NATIONAL WESTERN LIFE INSURANCE COMPANY GRANDFATHERED NON-QUALIFIED DEFERRED COMPENSATION PLAN

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.

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

1.2            Definitions

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

(a)            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 known as the Pension 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.  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)            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)            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.

(h)            Employer :  National Western Life Insurance Company, a corporation organized and existing under the laws of the State of Texas, and any successor or successors.

(i)            Freeze Date :  December 31, 2004.

(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, April 1, July 1 or October 1 which is coincident with or next follows the earlier of (i) six (6) months after the date the Employee first completes and Hour of Service for the Employer, provided the Employee completes five hundred (500) Hours of Service during such six (6) month period or (ii) the date he completes 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)            Original Effective Date :  April 1, 1995.

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

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

(q)            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.

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

(s)            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.

(t)             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.

1.4            Cessation of Benefit Accruals and Vesting Service

Notwithstanding any other provision of the Plan to the contrary, no individual (including individuals who ceased to be Employees prior to the Freeze Date) shall become a Participant, be credited with additional Years of Service for vesting purposes, or accrue any additional benefits under the Plan after the Freeze Date, other than earnings credited pursuant to Section 4.3 .  Therefore, no individual shall be credited with additional Service after the Freeze Date, and remuneration paid after the Freeze Date shall not be taken into account under the Plan for contribution purposes.  The provisions of this Section are intended to comply with an exemption from the requirements of Code section 409A and shall be construed in accordance therewith.  The provisions of this paragraph shall not be considered a “material modification” of the Plan, but shall instead be considered a cessation of future deferrals in accordance with Treasury regulation section 1.409A-6(a)(4)(iii).

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.

2.3            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(g) herein, no further contributions by that employee shall be allowed under the Plan.  The provisions of Article V, Determination of Payment of Account , shall continue to govern the employee's account.

2.4            Termination of Participation in Connection with the Amercian Jobs Creation Act of 2004

The Chairman of the Employer as of December 31, 2004 shall cease to participate in the Plan effective as of such date.  Contributions and other amounts allocated to the Account of such Participant after Dec