Document:

exhibit10by.htm

    

      

        

          EXHIBIT
10(by)

          

          National Western Life
Insurance Company

          2009 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
$30,000,000 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 2009 will be applied to
100% of each International Marketing officer’s base salary in accordance with
the following grid:

          

          
            
              	
                      Life
      Placed Target

                    	
                      Bonus

                    
	
                      Premium

                    	
                      %

                    
	
                      $26,500,000

                    	
                      20.0%

                    
	
                      $27,200,000

                    	
                      30.0%

                    
	
                      $27,900,000

                    	
                      40.0%

                    
	
                      $28,600,000

                    	
                      50.0%

                    
	
                      $29,300,000

                    	
                      60.0%

                    
	
                      $30,000,000

                    	
                      70.0%

                    
	
                      $30,700,000

                    	
                      80.0%

                    
	
                      $31,400,000

                    	
                      90.0%

                    
	
                      $32,100,000

                    	
                      100.0%

                    
	
                      Increment for
      every

                    	 
      
	
                      $700,000
      thereafter

                    	
                      5.0%

                    

            

          

          

          
            
               

            

            
              1

              
                

              

            

            
               

            

          

          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 2009 production of $30,000,000 of International
Life placed target premium, the officer’s 2009 sales bonus component under the
Program would be $70,000 ($100,000 x 70%).

          

          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 2009 will be applied
to each International Marketing officer’s base salary in accordance with the
following grid:

          

          

          
            
              	
                      Life
      Business

                    	
                      Bonus

                    
	
                      Persistency

                    	
                      %

                    
	
                      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 2009 persistency of 92.1% for International
Life business, the officer’s 2009 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.

          

          
            
               

            

            
              2

              
                

              

            

            
               

            

          

          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/

                    	
                      Bonus

                    
	
                      Target
      Premium

                    	
                      %

                    
	
                      Less
      than 5.10%

                    	
                      30.0%

                    
	
                      5.10
      % to 5.20%

                    	
                      27.0%

                    
	
                      5.20%
      to 5.30%

                    	
                      24.0%

                    
	
                      5.30%
      to 5.40%

                    	
                      21.0%

                    
	
                      5.40%
      to 5.50%

                    	
                      18.0%

                    
	
                      5.50%
      to 5.60%

                    	
                      15.0%

                    
	
                      5.60%
      to 5.70%

                    	
                      12.0%

                    
	
                      5.70%
      to 5.80%

                    	
                      9.0%

                    
	
                      5.80%
      to 5.90%

                    	
                      6.0%

                    
	
                      5.90%
      to 6.00%

                    	
                      3.0%

                    
	
                      More
      than 6.00%

                    	
                      0.0%

                    

            

          

          

          

          Assuming
actual expenses of $1.3 million, life target premium sales of $30.0 million, the
calculated ratio would be 4.33%. 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 2009
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 quarterly based upon actual
year-to-date results and may be advanced to participants who request bonus
advances, subject to the following. The overall bonus advance percentage will be
capped at the “par” bonus percentage level for each performance factor (i.e. 70%
for sales, 15% for persistency and 15% for expense management) even if actual
year-to-date results for any performance factor exceeds the par level.
Accordingly, the overall bonus advance percentage cannot exceed 100% of base
salary. In the event that actual year-to-date results subsequently fall below
the minimum Program performance factor levels, the Company will suspend the
bonus advance payments until such time as the year-to-date results reach the
minimum Program performance factor levels. Bonus amounts paid year-to-date will
not be recouped from participants in the event of suspension of quarterly
payments except at the end of the Program year if unearned.

          

          
            
               

            

            
              3

              
                

              

            

            
               

            

          

          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. 2010).
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 2009 for any reason
other than “termination for cause” by NWL, the 2009 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 there is no spouse, 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.

          

          

          

          February
2009

          

          
            
               

            

            
              4exhibitb10bz.htm

    EXHBIBIT
10(bz)

    

    National Western Life
Insurance Company

    2009 SENIOR VICE PRESIDENT
BONUS PROGRAM

    

    

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

    

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

    

    Sales
Component:

    

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

    

    
      	
              ●

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

            

    

    
      	
              ●

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

            

    

    
      	
              ●

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

            

    

    

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

    

    
      
        	 
      	 
      	
                Domestic
      Life

              	 
      	 
      	 
      
	
                Intl
      Life

              	
                Bonus

              	
                Placed
      Target

              	
                Bonus

              	
                Annuities
      Placed

              	
                Bonus

              
	
                Placed
      Target

              	
                %

              	
                 (1)

              	
                %

              	
                Premium

              	
                %

              
	
                $23,100,000

              	
                2.00%

              	
                $6,200,000

              	
                2.00%

              	
                $309,800,000

              	
                2.00%

              
	
                $25,000,000

              	
                2.25%

              	
                $6,900,000

              	
                2.25%

              	
                $344,200,000

              	
                2.25%

              
	
