Document:

exh10_58.htm

    EXHIBIT 10.58

     

    
 

    CONFIDENTIAL
TREATMENT REQUESTED FOR PORTIONS OF THIS DOCUMENT.  PORTIONS FOR WHICH
CONFIDENTIAL TREATMENT IS REQUESTED ARE DENOTED BY [***].  MATERIAL
OMITTED HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

     

    September
25, 2009

    

    Mr. David
Meyer, Managing Director

    Knightspoint
Partners, LLC

    1325
Avenue of the Americas, 27th
Floor

    New York,
NY 10019

    

    RE:
Amendment of Agreement

    

    Dear
David:

    

    This will
confirm our agreement to amend your agreement with CPI Corp. (the “Company”)
dated as of September 22, 2008 (the "Agreement”) regarding your compensation as
Chairman of the Board of Directors of the Company (the “Board”) during the
Company’s fiscal year 2009.

    

    
      	
              1.  

            	
              Subsection
      1.a.ii. shall be revised in its entirety to read as
    follows:

            

    

    

    Continuing
the development and implementation of the Company’s long-range strategic plan to
increase shareholder value over time including new sources of
revenue;

    

    
      	
              2.  

            	
              Subsection
      1.a.iii. shall be deleted and subsections 1.a.iv. and 1.a.v. shall be
      renumbered as subsections 1.a.iii. and 1.a.iv.,
    respectively;

            

    

    

    
      	
              3.  

            	
              Subsection
      2.b. shall be amended in its entirety to read as
  follows:

            

    

    

    Annual Performance
Bonus:  You will be eligible to receive an annual performance
bonus for each fiscal year of the Company during the term of this agreement in
an amount, in the aggregate, equal to 0.67% of the Adjusted EBITDA (“Full
Award”) as reported in the applicable earnings release of the Company for such
fiscal year.  Your actual performance bonus for FY 2009 will
be subject to satisfaction of the targets set out below:

    

     i.   You
will be entitled to an amount equal to 25% of the Full Award for achievement of
[$***] million of FY 2009 Adjusted EBITDA;

    

    ii.    You
will be entitled to an amount equal to 25% of the Full Award for achievement of
fourth quarter FY 2009 EBITDA of [$***] million or greater; and

     

     

    *** CONFIDENTIAL TREATMENT REQUESTED.  AN APPLICATION FOR
CONFIDENTIAL TREATMENT (INCLUDING THE PROPOSED DELETIONS) HAS BEEN FILED
PURSUANT TO RULE 24B-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934.

     

    

    
      
        
        

      

      
        
        

        
        

      

      
        
        

      

    

    iii. You
will be entitled to 50% of the Full Award based on achievement of such other
targets and goals as are determined by the Committee in its sole discretion,
including but not limited to reallocation of the targets set out
above.

    

              4.   Subject
to the provisions of this Amendment, the Agreement is hereby ratified and
affirmed.

    

            
 5.   This Amendment is subject to ratification by the
Board, and you shall be recused from voting on the matter.

    

    
      
        
        

      

    

    Please
acknowledge your agreement to the terms set forth herein by signing and
returning one copy of this letter to me.

     

     

                                              Sincerely,

    
      
        	 	
                 

                 

                CPI
Corp.

              	 
	 	 	 	 
	
                 

              	
                By:
      

              	/s/Turner
      White	 
	 	 	Turner
      White	 
	 	 	Chairman,
      Compensation Committee	 
	 	 	 	 

      

    

     

     

     

     

     

    

    Agreed to
this 25 day of September, 2009

    

    

    

    /s/David
M. Meyer

        David
M. Meyer

     

    *** CONFIDENTIAL TREATMENT REQUESTED.  AN APPLICATION FOR
CONFIDENTIAL TREATMENT (INCLUDING THE PROPOSED DELETIONS) HAS BEEN FILED
PURSUANT TO RULE 24B-2 UNDER THE SECURITIES EXCHANGE ACT OF
1934.exhibit10cj.htm

    
      EXHIBIT
10(cj)

    

    
      National
Western Life Insurance Company

    

    
      Executive
Officer Bonus Program

    

     

    SECTION
1

    OBJECTIVE

     

    The
objective of this National Western Life Insurance Company Executive Officer
Bonus Program (the “Plan”) is to attract and retain the best available executive
officers to be responsible for the management, growth, and success of the
business, and to provide an incentive for such individuals to exert their best
efforts on behalf of the Company and its shareholders.  The Company
intends that all Awards payable or provided for under this Plan be considered
“qualified performance-based compensation” within the meaning of Code
section 162(m), and this Plan shall be interpreted
accordingly.

     

     

    SECTION
2

    DEFINITIONS

     

    The
following words and phrases, when used herein, shall have the following meanings
unless a different meaning is plainly required by the context:
 

     

    2.1           “Award” means, as to any
Performance Period, the actual award (if any) payable to a Participant for the
Performance Period.  The actual award is determined by the Payout
Formula for the Performance Period, subject to the Committee’s authority under
Section 3.3 to reduce or eliminate the award
otherwise determined by the Payout Formula.

