<PAGE>
As filed with the Securities and Exchange Commission on December 21, 1998
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
----------------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------------
AFLAC INCORPORATED
------------------------------------------------------
(Exact Name of Registrant as Specified in Its Charter)
GEORGIA
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(State or Other Jurisdiction of Incorporation or Organization)
58-1167100
------------------------------------
(I.R.S. Employer Identification No.)
WORLDWIDE HEADQUARTERS, 1932 WYNNTON ROAD, COLUMBUS, GEORGIA 31999
------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
AFLAC INCORPORATED EXECUTIVE DEFERRED COMPENSATION PLAN
-------------------------------------------------------
(Full Title of the Plan)
ANGELA S. HART
SENIOR VICE PRESIDENT, DIRECTOR OF HUMAN RESOURCES
AFLAC INCORPORATED
WORLDWIDE HEADQUARTERS
1932 WYNNTON ROAD, COLUMBUS, GEORGIA 31999
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(Name and Address of Agent For Service)
(706) 323-3431
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(Telephone Number, Including Area Code, of Agent For Service)
The Securities and Exchange Commission is requested to send copies of all
communication and notice to:
MICHAEL P. ROGAN, ESQ.
Skadden, Arps, Slate, Meagher & Flom LLP
1440 New York Avenue, N.W.
Washington, D.C. 20005
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- ii -
CALCULATION OF REGISTRATION FEE
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Proposed Proposed
Title of Maximum Maximum
Securities Amount Offering Aggregate Amount of
to be to be Price Offering Registra-
Registered Registered Per Share(1) Price(1) tion Fee
- ---------------------------------------------------------------------------
Deferred $10,000,000 100% $10,000,000 $2,780.00
Compensation
Obligations(2)
Common Stock 500,000 $40.3125(4) $20,156,250 $5,603.44
$.10 par value shares(3)
("Common Stock")
(1) Estimated solely for the purpose of calculating the registration
fee.
(2) The Deferred Compensation Obligations are unsecured general
obligations of AFLAC Incorporated (the "Company" or the
"Registrant") to pay deferred compensation in accordance with
the terms of the AFLAC Incorporated Executive Deferred
Compensation Plan.
(3) Includes an indeterminate number of shares of Common Stock that
may be issuable by reason of stock splits, stock dividends, or
similar transactions in accordance with Rule 416 under the
Securities Act of 1933.
(4) Based on the reported average high and low prices of the Common
Stock of the Company on December 18, 1998.
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<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
AFLAC Incorporated ("AFLAC") hereby incorporates the following
documents into this Registration Statement by reference:
a. AFLAC's Annual Report on Form 10-K for the year ended December
31, 1997;
b. AFLAC's Quarterly Reports on Form 10-Q for the periods ended
March 31, 1998, June 30, 1998 and September 30, 1998;
c. all other reports filed by AFLAC pursuant to Sections 13(a) or
15(d) of the Securities Act of 1934 (the "Exchange Act") since December 31,
1997;
d. the description of the Common Stock contained in a registration
statement filed under the Exchange Act, and any amendments or reports filed
with the SEC for the purpose of updating such description.
In addition, all documents subsequently filed by AFLAC Incorporated
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act prior to
the filing of a post-effective amendment which indicates that all securities
offered hereby have been sold or which deregisters all such securities
remaining unsold, shall be deemed to be incorporated by reference in the
Registration Statement and to be a part thereof from the date of filing of
such documents.
Item 4. Description of Securities
This Registration Statement relates to Deferred Compensation
Obligations (as defined below) and shares of Common Stock. The Deferred
Compensation Obligations registered hereunder (the "Obligations") are
unsecured obligations of the Registrant to pay deferred compensation in the
future in accordance with the terms of the AFLAC Incorporated Executive
Deferred Compensation Plan (the "Plan"). Plan participants may defer
compensation into shares of Common Stock in accordance with the Plan. The
Plan is filed as Exhibit 4 to this Registration Statement. Such Exhibit
sets forth a description of the Obligations and is incorporated herein by
reference in its entirety in response to this Item 4, pursuant to Rule
411(b)(3) under the Securities Act of 1933.
No participant under the Plan shall have any preferred claim to, or any
beneficial ownership interest in, any assets which are subject to the Plan.
All such assets are subject to the claims of the creditors of AFLAC
Incorporated until they are paid to the participant in accordance with the
terms of the Plan.
Item 5. Interests of Named Experts and Counsel
The validity of deferred compensation obligations described herein has
been passed upon for the Registrant by Joey M. Loudermilk, Senior Vice
President and General Counsel for the Registrant.
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Item 6. Indemnification of Directors and Officers
The Georgia Business Corporation Code provides that, under certain
circumstances, directors, officers, employees and agents of a Georgia
corporation may be indemnified against expenses, judgments, fines and
amounts paid in settlement actually and reasonably incurred by them in
connection with settling, or otherwise disposing of, suits or threatened
suits to which they are a party or threatened to be named a party by reason
of acting in any of such capacities if such person acted in a manner such
person believed in good faith to be in, or not opposed to, the best
interests of the corporation. The By-Laws of the Company provide for
indemnification of officers and directors to the fullest extent permitted by
such Georgia law. The Company's Articles of Incorporation also limit the
potential personal monetary liability of the members of the Company's Board
of Directors to the Company or its shareholders for certain breaches of
their duty of care or other duties as a director.
