exhibit10bt.htm


    
      Exhibit
10(bt)

      


      National Western Life
Insurance Company

      2008 DOMESTIC MARKETING
OFFICER BONUS PROGRAM

      


      


      The Bonus
Program (“Program”) is designed to reward Domestic 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 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 Domestic 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 subdivided between Life production and Annuity
production. For 2008, the Domestic sales goals are:

      


      
        	
                Ø  

              	
                Life
      -- $10,500,000 net placed annualized target premium excluding California
      1st
      year business and $3,000,000 net paid annualized 2nd year California
      target premium (14% of MaxWealth and Lifetime Returns Select (LTRS) total
      single premium, 55% of LTRS 5 pay premium and 85% of LTRS 10 pay premium
      is assumed to be target for purposes of the
  Program)

              


      

      


      
        	
                Ø  

              	
                Annuities
      -- $540,000,000 net placed total
premium

              


      

      


      The New
Business Market Summary Report (NWAR60) will be the source of sales results for
purposes of this Program, as well as other programs to track 2nd year
California premium. Based upon these sales goals, the bonus percentage
corresponding with the Life and Annuity

      sales
production levels achieved in 2008 will be applied to 100% of each Domestic
Marketing officer’s base salary in accordance with the following
grid:


      
        
          
             

             October,
2008

          

           


        

        
          1

          
            

          

        

        
           


        

      


      National Western Life
Insurance Company

      2008 DOMESTIC MARKETING
OFFICER BONUS PROGRAM

       

       

      
        	
                Life
      Placed Target

              	
                Bonus

              	
                California
      Life 2nd Yr.

              	
                Bonus

              
	
                Premium
      (Minus California

              	
                %

              	
                Target
      Paid Premium 1

              	
                %

              
	
                1st
      Yr Premium)

              	 
      	 
      	 
      
	
                $8,000,000
      - <$8,500,000

              	
                5.0%

              	
                $  500,000
      - <$1,000,000

              	
                2.5%

              
	
                $8,500,000
      - <$9,000,000

              	
                10.0%

              	
                $1,000,000
      - <$1,500,000

              	
                4.0%

              
	
                $9,000,000
      - <$9,500,000

              	
                15.0%

              	
                $1,500,000
      - <$2,000,000

              	
                5.5%

              
	
                $9,500,000
      - <10,000,000

              	
                20.0%

              	
                $2,000,000
      - <$2,500,000

              	
                7.0%

              
	
                $10,000,000
      - <$10,500,000

              	
                25.0%

              	
                $2,500,000
      - <$3,000,000

              	
                8.5%

              
	
                $10,500,000
      - <$11,000,000

              	
                30.0%

              	
                $3,000,000
      - <$3,500,000

              	
                10.0%

              
	
                $11,000,000
      - <$11,500,000

              	
                35.0%

              	
                $3,500,000
      - <$4,000,000

              	
                11.5%

              
	
                $11,500,000
      - <$12,000,000

              	
                40.0%

              	
                $4,000,000
      - <$4,500,000

              	
                13.0%

              
	
                $12,000,000
      - <$12,5000,000

              	
                45.0%

              	
                $4,500,000
      - $<5,000,000

              	
                14.5%

              
	
                Increment for every
      $500,000 thereafter

              	
                5.0%

              	
                Increment for every
      $500,000 thereafter

              	
                1.5%

              


      

      


      1For the
purposes of this Bonus Program, 2nd year
target paid premium is defined as paid premium received by NWL in 2008 on life
insurance sales originally written in  California that is classified
as second year premium for the purposes of paying agent commission.

      


      
        	
                Annuity
      Placed Total Premium

              	
                Bonus

              
	 
      	
                %

              
	
                $340,000,000
      - <$380,000,000

              	
                5.0%

              
	
                $380,000,000
      - <$420,000,000

              	
                10.0%

              
	
                $420,000,000
      - <$460,000,000

              	
                15.0%

              
	
                $460,000,000
      - <$500,000,000

              	
                20.0%

              
	
                $500,000,000
      - <$540,000,000

              	
                25.0%

              
	
                $540,000,000
      - <$580,000,000

              	
                30.0%

              
	
                $580,000,000
      - <$620,000,000

              	
                35.0%

              
	
                $620,000,000
      - <$660,000,000

              	
                40.0%

              
	
                $660,000,000  and
      Greater

              	
                45.0%

              


      

      


      Assuming
an officer salary of $100,000 and 2008 production of $11,000,000 of Life placed
target premium (excludes California business), $2,500,000 of Life paid 2nd year
target California premium, and $470,000,000 of Annuity placed total premium, the
officer’s 2008 sales bonus component under the Program would be $63,500
($100,000 x 35% for Life business plus $100,000 x 8.5%% for California business,
plus $100,000 x 20% for Annuity business).


      
        
          
             

             October,
2008

          

           


        

        
          2

          
            

          

        

        
           


        

      


      National Western Life
Insurance Company

      2008 DOMESTIC MARKETING
OFFICER BONUS PROGRAM

      


      


      Persistency Component
(15%):

      


      Similar
to the sales component, the persistency component of the Program is further
subdivided between Life business and Annuity business.