     

    2.2           “Board” means the Board of
Directors of the Company.

     

    2.3           "Change
in Control"
shall mean, after the effective date of the Plan, the occurrence of any
one or more of the events described below:

     

    (a)           Any
"person," as such term is used in sections 13(d) and 14(d) of the Exchange Act
(other than the Company, any trustee or other fiduciary holding securities under
any employee benefit plan of the Company, or any company owned, directly or
indirectly, by the shareholders of the Company in substantially the same
proportions as their ownership of stock of the Company), is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Company representing fifty percent (50%) or
more of the combined voting power of the Company's then outstanding
securities;

     

    (b)           During
any period of two (2)-consecutive years, individuals who at the beginning of
such period constitute the Board cease for any reason to constitute at least a
majority thereof, unless the election by the Board or the nomination for
election by the Shareholders was approved by a vote of at least two-thirds (2/3)
of the directors then still in office who either were directors at the beginning
of the two (2)-year period or whose election or nomination for election was
previously so approved; 

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    

     

    (c)           The
shareholders of the Company approve a merger or consolidation of the Company
with any other corporation, other than a merger or consolidation that would
result in the voting securities of the Company outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) more than fifty
percent (50%) of the combined voting power of the voting securities of the
surviving entity outstanding immediately after such merger or consolidation;
provided, however, that a merger or consolidation effected to implement a
reorganization, recapitalization, or similar transaction in which no "person"
acquires more than twenty percent (20%) of the combined voting power of the
Company's then outstanding securities shall not constitute a Change in Control
of the Company; or

     

    (d)           The
shareholders of the Company approve a plan of complete liquidation of the
Company or an agreement for the sale or disposition by the Company of all or
substantially all of the Company's assets.

     

    2.4           “Code” means the Internal Revenue
Code of 1986, as amended, including the valid regulations promulgated pursuant
thereto.

     

    2.5           “Committee” means the Compensation and
Stock Option Committee of the Board, which shall consist of two or more
qualified members of the Board.  The members of the Committee shall be
“non-employee directors” within the meaning of Rule 16b-3 under the
Securities Exchange Act of 1934, as amended; shall be “outside directors” within
the meaning of Code section 162(m); and, to the extent required to satisfy
applicable requirements of the Listing Standards, shall satisfy the independence
requirements of such Listing Standards.  Notwithstanding the
foregoing, the failure of a Committee member to qualify as a “non-employee
director” or “outside director” or to satisfy such Listing Standards shall not
invalidate the payment of any Award under the Plan.

     

    2.6           “Company” means National Western Life
Insurance Company, a Colorado corporation, and any successor
thereto.

     

    2.7           “Covered
Employee” means
a person designated by the Committee as likely to be a “covered employee” (as
such term is defined under Code section 162(m)) with respect to a given
fiscal year of the Company for which or in which an Award is
payable.  An employee of the Company may be designated as a Covered
Employee hereunder even if the employee is in fact not a “covered employee” for
purposes of Code section 162(m).

     

    2.8           “Determination
Date” means as
to any Performance Period, (a) the first day of the Performance Period or
(b) if later, the latest date possible that will not jeopardize any Awards
for that Performance Period from constituting qualified performance-based
compensation under Code section 162(m).

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    

     

    2.9           “Disability” means an inability to
engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or to be of long-continued and indefinite duration, as determined by the
Committee in its discretion.

     

    2.10           “Exchange
Act” means the
Securities Exchange Act of 1934, as amended.

     

    2.11           “Listing
Standards” shall
mean the applicable listing standards of the NASDAQ Stock Market (“NASDAQ”) or,
if the stock of the Company is not listed on the NASDAQ, of any exchange or
self-regulatory organization on which such stock is then listed.

     

    2.12           “Participant” means, as to any
Performance Period, a Covered Employee who has been selected by the Committee
for participation in the Plan for that Performance Period.

     

    2.13           “Payout
Formula” means,
as to any Performance Period, the objective formula, standard, or payout matrix
established by the Committee pursuant to Section 3.2(a)(ii) for purposes of determining the amount of
the Awards (if any) to be paid to Participants based solely upon the attainment
of the designated Performance Goal(s) for such period.  The formula,
standard, or matrix may differ from Participant to Participant, but must be
sufficiently objective so that a third party with knowledge of the relevant
performance results could calculate the amount of the Award with respect to each
Participant.