The Company maintains (i) director and officer liability insurance that
provides for indemnification of the directors and officers of the Company
and of its majority-owned subsidiaries, and (ii) company reimbursement
insurance that provides for indemnification of the Company and its majority-
owned subsidiaries in those instances where the Company and/or its majority-
owned subsidiaries indemnified its directors and officers.
Item 8. Exhibits
Number Description
-------- -------------------
4 AFLAC Incorporated Executive Deferred
Compensation Plan
5 Opinion of Joey M. Loudermilk, General
Counsel, AFLAC Incorporated
15 Letter of KPMG Peat Marwick LLP,
Re: Unaudited Interim Financial Statements
23.1 Consent of KPMG Peat Marwick LLP
23.2 Consent of Counsel (included in Exhibit 5)
Item 9. Undertakings
a. Rule 415 Offering. The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration
statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate,
represents a fundamental change in the information set
forth in the registration statement;
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(iii) To include any material information with respect to
the plan of distribution not previously disclosed in
the registration statement or any material change to
such information in the registration statement;
provided, however, that paragraphs (i) and (ii) do not apply if the
registration statement is on Form S-3 or Form S-8 and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed by the registrant pursuant to Section 13
or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
b. FILINGS INCORPORATING SUBSEQUENT EXCHANGE ACT DOCUMENTS BY
REFERENCE. The undersigned registrant hereby undertakes that, for purposes
of determining any liability under the Securities Act of 1933, each filing
of the registrant's annual report pursuant to Section 13(a) or Section 15(d)
of the Securities Exchange Act of 1934 (and, where applicable, each filing
of an employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
c. REQUEST FOR ACCELERATION OF THE EFFECTIVE DATE OR FILING OF
REGISTRATION STATEMENT ON FORM S-8. Insofar as indemnification for
liabilities arising under the Securities Act of 1933 may be permitted to
directors, officers and controlling persons of the registrant pursuant to
the foregoing provisions, or otherwise, the registrant has been advised that
in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of
expenses incurred or paid by a director, officer or controlling person of
the registrant in the successful defense of any action, suit or proceeding)
is asserted by such director, officer or controlling person in connection
with the securities being registered, the registrant will, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has caused this
registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Columbus, State of Georgia, on
December 18, 1998.
AFLAC INCORPORATED
Dated December 18, 1998 By: /s/ Daniel P. Amos
------------------------ ----------------------------------
Daniel P. Amos
Chief Executive Officer
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<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Signature Title Date
--------------- ----------- ----------
/s/ Daniel P. Amos Chief Executive December 18, 1998
- ------------------------- Officer and Vice -----------------
Daniel P. Amos Chairman of the
Board
/s/ Kriss Cloninger, III Executive Vice December 18, 1998
- ------------------------- President, -----------------
Kriss Cloninger, III Treasurer and
Chief Financial
Officer
/s/ Norman P. Foster Executive Vice December 18, 1998
- ------------------------- President, -----------------
Norman P. Foster Corporate Finance
/s/ Angela S. Hart Senior Vice December 18, 1998
- ------------------------- President, -----------------
Angela S. Hart Director, Human Resources
/s/ Paul S. Amos Chairman of December 18, 1998
- ------------------------- the Board -----------------
Paul S. Amos
/s/ J. Shelby Amos, II Director December 18, 1998
- ------------------------- -----------------
J. Shelby Amos
/s/ Michael H. Armacost Director December 18, 1998
- ------------------------- -----------------
Michael H. Armacost
/s/ M. Delmar Edwards, M.D. Director December 18, 1998
- ------------------------- -----------------
M. Delmar Edwards, M.D.
/s/ George W. Ford, Jr. Director December 18, 1998
- ------------------------------ -----------------
George W. Ford, Jr.
/s/ Joe Frank Harris Director December 18, 1998
- ------------------------- -----------------
Joe Frank Harris
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<PAGE>
/s/ Elizabeth J. Hudson Director December 18, 1998
- ------------------------- -----------------
Elizabeth J. Hudson
/s/Kenneth S. Janke, Sr. Director December 18, 1998
- ------------------------- -----------------
Kenneth S. Janke, Sr.
/s/ Charles B. Knapp Director December 18, 1998
- ------------------------- -----------------
Charles B. Knapp
/s/ Hisao Kobayashi Director December 18, 1998
- ------------------------- -----------------
Hisao Kobayashi
/s/ Yoshiki Otake Director December 18, 1998
- ------------------------- -----------------
Yoshiki Otake
/s/ E. Stephen Purdom Director December 18, 1998
- ------------------------- -----------------
E. Stephen Purdom
/s/ Barbara K. Rimer Director December 18, 1998
- ------------------------- -----------------
Barbara K. Rimer
/s/ Henry C. Schwob Director December 18, 1998
- ------------------------- -----------------
Henry C. Schwob
/s/ J. Kyle Spencer Director December 18, 1998
- ------------------------- -----------------
J. Kyle Spencer
/s/ Glenn Vaughn, Jr. Director December 18, 1998
- ------------------------- -----------------
Glenn Vaughn, Jr.
