NOTICE AND PROXY STATEMENT
AFLAC INCORPORATED
Worldwide Headquarters
1932 Wynnton Road
Columbus, Georgia 31999
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MONDAY, APRIL 8, 1996
The Annual Meeting of Shareholders of AFLAC Incorporated (the
"Company") will be held on Monday, April 8, 1996, at 10:00 a.m. at the
Columbus Museum (in the Patrick Theatre), 1251 Wynnton Road, Columbus,
Georgia, for the following purposes, all of which are described in the
accompanying Proxy Statement:
1. To elect eighteen Directors of the Company to serve until the next
Annual Meeting and until their successors are duly elected and
qualified;
2. To consider and act upon the ratification of the appointment of KPMG
Peat Marwick LLP as independent auditors of the Company for the year
ending December 31, 1996; and
3. To transact such other business as may properly come before the meeting
or any adjournment thereof.
The accompanying proxy is solicited by the Board of Directors of the
Company. The Proxy Statement and the Company's Annual Report for the year
ended December 31, 1995, are enclosed.
The record date for the determination of shareholders entitled to vote
at the meeting is February 16, 1996, and only shareholders of record at the
close of business on that date will be entitled to vote at this meeting, and
any adjournment thereof.
YOUR VOTE IS IMPORTANT! WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE
MEETING, PLEASE MARK, SIGN, DATE AND RETURN THE ENCLOSED PROXY PROMPTLY IN
THE ENCLOSED PREPAID ENVELOPE SO THAT WE MAY BE ASSURED OF A QUORUM TO
TRANSACT BUSINESS. IF YOU ATTEND THE MEETING, YOU MAY REVOKE YOUR PROXY AND
VOTE IN PERSON.
By order of the Board of Directors,
/s/ Joey M. Loudermilk
-----------------------------------
Columbus, Georgia Joey M. Loudermilk
March 1, 1996 Secretary
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AFLAC INCORPORATED
PROXY STATEMENT
FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MONDAY, APRIL 8, 1996
SOLICITATION AND REVOCATION OF PROXY
This Proxy Statement is furnished to shareholders in connection with
the solicitation of proxies by the Board of Directors of AFLAC Incorporated
(the "Company") for use at the Annual Meeting of Shareholders to be held on
Monday, April 8, 1996, and any adjournment thereof, for the purposes set
forth in the accompanying Notice of Annual Meeting of Shareholders and
described in detail herein. The meeting will be held at 10:00 a.m. at the
Columbus Museum (in the Patrick Theatre), 1251 Wynnton Road, Columbus,
Georgia.
All properly executed proxies will be voted in accordance with the
instructions contained thereon, and if no choice is specified, the proxies
will be voted for the election of all nominees named elsewhere in this Proxy
Statement and for the appointment of KPMG Peat Marwick LLP as independent
auditors. Any proxy may be revoked by the shareholder at any time before it
is exercised by giving written notice to that effect to the Secretary of the
Company or by signing a later-dated proxy. Shareholders who attend the
meeting may revoke any proxy previously granted and vote in person.
This Proxy Statement and the accompanying proxy are being mailed to the
shareholders on or about March 4, 1996.
SOLICITATION OF PROXIES
The cost of soliciting proxies will be paid by the Company. The
Company will make arrangements with brokerage firms, custodians and other
fiduciaries to send proxy materials to their principals, and the Company
will reimburse them for their mailing and related expenses. In addition to
solicitation by mail, certain officers and other employees of the Company,
who will receive no compensation for their services other than their regular
compensation, may solicit proxies by telephone and by personal contacts. In
addition, the Company has retained D. F. King & Co., Inc. to assist in the
solicitation of proxies for a fee of $10,500, plus reimbursement of
reasonable out-of-pocket expenses.
DESCRIPTION OF VOTING RIGHTS
In accordance with the Company's Articles of Incorporation, shares of
the Company's Common Stock, par value $.10 per share (the "Common Stock"),
are entitled to one vote per share until they have been held by the same
beneficial owner for a continuous period of greater than 48 months prior to
the record date of the meeting, at which time they become entitled to 10
votes per share. Any transferee of a share of Common Stock where such share
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was transferred to the transferee by gift, devise or bequest, or otherwise
through the laws of inheritance, descent or distribution from the estate of
the transferor, or by distribution to a beneficiary of shares held in trust
for such beneficiary, is deemed to be the same beneficial owner as the
transferor. Shares acquired as a direct result of a stock split, stock
dividend or other distribution with respect to existing shares ("dividend
shares") are deemed to have been acquired and held continuously from the
date on which the shares with regard to which the issued dividend shares
were acquired. Shares of Common Stock acquired pursuant to the exercise of
a stock option are deemed to have been acquired on the date the option was
granted.
Shares of Common Stock held in "street" or "nominee" name are presumed
to have been held for less than 48 months and are entitled to one vote per
share unless this presumption is rebutted by providing evidence to the
contrary to the Board of Directors of the Company. Shareholders desiring to
rebut this presumption should complete and execute the affidavit appearing
on the reverse side of their proxy. The Board of Directors reserves the
right to require evidence to support the affidavit.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
Holders of record of Common Stock at the close of business on February
16, 1996, will be entitled to vote at the meeting. At that date, the number
of outstanding shares of Common Stock entitled to vote was 94,831,959.
According to the Company's records, this represents the following voting
rights:
75,846,328 Shares @ 1 Vote Per Share = 75,846,328 Votes
18,985,631 Shares @ 10 Votes Per Share = 189,856,310 Votes
----------- ------------
94,831,959 Shares Total 265,702,638 Votes
Shareholders with one vote per share shown above can rebut the
presumption that they are entitled to only one vote as outlined in
"Description of Voting Rights" above. If all of the outstanding shares were
entitled to 10 votes per share, the total votes available would be
948,319,590. However, for the purposes of this Proxy Statement, it is
assumed that the total votes available to be cast at the meeting will be
265,702,638.
The holders of a majority of the voting rights entitled to vote at the
meeting, present in person or represented by proxy, shall constitute a
quorum for the transaction of such business as shall come before the
meeting. Directors are elected by an affirmative vote of a plurality of
voting rights cast. Approval of all other matters to be considered at the
meeting requires the affirmative vote of holders of a majority of the voting
rights present in person or represented by proxy at the meeting. In the
case of the election of directors, under applicable Georgia law, in
tabulating the vote, votes withheld will be disregarded and will have no
effect on the outcome of the vote. In all matters other than the election
of the Directors abstentions will be counted and have the same effect as a
vote against the proposal.
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No person, as of February 16, 1996, was the owner of record or, to the
knowledge of the Company, beneficially owned 5% or more of the outstanding
shares of Common Stock or of the available votes of the Company other than
as shown below:
Percent
Name and Per- of
Address of Amount of cent Avail-
Beneficial Title of Class Beneficial Ownership of able
Owner Common Stock Shares Votes Class Votes
- ---------- -------------- ---------- --------- ----- ------
Oppenheimer Group, Inc.* 1 Vote Per Share 7,691,891 7,691,891 8.1 2.9
Oppenheimer Tower
World Financial Center
New York, NY 10281
Daniel P. Amos** 10 Votes Per Share 1,294,742 12,947,420
1932 Wynnton Road 1 Vote Per Share 673,070 673,070
Columbus, GA 31999 --------- ----------
1,967,812 13,620,490 2.1 5.0
(*) This information is derived from Amendment No. 7 to Schedule 13G,
dated February 1, 1996, filed with the Securities and Exchange Commission by
Oppenheimer Group, Inc. Oppenheimer Group, Inc. filed the Schedule 13G as a
parent holding company on behalf of itself, Oppenheimer & Co., L.P. (its
parent company), certain of its subsidiaries and certain investment advisory
clients and discretionary accounts of such subsidiaries. Oppenheimer Group,
Inc. and Oppenheimer & Co., L.P. disclaim beneficial ownership of the shares
listed above.
(**) Includes options to purchase 984,937 shares (and 7,149,370 available
votes) which are exercisable within 60 days.
On February 13, 1996, the Company declared a three-for-two stock split
to be distributed on March 18, 1996, to shareholders of record at the close
of business on February 29, 1996. Because such distribution is subsequent
to the record date for the meeting, all share information in this Proxy
Statement is presented on a pre-split basis.
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth, as of February 16, 1996, the number of
shares and percentage of outstanding Common Stock beneficially owned by
certain of the executive officers named in the "Summary Compensation Table"
below (the "Named Executive Officers"), and Directors and executive officers
as a group. The beneficial ownership of directors and of the remaining
Named Executive Officers is set forth below in the information provided for
director nominees under the caption "Election of Directors." The number of
shares of Common Stock shown are those deemed "beneficially owned," as
determined under Rule 13d-3 promulgated by the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and the information is not necessarily indicative of
beneficial ownership for any other purpose. Under such rule, beneficial
ownership includes any shares as to which a person, directly or indirectly,
through any contract, arrangement, understanding, relationship or otherwise,
has sole or shared voting power or investment power, and also any shares
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that the person has the right to acquire within 60 days through the exercise
of any option, warrant or right, through conversion of any security, or
pursuant to the automatic termination or power of revocation of a trust,
discretionary account or similar arrangement.