     

    2.14           “Performance
Goal” means the
level of attainment by the Participant(s) of the performance measure(s)
designated by the Committee for a Performance Period pursuant to Section 3.2(a)(i).  Unless amended with any required
shareholder approval in accordance with Section 7.1, performance measures which may serve as
determinants of Performance Goals shall be limited to the following measures
(which may relate to the Company and/or one or more business units, divisions or
subsidiaries and which may be adjusted in accordance with Section 3.2(c)):

     

    (a)           sales
(net placed annualized target premium for life business and total placed premium
for annuity business);

     

    (b)           net
sales;

     

    (c)           expense
management (ratio of actual Company expenses (excluding bonuses and, for
Participants who are domestic marketing officers, excluding agent health claims,
agent reserve balance changes, and sales conference expenses and, for
Participants who are international marketing officers, excluding sales
conference expenses) to a sales unit of production);

     

    (d)           GAAP
profitability (the Company’s GAAP operating earnings (net of federal income
taxes and excluding realized gains and losses on investments) for the
Performance Period as a percentage of the Company’s beginning GAAP stockholders’
equity for such period);

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    

     

    (e)           persistency
(for a designated period, the ratio of actual persistency to expected (pricing)
persistency);

     

    (f)           earnings;

     

    (g)           earnings
per share;

     

    (h)           pre-tax
earnings;

     

    (i)           net
earnings;

     

    (j)           operating
income;

     

    (k)           operating
income before taxes;

     

    (l)           
EBIT (earnings before interest and taxes);

     

    (m)          EBITDA
(earnings before interest, taxes, depreciation and amortization);

     

    (n)           gross
margin;

     

    (o)           revenues;

     

    (p)           revenue
growth;

     

    (q)           market
value added;

     

    (r)           economic
value added;

     

    (s)           return
on equity;

     

    (t)           return
on investments;

     

    (u)           return
on assets;

     

    (v)           return
on net assets;

     

    (w)           return
on capital;

     

    (x)           return
on invested capital;

     

    (y)           total
stockholder return;

     

    (z)           profit;

     

    (aa)         economic
profit;

     

    (bb)         operating
profit;

     

    

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    (cc)           capitalized
economic profit;

     

    (dd)           net
operating profit after tax;

     

    (ee)           net
profit before taxes;

     

    (ff)            
pre-tax profit;

     

    (gg)           cash
flow measures;

     

    (hh)           cash
flow return;

     

    (ii)            
comparable division or product sales;

     

    (jj)            
stock price (and stock price appreciation, either in absolute terms or in
relationship to the appreciation among members of a peer group determined by the
Committee);

     

    (kk)           market
share and/or market penetration;

     

    (ll)             
expenses;

     

    (mm)          cost
per policy;

     

    (nn)           strategic
milestones; or

     

    (oo)           goals
related to acquisitions or divestitures.

     

    The
Performance Goals established by the Committee for any Performance Period may be
expressed in terms of attaining a specified level of the performance measures or
the attainment of a percentage increase or decrease in the particular
performance measure, and may involve comparisons with respect to historical
results of the Company and its subsidiaries and/or operating groups or segments
thereof, all as the Committee deems appropriate.  The Performance
Goals established by the Committee for any Performance Period may be applied to
the performance of the Company relative to a market index, a peer group of other
companies or a combination thereof, all as determined by the Committee for such
Performance Period.

     

    2.15           “Performance
Period” means
the period consisting of one or more fiscal years of the Company designated by
the Committee during which the Performance Goal with must be satisfied in order
for an Award or a portion thereof to be payable.  Performance Periods
may be overlapping.

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    

    SECTION
3

    SELECTION
OF PARTICIPANTS AND DETERMINATIONS OF AWARDS 

    

    3.1           Selection
of Participants.  On or prior to
the Determination Date for any Performance Period, the Committee, in its sole
discretion, shall select the Covered Employees who shall be Participants for the
Performance Period.  In selecting Participants, the Committee shall
choose employees who are likely to have a significant impact on the performance
of the Company.  Participation in the Plan is in the sole discretion
of the Committee on a Performance Period by Performance Period
basis.  Accordingly, a Covered Employee who is a Participant for a
given Performance Period in no way is guaranteed or assured of being selected
for participation in any subsequent Performance Period or Performance
Periods.

     

    3.2            Determination
of Performance
Goals and Payout Formulae.  

     

    (a)           On
or prior to the Determination Date for a Performance Period, the Committee, in
its sole discretion, shall establish in writing, with respect to each
Participant for the Performance Period:

     

    (i)           the
Performance Goal(s) for the Participant; and

     

    (ii)           the
Payout Formula or Payout Formulae for purposes of determining the Award (if any)
payable to such Participant upon the attainment of such Performance
Goal(s).  Each Payout Formula shall be based on a comparison of actual
performance to the Performance Goal and shall provide for the payment of a
Participant’s Award only to the extent the Performance Goal for the Performance
Period is achieved.

     

    (b)           At
the time the Performance Goals are established by the Committee, their outcome
must be substantially uncertain.