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<PAGE>
EXHIBIT INDEX
NUMBER DESCRIPTION
- ------------ -----------------------
4 AFLAC Incorporated Executive Deferred
Compensation Plan
5 Opinion of Joey M. Loudermilk, General Counsel,
AFLAC Incorporated
15 Letter of KPMG Peat Marwick LLP
Re: Unaudited Interim Financial Statements
23.1 Consent of KPMG Peat Marwick LLP
23.2 Consent of Counsel (included in Exhibit 5)
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<PAGE>
EXHIBIT 4
AFLAC INCORPORATED
EXECUTIVE DEFERRED COMPENSATION PLAN
<PAGE>
AFLAC INCORPORATED
EXECUTIVE DEFERRED COMPENSATION PLAN
Effective as of the 1st day of January, 1999, AFLAC Incorporated (the
"Controlling Company") hereby establishes the AFLAC Incorporated Executive
Deferred Compensation Plan (the "Plan").
BACKGROUND AND PURPOSE
A. GOAL: The Controlling Company desires to provide its designated
key management employees (and those of its affiliated companies that
participate in the Plan) with an opportunity (i) to defer the receipt and
income taxation of a portion of such employees' annual compensation and
stock options, and (ii) to the extent (if any) determined from time-to-time
by the Controlling Company, to provide such employees with additional
deferred compensation provided by the respective employers.
B. PURPOSE: The purpose of the Plan document is to set forth the
terms and conditions pursuant to which these deferrals may be made and to
describe the nature and extent of the employees' rights to their deferred
amounts.
C. TYPE OF PLAN: The Plan constitutes an unfunded, nonqualified
deferred compensation plan that benefits certain designated employees who
are within a select group of key management or highly compensated
employees.
STATEMENT OF AGREEMENT
To establish the Plan with the purposes and goals as hereinabove
described, the Controlling Company hereby sets forth the terms and
provisions as follows:
<PAGE>
AFLAC INCORPORATED
EXECUTIVE DEFERRED COMPENSATION PLAN
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS.......................................... 1
1.1 Account............................................ 1
1.2 Administrative Committee........................... 1
1.3 Affiliate.......................................... 1
1.4 Annual Bonus....................................... 1
1.5 Annual Bonus Election.............................. 1
1.6 Beneficiary........................................ 1
1.7 Board.............................................. 1
1.8 Business Day....................................... 1
1.9 Change in Control.................................. 1
1.10 Code............................................... 2
1.11 Company Stock...................................... 2
1.12 Company Stock Fund................................. 2
1.13 Company Stock Unit................................. 2
1.14 Compensation....................................... 3
1.15 Controlling Company................................ 3
1.16 Deferral Contributions............................. 3
1.17 Deferral Election.................................. 3
1.18 Discretionary Contributions........................ 3
1.19 Effective Date..................................... 3
1.20 Eligible Employee.................................. 3
1.21 ERISA.............................................. 3
1.22 Financial Hardship................................. 3
1.23 Investment Election................................ 4
1.24 Investment Funds................................... 4
1.25 Matching Contributions............................. 4
1.26 Net Option Shares.................................. 4
1.27 Participating Company.............................. 4
1.28 Participant........................................ 4
1.29 Plan............................................... 4
1.30 Plan Year.......................................... 4
1.31 Social Security Tax Shares......................... 4
1.32 Stock Option....................................... 4
1.33 Stock Option Contributions......................... 5
1.34 Stock Option Election.............................. 5
1.35 Surviving Spouse................................... 5
1.36 Trust or Trust Agreement........................... 5
1.37 Trustee............................................ 5
1.38 Trust Fund......................................... 5
1.39 Valuation Date..................................... 5
ARTICLE II ELIGIBILITY AND PARTICIPATION........................ 5
2.1 Eligibility........................................ 5
(a) Annual Participation......................... 5
(b) Interim Plan Year Participation.............. 5
2.2 Procedure for Admission............................ 5
2.3 Cessation of Eligibility........................... 6
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ARTICLE III PARTICIPANTS' ACCOUNTS; DEFERRALS AND CREDITING...... 6
3.1 Participants' Accounts............................. 6
(a) Establishment of Accounts.................... 6
(b) Nature of Contributions and Accounts......... 6
(c) Several Liabilities.......................... 6
(d) General Creditors............................ 7
3.2 Deferral Contributions............................. 7
(a) Effective Date............................... 7
(b) Term......................................... 7
(c) Amount....................................... 8
(d) Revocation................................... 8
(e) Annual Bonus Election........................ 8
(f) Crediting of Deferral Contributions.......... 9
3.3 Matching Contributions............................. 9
3.4 Discretionary Contributions........................ 9
3.5 Stock Option Contributions......................... 9
(a) Election Specifics........./................. 9
(b) Timing of Election........................... 10
(c) Term......................................... 10
(d) Exercise of Stock Options.................... 10
3.6 Debiting of Distributions.......................... 10