Common Stock Beneficially Owned and
Approximate Percentage of Class
as of February 16, 1996
Percent Percent
Name Shares (1) of Shares Votes(1) of Votes
- ---- --------- --------- -------- --------
Kriss Cloninger, III 112,793 .1 112,793 .1
Hidefumi Matsui 103,375 .1 558,244 .2
All Directors and executive
officers as a group
(36 persons) 6,749,831 6.9 40,121,129 14.3
* Percentage not listed if less than .1%
(1) Includes options to purchase shares (and available votes), which are
exercisable within 60 days, for Kriss Cloninger, III, 112,500 (112,500);
Hidefumi Matsui, 94,500 (495,000); and for all Directors and executive
officers as a group, 2,680,079 (15,462,806).
1. ELECTION OF DIRECTORS
The Company proposes that the following eighteen individuals be elected
to the Board of Directors of the Company. The persons named in the
following table have been nominated by the Nominating Committee of the Board
of Directors for election as Directors and, if elected, are willing to serve
as such until the next Annual Meeting of Shareholders and until their
successors have been elected and qualified. It is intended that the persons
named in the accompanying proxy, or their substitutes, will vote for the
election of these nominees (unless specifically instructed to the contrary).
However, if any nominee at the time of the election is unable or unwilling
to serve or is otherwise unavailable for election, and in consequence
another nominee is designated, the persons named in the proxy, or their
substitutes, will have discretionary authority to vote or refrain from
voting in accordance with their judgment on such other nominees. The Board
of Directors has no reason to believe that any of the persons nominated will
be unable or unwilling to serve.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION
OF EACH OF THE BELOW-LISTED NOMINEES AS DIRECTORS
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<TABLE>
The following information is provided with respect to the nominees:
<CAPTION>
Shares of
Common Stock Voting
Beneficially Rights
Owned on Percent on Feb- Percent
Year February 16, of Out- ruary 16 of
First 1996 standing 1996 Available
Name Principal Occupation (1) Age Elected (2) (3) Shares (2) Votes
- ---- ------------------------ --- ------- ------------ -------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Paul S. Amos Chairman, the Company and AFLAC** 69 1956 678,592 .7 5,332,087 2.0
Daniel P. Amos Chief Executive Officer, the 44 1983 1,967,812 2.1 13,620,490 5.0
Company and AFLAC; President, AFLAC;
President, the Company, since
August 1991; Director, Synovus
Financial Corp., Columbus, GA
J. Shelby Amos, II Alabama/West Florida State Sales 43 1983 233,761 .3 2,038,315 .8
Coordinator, AFLAC
Michael H. Armacost President, The Brookings Institution, 58 1994 6,300 * 6,300 *
Washington D.C., since October 1995;
Professor, Asia/Pacific Research
Center, Stanford University, Stanford,
CA, from 1993 until September 1995;
U.S. Ambassador to Japan,
from 1989 until 1993
M. Delmar Edwards, M.D. Vice President and Assistant to the 69 1990 27,419 * 214,169 .1
Chairman, Columbus Regional
Healthcare System, Inc., Columbus,
GA, since July 1993; Practicing
Physician, Columbus, GA, until July
1993; Director, First Union National
Bank of Georgia, Columbus, GA;
Trustee, Morehouse School of
Medicine, Atlanta, GA
George W. Ford, Jr. Chairman of the Board, Progressive 72 1986 4,500 * 27,000 *
Funeral Home, Columbus, GA; Retired
Director, Columbus Bank & Trust
Company, Columbus, GA
Cesar E. Garcia Chairman of the Board, OWD Garcia 74 1987 110,750 .1 972,500 .4
Inc., Jacksonville, FL
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Shares of
Common Stock Voting
Beneficially Rights
Owned on Percent on Feb- Percent
Year February 16, of Out- ruary 16, of
First 1996 standing 1996 Available
Name Principal Occupation (1) Age Elected (2) (3) Shares (2) Votes
- ---- ------------------------ --- ------- ------------ -------- ---------- ---------
Joe Frank Harris Professor, Georgia State University, 60 1991 26,625 * 195,375 .1
Atlanta, GA, since December 1993;
Chairman of the Board, Harris Georgia
Corp., Cartersville, GA, since January
1991; Governor of the State of Georgia,
until January 1991; Director, Bankhead
Enterprises, Inc., Atlanta, GA
Elizabeth J. Hudson Executive Producer, NBC Productions, 46 1990 25,887 * 194,637 .1
since February 1993; Senior Vice
President, Corporate Communications,
NBC Inc., until February 1993
Kenneth S. Janke, Sr. President; Chief Executive Officer, 61 1989 40,036 * 208,786 .1
National Association of Investors
Corp., Madison Heights, MI; President
and Director, NAIC Growth Fund,
Madison Heights, MI
Charles B. Knapp President, The University of Georgia, 49 1990 25,750 * 194,500 .1
Athens, GA
Hisao Kobayashi Senior Advisor, The Dai-Ichi Bank, 60 1994 1,254,000 1.3 1,254,000 .5
Ltd., Tokyo, Japan; Chairman, CIT
Group Holdings Inc., Livingston, NJ;
Director, Nippon Light Metal Co.,
Ltd., Tokyo
Yoshiki Otake Chairman, AFLAC Japan, since January 56 1986 385,905 .4 3,193,995 1.2
1995; President, AFLAC Japan, until
December 1994; Vice Chairman, AFLAC
International, Inc., since October
1991; Executive Vice President, AFLAC,
from January 1991 until October 1991
E. Stephen Purdom Executive Vice President, AFLAC, since 48 1987 132,758 .1 654,830 .3
October 1994; Medical Director,
Columbus Clinic, Columbus, GA, until
September 1994; Senior Vice President
and Medical Director, AFLAC, until
October 1994; Director, Trust
Company Bank, Columbus, GA
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Shares of
Common Stock Voting
Beneficially Rights
Owned on Percent on Feb- Percent
Year February 16, of Out- ruary 16, of
First 1996 standing 1996 Available
Name Principal Occupation (1) Age Elected (2) (3) Shares (2) Votes
- ---- ------------------------ --- ------- ------------ -------- --------- ---------
Barbara K. Rimer Director, Cancer Control Research, 47 1995 2,127 * 2,127 *
Duke Comprehensive Cancer Center,
Durham, NC, since June 1991; Director,
Population Science for Behavioral
Research, Fox Chase Cancer Center,
from November 1990 until May 1991
Henry C. Schwob Owner, Schwob Realty Company, 68 1965 329,632 .4 3,081,292 1.2
Columbus, GA; Director, First Union
National Bank of Georgia, Columbus, GA
J. Kyle Spencer President, Spencer Investment 69 1968 307,700 .3 3,023,000 1.1
Company, Columbus, GA; Director,
First Union National Bank of Georgia,
Columbus, GA; Retired Chairman of the
Board, Bank South N.A., Columbus, GA
Glenn Vaughn, Jr. Retired Chairman of the Board, 66 1990 22,090 * 164,200 .1
Columbus Ledger-Enquirer,
Columbus, GA
(*) Percent not listed if less than .1%
(**) American Family Life Assurance Company of Columbus ("AFLAC") is a wholly owned subsidiary of the Company.
(1) Unless specifically noted, the respective Director or nominee has held the occupation for at least five years.
(2) Includes options to purchase shares (and available votes), which are exercisable within 60 days, for Paul S. Amos,
150,000 (150,000); Daniel P. Amos, 984,937 (7,149,370); J. Shelby Amos, II, 6,000 (6,000); Michael H. Armacost,
4,960 (4,960); M. Delmar Edwards, 24,750 (193,500); George W. Ford, Jr., 2,000 (2,000); Cesar E. Garcia, 6,000
(6,000); Joe Frank Harris, 24,750 (193,500); Elizabeth J. Hudson, 24,750 (193,500); Kenneth S. Janke, Sr.,
24,750 (193,500); Charles B. Knapp, 24,750 (193,500); Hisao Kobayashi, 4,000 (4,000); Yoshiki Otake, 254,921
(2,099,210); E. Stephen Purdom, 88,008 (362,580); Barbara K. Rimer 2,000 (2,000); Henry C. Schwob, 56,000 (506,000);
J. Kyle Spencer, 56,000 (506,000); and Glenn Vaughn, Jr., 19,750 (143,500).
Excludes options to purchase 2,000 shares (and 2,000 available votes), which will vest and be exercisable upon the
reelection of the following Directors: J. Shelby Amos, II, Michael H. Armacost, M. Delmar Edwards, George W.
Ford, Jr., Cesar E. Garcia, Joe Frank Harris, Elizabeth J. Hudson, Kenneth S. Janke, Sr., Charles B. Knapp,
Hisao Kobayashi, Barbara K. Rimer, Henry C. Schwob, J. Kyle Spencer and Glenn Vaughn, Jr.
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(3) All stock is owned solely and directly by the nominee except as follows:
Paul S. Amos, 71,612 shares owned by spouse; 38,441 shares owned by his minor grandchildren with Mr. Amos as custodian;
94,050 shares owned by trusts with Mr. Amos as trustee; and 750 shares owned by the Paul S. Amos Education Foundation.
