exhibit10bs.htm


    Exhibit
10(bs)

    


    National Western Life
Insurance Company

    2008 INTERNATIONAL MARKETING
OFFICER BONUS PROGRAM

    


    


    


    The Bonus
Program (“Program”) is designed to reward International Marketing officers for
their performance in achieving pre-determined sales targets while assisting the
Company in managing to its profit criteria. The Plan incorporates three
measurable performance factors: (1) sales, which are defined as net placed
annualized target premium for International Life business and as total placed
premium for Annuity business, (2) persistency, and (3) expense management. The
bonus percentages included in this document pertain to International Marketing
officers at the vice president level and higher. The bonus percentages for
assistant vice presidents are determined using one-half of the
percentages shown for vice presidents and above.

    


    Each of
the three 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 70% for sales
performance, 15% for persistency performance, and 15% for expense management
performance. Actual results compared to the targets can either increase or
decrease these percentages as explained in each of the following
sections.

    


    Sales
Component (70%):

    


    The sales
component of the Program is based upon an International Life sales target of
$38,800,000 net placed annualized target premium. The New Business Market
Summary Report (NWAR60) will be the source of sales results for purposes of this
Program. Based upon this sales goal, the bonus percentage corresponding with the
International Life sales production levels achieved in 2008 will be applied to
100% of each International Marketing officer’s base salary in accordance with
the following grid:

    


    


    
      	
              Life
      Placed Target Premium

            	
              Bonus
      %

            
	
              $35,300,000

            	
              20.0%

            
	
              $36,000,000

            	
              30.0%

            
	
              $36,700,000

            	
              40.0%

            
	
              $37,400,000

            	
              50.0%

            
	
              $38,100,000

            	
              60.0%

            
	
              $38,800,000

            	
              70.0%

            
	
              $39,500,000

            	
              80.0%

            
	
              $40,200,000

            	
              90.0%

            
	
              $40,900,000

            	
              100.0%

            
	
              Increment for every
      $700,000 thereafter

            	
              5.0%   
      

            


    

    



    
      
         


      

      
         


        
          

        

      

      
         


      

    


    Bonus
percentages associated with life international sales are not capped but increase
by 5.0% with every additional $700,000 of placed target premium. Assuming an
officer salary of $100,000 and 2008 production of $39,000,000 of International
Life placed target premium, the officer’s 2008 sales bonus component under the
Program would be $70,000 ($100,000 x 70%).

    


    In the
event that adverse persistency experience develops during calendar year 2009
with respect to 2008 life product sales, the Company reserves the right revisit
the 2008 Program bonus awarded for life sales and true up the award for such
adverse experience.

    


    


    Persistency Component
(15%):

    


    


    The
24th
month ratio of actual persistency to expected (i.e. pricing) persistency as
reported in the Duration Score Listing query will serve as the measure for the
persistency component of the Program. For purposes of the persistency
measurement, the parameters include all international writing agents (active and
terminated) and all life business (universal life and traditional).

    


    Based
upon these persistency performance factors, the bonus percentage corresponding
with the International Life persistency levels achieved in 2008 will be applied
to each International Marketing officer’s base salary in accordance with the
following grid:

    


    


    
      	
              Life
      Business Persistency

            	
              Bonus
      %

            
	
              Less
      than 88%

            	
              0%

            
	
              88%
      – 91%

            	
              3%

            
	
              91%
      – 94%

            	
              6%

            
	
              94%
      – 97%

            	
              9%

            
	
              97%
      – 100%

            	
              12%

            
	
              100%
      - 101%

            	
              15%

            
	
              101%
      - 102%

            	
              18%

            
	
              102%
      - 103%

            	
              21%

            
	
              103%
      - 104%

            	
              24%

            
	
              104%
      - 105%

            	
              27%

            
	
              105%
      - 106%

            	
              30%

            
	
              Greater
      than 106%

            	
              30%

            


    

    


    


    Assuming
an officer salary of $100,000 and 2008 persistency of 92.1% for International
Life business, the officer’s 2008 persistency bonus component under the Program
would be $6,000 ($100,000 x 6%).