3.7 Crediting of Earnings.............................. 10
(a) General Rule................................. 11
(i) Rate of Return........................ 11
(ii) Amount Invested....................... 11
(iii) Determination of Amount............... 11
(b) Cash Dividends............................... 11
(c) Adjustments for Stock Dividends and Splits... 11
3.8 Value of Account................................... 11
(a) General Rule................................. 11
(b) Value of Company Stock....................... 12
3.9 Vesting............................................ 12
(a) General...................................... 12
(b) Change in Control............................ 13
3.10 Notice to Participants of Account Balances......... 13
3.11 Good Faith Valuation Binding....................... 13
3.12 Errors and Omissions in Accounts................... 13
ARTICLE IV INVESTMENT FUNDS..................................... 13
4.1 Selection by Administrative Committee.............. 13
4.2 Participant Direction of Deemed Investments........ 13
(a) Nature of Participant Direction.............. 13
(b) Investment of Contributions.................. 14
(c) Investment of Existing Account Balances...... 14
(d) Administrative Committee Discretion.......... 14
ARTICLE V PAYMENT OF ACCOUNT BALANCES.......................... 14
5.1 Benefit Payments Upon Termination of Service for
Reasons Other Than Death.......................... 14
(a) General Rule Concerning Benefit Payments..... 14
(b) Timing of Distribution....................... 15
5.2 Form of Distribution............................... 15
(a) Single-Sum Payment........................... 15
(b) Annual Installments.......................... 15
(c) Multiple Forms of Distributions.............. 16
(d) Change in Control............................ 16
(e) Form of Assets............................... 16
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5.3 Death Benefits..................................... 16
5.4 In-Service Distributions........................... 17
(a) Hardship Distributions....................... 17
(b) Distributions with Forfeiture................ 17
5.5 Beneficiary Designation............................ 17
(a) General...................................... 17
(b) No Designation or Designee Dead or Missing... 17
5.6 Taxes.............................................. 18
ARTICLE VI CLAIMS............................................... 18
6.1 Claims............................................. 18
(a) Initial Claim................................ 18
(b) Appeal....................................... 18
(c) Satisfaction of Claims....................... 18
ARTICLE VII SOURCE OF FUNDS; TRUST............................... 19
7.1 Source of Funds.................................... 19
7.2 Trust.............................................. 19
(a) Establishment................................ 19
(b) Distributions................................ 19
(c) Status of the Trust.......................... 19
(d) Change in Control............................ 20
ARTICLE VIII ADMINISTRATIVE COMMITTEE............................. 20
8.1 Action............................................. 20
8.2 Rights and Duties.................................. 20
8.3 Compensation, Indemnity and Liability.............. 21
ARTICLE IX AMENDMENT AND TERMINATION............................ 21
9.1 Amendments......................................... 21
9.2 Termination of Plan................................ 21
ARTICLE X MISCELLANEOUS........................................ 22
10.1 Taxation........................................... 22
10.2 No Employment Contract............................. 22
10.3 Headings........................................... 22
10.4 Gender and Number.................................. 22
10.5 Assignment of Benefits............................. 22
10.6 Legally Incompetent................................ 22
10.7 Governing Law...................................... 22
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ARTICLE I
DEFINITIONS
For purposes of the Plan, the following terms, when used with an
initial capital letter, shall have the meaning set forth below unless a
different meaning plainly is required by the context.
1.1 ACCOUNT shall mean, with respect to a Participant or Beneficiary,
the total dollar amount or value evidenced by the last balance posted in
accordance with the terms of the Plan to the account record established for
such Participant or Beneficiary.
1.2 ADMINISTRATIVE COMMITTEE shall mean the Compensation Committee of
the Board; provided, the Board may, in its discretion, choose to appoint
some other administrative committee to serve in such capacity. The
Administrative Committee shall act on behalf of the Controlling Company to
administer the Plan, all as provided in Article VIII.
1.3 AFFILIATE shall mean (i) any corporation or other entity that is
required to be aggregated with the Controlling Company under Code Sections
414(b), (c), (m) or (o), and (ii) any other entity in which the Controlling
Company has an ownership interest and which the Controlling Company
designates as an Affiliate for purposes of the Plan.
1.4 ANNUAL BONUS shall mean that portion of an Eligible Employee's
Compensation designated by the Administrative Committee as an annual bonus
payable with respect to services performed during a Plan Year.
1.5 ANNUAL BONUS ELECTION shall mean a written, electronic or other
form of election pursuant to which a Participant may elect to defer under
the Plan all or a portion of his Annual Bonus.
1.6 BENEFICIARY shall mean, with respect to a Participant, the
person(s) designated in accordance with Section 5.5 to receive any death
benefits that may be payable under the Plan upon the death of the
Participant.
1.7 BOARD shall mean the Board of Directors of the Controlling
Company.
1.8 BUSINESS DAY shall mean each day on which the Trustee operates,
and is open to the public, for its business.