Daniel P. Amos, 39,838 shares owned by spouse; 271,787 shares owned by his minor children with Mr. Amos as trustee;
2,009 shares owned by his minor children with his wife as trustee; 214,332 shares owned by trusts with Mr. Amos
as trustee; 70,236 shares owned by Daniel P. and Shannon Amos Foundation, Inc.; and 750 shares owned by the Paul S.
Amos Education Foundation. Does not include 3,255 shares owned by a trust with his wife as trustee of which Mr. Amos
disclaims beneficial ownership.
Shelby Amos, II, 81,177 shares owned by his minor children with Mr. Amos as trustee; and 8,143 shares owned by a
corporation of which Mr. Amos is a controlling shareholder.
Cesar E. Garcia, 250 shares owned by spouse; and 104,500 shares owned jointly with son.
Elizabeth J. Hudson, 1,137 shares owned jointly with spouse.
Kenneth S. Janke, Sr., 1,447 shares owned by a trust with Mr. Janke as trustee; 202 shares owned by a trust with his
wife as trustee; 11,000 shares owned by a partnership of which Mr. Janke is a partner; 2,500 shares owned by the NAIC
Growth Fund of which Mr. Janke is President; and 137 shares owned by an investment club of which Mr. Janke is a member.
Charles B. Knapp, 1,000 shares owned by spouse.
Hisao Kobayashi, 1,250,000 shares owned by The Dai-Ichi Kangyo Bank, Ltd.; Mr. Kobayashi shares the power to vote these
shares.
Stephen Purdom, 3,750 shares owned jointly with spouse; and 1,000 shares owned by his minor child with Mr. Purdom as
custodian.
Barbara K. Rimer, 127 shares owned jointly with spouse.
Henry C. Schwob, 18,551 shares owned by spouse; and 22,791 shares owned by his children with spouse as custodian.
J. Kyle Spencer, 31,570 shares owned by spouse.
Glenn Vaughn, Jr., 1,715 shares owned jointly with spouse; and 625 shares owned by spouse.
Daniel P. Amos is the son of Paul S. Amos. J. Shelby Amos, II is the nephew of Paul S. Amos. Daniel P. Amos and
J. Shelby Amos, II are cousins. Kenneth S. Janke, Sr. is the father of Kenneth S. Janke Jr., an executive officer
of the Company. No other family relationships exist among any other executive officers or Directors.
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Pursuant to Section 16 of the Securities Exchange Act of 1934, as
amended, officers, directors and holders of more than 10% of the Common
Stock are required to file reports of their trading in Company equity
securities with the Securities and Exchange Commission.
Based solely on its review of the copies of such reports received by
the Company, or written representations from certain reporting persons that
no reports on Form 5 were required for those persons, the Company believes
that during the last fiscal year all Section 16 filing requirements
applicable to its reporting persons were complied with, and the Company is
not aware of any filing delinquencies from prior fiscal years, except as set
forth below.
Mr. Spencer reported two transactions involving sales of a total of
4,449 shares of Common Stock on a late Form 4. Mrs. Rimer filed a late Form
4 with respect to a purchase of 20 shares of Common Stock. Mr. Akitoshi Kan
failed to report a total of 16 transactions (consisting solely of monthly
purchases through an Employee Stock Purchase Plan) for purchase of an
aggregate of 24.905 shares of Common Stock from November 1993 until March of
1995 when Mr. Kan withdrew from the Plan. Mr. Kan subsequently reported his
transactions on year-end report Form 5.
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BOARD AND COMMITTEE MEETINGS AND DIRECTORS' COMPENSATION
During 1995, the Board of Directors met seven times, and all Directors
attended more than 75% of the meetings of the Board and of the Board
Committees on which they served.
THE FOLLOWING DIRECTORS WERE MEMBERS OF THE RESPECTIVE COMMITTEES DURING THE
PAST YEAR:
AUDIT COMPENSATION NOMINATING
J. Kyle Spencer Gov. Joe Frank Harris Paul S. Amos
George W. Ford, Jr. M. Delmar Edwards, M.D. Daniel P. Amos
Cesar E. Garcia Cesar E. Garcia J. Shelby Amos, II
Elizabeth J. Hudson John M. Pope Kenneth S. Janke, Sr.
Peter D. Morrow Glenn Vaughn, Jr. Dr. Charles B. Knapp
Henry C. Schwob
The Audit Committee, which met four times during 1995, is charged with
the duties of assuring that proper guidelines are established for the
dissemination of financial information; meeting periodically with, and
reviewing recommendations of, the Company's independent and internal
auditors; meeting periodically with management with respect to the Company's
system of internal controls and accounting systems used by the Company;
determining that no restrictions are placed on the scope of the examination
of the financial statements by the independent auditors; reviewing
consolidated financial statements; and performing any other duties or
functions deemed appropriate by the Board. The Committee also recommends to
the Board of Directors the appointment of the Company's principal
independent auditors. At least annually, the Committee reviews the services
performed and the fees charged by the independent auditors.
The independent auditors have direct access to the Committee and may
discuss any matters that arise in connection with their audits, the
maintenance of internal controls and any other matters relating to the
Company's financial affairs. The Committee may authorize the independent
auditors to investigate any matters that the Committee deems appropriate and
may present its recommendations and conclusions to the Board.
The Nominating Committee met once during 1995 to recommend nominees for
election as Directors at the Annual Meeting of Shareholders. The Committee
will consider, as potential nominees, persons recommended by shareholders.
Recommendations should be submitted to the Nominating Committee in care of
the Secretary of the Company.
Each Director of the Company receives $1,250 per month for service as
such. A Director serving on one or more committees who is not an officer of
the Company receives an additional $600 per month for that service ($200 if
an officer). Each Director also receives $2,000 for attendance at each
meeting of the Board of Directors. The chairmen of the Compensation and
Audit Committees receive $10,000 and $12,000 respectively.
During 1995, the following Directors received additional payments as
compensation for special consulting services to individual subsidiaries of
the Company: Mr. Cesar E. Garcia, $12,000, for services to Communicorp,
Inc.; and Mr. Henry C. Schwob, $48,237, for services to AFLAC's Investment
Committee.
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Directors who are not also employees of the Company or its subsidiaries
have been granted non-qualified stock options pursuant to the Amended 1985
Stock Option Plan (the "1985 Plan"). The exercise price for the options is
the fair market value of the Common Stock on the date of grant. In years
prior to 1993, aggregate stock options, ranging from 15,000 to 40,000 per
Director, have been granted by the Directors' Stock Option Committee, which
determined the value of each Director's continuing service to the Company
based on experience gained from the number of years already served. The
stock options granted prior to 1993 vest over a four-year period, contingent
upon the shareholders re-electing the Director to the Board of Directors.
Options vest in full upon the death or disability of the Director. The
number of options that will vest upon each Director's re-election by the
shareholders at the April 8, 1996, meeting are set forth in footnote 2 on
page 6 of this Proxy Statement. In addition, pursuant to amendments to the
1985 Plan approved by shareholders at the 1994 annual meeting, each new non-
employee Director, including any Advisory Director, will be granted an
option to purchase 10,000 shares of Common Stock as of the earlier of the
date such individual is appointed to the Board or the date of the first
annual meeting of shareholders at which such Director is elected to the
Board. Options granted to each non-employee Director will become
exercisable in cumulative installments of 20% of the shares of Common Stock
covered thereby as of the date of the grant, and an additional 20% as of
each of the next four anniversaries of the date of the option grant to the
extent the non-employee Director continues to be a Director as of that date,
provided, however, that upon cessation of service by reason of retirement, a
non-employee Director will become immediately vested in all outstanding
options that have not yet expired. The exercise price of all shares of
Common Stock subject to options granted to non-employee Directors will be
100% of the fair market value of such shares as of the date of grant. All
Directors elected at the 1995 annual meeting received such grants.
The Company maintains a retirement plan for non-employee directors who
have attained age 55 and completed at least five years of service as a non-
employee director. The annual benefit paid to a non-employee director upon
retirement (or to his or her spouse in the event of death prior to
retirement or prior to completion of payments under the plan) is equal to
the director's compensation, including retainer and regular Board member
fees, but excluding committee fees, paid for a period of time equal to the
number of completed years served as a non-employee director.
COMPENSATION REPORT
This report on the compensation policies, components and decisions of
the Company for 1995 with respect to the Company's executive officers is
presented by the Compensation Committee of the Company, which for the first
four months of 1995 was made up of three members, consisting of Governor Joe
Frank Harris, Chairman of the Compensation Committee, and Messrs. Cesar E.
Garcia and John M. Pope. Following the Company's 1995 Annual Meeting of
Shareholders held on May 1, 1995, Dr. M. Delmar Edwards and Mr. Glenn
Vaughn, Jr. were elected by the Board of Directors to succeed Mr. Pope. All
such members of the Compensation Committee are outside Directors as defined
by Section 162 (m) of the Internal Revenue Code of 1986 ("Section 162 (m)").
The function of the Compensation Committee is to approve current
compensation arrangements for executive officers of the Company who are also
members of the Board of Directors, including among the executive officers
named in the accompanying compensation tables, Messrs. Daniel P. Amos, Paul
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S. Amos and Yoshiki Otake. The Compensation Committee determines all
aspects of compensation for executive officers who are members of the Board
with respect to stock options, and under the Company's Management Incentive
Plan with respect to executive officers (as defined therein and including
the executive officers named in the accompanying compensation table). Other
compensation decisions for executive officers are made by the Chief
Executive Officer, Mr. Daniel P. Amos. The Compensation Committee met a
total of four times over the past fiscal year.