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    

     

    (c)           Performance
Goals and Payout Formulae shall not be changed following their establishment;
provided, however, that the Committee shall have the authority to adjust such
goals and formulae during a Performance Period for such reasons as it deems
equitable to the extent permitted while still satisfying the requirements for
qualified performance-based compensation under Code Section
162(m).  Specifically, to the extent permitted under Code Section
162(m) and to the extent applicable, the Committee shall make the following
adjustments in determining the attainment of Performance Goals for a Performance
Period: (i) to exclude the dilutive effects of acquisitions or joint ventures;
(ii) to assume that any business divested by the Company achieved performance
objectives at targeted levels during the balance of a Performance Period
following such divestiture; (iii) to exclude restructuring and/or other
nonrecurring charges; (iv) to exclude exchange rate effects, as applicable, for
non-U.S. dollar denominated net sales and operating earnings; (v) to exclude the
cumulative effects of changes to generally accepted accounting principles (or
standards) required by the Financial Accounting Standards Board; (vi) to exclude
the effects to any statutory adjustments to corporate tax rates; (vii) to
exclude the impact of any “extraordinary items” as determined under generally
accepted accounting principles and as such items are specifically identified on
the Company’s audited financial statements; (viii) to exclude the effect of any
change in the outstanding shares of the Company by reason of any stock dividend
or split, stock repurchase, reorganization, recapitalization, merger,
consolidation, spin-off, combination or exchange of shares or other similar
corporate change, or any distributions to common stockholders other than regular
cash dividends; and (ix) to exclude any other unusual, non-recurring gains or
losses as determined under generally accepted accounting principles and as such
items are specifically identified on the Company’s audited financial
statements.  

     

    3.3            Determination
of Awards.  After the end of
each Performance Period, the Committee shall determine the extent to which the
Performance Goal has been achieved or exceeded and the Award for each
Participant for the Performance Period, and the Committee shall certify such
determination in writing.  For this purpose, approved minutes of the
Committee meeting at which the certification is made shall be treated as a
written certification.  The Award for each Participant shall be
determined by applying the Payout Formula to the level of actual performance
which has been certified by the Committee.  Notwithstanding any
contrary provision of the Plan except for the immediately following sentence,
the Committee, in its sole discretion, may eliminate or reduce (but not
increase) the Award payable to any Participant below that which otherwise would
be payable under the Payout Formula.  Notwithstanding anything herein
to the contrary, the Committee may not eliminate or reduce the Award payable to
any Participant for any Performance Period during which a Change in Control
occurs.

     

    3.4           Termination
Prior to the Date the Award for the
Performance Period is Paid.  If a Participant
terminates employment with the Company for any reason after the end of the
applicable Performance Period but prior to the date the Award for such
Performance Period is paid, the Participant shall be entitled to the payment of
the Award for the Performance Period subject to reduction or elimination under
Section 3.3 based on the circumstances
surrounding such termination of employment.

     

    

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    3.5           Termination
Prior to End of the Performance Period for Reasons other than Death
or
Disability.  If a Participant
terminates employment with the Company prior to the end of the applicable
Performance Period for any reason other than death or Disability, the Committee
shall reduce the Participant’s Award (as determined by the Committee after the
end of the Performance Period pursuant to Section 3.3) proportionately based on the date of termination
(and subject to further reduction or elimination under Section 3.3 based on the circumstances surrounding such
termination of employment).

     

    3.6            Termination
Prior to the End of the Performance Period Due to Death
or
Disability.  If a Participant
terminates employment with the Company prior to the end of the applicable
Performance Period due to death or Disability, the Participant (or in the case
of the Participant’s death, the Participant’s estate) shall be entitled to the
payment of the Award for the Performance Period, subject to reduction or
elimination under Section 3.3.

     

    3.7            Leave of
Absence.  If a Participant
is on a leave of absence at any time during a Performance Period, the Committee
may reduce his or her Award proportionately based on the duration of the leave
of absence (and subject to further reduction or elimination under
Section 3.3).

     

    3.8            Maximum
Benefit.  Notwithstanding
anything herein to the contrary, the total amount of all Awards paid to any
single Participant with respect to a Performance Period shall not exceed one
percent (1%) of the Company’s “pre-tax income” for such Performance
Period.  For this purpose, “pre-tax income” means the Company’s
earnings before income taxes as reported in the Company’s audited financial
statements, excluding (a) any losses from discontinued operations;
(b) extraordinary gains and losses, as such items are specifically
identified on such audited financial statements; and (c) the cumulative
effect of accounting changes during the fiscal year.  

     

     

    SECTION
4

    PAYMENT
OF AWARDS

     

    4.1           Right to
Receive Payment.  Each Award that
may become payable under the Plan shall be paid solely from the general assets
of the Company.  Nothing in this Plan shall be construed to create a
trust or to establish or evidence any Participant’s claim of any right other
than as an unsecured general creditor of the Company with respect to any payment
to which he or she may be entitled.

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    

     

    4.2           Timing
of Payment.  

     

    (a)           Payments
under this Plan for a Performance Period are intended to qualify as short-term
deferrals under Code section 409A and shall be made after the close of the
Performance Period, but not later than March 15th immediately
following the close of the Performance Period.

     

    (b)           If
upon the date of a Participant’s “separation from service” (as defined for
purposes of Code sections 409A(a)(2)(A)(i) and 409A(a)(2)(B)(i)) with the
Company and its controlled subsidiaries and affiliates the Participant is a
“specified employee” within the meaning of Code section 409A (determined by
applying the default rules applicable under such Code section except to the
extent such rules are modified by a written resolution that is adopted by the
Committee and that applies for purposes of all deferred compensation plans of
the Company and its affiliates) and the deferral of any amounts otherwise
payable under Plan as a result of Participant’s separation from service is
necessary to prevent any accelerated or additional tax to the Participant under
Code section 409A, then the Company shall defer the payment of any such amounts
hereunder until the date that is six months following the date of the
Participant’s separation from service, at which time any such delayed amounts
shall be paid or provided to the Participant.

     

    4.3           Form of
Payment.  Each Award shall
be paid in cash in a single lump sum.

     

    4.4           Payment
in the Event of Death.  If a Participant
dies prior to the payment of an Award earned by him or her for a prior
Performance Period, the Award, if any, shall be paid to the Participant’s estate
at the time specified in Section 4.2.

     

     

    SECTION
5 

    ADMINISTRATION

     

    5.1           Committee.  The Plan shall
be administered by the Committee.

     

    5.2           Committee
Authority.  The Committee
shall have all discretion and authority necessary or appropriate to administer
the Plan and to interpret the provisions of the Plan, consistent
with qualification of the Plan as providing for qualified performance-based
compensation under Code section 162(m).

     

    5.3           Indemnification
Of Committee.  No member of the
Committee nor any officer or employee of the Company acting with or on behalf of
the Committee, shall be personally liable for any action, determination, or
interpretation taken or made in good faith with respect to the Plan, and all
members of the Committee, and each officer or employee of the Company acting
with it or on its behalf shall, to the extent permitted by law, be fully
indemnified and protected by the Company with respect to any such action,
determination or interpretation.

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    

     

    5.4           Tax
and
Other Withholding.  The Company
shall withhold all applicable taxes and other amounts required by law to be
withheld from any payment, including any foreign, federal, state, and local
taxes.

     

    5.5           Determinations.  Any
determination, decision, or action of the Committee in connection with the
construction, interpretation, administration, or application of the Plan shall
be final, conclusive, and binding upon all persons, and shall be given the
maximum deference permitted by law.

     

     

    SECTION
6

    MISCELLANEOUS
PROVISIONS

     

    6.1           Non-transferability.  A Participant’s
rights under this Plan shall not be assignable, transferable, pledged, hedged or
in any manner alienated, whether by operation of law or
otherwise.  Any assignment, transfer, pledge, or other disposition in
violation of the provisions of this Section shall be null and
void.

     

    6.2           No
Guarantee of Employment or Participation.  Nothing in the
Plan shall interfere with or limit in any way the right of the Company to
terminate any Participant’s employment at any time, nor confer upon any
Participant any right to continue in the employment of the Company.

     

    6.3           No
Effect On Benefits.  Awards will
constitute special discretionary incentive payments to the Participants and will
not be required to be taken into account in computing the amount of salary or
compensation of the Participants for the purpose of determining any
contributions to or any benefits under any pension, retirement, profit-sharing,
bonus, life insurance, severance or other benefit plan of the Company or under
any agreement with a Participant, unless the Company specifically provides
otherwise.

     

    6.4           Governing
Law.  The Plan and all
determinations made and actions taken pursuant hereto, to the extent not
otherwise governed by the Code, shall be governed by the law of the State of
Texas, without giving effect to conflict or choice of law provisions
thereof.

     

    6.5           Unfunded
Plan.  The Plan shall
be unfunded.  The Company may maintain bookkeeping accounts with
respect to Participants who are entitled to awards under the Plan, but such
accounts shall be used merely for bookkeeping convenience.  The
Company shall not be required to segregate any assets that may at any time be
represented by interests in awards nor shall the Plan be construed as providing
for any such segregation.

     

    6.6           Binding
Effect.  This Plan shall
be binding upon and inure to the benefit of the Company, its successors and
assigns, and the Participants, and their heirs, assigns, and personal
representatives.

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    

     

    6.7           Construction
of Plan.  The captions
used in this Plan are for convenience only and shall not be construed in
interpreting the Plan.  Whenever the context so requires, the
masculine shall include the feminine and neuter, and the singular shall also
include the plural, and conversely.  The words "hereof,” "herein,”
"hereunder" and other similar compounds of the word "hereof" shall, unless
otherwise specifically stated, mean and refer to the entire Plan, not to any
particular provision or Section.  The word “including” and words of
similar import when used in this Plan shall mean “including, without
limitation,” unless the context otherwise requires or unless otherwise
specified.

     

    6.8           Integrated
Plan.  This Plan
constitutes the final and complete expression of agreement with respect to the
subject matter hereof.

     

    6.9           Severability.  If any provision
of the Plan or any Award is or becomes or is deemed to be invalid, illegal or
unenforceable in any jurisdiction or as to any person or Award, or would
disqualify the Plan or any Award under any law deemed applicable by the
Committee, such provision shall be construed or deemed amended to conform to
applicable laws, or if it cannot be construed or deemed amended without, in the
sole determination of the Committee, materially altering the intent of the Plan
or the Award, such provision shall be stricken as to such jurisdiction, person
or Award and the remainder of the Plan and any such Award shall remain in full
force and effect.