1.9 CHANGE IN CONTROL shall mean the occurrence of any of the
following events:
(a) Any Person is or becomes the beneficial owner, directly or
indirectly, of securities of the Controlling Company representing 30% or
more of the combined voting power of the Controlling Company's then
outstanding securities; provided, for purposes of this subsection (a),
securities acquired directly from the Controlling Company or its Affiliates
shall not be taken into account as securities beneficially owned by such
Person;
(b) During any period of 2 consecutive years, individuals who
at the beginning of such period constitute the Board and any new director
(other than a director designated by a Person who has entered into an
1
<PAGE>
agreement with the Controlling Company to effect a transaction described in
subsection (a), (c) or (d) hereof) whose election by the Board or
nomination for election by the Controlling Company's shareholders was
approved by a vote of at least 2/3 of the directors then still in office
who either were directors at the beginning of the period or whose election
or nomination for election was previously so approved, cease for any reason
to constitute a majority thereof;
(c) The shareholders of the Controlling Company approve a merger
or consolidation of the Controlling Company with any other corporation,
other than (i) a merger or consolidation which would result in the voting
securities of the Controlling Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity), in combination
with the ownership of any trustee or other fiduciary holding securities
under an employee benefit plan of the Controlling Company, at least 75% of
the combined voting power of the voting securities of the Controlling
Company or such surviving entity outstanding immediately after such merger
or consolidation; or (ii) a merger or consolidation effected to implement a
recapitalization of the Controlling Company (or similar transaction) in
which no Person acquires more than 50% of the combined voting power of the
Controlling Company's then outstanding securities; or
(d) The shareholders of the Controlling Company approve a plan
of complete liquidation of the Controlling Company or an agreement for the
sale or disposition by the Controlling Company of all or substantially all
of the Controlling Company's assets.
As used herein, the term "Person" shall have the meaning given in
Section 3(a)(9) of the Securities Exchange Act of 1934, as modified and
used in Sections 13(d) and 14(d) thereof; provided, a Person shall not
include (i) the Controlling Company or any of its subsidiaries; (ii) a
trustee or other fiduciary holding securities under an employee benefit
plan of the Controlling Company or any of its subsidiaries; (iii) an
underwriter temporarily holding securities pursuant to an offering of such
securities; or (iv) a corporation owned, directly or indirectly, by the
shareholders of the Controlling Company in substantially the same
proportions as their ownership of stock of the Controlling Company.
1.10 CODE shall mean the Internal Revenue Code of 1986, as amended,
and any succeeding federal tax provisions.
1.11 COMPANY STOCK shall mean the $.10 par value common stock of the
Controlling Company.
1.12 COMPANY STOCK FUND shall mean an Investment Fund the rate of
return of which shall be determined as if the amounts deemed invested
therein have been invested in shares of Company Stock. The aggregate of
all Company Stock Units under the Plan shall constitute the Company Stock
Fund.
1.13 COMPANY STOCK UNIT shall mean an accounting entry that is equal
in value at any time to the current fair market value of one share of
Company Stock, and that represents an unsecured obligation to pay that
amount to a Participant in accordance with the terms of the Plan. A Stock
Unit shall not carry any voting, dividend or other similar rights and shall
not constitute an option or any other right to acquire any equity
securities of the Company.
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1.14 COMPENSATION shall mean, for a Participant for any Plan Year,
the total of such Participant's cash compensation for such Plan Year paid
or payable in a regular paycheck or bonus paycheck while an active
Participant in the Plan, plus any amounts deferred at the election of the
Participant under any plan described in Code Section 125 or Code Section
401(k) for such Plan Year, plus his Deferral Contributions for such Plan
Year.
1.15 CONTROLLING COMPANY shall mean AFLAC Incorporated, a Georgia
corporation with its principal place of business in Columbus, Georgia.
1.16 DEFERRAL CONTRIBUTIONS shall mean, for each Plan Year, that
portion of a Participant's Compensation (inclusive of Annual Bonus
deferrals) deferred under the Plan pursuant to Section 3.2.
1.17 DEFERRAL ELECTION shall mean a written, electronic or other form
of election pursuant to which a Participant may elect to defer under the
Plan a portion of his Compensation (other than his Annual Bonus).
1.18 DISCRETIONARY CONTRIBUTIONS shall mean the amount (if any)
credited to a Participant's Account pursuant to Section 3.4.
1.19 EFFECTIVE DATE shall mean January 1, 1999, the date that the
Plan initially shall be effective.
1.20 ELIGIBLE EMPLOYEE shall mean, for a Plan Year, an individual who
is a U.S. based employee of a Participating Company and who is an officer
(other than an Assistant Vice President) of such Participating Company.
The Compensation Committee of the Board, from time to time and in its sole
discretion, may designate such other individuals, on an individual basis or
as part of a specified group, as eligible to participate in the Plan.
1.21 ERISA shall mean the Employee Retirement Income Security Act of
1974, as amended.
1.22 FINANCIAL HARDSHIP shall mean a severe financial hardship to the
Participant resulting from a sudden and unexpected illness or accident of
the Participant or of the Participant's dependent [as defined in Code
Section 152(a)], loss of the Participant's property due to casualty, or
other similar extraordinary and unforeseeable circumstances arising as a
result of events beyond the control of the Participant. Financial Hardship
shall be determined by the Administrative Committee on the basis of the
facts of each case, including information supplied by the Participant in
accordance with uniform guidelines prescribed from time to time by the
Administrative Committee; provided, the Participant will be deemed not to
have a Financial Hardship to the extent that such hardship is or may be
relieved:
(a) Through reimbursement or compensation by insurance or
otherwise;
(b) By liquidation of the Participant's assets, to the extent
the liquidation of assets would not itself cause severe financial hardship;
or
(c) By cessation of deferrals under the Plan.