      


      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
Life persistency component of the Program. For purposes of the persistency
measurement, the parameters include all 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 Domestic Life persistency levels achieved in 2008 will be applied to
each Domestic Marketing officer’s base salary in accordance with the following
grid:

      


      


      
        	
                Domestic
      Life Persistency

              	
                Bonus
      %

              
	
                Less
      than 88%

              	
                0%

              
	
                88%
      – <91%

              	
                1.5%

              
	
                91%
      – <94%

              	
                3.0%

              
	
                94%
      – <97%

              	
                4.5%

              
	
                97%
      – <100%

              	
                6.0%

              
	
                100%
      - <101%

              	
                7.5%

              
	
                101%
      - <102%

              	
                9.0%

              
	
                102%
      - <103%

              	
                10.5%

              
	
                103%
      - <104%

              	
                12.0%

              
	
                104%
      - <105%

              	
                13.5%

              
	
                105%
      - <106%

              	
                15.0%

              
	
                106%
      and Greater

              	
                15.0%

              


      

      


      


      It is
anticipated that the Duration Score Listing query will also support the annuity
line of business sometime during 2008. Therefore, the 24th month
ratio of actual persistency to expected (i.e. pricing) persistency as reported
in the Duration Score Listing query for Annuity business will also serve as the
measure for the Annuity persistency component of the Program. The bonus
percentage corresponding with the Annuity persistency levels achieved in 2008
will be applied to each Domestic Marketing officer’s base salary in accordance
with the following grid:


      
        
          
             

             October,
2008

          

           


        

        
          3

          
            

          

        

        
           


        

      


      National Western Life
Insurance Company

      2008 DOMESTIC MARKETING
OFFICER BONUS PROGRAM

      


      
        	
                Annuity

              	
                Bonus

              
	
                Persistency

              	
                %

              
	
                Less
      than 96%

              	
                0%

              
	
                96%
      – <97%

              	
                1.5%

              
	
                97%
      – <98%

              	
                3.0%

              
	
                98%
      – <99%

              	
                4.5%

              
	
                99%
      – <100%

              	
                6.0%

              
	
                100%
      - <101%

              	
                7.5%

              
	
                101%
      - <102%

              	
                9.0%

              
	
                102%
      - <103%

              	
                10.5%

              
	
                103%
      - <104%

              	
                12.0%

              
	
                104%
      - <105%

              	
                13.5%

              
	
                105%
      - <106%

              	
                15.0%

              
	
                 106%
      and Greater

              	
                15.0%

              


      

      


      Assuming
an officer salary of $100,000 and 2008 persistency ratios of 92.2% for Life
business and 102.42% for Annuity business, the officer’s 2008 persistency bonus
component under the Program would be $13,500 ($100,000 x 3.0% for Life business
plus $100,000 x 10.5% for Annuity business).

      


      Expense Component
(15%):

      


      The
expense component of the program is based upon the ratio of actual expenses to
target premium sales as defined under the Sales Component (refer to page 1). For
purposes of this ratio, annuity target premium is defined as 7.5% of total
placed premium. Actual expenses include all cost center expenses with the
exception of bonuses paid, agent health claims, agent reserve balance changes,
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 Domestic Marketing officer’s
base salary:

      


      
        	
                Ratio
      of Expense/

              	
                Bonus

              
	
                Target
      Premium

              	
                %

              
	
                Less
      than 3.90%

              	
                30.0%

              
	
                3.90
      % - <4.05%

              	
                27.0%

              
	
                4.05%
      - <4.20%

              	
                24.0%

              
	
                4.20%
      - <4.35%

              	
                21.0%

              
	
                4.35%
      - <4.50%

              	
                18.0%

              
	
                4.50%
      - <4.65%

              	
                15.0%

              
	
                4.65%
      - <4.80%

              	
                12.0%

              
	
                4.80%
      - <4.95%

              	
                9.0%

              
	
                4.95%
      - <5.10%

              	
                6.0%

              
	
                5.10%
      - <5.25%

              	
                3.0%

              
	
                5.25%
      or Greater

              	
                0.0%

              


      

      



      
        
          
             

             October,
2008

          

           


        

        
          4

          
            

          

        

        
           


        

      


      National Western Life
Insurance Company

      2008 DOMESTIC MARKETING
OFFICER BONUS PROGRAM

      


      


      Assuming
actual expenses of $2.3 million, life target premium sales of $9.6 million,
2nd
year California paid premium target of $4.5 million, and annuity total placed
premium of $470 million, the calculated ratio would be 4.66% ($2.3 million
divided by the sum of $9.6 million life target sales, $4.5 million California
business, and $35.25 million annuity ($470 million times 7.5%)). The officer’s
2008 expense management bonus component under the Program, assuming a $100,000
base salary, would be $12,000 ($100,000 x 12%).

      


      From the
above examples, the officer with a $100,000 base salary would receive a 2008
bonus under the program of 89.0% or $89,000 ($63,500 sales plus $13,500
persistency plus $12,000 expense management) reflecting persistency, expense
management and sales 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 Domestic 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 Domestic
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, or, if the individual’s spouse is also not
living at that time, then the bonus amount will be paid to the individual’s
child(ren).


      
        
          
             

             October,
2008

          

           


        

        
          5

          
            

          

        

        
           


        

      


      National Western Life
Insurance Company

      2008 DOMESTIC MARKETING
OFFICER BONUS PROGRAM

      


      


      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.

      


      



      
        
          
             

             October,
2008

          

           


        

        
          6