COMPENSATION POLICIES AND GOALS
The Company's goal is to retain, motivate and reward management of the
Company through its compensation policies and awards, while aligning their
interests more closely with that of the Company and its shareholders. With
respect to the retention of management, the Company seeks to attract and
retain the highest caliber of management by offering, in addition to other
intangible non-monetary benefits, total compensation that is comparable to
that offered by its competitors. The Company believes that it is also
important to provide compensation components that accrue to the benefit of,
and provide security to, its management over the long term, such as pension
benefits, to promote the retention of management. To align the interest of
management more closely with that of the Company and to motivate and reward
individual initiative and effort, the Company seeks to promote performance-
based compensation so that contribution to the Company as a whole, as well
as the attainment of individual performance goals, is rewarded. Through the
use of performance-based plans that reward attainment of division or Company
goals, the Company seeks to foster an attitude of teamwork, and the use of
tools like equity ownership is important to ensure that the efforts of
management are consistent with the objectives of shareholders. Through the
use of stock options the Company seeks to promote increased equity ownership
by management in the Company.
COMPENSATION COMPONENTS
At present, the compensation of the executive officers of the Company
consists of a combination of salary, incentive bonuses, stock options,
contributions to or accruals for benefit plans, and participation in various
other plans, such as the Company's 401(k) plan, as well as medical and other
personal benefits typically offered to executives at large corporations.
SALARIES. In 1995, salaries for executive officers generally were
increased at an average rate of 4.5% to reflect a cost-of-living increase,
to recognize the Company's comparative performance in fiscal 1994 and on the
basis of a 4.6% average projected salary increase for executives of
insurance companies in 1995 (as immediately discussed below in connection
with compensation for Mr. Daniel P. Amos). In 1995, the base salaries of
Messrs. Paul S. Amos and Daniel P. Amos, Chairman and CEO of the Company,
respectively, were increased by 7.5%. This increase was based on employment
agreements with both executives (see "Employment Agreements and Termination
of Employment Arrangements" below) which provide that such executives would
receive salary increases comparable to those received by other executive
officers, financial results of the Company (excluding the effects of
currency fluctuations) and stock price performance of the Company over the
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<PAGE>
prior fiscal year, the overall good moral of Company employees, confidence
placed in the Company's management by the Committee, and the results of a
compensation report prepared for the Company by Hewitt Associates LLC (the
"Hewitt Report"). These factors were considered more or less equally. The
Hewitt Report detailed the favorable performance of the Company in 1995 over
1994 in increase of its asset base, increase in revenues, and return on
shareholder equity in comparison to a group of 13 insurance companies
identified by the Committee as appropriate comparators to the Company from a
business standpoint and for executive talent (this group included each of
the companies that constitute the S&P Life Insurance Index, which is one of
the indices used in the Company's "Stock Performance Graph" (see page 13),
but also includes a broader group of companies viewed by the Company as its
most direct competitors, as deemed appropriate for comparative compensation
purposes). While the salary increase for Mr. Daniel P. Amos is somewhat
higher than the average 5.2% salary increase in 1994 for the CEOs of this
comparison group, and the 4.6% projected average base salary increase for
1995 for executives of insurance companies derived from an annual salary
increase survey conducted by Hewitt Associates LLC, the Committee felt the
increase justified by the Company's performance in 1994 relative to the
comparison group of companies, including the achievement of a 13.8% increase
in total shareholder return as compared to the decreases in total
shareholder return sustained by most of the comparison group. The Committee
also noted that the salary increase was in the middle of the range of salary
increases in 1994 for the CEOs of the comparison group set forth in the
Hewitt Report (which varied from no increase to a 16.8% increase). Because
of Mr. Paul S. Amos' leadership role as Chairman, a comparable increase in
his salary was deemed justified. Base salaries for the other named
executive officers in the accompanying table were established by the
Company's CEO pursuant to employment agreements entered into by each of them
as more fully described below under the caption "Employment Agreements and
Termination of Employment Arrangements." The Compensation Committee did not
participate in the establishment of the base salaries pursuant to these
employment agreements.
BONUSES. Under the Company's Management Incentive Plan, cash bonuses
in an amount equal to 15% to 50% of salary, for 1995, with respect to the
Company's executive officers generally, and equal to 70% of salary, with
respect to Messrs. Daniel P. Amos and Paul S. Amos pursuant to their
employment agreements, are paid on the basis of the attainment of target
annual performance goals for the Company and, generally speaking, personal
goals. None of the Named Executive Officers ("NEOs") in the accompanying
table, however, have personal goals. In the event that maximum performance
goals are achieved, Messrs. Daniel P. Amos and Paul S. Amos may earn up to
105% of salary and other NEOs may earn up to 75% of salary. The
establishment of the percentage of salary that such bonus may constitute for
Messrs. Daniel P. Amos and Paul S. Amos was based on the recognition by the
Compensation Committee that the bonus goals are set very aggressively and
that such performance-based compensation should account for a substantial
proportion of the total compensation for these top two executives of the
Company.
The performance goals are established on the basis of recommendations
by management, and the awards, if attained, are paid in the following year.
With respect to 1995, the Committee established Company performance goals
for executive officers, including the CEO, based on, among other things,
earnings per share, increases in premiums, increases in new sales, specified
operating expense controls, pretax operating earnings, and, in the case of
most executive officers other than the NEOs, personal goals. (In connection
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<PAGE>
with compliance with Section 162(m), the Compensation Committee deemed it
appropriate that the bonus components of the NEOs were based on objective
Company performance goals rather than more subjective personal goals.) With
respect to Messrs. Daniel P. Amos and Paul S. Amos, 30% of the target award
was attributed to the earnings-per-share goal, while the other Company
performance goals accounted for 70% of the total possible award in 5% to 10%
increments. With respect to the other executive officers, 20% to 30% of the
target award was attributed to the earnings-per-share goal, while the other
Company performance goals each accounted for 5% to 10% of the total possible
award, generally up to 90%. Generally, personal goals constituted the
remainder of the performance award for the other executive officers. With
respect to each Company performance goal, a minimum, target and maximum
performance level is specified, the attainment of which determines the
amount paid with respect to each performance goal. The bonus percentage is
decreased or increased to the extent the Company performance levels meet the
minimum levels or exceed target levels as the case may be, up to the maximum
performance levels. Performance levels with respect to personal goals are
not considered for purposes of this percentage adjustment. Personal goals
may be achieved in whole or in part with an appropriate payment adjustment
to reflect partial achievement; however, no additional payments are made if
such goals are exceeded. Payment on attainment of any particular
performance goal may occur independently of (i.e., is not contingent upon)
attainment of any other performance goal. For the year ended December 31,
1995, all of the NEOs achieved bonus levels at or slightly above target
bonus levels but below maximum bonus levels.
OTHER BENEFITS AND ACTIONS. The Company maintains (i) its Amended 1985
Stock Option Plan (the "1985 Plan") pursuant to which officers and other
employees are granted options to purchase Company stock; (ii) its
Retirement Plan for Senior Officers (the "Retirement Plan"), which provides
lifetime retirement and medical benefits to plan participants, and (iii) its
Supplemental Executive Retirement Plan (the "Supplemental Plan") for certain
key executives of the Company and certain subsidiaries who do not
participate in the Retirement Plan, which provides for certain pension
benefits in the event of termination (other than for cause), upon death,
after age 55 or in certain change-in-control situations. Certain of the
NEOs are participants in the Retirement Plan or in the Supplemental Plan,
but not both. The executive officers of the Company may also participate in
the nondiscriminatory AFLAC Incorporated 401(k) Retirement Plan and a
noncontributory defined benefit pension plan covering substantially all
employees.
In 1995, no options were granted to the NEOs under the 1985 Plan. On
August 8, 1995, the Board amended the 1985 Plan to allow participation in
the Plan by certain employees of AFLAC Japan and to increase the number of
shares with respect to which options could be granted under the Plan. With
the exception of the foregoing, no decisions with respect to any of the 1985
Plan, the Supplemental Plan and the Retirement Plan were made by the
Compensation Committee in 1995.
In 1995, the Company executed an employment agreement with Mr. Paul S.
Amos, Chairman of the Company, as further described below under "Employment
Agreements and Termination of Employment Arrangements." Mr. Amos'
employment agreement is similar to agreements previously granted to other
U.S.-based executive officers. The Committee determined that this was in
the best interests of the Company in order to reduce or eliminate potential
questions or problems in the event of the disability or death of the
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<PAGE>
Chairman during the course of his employment, and to avoid uncertainty and
confusion with respect to other situations.
The Compensation Committee believes that the executive compensation
policies serve the best interests of the shareholders and the Company. The
bonus and stock option components of compensation for Company executives are
intended to be directly related to and commensurate with Company
performance.
In connection with making decisions with respect to executive
compensation, the Compensation Committee will take into account, as one of
the factors which it considers, the provisions of Section 162(m), which
limits the deductibility by the Company of certain categories of
compensation in excess of $1,000,000 paid to certain executive officers. It
may, however, determine to authorize compensation arrangements that exceed
the $1,000,000 deductibility cap imposed by Section 162(m). In this
connection, the 1985 Plan and the Management Incentive Plan have been
amended to conform to the requirements of Section 162(m).