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Examples of what are not considered to be unforeseeable emergencies
include the need to send a Participant's child to college or the desire to
purchase a home.
1.23 INVESTMENT ELECTION shall mean an election, made in such form as
the Administrative Committee may direct, pursuant to which a Participant
may elect the Investment Funds in which the amounts credited to his Account
shall be deemed to be invested.
1.24 INVESTMENT FUNDS shall mean the investment funds selected from
time to time by the Administrative Committee for purposes of determining
the rate of return on amounts deemed invested pursuant to the terms of the
Plan.
1.25 MATCHING CONTRIBUTIONS shall mean, the amount (if any) credited
to a Participant's Account pursuant to Section 3.3.
1.26 NET OPTION SHARES shall mean, with respect to a Participant who
pays the exercise price of, and thereby exercises, a Stock Option by
surrendering (in a manner more fully described in Section 3.5) shares of
Company Stock, a number of shares of Company Stock equal to the difference
between (i) the shares of Company Stock for which the Stock Option is
exercised; and (ii) the total of (A) the number of his shares surrendered
to pay the exercise price thereof, and (B) the number of Social Security
Tax Shares.
1.27 PARTICIPATING COMPANY shall mean, as of the effective date, the
Controlling Company and its Affiliates that are designated by the
Controlling Company on Exhibit A hereto, as Participating Companies herein.
In addition, any other Affiliate in the future may adopt the Plan with the
consent of the Compensation Committee of the Board, and such Affiliate's
name shall be added to Exhibit A.
1.28 PARTICIPANT shall mean any person who has been admitted to, and
has not been removed from, participation in the Plan pursuant to the
provisions of Article II.
1.29 PLAN shall mean the AFLAC Incorporated Executive Deferred
Compensation Plan, as contained herein and all amendments hereto. For tax
purposes and purposes of Title I of ERISA, the Plan is intended to be an
unfunded, nonqualified deferred compensation plan covering certain
designated employees who are within a select group of key management or
highly compensated employees.
1.30 PLAN YEAR shall mean the 12-consecutive-month period ending on
December 31 of each year.
1.31 SOCIAL SECURITY TAX SHARES shall mean the number of shares of
Company Stock that are withheld from the exercise of a Stock Option subject
to a Stock Option Election and that are used to pay the Participant's
portion of any Social Security or other taxes due as a result of the Stock
Option exercise and deferral.
1.32 STOCK OPTION shall mean, with respect to a Participant, an
option to purchase shares of the Controlling Company awarded to the
Participant under any stock option program of the Controlling Company.
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1.33 STOCK OPTION CONTRIBUTIONS shall mean that portion of a
Participant's Net Option Shares deferred under the Plan pursuant to Section
3.5.
1.34 STOCK OPTION ELECTION shall mean a written, electronic or other
form of election pursuant to which a Participant may elect to defer under
the Plan the receipt of all or a portion of the Net Option Shares payable
to him upon his exercise of a Stock Option, as more fully described in
Section 3.5.
1.35 SURVIVING SPOUSE shall mean, with respect to a Participant, the
person who is treated as married to such Participant under the laws of the
state in which the Participant resides. The determination of a
Participant's Surviving Spouse shall be made as of the date of such
Participant's death.
1.36 TRUST OR TRUST AGREEMENT shall mean the separate agreement or
agreements between the Controlling Company and the Trustee governing the
creation of the Trust Fund, and all amendments thereto.
1.37 TRUSTEE shall mean the party or parties so designated from time
to time pursuant to the terms of the Trust Agreement.
1.38 TRUST FUND shall mean the total amount of cash and other
property held by the Trustee (or any nominee thereof) at any time under the
Trust Agreement.
1.39 VALUATION DATE shall mean each Business Day; provided, the value
of an Account on a day other than a Valuation Date shall be the value
determined as of the immediately preceding Valuation Date.
ARTICLE II
ELIGIBILITY AND PARTICIPATION
2.1 ELIGIBILITY.
(a) ANNUAL PARTICIPATION. Each individual who is an Eligible
Employee as of the first day of a Plan Year shall be eligible to
participate in the Plan for the entire Plan Year. Such individual's
participation shall become effective as of the first day of such Plan Year
(assuming he satisfies the procedures for admission described below).
(b) INTERIM PLAN YEAR PARTICIPATION. Each individual who
becomes an Eligible Employee during a Plan Year shall be eligible to
participate in the Plan for a portion of such Plan Year. Such individual's
participation shall become effective as of the first day of the calendar
month coinciding with or next following the date he becomes an Eligible
Employee (assuming he satisfies the procedures for admission described
below).
2.2 PROCEDURE FOR ADMISSION.
Each Eligible Employee shall become a Participant by completing
such forms and providing such data in a timely manner, as are required by
the Administrative Committee as a precondition of participation in the
Plan. Such forms and data may include, without limitation, a Deferral
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Election, an Annual Bonus Election and/or Stock Option Election, the
Eligible Employee's acceptance of the terms and conditions of the Plan, and
the designation of a Beneficiary to receive any death benefits payable
hereunder.
