Common use of EMPLOYEE BENEFIT PAYMENTS Clause in Contracts

EMPLOYEE BENEFIT PAYMENTS. During the period from the date of this Agreement to the Closing Date, the Company, by action and at the discretion of its Compensation Committee, shall have the right but not the obligation to make the following payments and allocations with respect to all individuals employed by the Company or any of its subsidiaries on July 1, 1996, including the employees identified on Section 5.6 of the Disclosure Schedule whose employment with the Company or any of its subsidiaries terminated with the Company's approval prior to the date of this Agreement and any employee whose employment may be terminated with the Company's approval prior to the Closing Date (collectively, the "Eligible Employees"): (i) The Company's profit sharing contribution to the Washington National Corporation Profit Sharing Plan for calendar year 1996, in the amount of 3% of compensation as defined in the Plan (which Plan shall be amended prior to the Closing Date to permit contributions to be made on behalf of any Eligible Employee who is not a current employee of the Company or any of its subsidiaries), may, in the discretion of the Compensation Committee and to the extent permitted by such Plan, be allocated to the accounts maintained under such Plan for the Eligible Employees on the earlier of the Closing Date and March 15, 1997. (ii) Each Eligible Employee may be paid a lump sum payment under the Washington National Corporation Annual Pay At Risk Plan for the period that such Eligible Employee was employed by the Company or any of its subsidiaries in calendar year 1996, with such payments to be made on or prior to the Closing Date, provided that such payments shall not in the aggregate exceed $5,003,610. (iii) Each Eligible Employee may be paid a lump sum payment under the Washington National Corporation Annual Pay At Risk Plan for the period that such Eligible Employee was employed by the Company or any of its subsidiaries in calendar year 1997, with such payments to be made on the Closing Date, provided that such payments shall not in the aggregate exceed $238,455 per month, including a prorated amount for the month in which the Closing Date occurs. (iv) Each Eligible Employee may be paid a lump sum payment under the Washington National Corporation Long Term Pay At Risk Plan for the 1994-1996 performance period for the period that such Eligible Employee was employed by the Company or any of its subsidiaries during the 1994-1996 performance period, with such payments to be made on or prior to the Closing Date, provided that such payments shall not in the aggregate exceed $448,790. (v) Each Eligible Employee may be paid a lump sum payment under the Washington National Corporation Long Term Pay At Risk Plan for the 1995-1997 and 1996-1998 performance periods, for the period that such Eligible Employee was employed by the Company or any of its subsidiaries during the 1995-1997 performance period and/or the 1996-1998 performance period, as applicable, with such payments to be made on the Closing Date, provided that (i) such payments for the 1995-1997 performance period shall not in the aggregate exceed $587,260 for the period through December 31, 1996 and $19,560 per month for each month in 1997, including a prorated amount for the month in which the Closing Date occurs, and (ii) such payments for the 1996-1998 performance period shall not in the aggregate exceed $297,205 for the period through December 31, 1996 and $20,505 per month for each month in 1997, including a prorated amount for the month in which the Closing Date occurs. (vi) The Company shall make all required contributions under the terms of the Washington National Employee Savings Plan and the Washington National Pension Plan Plus (which Plans shall be amended prior to the Closing Date to permit contributions to be made on behalf of any Eligible Employee who is not a current employee of the Company or any of its subsidiaries and to permit contributions to be made on a date other than the end of the calendar quarter in the event the Closing Date falls on such date) for the period commencing on the date hereof and ending on the Closing Date, with contributions to be made on the Closing Date. (vii) The Company shall continue to credit participants under the terms of the Washington National Corporation Supplemental Executive Retirement Plan ("SERP") (which shall be amended prior to the Closing Date to permit credits to be determined on the earlier to occur of the Closing Date and the participant's date of termination of employment) with respect to all compensation (excluding severance, change of control or similar benefits) earned by such participants through the Closing Date or their earlier date of termination of employment. The Company shall terminate the SERP immediately prior to the Effective Time. (viii) Each Eligible Employee who held any shares of Restricted Stock as of July 1, 1996 and whose Restricted Stock has been forfeited as of the date of this Agreement, may be paid a lump sum payment in consideration for such forfeited Restricted Stock in an amount in cash equal to 125% of the Cash Price, less applicable withholding taxes, with such payments to be made on the earlier of the Closing Date and March 15, 1997, provided that such payments shall not in the aggregate exceed $289,500.