Compensation Committee
Governor Joe Frank Harris - Chairman
M. Delmar Edwards (From May 1, 1995)
Cesar E. Garcia
John M. Pope (To May 1, 1995)
Glenn Vaughn, Jr. (From May 1, 1995)
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<PAGE>
<TABLE>
Annual Compensation Long-Term Compensation Awards
<CAPTION>
Other Restricted
Annual Stock LTIP All Other
Name and Compensation Award(s) Payouts Compensation
Principal Position Year Salary($) Bonus($)(1) ($) (2) ($) Options(#) ($) ($)(3)
- ------------------ ---- --------- ----------- ------------ ---------- --------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Daniel P. Amos 1995 1,026,210 757,631 -0- -0- -0- -0- 5,456
President and CEO 1994 980,862 744,958 -0- -0- -0- -0- 6,666
1993 913,218 658,346 -0- -0- 300,000 -0- 5,602
Paul S. Amos 1995 1,095,984 828,709 -0- -0- -0- -0- 15,840
Chairman 1994 1,047,539 815,131 86,442 -0- -0- -0- 16,467
1993 975,064 722,333 -0- -0- 150,000 -0- 14,782
Yoshiki Otake 1995 793,408 291,471 -0- -0- -0- -0- 29,936
Chairman, 1994 667,808 296,452 -0- -0- -0- -0- 10,012
AFLAC Japan 1993 614,213 134,515 -0- -0- 50,000 -0- 4,478
Hidefumi Matsui 1995 415,314 226,941 -0- -0- -0- -0- 16,311
President, 1994 363,974 161,575 -0- -0- -0- -0- 5,787
AFLAC Japan 1993 307,275 70,676 -0- -0- 50,000 -0- 1,978
Kriss Cloninger, III 1995 377,054 208,534 -0- -0- -0- -0- 6,066
Exec. Vice President 1994 350,801 203,206 -0- -0- -0- -0- 6,990
and CFO 1993 326,563 166,663 -0- -0- 75,000 -0- 3,420
(1) Includes cash bonuses paid in 1994, 1995 and 1996 under the Management Incentive Plan for services rendered during
1993, 1994 and 1995 and other cash bonus payments.
(2) Includes medical expenses of $45,063 and payments for tax services of $27,000 for Mr. Paul S. Amos. No other
Named Executive Officer received benefits in excess of $50,000.
(3) Includes premiums paid in 1995 for term life insurance in the amount of $956, $11,340, $29,936, $1,566, and
$16,311 for Mr. Daniel P. Amos, Mr. Paul S. Amos, Mr. Yoshiki Otake, Mr. Kriss Cloninger, III and Mr. Hidefumi
Matsui, respectively, and Company-matching contributions to the 401(k) retirement plan in the amount of $4,500 for
each of Mr. Daniel P. Amos, Mr. Paul S. Amos and Mr. Kriss Cloninger, III. Includes premiums paid in 1994 for
term life insurance in the amount of $2,169, $11,970, $10,012, $2,493, and $5,787 for Mr. Daniel P. Amos, Mr. Paul
S. Amos, Mr. Yoshiki Otake, Mr. Kriss Cloninger, III and Mr. Hidefumi Matsui, respectively, and Company-matching
contributions to the 401(k) retirement plan in the amount of $4,497 for each of Mr. Daniel P. Amos, Mr. Paul S.
Amos and Mr. Kriss Cloninger, III. Includes premiums paid in 1993 for term life insurance in the amount of
$3,420, $12,600, $4,478, $3,420, and $1,978 for Mr. Daniel P. Amos, Mr. Paul S. Amos, Mr. Yoshiki Otake, Mr. Kriss
Cloninger, III and Mr. Hidefumi Matsui, respectively, and Company-matching contributions to the 401(k) retirement
plan in the amount of $2,182 for each of Mr. Daniel P. Amos and Mr. Paul S. Amos.
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</TABLE>
<PAGE>
STOCK PERFORMANCE GRAPH
The following graph compares the five-year performance of the Company's
Common Stock to the Dow Jones Industrial Average (Dow Jones), and the
Standard & Poor's Life Insurance Index (S&P Life). The Standard & Poor's
Life Insurance Index includes: Providian Corp., Jefferson-Pilot Corp.,
Lincoln National Corp., Torchmark Corp., UNUM Corp. and USLIFE Corp. The
graph assumes that the value of the investment in the Company's Common Stock
and each index was $100 at December 31, 1990, and that all dividends were
reinvested.
(Stock Performance graph inserted here.)
Performance Graph Index
DECEMBER 31
1990 1991 1992 1993 1994 1995
---- ---- ---- ---- ---- ----
AFLAC INCORPORATED 100 164 186 194 221 304
DOW JONES 100 124 133 156 164 224
S&P LIFE 100 144 193 196 162 233
(All performance data provided by STAR Services, Inc., San Francisco, CA
94120)
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<PAGE>
RETIREMENT PLANS FOR KEY EXECUTIVES
Participants in the Retirement Plan for Senior Officers receive full
compensation for the first 12 months after retirement. Thereafter, the
participants may elect to receive annual lifetime retirement benefits equal
to 60% of their final compensation, or 54% of such compensation with 1/2 of
such amount to be paid to their spouses for a specified period after death
of the participant. Final compensation is deemed to be the higher of (i)
the compensation paid during the last 12 months of active employment with
the Company, or (ii) the highest compensation received in any calendar year
of the last three years preceding the date of retirement. Compensation
under this plan is defined to be base salary plus bonus. All benefits are
subject to annual cost-of-living increases as the Compensation Committee may
approve. Retired participants and their spouses are also entitled to
receive full medical expense benefits for their lifetimes. The benefits
payable under the plan are not subject to Social Security or defined benefit
pension plan offsets.
Generally, no benefits are payable until the participant accumulates 10
years credited service at age 60 or 20 years credited service. Reduced
benefits may be paid to a participant who retires (other than for
disability) before age 65 with less than 20 years credited service.
Mr. Daniel P. Amos and Mr. Paul S. Amos are covered by this plan. AFLAC
has entered into a similar agreement with Mr. Yoshiki Otake. Mr. Daniel P.
Amos, Mr. Paul S. Amos, and Mr. Yoshiki Otake have 22, 41, and 21 years,
respectively, of credited service.
RETIREMENT PLAN FOR SENIOR OFFICERS TABLE
YEARS OF SERVICE
COMPENSATION 15 20 25 30 35
------------ ---- ---- ---- ---- ----
$ 500,000 $ 300,000 $ 300,000 $ 300,000 $ 300,000 $ 300,000
750,000 450,000 450,000 450,000 450,000 450,000
1,000,000 600,000 600,000 600,000 600,000 600,000
1,250,000 750,000 750,000 750,000 750,000 750,000
1,500,000 900,000 900,000 900,000 900,000 900,000
1,750,000 1,050,000 1,050,000 1,050,000 1,050,000 1,050,000
2,000,000 1,200,000 1,200,000 1,200,000 1,200,000 1,200,000
2,250,000 1,350,000 1,350,000 1,350,000 1,350,000 1,350,000
The Company maintains a Supplemental Executive Retirement Plan for
certain key executives of the Company and its subsidiaries who do not
participate in the Retirement Plan for Senior Officers. Participation in
the Supplemental Executive Retirement Plan is limited to key employees of
the Company (and its subsidiaries) designated by the Board of Directors of
the Company from time to time. On August 11, 1992, the Plan was amended to
require 15 years of service in order for a participant to be qualified under
the Plan, provided that said requirement not affect those individuals who
were participating in the Plan prior to this amendment. Under the Plan,
participants who terminate their employment for any reason other than
"cause" or death (i) between the ages of 55 to 65, are entitled to an annual
pension that, when combined with the retirement income payable under the
Company's Defined Benefit Pension Plan (assuming benefits thereunder are
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<PAGE>
paid as a single life annuity), will equal 50% of their final pay, or (ii)
at the age of 65 or older, are entitled to an annual pension that, when
combined with the retirement income payable under the Company's Defined
Benefit Pension Plan (assuming benefits thereunder are paid as a single life
annuity), will equal 65% of their final pay. For purposes of the Plan,
final pay means the highest annual base salary paid to a participant during
any calendar year in the three-calendar-year period preceding the
participant's termination of employment.
Benefits are generally payable in the form of an annuity for the life
of the participant. However, a participant may elect a joint and survivor
annuity pursuant to which he or she will receive reduced benefits during his
or her lifetime and, after his or her death, his or her surviving spouse
will receive a monthly benefit equal to 50% of the amount that had been paid
to the participant. No benefits are payable to a participant whose
employment is terminated before age 55 except for certain terminations
following a "change in control." If a participant dies after age 55 but
before benefits are paid under the plan, his or her spouse will receive a
death benefit equal to 50% of the benefits that the participant would have
been entitled to receive had he or she retired on the day preceding the date
of his or her death. If a participant's employment is terminated for
"cause," he or she immediately forfeits all rights and entitlements under
the plan. The benefits payable under the plan are not subject to Social
Security offset; benefits are subject to offset for amounts paid under the
Company's Defined Benefit Pension Plan.