2.3 CESSATION OF ELIGIBILITY.
The Administrative Committee may remove an employee from active
participation in the Plan if, as of any day during a Plan Year, he ceases
to satisfy the criteria which qualified him as an Eligible Employee, in
which case his deferrals under the Plan shall cease. Even if his active
participation in the Plan ends, an employee shall remain an inactive
Participant in the Plan until the earlier of (i) the date the full amount
of his vested Account (if any) is distributed from the Plan, or (ii) the
date he again becomes an Eligible Employee and recommences participation in
the Plan. During the period of time that an employee is an inactive
Participant in the Plan, his Account shall continue to be credited with
earnings as provided for in Section 3.7.
ARTICLE III
PARTICIPANTS' ACCOUNTS; DEFERRALS AND CREDITING
3.1 PARTICIPANTS' ACCOUNTS.
(a) ESTABLISHMENT OF ACCOUNTS. The Administrative Committee
shall establish and maintain, on behalf of each Participant, an Account.
Each Account shall be credited with (i) Deferral Contributions, (ii)
Matching Contributions, (iii) Discretionary Contributions, (iv) Stock
Option Contributions, and (v) earnings attributable to such Account, and
shall be debited by the amount of all distributions. Each Account of a
Participant shall be maintained until the value thereof has been
distributed to or on behalf of such Participant or his Beneficiary.
(b) NATURE OF CONTRIBUTIONS AND ACCOUNTS. The amounts credited
to a Participant's Account shall be represented solely by bookkeeping
entries. Except as provided in Article VII, no monies or other assets shall
actually be set aside for such Participant, and all payments to a
Participant under the Plan shall be made from the general assets of the
Participating Companies.
(c) SEVERAL LIABILITIES. Each Participating Company shall be
severally (and not jointly) liable for the payment of benefits under the
Plan in an amount equal to the total of (i) all undistributed Deferral
Contributions withheld from Participant's Compensation paid or payable by
each such Participating Company, (ii) all undistributed Matching
Contributions attributable to such Deferral Contributions, (iii) all
undistributed Discretionary Contributions credited while such Participant
was employed by such Participating Company, (iv) all undistributed Stock
Option Contributions attributable to the exercise of a Stock Option by the
Participant while employed by such Participating Company, and (v) all
investment earnings attributable to the amounts described in clauses (i)-
(iv) hereof. The Administrative Committee shall allocate the total
liability to pay benefits under the Plan among the Participating Companies
pursuant to this formula, and the Administrative Committee's determination
shall be final and binding.
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(d) GENERAL CREDITORS. Any assets which may be acquired by a
Participating Company in anticipation of its obligations under the Plan
shall be part of the general assets of such Participating Company. A
Participating Company's obligation to pay benefits under the Plan
constitutes a mere promise of such Participating Company to pay such
benefits, and a Participant or Beneficiary shall be and remain no more than
an unsecured, general creditor of such Participating Company.
3.2 DEFERRAL CONTRIBUTIONS.
Each Eligible Employee who is or becomes eligible to participate
in the Plan for all or any portion of a Plan Year may elect to have
Deferral Contributions made on his behalf for such Plan Year by completing
and delivering to the Administrative Committee (or its designee) a Deferral
Election and/or Annual Bonus Election setting forth the terms of his
election. Subject to the terms and conditions set forth below, a Deferral
Election may provide for the reduction of an Eligible Employee's
Compensation (exclusive of Annual Bonus amounts) payable in each regular
paycheck earned during the Plan Year for which the Deferral Election is in
effect, and an Annual Bonus Election shall provide for the reduction of an
Eligible Employee's Annual Bonus payable during the Plan Year for which the
Annual Bonus Election is in effect; provided, if the total of the
Participant's deferrals under any Affiliates' Section 401(k) and 125 plans
and the Plan exceed 100% of his Compensation, the Section 401(k) and 125
plan deferrals shall be made first, and the remaining Compensation shall be
deferred under the Plan. Subject to any modifications, additions or
exceptions that the Administrative Committee, in its sole discretion, deems
necessary, appropriate or helpful, the following terms shall apply to such
elections:
(a) EFFECTIVE DATE.
(i) INITIAL DEFERRAL ELECTION. A Participant's initial
Deferral Election with respect to his Compensation for any Plan
Year shall be effective for the first regular paycheck earned
after the date the Deferral Election is submitted and becomes
effective. To be effective, a Participant's initial Deferral
Election must be made within the time period prescribed by the
Administrative Committee (generally, before the first day of the
Plan Year for which Deferral Contributions will be made, or, if
later, within 30 days after the date on which his participation
becomes effective pursuant to Plan Section 2.1(b)). If an
Eligible Employee fails to submit a Deferral Election in a timely
manner, he shall be deemed to have elected not to participate in
the Plan for that Plan Year with respect to his non-bonus cash
compensation.
(ii) SUBSEQUENT DEFERRAL ELECTION. A Participant's
subsequent Deferral Election with respect to his Compensation
(other than his Annual Bonus) for any Plan Year must be made on
or before the last day of the Plan Year immediately preceding the
Plan Year for which he desires to participate and in which such
Compensation to be deferred is earned.