     

    6.10           Waiver.  Neither the
failure nor any delay on the part of the Company or the Committee to exercise
any right, power, or privilege hereunder shall operate as a waiver
thereof.  No term, condition, or provision of the Plans shall be
deemed waived, and there shall be no estoppel against enforcing any provision of
the Plans, except through a writing of the party to be charged by the waiver or
estoppel.  No such written waiver shall be deemed a continuing waiver
unless explicitly made so, and it shall operate only with regard to the specific
term or condition waived, and shall not be deemed to waive such term or
condition in the future, or as to any act other than as specifically
waived.  No person other than as named or described by class in the
waiver shall be entitled to rely on the waiver for any purpose.

     

    6.11           Right of
Offset.  The Company will
have the right to offset against the obligation to pay an amount to any
Participant, any outstanding amounts (including, without limitation, travel and
entertainment or advance account balances, loans or amounts repayable to it
pursuant to housing, automobile or other employee programs) such Participant
then owes to the Company.

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    

     

    6.12           Application
of Code Section 409A.  Notwithstanding
any other provision of this Plan to the contrary, the Committee, in its sole
discretion and without a Participant’s consent, may amend or modify the Plan in
any manner to provide for the application and effects of Code
section 409A.  To the extent any provision of this Plan or any
omission from this Plan would (absent this Section) cause amounts to be
includable in income under Code section 409A(a)(1), this Plan shall be deemed
amended to the extent necessary to comply with the requirements of Code section
409A; provided,
however, that this Section shall not apply and shall not be construed to
amend any provision of this Plan to the extent this Section or any amendment
required thereby would itself cause any amounts to be includable in income under
Code section 409A(a)(1).

     

     

    SECTION
7

    AMENDMENT,
ADJUSTMENT AND TERMINATION

     

    7.1           Amendment.  Subject to the
last sentence of this Section, the Committee may amend the Plan at any time and
for any reason; provided, however, that any amendment of the Plan which would
(a) increase the maximum amount of compensation payable under Section 3.8, (b) change the specified performance measures
under Section 2.14 (as may be adjusted pursuant to
Section 3.2(c)), or (c) modify the requirements as
to eligibility for participation in the Plan shall not be effective with respect
to any Awards or Participants unless the shareholders of the Company approve
such amendment in accordance with section 162(m) of the Code. Notwithstanding
the foregoing, if applicable tax and/or securities laws change to permit
Committee discretion to change the specified performance measures without
obtaining shareholder approval of such changes and without any adverse tax or
other consequence, the Committee shall have sole discretion to make such changes
without obtaining shareholder approval.  During any Performance Period
in which a Change in Control occurs, the Committee may not amend the Plan in a
manner that adversely affects a Participant without the consent of the
Participant.

     

    7.2           Code
Section 162(m) Compliance.  In the event
that Code section 162(m) requires that any special terms, provisions or
conditions be included in the Plan in order for an Award to constitute
“qualified performance-based compensation,” within the meaning of Code
section 162(m), then such terms, provisions and conditions shall, to the
extent practicable, be deemed to be made a part of the Plan, and notwithstanding
any provision in the Plan to the contrary, the Plan, and if applicable, the
terms of any grant to a Participant under the Plan, shall be reformed in such
manner as the Committee determines is appropriate for an Award to constitute
“qualified performance-based compensation,” within the meaning of Code
section 162(m).

     

    7.3           Termination.  The Committee
may terminate the Plan at any time and for any reason.  No Awards
shall be paid after the effective date of the termination of the
Plan.

     

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

     

    SECTION
8

    EFFECTIVE
DATE

     

    Subject
to shareholder approval of the Plan, this Plan shall be effective for
Performance Periods beginning on or after January 1, 2010, and shall
continue thereafter until the Plan is terminated.  The material terms
of this Plan shall be disclosed to the shareholders of the Company for approval
in accordance with Code section 162(m).  Any Performance Goals
and Payout Formulae established prior to shareholder approval of the Plan shall
be contingent upon shareholder approval of the Plan.

     

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    National Western Life
Insurance Company

    2010 EXECUTIVE OFFICER BONUS
PROGRAM

    

    ADDENDUM

    

    

    Participants’
maximum payout potential in the 2010 Executive Officer Bonus Program
include:

     

    
      

      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          
                                                            
                                                              
                                                                
                                                                  
                                                                    
                                                                      
                                                                        	
                                                                                Robert
      L. Moody, Chairman

                                                                              	 
      	
                                                                                2010
      Base Salary

                                                                              	
                                                                                $

                                                                              	
                                                                                1,707,396.38

                                                                              	 
      	
                                                                                50%

                                                                              
	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                                                                                Ross
      R. Moody, President & COO

                                                                              	 
      	
                                                                                2010
      Base Salary

                                                                              	
                                                                                $

                                                                              	
                                                                                586,123.69

                                                                              	 
      	
                                                                                50%

                                                                              

                                                                      

                                                                    

                                                                  

                                                                

                                                              

                                                            

                                                          

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

      
 

    

    Goals/Performance
Payout:

     

    The
Program incorporates three measurable performance factors: (1) Company sales,
which are defined as net placed annualized target premium for Life business and
as total placed premium for Annuity business, (2) Company 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 percentage (applied to Base Salary (as
defined below)) is 15% for sales performance, 15% for expense management
performance, and 20% for profitability, for an overall par bonus percentage of
50%.  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
50%.  For purposes of the Program, the Base Salary of each Executive
Officer is the officer’s annual base salary for 2010 as certified by the
Committee.