Kriss Cloninger, III participates in the Supplemental Executive
Retirement Plan. The estimated annual benefit payable upon a retirement age
of 55 for Mr. Cloninger is $268,019.
For retirement benefits to Mr. Hidefumi Matsui see "Employment
Agreements and Termination of Employment Arrangements" below.
DEFINED BENEFIT PENSION PLAN
The Company has a noncontributory defined benefit pension plan covering
substantially all U.S. employees who satisfy the eligibility requirements.
Benefits are calculated in accordance with the following formula: l% of
average monthly compensation times years of credited service not in excess
of 25 years, plus .5% of average monthly compensation times years of
credited service in excess of 25 years. Participants are eligible to
receive normal retirement benefits upon attaining their normal retirement
age of 65. Participants with 15 years of credited service are eligible to
receive reduced normal retirement benefits upon reaching their early
retirement age of 55. After attaining the early retirement age of 55, a
participant can be eligible for full normal retirement benefits when the
participant's years of credited service plus their attained age equals or
exceeds 85. For purposes of the plan, average monthly compensation is
deemed to be the participant's highest average compensation during any five
consecutive years of service within the 10 consecutive plan years of service
immediately preceding retirement. Compensation generally means salaries and
annual incentive bonuses. The benefits payable under the plan as amended are
not subject to adjustment for Social Security benefits or other offsets.
The benefits payable under the plan may be paid monthly over the life of the
participant (with joint and survivor options available at reduced rates).
The maximum retirement benefit is limited in accordance with section 415 of
the Internal Revenue Code of 1986 (the "Code") to $120,000 for 1995. The
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<PAGE>
maximum compensation that may be taken into account in the calculation of
retirement benefits is limited in accordance with section 401(a) (17) of the
Code to $150,000 for 1995. These limitation amounts for future years will
be indexed for cost-of-living adjustments, but only increase when a new
$5,000 increment is reached. The following table reflects annual benefits
as determined by the above formula.
DEFINED BENEFIT PENSION PLAN TABLE
YEARS OF SERVICE
COMPENSATION 15 20 25 30 35
- ------------ ---- ---- ---- ---- ----
$25,000 $ 3,750 $ 5,000 $ 6,250 $ 6,875 $ 7,500
50,000 7,500 10,000 12,500 13,750 15,000
75,000 11,250 15,000 18,750 20,625 22,500
100,000 15,000 20,000 25,000 27,500 30,000
125,000 18,750 25,000 31,250 34,375 37,500
150,000 22,500 30,000 37,500 41,250 45,000
Mr. Daniel P. Amos and Mr. Kriss Cloninger, III have 22 years and 4
years, respectively, of credited service in the plan.
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<PAGE>
<TABLE>
AGGREGATED OPTION EXERCISES IN 1995
AND OPTION VALUES AS OF DECEMBER 31, 1995
<CAPTION>
Value of Unexercised
Number of Unexercised In-the-Money
Options at Options at
Shares 12-31-95(#) 12-31-95($)
Acquired Value
Name on Exercise(#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
- ---- -------------- ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Daniel P. Amos, CEO -0- -0- 984,937 -0- 26,169,808 -0-
Paul S. Amos 17,918 507,303 299,546 -0- 7,895,475 -0-
Yoshiki Otake -0- -0- 239,920 15,001 7,051,605 421,034
Hidefumi Matsui 3,500 96,731 94,500 -0- 1,941,350 -0-
Kriss Cloninger, III -0- -0- 112,500 -0- 1,931,250 -0-
-21-
</TABLE>
<PAGE>
EMPLOYMENT AGREEMENTS AND TERMINATION OF EMPLOYMENT ARRANGEMENTS
On August 1, 1993, the Company entered into an employment agreement
with Mr. Daniel P. Amos. This agreement replaced a prior employment
agreement with Mr. Amos that expired on July 31, 1993. The new agreement
provides for a three-year term commencing August 1, 1993, with automatic
extensions of one-year periods to the term of the agreement occurring on an
annual basis beginning August 1, 1994, unless written notice of termination
is given prior to such annual extensions. Pursuant to the agreement, Mr.
Amos is entitled to receive an annual base salary of $1,018,250 subject to
annual increases in the same general proportion as provided to other senior
executive officers of the Company.
The agreement provides that Mr. Amos (referred to hereafter as the
"Executive") will continue to participate in the Company's Management
Incentive Plan, the Retirement Plan for Senior Officers and the 1985 Plan,
and will participate in all other fringe benefit plans applicable to
employees generally or provided to senior executives of the Company. The
Executive may receive other benefits as determined from time to time by the
Compensation Committee.
Pursuant to the agreement, the Company remains obligated to continue
compensation and benefits to the Executive for the scheduled term of the
agreement if the employment of the Executive is terminated by the Company
without "good cause." If the Executive's employment is terminated by the
Company for "good cause," or by the Executive without "good reason," the
Company is generally obligated to pay compensation and benefits only to the
date of termination (except that the Executive is entitled to benefits under
the Retirement Plan for Senior Officers if the termination is not for "good
cause"). "Good cause" generally means (i) the willful failure by the
Executive to substantially perform his management duties for more than 60
days, (ii) intentional conduct by the Executive causing substantial injury
to the Company, or (iii) the conviction or plea of guilty by the Executive
of a felony crime involving moral turpitude. "Good reason" is defined to
include a breach of the agreement, a diminution or change in the Executive's
title, duties or authority, or a relocation of the Company's principal
offices. Upon voluntary termination without "good reason" or termination by
the Company for "good cause," the Executive is prohibited for a two-year
period from directly or indirectly competing with the Company.
The agreement provides that compensation and benefits continue for
certain specified periods in the event that the Executive becomes totally
disabled. Upon death of the Executive, his estate is to be paid an amount,
payable over a three-year period, equal to the Executive's base salary and
any bonus actually paid during the last three years of his life.
Upon a "change in control" of the Company, the agreement is extended
for an additional three-year period. If, following a change in control, the
Executive's employment with the Company is terminated by the Company without
"good cause," or by the Executive for "good reason," the Company must pay to
the Executive, among other payments but in lieu of any further salary
payments subsequent to the date of termination, a lump sum severance payment
equal to three times the sum of the Executive's base salary and bonus under
the Management Incentive Plan (as paid during periods specified in the
agreement).
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<PAGE>
A "change in control" is generally deemed to occur when: (i) a person
or group acquires beneficial ownership of 30% or more of the Common Stock of
the Company; (ii) during any period of two consecutive years, individuals
who at the beginning of such period constitute the Board cease for any
reason to constitute a majority of the Board; or (iii) the shareholders
approve a liquidation or sale of substantially all of the assets of the
Company or certain mergers or consolidation of the Company.
On August 1, 1995, the Company entered into an employment agreement
with Mr. Paul S. Amos. This agreement provides for a three-year term
commencing August 1, 1995, with automatic extensions of one-year periods to
the term of the agreement occurring on an annual basis beginning August 1,
1996, unless written notice of termination is given prior to such annual
extensions. Pursuant to the agreement, Mr. Amos is entitled to receive an
annual base salary of $1,090,985 subject to annual increases in the same
general proportion as provided to other senior executive officers of the
Company.
Pursuant to an employment agreement between the Company and Mr. Kriss
Cloninger, III, as amended, Mr. Cloninger is employed as Chief Financial
Officer of the Company. The term of the agreement is subject to automatic
two-year extensions on an annual basis beginning March 16, 1994, unless
written notice that such extension will not occur is given prior to such
annual date by either party. Mr. Cloninger is entitled to a base salary per
year of $400,000, which shall be increased annually during the term of the
agreement and any extensions thereof, as determined by the Company's CEO.
The Company shall also pay Mr. Cloninger, as performance bonus compensation,
an amount each year under the Company's Management Incentive Plan with a
target level based on at least 60% of base salary. Mr. Cloninger may also
receive additional discretionary bonuses approved by the Company's Board.
Mr. Cloninger will be eligible to participate in all fringe benefit
programs applicable to employees generally, and shall receive such other
"fringe" or employee benefits (including awards of stock options) as are
provided to key executive employees of the Company and that are appropriate
to his responsibilities as Chief Financial Officer.
Other material terms of Mr. Cloninger and Mr. Paul S. Amos' employment
agreements relating to termination, disability, death and changes in control
of the Company are substantially similar to such provisions in Mr. Daniel P.
Amos' employment agreement, as described above.
The Company maintains a Supplemental Executive Retirement Plan for
certain key executives of the Company and its subsidiaries who do not
participate in the Retirement Plan for Senior Officers. Mr. Kriss
Cloninger, III is a participant in the Plan. Under the plan, as amended,
in the event that a participant's employment with the Company is terminated
within two years of a "change in control" of the Company other than for
death, disability or cause, or a participant terminates his employment
during such period for "good reason," the participant becomes 100% vested in
his retirement benefits and is entitled to receive a lump-sum amount equal
to the greater of: (i) the present value of the retirement benefit, which
(a) he is entitled to receive upon the date of such termination, or (b) he
would have received had he remained in the employ of the Company until he
attained age 55 (for participants who had not yet attained age 55 as of the
date of termination); and (ii) three times the participant's final pay (as
defined). A "change in control" shall generally occur under the same
circumstances described as a "change in control" in Mr. Daniel P. Amos'
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<PAGE>
employment agreement. "Cause" shall mean generally: (i) the participant's
willful failure to substantially perform his duties with the Company (other
than that resulting from illness or after a participant gives notice of
termination of employment for "good reason") after a written demand for
substantial performance is delivered to the participant by the Board, or
(ii) the willful engaging by the participant in materially injurious conduct
to the Company. "Good reason" is defined to include various adverse changes
in employment status, duties and/or compensation and benefits following a
"change in control." Benefits may be reduced to the extent that they are
not deductible by the Company for income tax purposes.