    



    
      
         


      

      
         


        
          

        

      

      
         


      

    


    Expense Component
(15%):

    


    The
expense component of the Program is based upon the ratio of actual expenses to
life target premium sales. Actual expenses include all cost center expenses as
reported in the monthly cost center reports comparing actual expenses to
budgeted expenses with the exception of bonuses paid and sales conference
expenses.

    


    Based
upon the actual ratio achieved, the corresponding bonus percentage based upon
the following chart will be applied to 100% of each International Marketing
officer’s base salary:

     

    


    
      	
               Ratio
      of Expense/

              Target
      Premium

            	
              Bonus
      %

            
	
              Less
      than 3.90%

            	
              30.0%

            
	
              3.90
      % to 4.0%

            	
              27.0%

            
	
              4.00%
      to 4.10%

            	
              24.0%

            
	
              4.10%
      to 4.20%

            	
              21.0%

            
	
              4.20%
      to 4.30%

            	
              18.0%

            
	
              4.30%
      to 4.40%

            	
              15.0%

            
	
              4.40%
      to 4.50%

            	
              12.0%

            
	
              4.50%
      to 4.60%

            	
              9.0%

            
	
              4.60%
      to 4.70%

            	
              6.0%

            
	
              4.70%
      to 4.80%

            	
              3.0%

            
	
              More
      than 4.80%

            	
              0.0%

            


    

    


    


    Assuming
actual expenses of $1.7 million, life target premium sales of $39.0 million, the
calculated ratio would be 4.36%. The officer’s 2008 expense management bonus
component under the Program, assuming a $100,000 base salary, would be $15,000
($100,000 x 15%).

    


    From the
above examples, the officer with a $100,000 base salary would receive a 2008
bonus under the program of 91.0% or $91,000 ($70,000 sales plus $6,000
persistency plus $15,000 expense management) reflecting sales and expense
management at “par” and persistency below “par”. See “Administration” for
further guidelines when the bonus percentage exceeds 100%.

    


    Administration:

    


    Bonus
amounts under the program will be calculated and advanced quarterly based upon
actual results. However, bonus advances will be limited to 100% of participant
base salary even if actual results to-date exceeds 100%. In the event that
actual year-to-date results are below minimum Program performance factor levels,
the Company may, at its discretion, suspend the bonus
advance payments until such time as the year-to-date results reach the minimum
Program performance levels. Bonus amounts paid year-to-date will not be recouped
from the participants in the event of suspension of quarterly payments except at
the end of the Program year if unearned.


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    If at the
end of the year the aggregate bonus percentage exceeds 100%, the incremental %
above 100% will be applied to the base salaries of all International Marketing
Officers (weighted for the portion of the calendar year each participant was
employed by the Company) to determine a dollar amount to be put into a “pool”.
The pool amount will be allocated based upon the recommendation of the
International Chief Marketing Officer and as approved by the Company President.
The recommendation of the pool allocation by the Chief Marketing Officer must be
submitted to the Company President by the end of the January 2009.

    


    The pool
amount will be paid out quarterly in the following calendar year (i.e. 2009).
Participants must be currently employed by the Company in order to receive pool
payments. In other words, unpaid pool bonuses will be forfeited by participants
upon termination from the Company. Amounts forfeited by terminated participants
will remain the property of the Company and will not be redistributed among the
remaining participants.

    


    If
employment with the Company is terminated during calendar 2008 for any reason
other than “termination for cause” by NWL, the 2008 bonus amount paid at
termination will be based upon the current year-to-date bonus % (not to exceed
100%) and the prorated 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 the individual’s spouse is also not living at
that time, then to the individual’s children.

    


    The
Program, its terms, and its administration are at the complete discretion of the
Company President and/or Compensation and Stock Option Committee (“Compensation
Committee”) of the Board of Directors 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
Company President and/or Compensation Committee sees fit. Accordingly, this
Program does not constitute a legal and binding obligation of the Company to
perform.

    


    All
amounts paid to participants under this program will be excluded when
determining benefits under the Company’s pension, 401(k), and other benefit
programs.

    


    


    


    August
2008