EMPLOYEE BENEFIT PAYMENTS. During the period from the date of this Agreement to the Closing Date, the Company, by action and at the discretion of its Compensation Committee, shall have the right but not the obligation to make the following payments and allocations with respect to all individuals employed by the Company or any of its subsidiaries Subsidiaries on or after July 1, 1996, including the employees identified on Section 5.6 5.5 of the Disclosure Schedule whose employment with the Company or any of its subsidiaries Subsidiaries terminated with the Company's approval prior to the date of this Agreement and any employee whose employment may be terminated by the Company with the Company's approval consent of the Acquiror prior to the Closing Date (collectively, the "Eligible Employees"): (i) The Company's profit sharing contribution to the Washington National Corporation Profit Sharing Plan for calendar year 19961997, in the amount of 35% of compensation as defined in the Plan (which Plan shall be amended prior to the Closing Date to permit contributions to be made on behalf of any Eligible Employee who is not a current employee of the Company or any of its subsidiariesSubsidiaries), may, in the discretion of the Compensation Committee and to the extent permitted by such Plan, be allocated to the 31 accounts maintained under such Plan for the Eligible Employees on the earlier of the Closing Date and March 15, 19971998. (ii) Each Eligible Employee may be paid a lump sum payment payments under the Washington National Corporation Annual Pay At Risk Plan for the period periods that such Eligible Employee was employed by the Company or any of its subsidiaries Subsidiaries in calendar year 19961997 and calendar year 1998, (i) with such payments for calendar year 1997 to be made on or prior to the earlier of the Closing Date and March 15, 1998 in an aggregate amount not in excess of $310,000 per month for the entire 1997 calendar year, regardless of the Closing Date, provided that and (ii) with such payments shall for calendar year 1998 to be made on the Closing Date in an aggregate amount not in excess of $240,000 per month, including a prorated amount based upon the aggregate exceed $5,003,610number of days elapsed in the month in which the Closing Date occurs. (iii) Each Eligible Employee may be paid a lump sum payment under the Washington National Corporation Annual Pay At Risk Plan for the period that such Eligible Employee was employed by the Company or any of its subsidiaries in calendar year 1997, with such payments to be made on the Closing Date, provided that such payments shall not in the aggregate exceed $238,455 per month, including a prorated amount for the month in which the Closing Date occurs. (iv) Each Eligible Employee may be paid a lump sum payment under the Washington National Corporation Long Term Pay At Risk Plan for the 1994-1996 performance period for the period that such Eligible Employee was employed by the Company or any of its subsidiaries during the 1994-1996 performance period, with such payments to be made on or prior to the Closing Date, provided that such payments shall not in the aggregate exceed $448,790. (v) Each Eligible Employee may be paid a lump sum payment under the Washington National Corporation Long Term Pay At Risk Plan for the 1995-1997 and 1997, 1996-1998 and 1997-1999 performance periods, for the period that such Eligible Employee was employed by the Company or any of its subsidiaries Subsidiaries during the 1995-1997 performance period and/or period, the 1996-1998 performance period and/or the 1997-1999 performance period, as applicable, with such payments to be made on the Closing Date, provided that applicable (i) with such payments for the 1995-1997 performance period shall to be made on the earlier of the Closing Date and March 15, 1998 in an aggregate amount not in the aggregate exceed excess of $587,260 445,000 for the period through December 31, 1996 and $19,560 19,000 per month for each month in 1997, including a prorated amount based upon the number of days elapsed in the month in which the Closing Date occurs (if the Closing Date occurs in 1997), (ii) with such payments for the 1996-1998 performance period to be made on the Closing Date in an aggregate amount not in excess of $235,000 for the period through December 31, 1996 and $19,500 per month for each month in 1997 and 1998, including a prorated amount based upon the number of days elapsed in the month in which the Closing Date occurs, and (iiiii) with such payments for the 19961997-1998 1999 performance period shall to be made on the Closing Date in an aggregate amount not in the aggregate exceed excess of $297,205 for the period through December 31, 1996 and $20,505 19,000 per month for each month in 1997the period, including a prorated amount for based upon the number of days elapsed in the month in which the Closing Date occurs. (viiv) The Company shall make all required contributions under the terms of the Washington National Employee Savings Plan and the Washington National Pension Plan Plus (which Plans shall be amended prior to the Closing Date to permit contributions to be made on behalf of any Eligible Employee who is not a current employee of the Company or any of its subsidiaries Subsidiaries and to permit contributions to be made on a date other than the end of the calendar quarter in the event the Closing Date falls on such date) for the period commencing on the date hereof and ending on the Closing Date, with contributions to be made on the Closing Date. (viiv) The Company shall continue to credit participants under the terms of the Washington National Corporation Supplemental Executive Retirement Plan ("SERP") (which shall be amended prior to the Closing Date to permit credits to be determined on the earlier to occur of the Closing Date and the participant's date of termination of employment) 32 with respect to all compensation (excluding severance, change of control or similar benefits) earned by such participants through the Closing Date or their earlier date of termination of employment. The Company shall terminate the SERP immediately prior to the Effective Time. (viiivi) Each Eligible Employee who held any shares of Restricted Stock as of July 1, 1996 and whose Restricted Stock has been forfeited as of the date of this Agreement, may be paid a lump sum payment in consideration for such forfeited Restricted Stock in an amount in cash equal to 125% of the Cash Price, Merger Consideration less applicable withholding taxes, with such payments to be made on the earlier of the Closing Date and March 15, 19971998, provided that such payments shall not in the aggregate exceed $289,500322,109. (vii) In lieu of granting stock options to certain Eligible Employees and the directors of the Company in 1997, the Company may, by action and at the discretion of its Compensation Committee, pay a bonus to such persons in an aggregate amount not in excess of $565,950 representing the difference between the Merger Consideration and the price of the Common Shares on March 14, 1997 (the designated stock option grant date in 1997).