Pursuant to an employment agreement between AFLAC and Mr. Yoshiki
Otake, Mr. Otake is to serve as Chairman of AFLAC Japan (or, upon his
removal, the position of a senior officer of AFLAC Japan) through 2004,
subject to annual renewals thereafter by the mutual consent of the parties.
He shall receive compensation in 1996 of 75,290,250 yen and shall be
eligible for a short-term management incentive bonus with a target amount of
at least 35% of the base salary. Pursuant to the agreement, Mr. Otake shall
be considered for salary increases in the same manner and time as the senior
executive officers of AFLAC. Mr. Otake shall participate in the Company's
stock option plan in the same manner as most AFLAC senior officers and
directors.
Under the agreement, Mr. Otake is eligible for full retirement benefits
at age 65 and may take voluntary early retirement with reduced benefits upon
the approval of AFLAC. Mr. Otake is entitled to full retirement benefits
upon total and permanent disability prior to age 65. His full retirement
benefits (which are subject to annual adjustment for cost-of-living
increases proportionate to those granted to Senior Officers of AFLAC Japan)
consist of a choice between (i) 60% of the higher of his total compensation
(defined under this agreement as base salary and bonus) for the last 12
months of employment, or the highest total compensation received in any
calendar year during the agreement term, during the remainder of Mr. Otake's
life, or (ii) 54% of such compensation, paid to Mr. Otake during the
remainder of his life, with 1/2 of such amount to be paid to his spouse for
a specified period of time after his death. After retirement, Mr. Otake and
his spouse shall receive medical benefits for the remainder of their lives.
After 1995 and until Mr. Otake reaches 65, where mutual consent to renew the
agreement is not obtained but where Mr. Otake remains mentally and
physically sound, he shall be allowed to continue his employment with such
stature as deemed appropriate by AFLAC with a starting salary equivalent to
70% of his last salary, subject to annual cost-of-living increases. Mr.
Otake has agreed not to engage in any activity competitive with AFLAC while
any benefits (including retirement benefits) are being paid to him by AFLAC.
In consideration of the benefits contained in his agreement, Mr. Otake has
waived any rights to participate in any other AFLAC or AFLAC Japan
retirement or pension plans.
On January l, l995, AFLAC entered into an employment agreement with Mr.
Hidefumi Matsui. Mr. Matsui is to serve as President of AFLAC Japan (or,
upon his removal, the position of a Senior Officer of AFLAC Japan) through
2004, subject to annual renewals thereafter by the mutual consent of the
parties. He shall receive compensation in 1996 of 41,035,050 yen with
annual adjustments thereafter in keeping with adjustments made in base
salaries of other senior executive officers and shall be eligible for a
short-term management incentive bonus with a target amount of at least 35%
of the base salary. Mr. Matsui shall participate in the Company's 1985 Plan
in the same manner as most AFLAC senior officers.
-24-
<PAGE>
Under the agreement, Mr. Matsui is eligible for full retirement
benefits upon age 65 and may take voluntary early retirement with reduced
benefits upon the approval of AFLAC. He shall be eligible for early
retirement from ages 55 to 65 and may receive 50% of base salary as
calculated on the day before retirement. Mr. Matsui is entitled to
retirement benefits of 50% of base salary as calculated on the day before
his retirement for total and permanent disability prior to age 65. His full
retirement benefits (which are subject to annual adjustment for cost-of-
living increases proportionate to those granted to senior officers of AFLAC
Japan) consist of a choice between (i) 65% of his base salary on the day
before retirement, during the remainder of Mr. Matsui's life, or (ii) 90% of
the amount specified in (i) above, paid to Mr. Matsui during the remainder
of his life, with 1/2 of such amount to be paid to his spouse after his
death, provided that if, at the time of his death his spouse is 55 or older,
benefits shall be paid for her lifetime. If, however, his spouse is younger
than 55, benefits shall be paid only for the shorter of 20 years or the
surviving spouse's life. Mr. Matsui has agreed not to engage in any
activity competitive with AFLAC while any benefits (including retirement
benefits) are being paid to him by AFLAC. In consideration of the benefits
contained in his agreement, Mr. Matsui has waived any rights to participate
in any other AFLAC or AFLAC Japan retirement or pension plans. The
estimated annual benefit payable upon a retirement age of 55 for Mr. Matsui
is 23,751,571 yen.
CERTAIN TRANSACTIONS AND RELATIONSHIPS
Information is provided with respect to executive officers, Directors
and/or members of their immediate families who were indebted to the Company
or its subsidiaries, at any time since January 1, 1995, in excess of
$60,000, as follows:
Largest
Aggregate Amount
Amount Outstanding
Outstanding Rate as of
Since Nature of of January 31,
Name (1) January 1, 1995 Indebtedness Interest 1996
- ----------------------------------------------------------------------------
Daniel P. Amos $2,000,000 Term Stock Note(2) 6.00% $2,000,000
Minoru Nakai $ 348,731 Stock Option Note(3) 5.54% $ 235,530
Gary Stegman $ 39,636 Stock Option Note(3) 5.54% $ -0-
$ 97,909 Stock Option Note(3) 4.83% $ 65,163
(1) All of the named individuals were executive officers of the Company or
one of its subsidiaries during 1995.
(2) Collateralized note accepted by the Company and secured by stock of
the Company.
(3) Collateralized notes accepted by the Company in payment of stock
options exercised.
-25-
<PAGE>
J. Shelby Amos, II, a Director of the Company, has been associated with
AFLAC since 1973 and presently serves as Alabama/West Florida State Sales
Coordinator. In 1995, he earned renewal and first-year commissions of
$754,070 (before expenses) on annualized premiums of $24,225,145, and he
received $49,836 in 1996 in lieu of shares earned in 1995 under the AFLAC
Associates' Stock Bonus Plan.
In 1995, $261,139 was paid by AFLAC to a corporation of which Maria
Theresa Amos Land, the sister of J. Shelby Amos, II, is the sole
shareholder. This amount was earned as renewal commissions before expenses,
on annualized premiums of $9,577,436 by W. Donald Land, the deceased husband
of Maria Theresa Amos Land, who served as Florida State Sales Coordinator
with AFLAC from 1975 until May 1990.
State Sales Coordinators are not salaried employees but are
compensated on a commission basis and are required to pay their own expenses
that include travel, office expenses, incentives for district and regional
sales coordinators and associates in their state, and recruiting and
training costs. The compensation arrangements with J. Shelby Amos, II and
W. Donald Land are similar to those of other State Sales Coordinators.
2. RATIFICATION OF APPOINTMENT
OF INDEPENDENT AUDITORS
The Board of Directors of the Company, in accordance with the
recommendation of its Audit Committee, none of whom is an employee of the
Company, has reappointed KPMG Peat Marwick LLP, Certified Public
Accountants, as independent auditors for the Company, subject to
ratification by the shareholders.
In connection with its audit of the Company's financial statements for
the year ended December 31, 1995, included in the Company's Annual Report to
Shareholders, KPMG Peat Marwick LLP reviewed the Company's filings with the
Securities and Exchange Commission, the Tokyo Stock Exchange and the
Ministry of Finance of Japan and conducted timely reviews of quarterly
reports to shareholders.
Representatives of KPMG Peat Marwick LLP are expected to be present at
the 1996 Annual Meeting of Shareholders with the opportunity to make a
statement if they so desire. Such representatives are expected to be
available to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS UNANIMOUSLY A VOTE "FOR"
RATIFICATION OF THE SELECTION OF SUCH FIRM
AS THE COMPANY'S INDEPENDENT AUDITORS
3. OTHER MATTERS
Management does not intend to bring any other matter before the
meeting, and does not know of any other matter that is proposed to be
brought before the meeting. However, should any other matter properly come
before the meeting, the persons named in the enclosed proxy will have
discretionary authority to vote all proxies in accordance with their
judgment on such matter.
-26-
<PAGE>
SHAREHOLDER PROPOSALS
For a shareholder's proposal to be included in the Company's Proxy
Statement for the 1997 Annual Meeting of Shareholders, the shareholder must
follow the procedures of Rule 14a-8 under the Exchange Act and the proposal
must be received by the Secretary of the Company by October 31, 1996.
ANNUAL REPORT
The Company has mailed a copy of its Annual Report to each shareholder
entitled to vote at the 1996 Annual Meeting of Shareholders. A copy of the
Company's Form 10-K is available at no charge to all shareholders. For a
copy write to:
Kenneth S. Janke Jr.
