, or such other cause
as shall be deemed as acceptable by the Board of Directors of the Employer.
4.2 Establishment of Trust
The Employer shall establish a trust fund with regard to the Accounts
hereunder, designed to be an irrevocable grantor trust under Code Section
671.
4.3 Allocation of Investment Earnings
Investment earnings shall be credited as of the last day of each calendar
quarter, based on the actual investment results for such quarter. The
earnings to be allocated will be allocated to each Participant's Account in
the proportion that the Participant's Account balance at the beginning of
the quarter, less any withdrawals during the quarter, plus one-half (1/2) of
any additions made to the Account during the quarter, bears to the total of
all such Accounts.
If more than one investment fund is maintained, each Participant shall
provide an election as to the investment of his Accounts. Each
Participant's investment election shall be made in writing, on such forms as
the Committee shall prescribe, and shall remain effective hereunder until
changed. A Participant's election hereunder may be changed as of any
Valuation Date, provided that notice of such change is received at least
thirty (30) days prior to such Valuation Date, or within such time frame as
is approved by the Committee.
ARTICLE V
DETERMINATION OF PAYMENT OF ACCOUNT
5.1 Vesting of Account
The Participant's Account derived from contributions made under Section 3.1
hereof shall be one hundred percent (100%) vested and non-forfeitable at all
times.
As to a Participant who is at the level of Executive Vice President or
above, his total Account shall be one hundred percent (100%) vested and
non-forfeitable at all times.
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
3.1 hereof, such Account shall become one hundred percent (100%) vested and
non-forfeitable in accordance with the following:
(a) Upon the retirement of a Participant at or after his Normal Retirement
Date.
(b) Upon a determination of Disability in accordance with Section 1.2(e)
hereof.
(c) Upon the death of a Participant.
Prior to the occurrence of any of the foregoing, such a Participant shall
become vested in his Account 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%
5.2 Determination of Account
As of the date of a Participant's termination of employment with the
Employer (including termination due to any of the events specified under
Section 5.1 hereof), his vested Account balance shall be determined in
accordance with the provisions of Section 5.1 above. Thereafter, as of the
last day of the Plan Quarter coincident with or next following his
termination of employment, the non-vested portion of his Account shall be
forfeited. Such forfeited amount shall be used to first reduce the Employer
contributions specified under Sections 3.2, 3.3 and 3.4 hereof and any
remaining amounts shall be reallocated among all Participants eligible to
receive Employer contributions as of such date under Section 4.1 hereof, in
the proportion that such Participant's Compensation for the Plan Quarter
bears to the Compensation for the Plan Quarter of all Participants eligible
for such contribution.
5.3 Timing of Payment
A Participant, or in the case of a benefit due to the death of a
Participant, his Beneficiary, shall be entitled to payment of his vested
Account balance immediately following the termination of his employment
status with the Employer.
Payment shall be made as soon as administratively feasible following such
event, based on the Participant's Account balance as of the last day of the
calendar quarter next preceding the date of distribution. However, if the
Employer determines that such payment would not be in the best interest of
remaining participants due to fluctuations in the value of the trust, no
distribution shall be made until a subsequent value of the trust is
determined, as of the last day of the calendar quarter in which the event
requiring distribution occurs.
5.4 Form of Payment
A Participant or Beneficiary entitled to payment shall receive a single lump
sum payment.
ARTICLE VI
MISCELLANEOUS
6.1 Administration of the Plan
The Plan shall be administered by the Employer. The books and records of
the Plan shall be maintained by the Employer at its expense, and no member
of the Board of Directors of the Employer, or any employee of the Employer
acting on its behalf, shall be liable to any person for any action taken or
omitted in connection with the administration of the Plan, unless
attributable to his own fraud or willful misconduct.
6.2 Amendment of the Plan
The Plan may be amended, in whole or in part, from time-to-time, by the
Board of Directors of the Employer, without the consent of any other party.
6.3 Termination of the Plan
The Plan may be terminated, at any time, by action of the Board of
Directors, without the consent of any other party. The termination of this
Plan shall not result in the granting of any additional rights to any
Participant, such as, to the extent not funded, full vesting of his
Account, except as already provided under the terms of Section 5.1 hereof.
6.4 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.
6.5 Non-Alienation
To the extent permitted by law, the right of any Participant or Beneficiary
in any Account balance hereunder shall not be subject in any manner to
attachment or other legal process for the debts of such Participant or
Beneficiary, and any such Account balance shall not be subject to
anticipation, alienation, sale, transfer, assignment or encumbrance.
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
April 1, 1995, 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 27th
day of March, 1995.
ATTEST: NATIONAL WESTERN LIFE
INSURANCE COMPANY
/S/ James P. Payne /S/ Ross R. Moody
Secretary Name:
Title: