EXHBIBIT 10(bz)

National Western Life Insurance Company
2009 SENIOR VICE PRESIDENT BONUS PROGRAM

The Bonus Program (“Program”) is designed to reward Senior Vice Presidents for
their performance in assisting the Company in achieving pre-determined sales
targets while managing to profit criteria. The Plan incorporates three
measurable performance factors: (1) sales, which are defined as net placed
annualized target premium for Life business and as total placed premium for
Annuity business, (2) expense management, and (3) overall Company profitability.

Each of the above performance factors will have an assigned target level for
purposes of the Program. Assuming a “par” performance (i.e. achieving each
target level), the weighting of the bonus (applied to base salary) is 7.5% for
sales performance, 7.5% for expense management performance, and 15% for
profitability, or an overall par percentage of 30%. Actual results compared to
the targets can either increase or decrease each of these individual percentages
as explained in the following sections. However, the total bonus percentage
cannot exceed 30%.

Sales Component:

The sales component of the Program is further subdivided between Life production
and Annuity production. For 2009, the bonus sales goals are:

●
International Life -- $27,000,000 net placed annualized target premium

●
Domestic Life -- $7,700,000 net placed annualized target premium

●
Annuities -- $382,500,000 net placed total premium

The New Business Market Summary Report (NWAR60) will be the source of sales
results for purposes of this Program. Based upon these sales goals, the bonus
percentage corresponding with each sales production levels achieved in 2009 will
be applied to 100% of the executive officer’s base salary in accordance with the
following grid:

   
Domestic Life
     
Intl Life
Bonus
Placed Target
Bonus
Annuities Placed
Bonus
Placed Target
%
 (1)
%
Premium
%
$23,100,000
2.00%
$6,200,000
2.00%
$309,800,000
2.00%
$25,000,000
2.25%
$6,900,000
2.25%
$344,200,000
2.25%
$27,000,000
2.50%
$7,700,000
2.50%
$382,500,000
2.50%
$29,000,000
2.75%
$8,400,000
2.75%
$420,800,000
2.75%
$31,200,000
3.00%
$9,300,000
3.00%
$462,800,000
3.00%

(1) Does not include California 1st year premium.

 
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The level shaded in gray represents the Company’s sales goals for each segment
for purposes of the bonus program and represents the par performance level. If
the actual results attain this level, the executive officer would be eligible to
receive a bonus of 7.5% (2.5% for each line of business) of base salary.

Expense Management Component:

The expense component of the program is based upon a ratio of actual expenses to
a sales unit of production. For purposes of this ratio, the sales unit of
production will be based upon target premium. Annuity sales target premium will
be assumed to be equal to 7.5% of total placed annuity premium.

Assuming “par” sales goals of $27.0 million in International Life sales, $7.7
million in Domestic Life sales (not including California 1st year premium), and
$382.5 million in total annuity sales, the par sales production for purposes of
the expense management component is $63.4 million. The submitted expense budget
based upon these sales goals is approximately $49.2 million. Accordingly, the
par ratio of expenses to sales production is roughly 77%. Based upon this
relationship, the bonus percentage corresponding with the actual expense ratio
achieved in 2009 will be applied to 100% of each executive officer’s base salary
in accordance with the following grid:

Expense/Sales Ratio
Bonus %
83%
5.5%
80%
6.5%
77%
7.5%
74%
8.5%
71%
9.5%

For purposes of the expense component, marketing and executive officer bonuses
will be excluded. In addition, special consideration may be given at the
discretion of the  Compensation and Stock Option Committee of the Board of
Directors (“Compensation Committee”) for items of an unusual and/or
non-recurring nature (i.e. excess pension contributions) that are beyond the
control of Company management.

Company Profitability Component:

The profitability component of the program is based upon GAAP operating earnings
as a percentage of beginning stockholders’ equity. GAAP operating earnings are
net of federal income taxes and exclude realized gains and losses on
investments. The amounts used for purposes of the bonus calculation will be the
figures audited by the Company’s independent auditors.

 
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The bonus percentage corresponding with the actual GAAP operating earnings
achieved in 2009 relative to beginning of the year stockholders’ equity will be
applied to 100% of each executive officer’s base salary in accordance with the
following grid:

GAAP Profitability
Bonus %
7.5% of Stockholders’ Equity
5.0%
8.5% of Stockholders’ Equity
10.0%
9.5% of Stockholders’ Equity
15.0%
10.5% of Stockholders’ Equity
17.0%
11.5% of Stockholders’ Equity
19.0%

Example:

Assume the following results for 2009:
 

  ●
International Life placed target premium sales
$
30,000,000
  ●
Domestic Life placed target premium sales
$
7,000,000
  ●
Annuity placed total premium sales
$
400,000,000
  ●
Actual budget center expenses
$
49,700,000
  ●
GAAP operating earnings
$
80,000,000
  ●
Beginning GAAP stockholders’ equity
$
990,000,000

 
Based upon the above charts, the executive officer’s 2009 bonus would be
calculated as follows:

 
Sales Component
             
International Life sales bonus %
 
2.75%
 
Domestic Life sales bonus %
 
2.25%
 
Annuity s Total sales bonus %ales bonus %
 
2.50%
     
7.50%
         
Expense Management Component
             
Actual budget center expenses
$
49,700,000
         
Sale Production Amount:
     
     International Life target premium
$
30,000,000
 
     Domestic Life target premium
 
7,000,000
 
     Annuity target ($400m @ 7.5%)
 
30,000,000
   
$
67,000,000
         
Ratio of Actual/Sales Production
 
74.2%
 
Expense management bonus %
 
8.5%
       

 
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Company Profitability Component
             
GAAP operating earnings
$
80,000,000
 
Beginning stockholders’ equity
$
990,000,000
         
Ratio of earnings/equity
 
8.1%
 
Company profitability bonus
 
5.0%
         
Total Bonus %
     
Sales component
 
7.5%
 
Expense management component
 
8.5%
 
Company profitability component
 
5.0%
 
Total
 
21.0%

Administration:

Bonus amounts under the program will be earned and paid at the end of the
Company’s calendar year upon the availability of audited GAAP financial
statements. The Company’s independent auditors will also review the calculation
of the bonus % for compliance with the details of this Program as part of the
Company’s audited financial statements.

If employment with the Company is terminated for any reason other than
“termination for cause” by NWL, the bonus amount paid at termination will be
based upon the pro rated percentage of the calendar year that services were
rendered to the Company. In the event of death, the bonus amount will be paid to
the individual’s spouse, and if there is no spouse, then to the individual’s
children.

Participants in the Program are designated by the Compensation Committee. The
Program, its terms, and its administration are at the complete discretion of the
Compensation Committee and may be changed or revoked at any time without the
consent of the participants. This includes, among other things, amendment of the
terms, targets, and other features of the Program as the Compensation Committee
sees fit. Accordingly, this Program does not constitute a legal and binding
obligation of the Company to perform.

February 2009

 
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