Senior Vice President, Investor Relations
AFLAC Incorporated
Worldwide Headquarters
Columbus, Georgia 31999
By Order of the Board of Directors,
/s/ Joey M. Loudermilk
-----------------------------
Joey M. Loudermilk
Secretary
March 1, 1996
-27-
<PAGE>
APPENDIX A
AFLAC INCORPORATED
PROXY
Worldwide Headquarters
1932 Wynnton Road, Columbus, Georgia 31999
__________________________________________
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Paul S. Amos, Daniel P. Amos and Joey M.
Loudermilk as Proxies or any one of them, each with the power to appoint his
substitute, and hereby authorizes them to represent and to vote, as
designated below, all the shares of common stock of AFLAC Incorporated held
of record by the undersigned on February 16, 1996, at the Annual Meeting of
the Shareholders to be held on Monday, April 8, 1996, at 10:00 a.m., or any
adjournment thereof.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ALL PROPOSALS
The following proposals are being submitted to the Shareholders:
1. Election of eighteen Directors of the Company.
To vote your Shares for ALL Director nominees, mark the "For" box. To
withhold voting for all nominees, mark the "Withheld" box. If you do
not wish your Shares voted "For" a particular nominee, mark the
"exceptions" box.
*EXCEPTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
STRIKE A LINE THROUGH THAT NOMINEE'S NAME IN THE LIST BELOW.
For Withheld Exceptions*
_____ _____ _____
1. Paul S. Amos 7. Cesar E. Garcia 13. Yoshiki Otake
2. Daniel P. Amos 8. Joe Frank Harris 14. E. Stephen Purdom
3. J. Shelby Amos, II 9. Elizabeth J. Hudson 15. Barbara K. Rimer
4. Michael H. Armacost 10. Kenneth S. Janke, Sr. 16. Henry C. Schwob
5. M. Delmar Edwards, M.D. 11. Charles B. Knapp 17. J. Kyle Spencer
6. George W. Ford, Jr. 12. Hisao Kobayashi 18. Glenn Vaughn, Jr.
2. Ratification of appointment of For Against Abstain
KPMG Peat Marwick LLP as
independent auditors. _____ _____ _____
3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting or any adjournment
thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED "FOR" PROPOSALS 1 AND 2.
<PAGE>
(PLACE LABEL HERE)
Sign here as name(s) appears on account:
X ___________________________________________
X ___________________________________________
Date _________________________________, 1996
Complete the proxy, Please sign exactly as name appears on account.
turn the proxy over, When shares are held by joint tenants, both
read description of must sign. When signing as attorney, executor,
voting rights and administrator, trustee or guardian, please give
complete, sign and full title as such. If a corporation, please
date the affidavit sign in full corporate name by President or
if applicable. other authorized officer. If a partnership,
please sign in partnership name by authorized
person.
DESCRIPTION OF VOTING RIGHTS
In accordance with the Company's Articles of Incorporation, shares of
Common Stock are entitled to one vote per share until they have been held by
the same beneficial owner for a continuous period of greater than 48 months
prior to the record date of the meeting, at which time they become entitled
to ten votes per share. Any transferee of a share of Common Stock where
such share was transferred to the transferee by gift, devise or bequest or
otherwise through the laws of inheritance, descent or distribution from the
estate of the transferor or by distribution to a beneficiary of shares held
in trust for such beneficiary, is deemed to be the same beneficial owner as
the transferor. Shares acquired as a direct result of a stock split, stock
dividend or other distribution with respect to existing shares ("dividend
shares") are deemed to have been acquired and held continuously from the
date on which the shares with regard to which the dividend shares were
issued were acquired. Shares of Common Stock acquired pursuant to the
exercise of a stock option are deemed to have been acquired on the date the
option was granted.
Shares of Common Stock held in "street" or "nominee" name are presumed
to have been held for less than 48 months and are entitled to one vote per
share UNLESS this presumption is rebutted by providing evidence to the
contrary to the Board of Directors of the Company. SHAREHOLDERS DESIRING TO
REBUT THIS PRESUMPTION SHOULD COMPLETE AND EXECUTE THE AFFIDAVIT BELOW. THE
BOARD OF DIRECTORS RESERVES THE RIGHT TO REQUIRE EVIDENCE TO SUPPORT THIS
AFFIDAVIT.
AFFIDAVIT
Under the penalties of perjury, I do solemnly swear that I am entitled to
the number of votes set forth below because
____________________________________________________________________________
____________________________________________________________________________
I agree to provide evidence to _____ Shares @ 1 Vote/Share = _____ Votes
support this statement at the _____ Shares @ 10 Votes/Share = _____ Votes
request of the Company. Total = _____ Votes
Sign here X ___________________________
X ___________________________ Date _________________, 1996
<PAGE>
APPENDIX B
AFLAC INCORPORATED
PROXY
Worldwide Headquarters
1932 Wynnton Road, Columbus, Georgia 31999
__________________________________________
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Paul S. Amos, Daniel P. Amos and Joey M.
Loudermilk as Proxies or any one of them, each with the power to appoint his
substitute, and hereby authorizes them to represent and to vote, as
designated below, all the shares of common stock of AFLAC Incorporated held
of record by the undersigned on February 16, 1996, at the Annual Meeting of
the Shareholders to be held on Monday, April 8, 1996, at 10:00 a.m., or any
adjournment thereof.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ALL PROPOSALS
The following proposals are being submitted to the Shareholders:
1. Election of eighteen Directors of the Company.
To vote your Shares for ALL Director nominees, mark the "For" box. To
withhold voting for all nominees, mark the "Withheld" box. If you do
not wish your Shares voted "For" a particular nominee, mark the
"exceptions" box.
*EXCEPTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
STRIKE A LINE THROUGH THAT NOMINEE'S NAME IN THE LIST BELOW.
For Withheld Exceptions*
_____ _____ _____
1. Paul S. Amos 7. Cesar E. Garcia 13. Yoshiki Otake
2. Daniel P. Amos 8. Joe Frank Harris 14. E. Stephen Purdom
3. J. Shelby Amos, II 9. Elizabeth J. Hudson 15. Barbara K. Rimer
4. Michael H. Armacost 10. Kenneth S. Janke, Sr. 16. Henry C. Schwob
5. M. Delmar Edwards, M.D. 11. Charles B. Knapp 17. J. Kyle Spencer
6. George W. Ford, Jr. 12. Hisao Kobayashi 18. Glenn Vaughn, Jr.
2. Ratification of appointment of For Against Abstain
KPMG Peat Marwick LLP as
independent auditors. _____ _____ _____
3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting or any adjournment
thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED "FOR" PROPOSALS 1 AND 2.
<PAGE>
ACCT.# PROXY # TOTAL SHARES
According to the records Sign here as name(s) appears on account:
of the Company you are X ____________________________________________
entitled to the following X ____________________________________________
number of votes: Date _________________________________, 1996
Please sign exactly as name appears on account.
VOTING RIGHTS When shares are held by joint tenants, both must
sign. When signing as attorney, executor, admin-
istrator, trustee or guardian, please give full
________________ title as such. If a corporation, please sign in
full corporate name by President or other
authorized officer. If a partnership, please
sign in partnership name by authorized person.
If you do not agree with the voting rights,
check here ____ and complete, sign and date the
reverse side.
DESCRIPTION OF VOTING RIGHTS
In accordance with the Company's Articles of Incorporation, shares of
Common Stock are entitled to one vote per share until they have been held by
the same beneficial owner for a continuous period of greater than 48 months
prior to the record date of the meeting, at which time they become entitled
to ten votes per share. Any transferee of a share of Common Stock where
such share was transferred to the transferee by gift, devise or bequest or
otherwise through the laws of inheritance, descent or distribution from the
estate of the transferor or by distribution to a beneficiary of shares held
in trust for such beneficiary, is deemed to be the same beneficial owner as
the transferor. Shares acquired as a direct result of a stock split, stock
dividend or other distribution with respect to existing shares ("dividend
shares") are deemed to have been acquired and held continuously from the
date on which the shares with regard to which the dividend shares were
issued were acquired. Shares of Common Stock acquired pursuant to the
exercise of a stock option are deemed to have been acquired on the date the
option was granted.
Shares of Common Stock held in "street" or "nominee" name are presumed
to have been held for less than 48 months and are entitled to one vote per
share UNLESS this presumption is rebutted by providing evidence to the
contrary to the Board of Directors of the Company. SHAREHOLDERS DESIRING TO
REBUT THIS PRESUMPTION SHOULD COMPLETE AND EXECUTE THE AFFIDAVIT BELOW. THE
BOARD OF DIRECTORS RESERVES THE RIGHT TO REQUIRE EVIDENCE TO SUPPORT THIS
AFFIDAVIT.
ONLY IF YOU DO NOT AGREE WITH THE VOTING RIGHTS shown on the front of
this Proxy should you complete the following:
AFFIDAVIT
Under the penalties of perjury, I do solemnly swear that I am entitled to
the number of votes set forth below because
____________________________________________________________________________
____________________________________________________________________________
I agree to provide evidence to _____ Shares @ 1 Vote/Share = _____ Votes
support this statement at the _____ Shares @ 10 Votes/Share = _____ Votes
request of the Company. Total = _____ Votes
Sign here X ___________________________
X ___________________________ Date _________________, 1996
