Management Contracts with Gal-Tex Hotel Corporation
: We have entered into management
contracts with a subsidiary of Gal-Tex for the management of a hotel and adjacent fitness center owned by us. During the year ended December 31, 2018, we paid Gal-Tex $439,292 and $145,120, respectively, for services rendered under these
contracts. Both of such contracts are terminable by us upon thirty days prior written notice.
Transactions with Robert L. Moody,
Jr.
: Robert L. Moody, Jr. (RLM Jr.) is the brother of two of our directors, including our Chairman of the Board, and one of our advisory directors. RLM Jr., mainly through his wholly-owned insurance agency, Moody Insurance Group,
Inc. (MIG), has entered into a number of agency agreements with us and some of our subsidiaries. In 2018, total commissions paid under such agency contracts, primarily from the marketing of health insurance products, were $443,544. We
have entered into a Consulting and Special Marketing Agreement with MIG concerning development and marketing of new products. During 2018, we paid compensation of $109,721 under this agreement and a predecessor agreement. In addition to consulting
fees, such amount includes dividends on shares of our Restricted Stock granted to MIG as a consultant. We also entered into a National Marketing Directors Contract with MIG in 1994, which gave MIG the exclusive right to sell annuities in the
financial institutions market. In a subsequent restructuring of such contract, MIG gave up such exclusive right, and we assumed all responsibilities for sales and service in such market. During 2018, MIG received $1,133,668 in commissions under such
restructured contract. As agreed by us and certain of our subsidiaries, MIG markets products of unrelated companies through certain of our agents. MIG receives commissions from the companies issuing such products. In 1994, MIG provided brokerage and
business development services to an unrelated marketing company which has had a marketing agreement with us since such time. MIG has advised us that, during 2018, commissions received from such marketing company related to sales of our products
aggregated $66,419. We entered into an agreement with MIG in 2006 pursuant to which we provide certain services that direct network traffic to MIGs site-hosting provider. MIG paid us $480 for such services during 2018, based on the same rates
charged to our internal departments.
Transactions with Moody National Bank
: We and some of our subsidiaries have entered into
various depository, custodian and safekeeping arrangements with Moody National Bank in the ordinary course of our business. In addition, American National Registered Investment Advisor, Inc. (ANRIA), a registered investment advisor
subsidiary of ours, provides investment management services to certain accounts maintained by others at the Trust Department of Moody National Bank. For such services, Moody National Bank compensates ANRIA from the fees the bank receives for its
services as custodian, trustee or other agent of such accounts. During 2018, Moody National Bank paid ANRIA $364,689 in fees for such services.
Health Insurance and Retirement Plan Contracts with Certain Affiliates
: Our Merit Plan is insured by National Western Life
Insurance Company (National Western). Further information regarding the Merit Plan is provided above in connection with the All Other Compensation
Table NEOs. Ross R. Moody, our Chairman of the Board, is the Chairman and Chief Executive Officer of National Westerns parent company, and Robert L. Moody, Sr., our Chairman Emeritus, is the controlling stockholder and Chairman Emeritus
of National Westerns parent company. During 2018, we paid National Western $2,720,928 in premium and fees with respect to the Merit Plan. In addition, we insure substantially similar plans offered by National Western, Gal-Tex, and The Moody
Foundation to certain of their officers. During 2018, National Western, Gal-Tex, and The Moody Foundation paid us premium and fees with respect to such plans in the amounts of $688,028; $1,240; and $121,413, respectively. Lastly, we act as insurer
under a Group Retirement Policy Deposit Administration Contract issued to Gal-Tex as policyholder, pursuant to which Gal-Tex made contributions totaling $892,690 during 2018 and paid premiums of $1,508,005 during 2018 for annuities issued under such
contract.
Transactions with Greer, Herz
& Adams, L.L.P
.: Irwin M. Herz, Jr. is a director of ours and a
Partner with Greer, Herz & Adams, L.L.P. which serves as our General Counsel. In the year ended December 31, 2018, Greer, Herz & Adams, L.L.P. received approximately $10,844,088 in legal fees and reimbursements of expenses in
connection with its services as our General Counsel. We also furnished offices, telephones and the use of certain office decorations to the law firm.
Other Family Relationships
: Robert L. Moody, Sr., our Chairman Emeritus, is the father of directors Frances A. Moody-Dahlberg and Ross
R. Moody and advisory director Russell S. Moody. As Chairman Emeritus, Robert L. Moody, Sr. received approximately $151,498 in compensation during 2018. E. Vince Matthews III, a half-brother of director Frances A. Moody-Dahlberg, is a director of a
mutual insurer managed by us and an advisory director of one of our subsidiaries. Mr. Matthews is also employed as one of our officers, for which he received total compensation during 2018, including under our Merit Plan for officers, in excess
of $235,000, but less than $275,000. Please also see the section Compensation Committee Interlocks and Insider Participation above.
Procedure for Review, Approval or Ratification of Related Persons Transactions
The Audit Committee reviews, approves or ratifies any related party transactions in which we have or will have an amount involved exceeding
$120,000 and a related person has or will have a direct or indirect material interest. The Audit Committee will approve or ratify the transaction only if it determines that the transaction is in our best interests. In considering the transaction,
the Audit Committee will consider all relevant factors, including (as applicable) the business rationale for entering into the transaction; the alternatives to entering into the transaction; whether the transaction is on terms comparable to those
that could be obtained in arms-length dealings with an unrelated third party; and the overall fairness of the transaction to us. We have not adopted formal written procedures for the review of related party transactions. Rather, we are guided by the
corporate governance rules of NASDAQ, the requirements of Item 404(a) of Regulation
S-K
promulgated by the SEC, and other SEC interpretive guidance on related party transactions.
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