    

    Company
Sales Component:

    

    The sales
component of the Program is further subdivided between Life production and
Annuity production.  For 2010, the bonus sales goals for each line of
business of the Company are:

     

    -     International
Life -- $27,400,000 net placed annualized target premium

    -    Domestic
Life --  $4,500,000 net placed annualized target premium

    -    Annuities
--  $720,000,000 total placed premium

    

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

    The
Company’s New Business Market Summary Report (NWAR60) will be the source of
sales results for purposes of this Program.  The bonus percentage
corresponding with each sales production level achieved in 2010 will be applied
to 100% of the Executive Officer’s Base Salary in accordance with the following
grid:

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                	
                                                        Intl
      Life

                                                      	
                                                        Bonus

                                                      	
                                                        Domestic

                                                      	
                                                        Bonus

                                                      	
                                                        Annuities

                                                      	
                                                        Bonus

                                                      
	
                                                        Placed

                                                      	
                                                        %

                                                      	
                                                        Life
      Placed

                                                      	
                                                        %

                                                      	
                                                        Placed

                                                      	
                                                        %

                                                      
	
                                                        Target

                                                      	 
      	
                                                        Target  (1)

                                                      	 
      	
                                                        Premium

                                                      	 
      
	
                                                        $22,900,000

                                                      	
                                                        3.00%

                                                      	
                                                        $3,800,000

                                                      	
                                                        3.00%

                                                      	
                                                        $609,000,000

                                                      	
                                                        3.00%

                                                      
	
                                                        $24,900,000

                                                      	
                                                        4.00%

                                                      	
                                                        $4,100,000

                                                      	
                                                        4.00%

                                                      	
                                                        $662,000,000

                                                      	
                                                        4.00%

                                                      
	
                                                        $27,400,000

                                                      	
                                                        5.00%

                                                      	
                                                        $4,500,000

                                                      	
                                                        5.00%

                                                      	
                                                        $720,000,000

                                                      	
                                                        5.00%

                                                      
	
                                                        $29,600,000

                                                      	
                                                        6.00%

                                                      	
                                                        $4,900,000

                                                      	
                                                        6.00%

                                                      	
                                                        $778,000,000

                                                      	
                                                        6.00%

                                                      
	
                                                        $32,000,000

                                                      	
                                                        7.00%

                                                      	
                                                        $5,300,000

                                                      	
                                                        7.00%

                                                      	
                                                        $840,000,000

                                                      	
                                                        7.00%

                                                      

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    

    
      	
              (1)

            	
              Includes California 1st Year
    Premium.

            

    

    

    The level
shaded in gray represents the Company’s sales goals for each segment for
purposes of the 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 15% (5% for each line of business) of Base
Salary.  If net placed annualized target premium or total placed
premium, as applicable, for a segment is below the lowest target amount for that
segment, no bonus percentage will be earned for that segment.  The
bonus percentage shown for each specified amount of net placed annualized target
premium or total placed premium, as applicable, applies if actual performance is
equal to or greater than the amount shown and, except for the last level, is
less than the amount shown for the next level.

    

    Company Expense Management
Component:

    

    The
expense component of the Program is based upon a ratio of actual Company
expenses to a sales unit of production for 2010.  For purposes of this
ratio, the sales unit of production will be based upon target premium for
2010.  Annuity sales target premium will be assumed to be equal to
7.5% of total placed annuity premium for 2010.

    

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

    Assuming
“par” sales goals of $27.4 million in International Life sales, $4.5 million in
Domestic Life sales (including California 1st year
premium), and $720 million in total annuity sales, the par sales production for
purposes of the expense management component is $85.9 million (i.e., $27.4
million plus $4.5 million plus $54.0 million (7.5% of $720
million)).  The submitted expense budget for 2010 based upon these
sales goals is approximately $52 million.  Accordingly, the par ratio
of expenses to sales production for 2010 is approximately 60%.  Based
upon this relationship, the bonus percentage corresponding with the actual
expense to sales ratio achieved in 2010 will be applied to 100% of each
Executive Officer’s Base Salary in accordance with the following
grid:

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                	
                                        Expense/Sales
      Ratio

                                      	
                                        Bonus
      %

                                      
	
                                        More
      than 66%

                                      	
                                        0.00%

                                      
	
                                        63%
      to 66%

                                      	
                                        10.00%

                                      
	
                                        60%
      to 63%

                                      	
                                        12.50%

                                      
	
                                        57%
      to 60%

                                      	
                                        15.00%

                                      
	