                $27,000,000

              	
                2.50%

              	
                $7,700,000

              	
                2.50%

              	
                $382,500,000

              	
                2.50%

              
	
                $29,000,000

              	
                2.75%

              	
                $8,400,000

              	
                2.75%

              	
                $420,800,000

              	
                2.75%

              
	
                $31,200,000

              	
                3.00%

              	
                $9,300,000

              	
                3.00%

              	
                $462,800,000

              	
                3.00%

              

      

    

    

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

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

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

    

    Expense Management
Component:

    

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

    

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

    

    
      
        	
                Expense/Sales
      Ratio

              	
                Bonus
      %

              
	
                83%

              	
                5.5%

              
	
                80%

              	
                6.5%

              
	
                77%

              	
                7.5%

              
	
                74%

              	
                8.5%

              
	
                71%

              	
                9.5%

              

      

    

    

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

    

    Company Profitability
Component:

    

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

    

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

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

    

    
      
        	
                GAAP
      Profitability

              	
                Bonus
      %

              
	
                7.5%
      of Stockholders’ Equity

              	
                5.0%

              
	
                8.5%
      of Stockholders’ Equity

              	
                10.0%

              
	
                9.5%
      of Stockholders’ Equity

              	
                15.0%

              
	
                10.5%
      of Stockholders’ Equity

              	
                17.0%

              
	
                11.5%
      of Stockholders’ Equity

              	
                19.0%

              

      

    

    

    Example:

    

    Assume
the following results for 2009:

     

    
      
        
          
            
              
                	 
      ●	
                        International
      Life placed target premium sales

                      	
                        $

                      	
                        30,000,000

                      
	 
      ●	
                        Domestic
      Life placed target premium sales

                      	
                        $

                      	
                        7,000,000

                      
	 
      ●	
                        Annuity
      placed total premium sales

                      	
                        $

                      	
                        400,000,000

                      
	 
      ●	
                        Actual
      budget center expenses

                      	
                        $

                      	
                        49,700,000

                      
	 
      ●	
                        GAAP
      operating earnings

                      	
                        $

                      	
                        80,000,000

                      
	 
      ●	
                        Beginning
      GAAP stockholders’ equity

                      	
                        $

                      	
                        990,000,000

                      

              

            

             

          

        

      

    

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

    

    
      
        
          
            
              
                
                  	 
      	
                          Sales Component

                        	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	
                          International
      Life sales bonus %

                        	 
      	
                          2.75%

                        
	 
      	
                          Domestic
      Life sales bonus %

                        	 
      	
                          2.25%

                        
	 
      	
                          Annuity
      s Total sales bonus %ales bonus %

                        	 
      	
                          2.50%

                        
	 
      	 
      	 
      	
                          7.50%

                        
	 
      	 
      	 
      	 
      
	 
      	
                          Expense Management
Component

                        	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	
                          Actual
      budget center expenses

                        	
                          $

                        	
                          49,700,000

                        
	 
      	 
      	 
      	 
      
	 
      	
                          Sale
      Production Amount:

                        	 
      	 
      
	 
      	
                               International
      Life target premium

                        	
                          $

                        	
                          30,000,000

                        
	 
      	
                               Domestic
      Life target premium

                        	 
      	
                          7,000,000

                        
	 
      	
                               Annuity
      target ($400m @ 7.5%)

                        	 
      	
                          30,000,000

                        
	 
      	 
      	
                          $

                        	
                          67,000,000

                        
	 
      	 
      	 
      	 
      
	 
      	
                          Ratio
      of Actual/Sales Production

                        	 
      	
                          74.2%

                        
	 
      	
                          Expense
      management bonus %

                        	 
      	
                          8.5%

                        
	 
      	 
      	 
      	 
      

                

              

            

          

        

      

    

    

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    

    
      
        
          
            
              	 
      	
                      Company Profitability
    Component

                    	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	
                      GAAP
      operating earnings

                    	
                      $

                    	
                      80,000,000

                    
	 
      	
                      Beginning
      stockholders’ equity

                    	
                      $

                    	
                      990,000,000

                    
	 
      	 
      	 
      	 
      
	 
      	
                      Ratio
      of earnings/equity

                    	 
      	
                      8.1%

                    
	 
      	
                      Company
      profitability bonus

                    	 
      	
                      5.0%

                    
	 
      	 
      	 
      	 
      
	 
      	
                      Total Bonus %

                    	 
      	 
      
	 
      	
                      Sales
      component

                    	 
      	
                      7.5%

                    
	 
      	
                      Expense
      management component

                    	 
      	
                      8.5%

                    
	 
      	
                      Company
      profitability component

                    	 
      	
                      5.0%

                    
	 
      	
                      Total

                    	 
      	
                      21.0%

                    

            

          

        

      

    

    

    Administration:

    

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

    

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

    

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

    

    

    

    

    

    

    

    

    February
2009

    
      
         

      

      
        4

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00153-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00153-of-00352.parquet"}]]