                                        54%
      to 57%

                                      	
                                        17.50%

                                      
	
                                        Less
      than 54%

                                      	
                                        20.00%

                                      

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    

    For
purposes of the expense component, bonuses under this Program, the Officer
Bonus Program and marketing bonuses under the Company’s Domestic Marketing
Officer Bonus Program and International Marketing Officer Bonus Program will be
excluded.  In addition, special consideration may be given at the
discretion of the Committee for items of an unusual and/or non-recurring nature
(e.g., excess pension contributions) that are beyond the control of Company
management.  If the actual expense to sales ratio exceeds the highest
level shown (66%), no bonus percentage will be earned.  The bonus
percentage shown for each specified expense to sales ratio applies if the actual
expense to sales ratio is equal to or less than the amount shown and, except for
the last level, is greater than the amount shown for the next
level.

    

    Company Profitability
Component:

    

    The
profitability component of the Program is based upon the Company’s GAAP
operating earnings for 2010 as a percentage of the Company’s beginning GAAP
stockholders’ equity for 2010.  For this purpose, 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 under the Program will be the figures audited by the Company’s
independent auditors.

    

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

    The bonus
percentage corresponding with the Company’s actual GAAP operating earnings
achieved in 2010 as a percentage of the Company’s beginning GAAP stockholders’
equity for 2010 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

                                	
                                  10.00%

                                
	
                                  8.5%
      of Stockholders’ Equity

                                	
                                  15.00%

                                
	
                                  9.5%
      of Stockholders’ Equity

                                	
                                  20.00%

                                
	
                                  10.5%
      of Stockholders’ Equity

                                	
                                  25.00%

                                
	
                                  11.5%
      of Stockholders’ Equity

                                	
                                  30.00%

                                

                        

                      

                    

                  

                

              

            

          

        

      

    

    

    If the
Company’s actual GAAP operating earnings achieved in 2010 as a percentage of the
Company’s beginning GAAP stockholders’ equity is less than the lowest percentage
shown (7.5%), no bonus percentage will be earned.  The bonus
percentage shown for each specified percentage of stockholder’s equity applies
if the actual percentage of stockholder’s equity is equal to or greater than the
amount shown and, except for the last level, is less than the amount shown for
the next level.

    

    Example:                                

    

    Assume
the following results for 2010:

    

    
      
        
          	
                  -

                	
                  International
      Life placed target premium sales

                	
                  $

                	
                  30,000,000

                
	
                  -

                	
                  Domestic
      Life placed target premium sales

                	
                  $

                	
                  5,000,000

                
	
                  -

                	
                  Annuity
      placed total premium sales

                	
                  $

                	
                  650,000,000

                
	
                  -

                	
                  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 2010 bonus would be calculated as
follows:

    

    
      
        	 
      	
                Company Sales
      Component

              	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	
                International
      Life sales bonus %

              	 
      	
                6.0%

              
	 
      	
                Domestic
      Life sales bonus %

              	 
      	
                6.0%

              
	 
      	
                Annuity
      sales bonus %

              	 
      	
                3.0%

              
	 
      	
                Total
      sales bonus %

              	 
      	
                15.0%

              

      

    

    

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

    

    
      
        	 
      	
                Company Expense
      Management Component

              	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	
                Actual
      budget center expenses

              	
                $

              	
                49,700,000

              
	 
      	 
      	 
      	 
      
	 
      	
                Sale
      Production Amount:

              	 
      	 
      
	 
      	
                International
      Life target premium

              	
                $

              	
                30,000,000

              
	 
      	
                Domestic
      Life target premium

              	 
      	
                5,000,000

              
	 
      	
                Annuity
      target ($650m @ 7.5%)

              	 
      	
                48,750,000

              
	 
      	 
      	
                $

              	
                83,750,000

              
	 
      	 
      	 
      	 
      
	 
      	
                Ratio
      of Actual/Sales Production

              	 
      	
                59%

              
	 
      	
                Expense
      management bonus %

              	 
      	
                15%

              
	 
      	 
      	 
      	 
      
	 
      	
                Company Profitability
      Component

              	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	
                GAAP
      operating earnings

              	
                $

              	
                80,000,000

              
	 
      	
                Beginning
      GAAP stockholders’ equity

              	
                $

              	
                990,000,000

              
	 
      	 
      	 
      	 
      
	 
      	
                Ratio
      of earnings/equity

              	 
      	
                8.08%

              
	 
      	
                Company
      profitability bonus

              	 
      	
                10.00%

              
	 
      	 
      	 
      	 
      
	 
      	
                Total Bonus
      %

              	 
      	 
      
	 
      	
                Company
      Sales component

              	 
      	
                15.0%

              
	 
      	
                Company
      Expense management component

              	 
      	
                15.0%

              
	 
      	
                Company
      profitability component

              	 
      	
                10.0%

              
	 
      	
                Total

              	 
      	
                40.0%

              
	 
      	 
      	 
      	 
      

      

    

    

    

     

    
      
         

      

      
        18

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