(b) TERM. Each Participant's Deferral Election shall remain in
effect for all such applicable Compensation earned during the current and
all future Plan Years until the earlier of (i) the date the Participant
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ceases to be an active Participant for such Plan Year, or (ii) the date the
Participant makes a subsequent Deferral Election or revokes such Deferral
Election. If a Participant is transferred from the employment of one
Participating Company to the employment of another Participating Company,
his Deferral Election with the first Participating Company will remain in
effect and will apply to his Compensation (other than his Annual Bonus)
from the second Participating Company until the earlier of those events set
forth in the preceding sentence.
(c) AMOUNT. A Participant may elect to defer his Compensation
payable in each regular paycheck in 1% increments, up to a maximum of 100%
(or such other maximum percentage and/or amount, if any, established by the
Administrative Committee from time-to-time); provided, for a Participant
who participates in any Affiliate's employee pension benefit plan that is,
or purports to be, qualified under Code Section 401(a) during a Plan Year,
his deferrals under the Plan for such Plan Year shall be limited such that
they shall not cause such Code Section 401(a) plan to fail the requirements
of Code Section 415 with respect to such Participant.
(d)REVOCATION. A Participant may revoke his Deferral Election by
delivering a written, electronic or other form of notice of revocation to
the Administrative Committee, and such revocation shall be effective as
soon as practicable after the date on which it is received by the
Administrative Committee. A Participant who revokes a Deferral Election
may enter into a new Deferral Election with respect to his Compensation for
any subsequent Plan Year by making such Deferral Election on or before the
last day of the Plan Year immediately preceding the Plan Year for which he
desires to participate and in which the Compensation to be deferred is
earned.
(e) ANNUAL BONUS ELECTION. To the extent permitted by the
Administrative Committee, a Participant may complete and deliver to the
Company (or its designee) an Annual Bonus Election with respect to an
Annual Bonus payable during a Plan Year. The terms of such Annual Bonus
Election shall be determined by reference to the foregoing provisions of
this Section 3.2; provided, the following modifications shall apply:
(i) EFFECTIVE. A Participant's Annual Bonus Election
shall be effective for the Annual Bonus payable after the date
the Annual Bonus Election is delivered to the Administrative
Committee. The Participant shall deliver the Annual Bonus
Election to the Administrative Committee on or before the last
day of the Plan Year immediately preceding the Plan Year during
which the Annual Bonus is payable.
(ii) MODIFICATION. Such Annual Bonus Election shall
remain in effect from year to year in accordance with its
original terms until the Participant either makes a subsequent
Annual Bonus Election, or revokes his Annual Bonus Election;
provided, any such election or revocation may be effective only
as to any Annual Bonuses to be paid in a subsequent Plan Year.
(iii) FAILURE TO ELECT. If a Participant does not
make an Annual Bonus Election for a Plan Year, no part of his
Annual Bonus shall be deferred under the Plan.
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(iv) AMOUNT. The Participant may elect to reduce his
Annual Bonus up to 100%; provided for a Participant who
participates in any Affiliate's employee pension benefit plan
that is, or purports to be, qualified under Code Section 401(a)
during a Plan Year, his deferrals under the Plan for such Plan
Year shall be limited such that they shall not cause such Code
Section 401(a) plan to fail the requirements of Code Section 415
with respect to such Participant.
(v) TERMINATION. If not earlier changed or revoked
pursuant to the terms of subsection (e)(ii) hereof, a
Participant's Annual Bonus Election shall terminate on the date
the Participant ceases to be an active Participant.
(f) CREDITING OF DEFERRAL CONTRIBUTIONS. For each Plan Year
that a Participant has a Deferral Election or Annual Bonus Election in
effect, the Administrative Committee shall credit the amount of such
Participant's Deferral Contributions to his Account on, or as soon as
practicable after, the Valuation Date on which such amount would have been
paid to him but for his Deferral Election or Annual Bonus Election.
3.3 MATCHING CONTRIBUTIONS.
If and to the extent the Compensation Committee of the Board
determines that the Company will make Matching Contributions for some or
all Participants, then as of the end of each payroll period (or such other
date or time as the Administrative Committee, in its sole discretion,
determines from time-to-time), the Administrative Committee shall credit to
each Participant's Account for such payroll period a Matching Contribution
equal to the amount of the Matching Contribution so determined.
3.4 DISCRETIONARY CONTRIBUTIONS.
The amount of such Discretionary Contribution (if any) shall be
determined by the Compensation Committee of the Board in its sole
discretion. The Administrative Committee shall credit any such
Discretionary Contribution to the Account of a Participant as of any
Valuation Date.
3.5 STOCK OPTION CONTRIBUTIONS.
Each Eligible Employee who has an outstanding Stock Option may
irrevocably elect to have the Participating Company defer under the Plan
(as a Stock Option Contribution) all or a portion of the Net Option Shares
that will become payable to him upon his exercise of such Stock Option, by
completing and submitting to the Administrative Committee (or its designee)
a Stock Option Election setting forth the terms of his election. Subject
to any modifications, additions or exceptions that the Administrative
Committee, in its sole discretion, deems necessary, appropriate or helpful,
the following terms and conditions shall apply to such elections:
(a) ELECTION SPECIFICS. A Participant's Stock Option Election
must specifically identify each of the Stock Options to which it will apply
and the number of Net Option Shares which will be deferred under the Plan
upon the exercise of each of such Stock Options. As part of the Stock
Option Election, the Participant must certify and agree (i) that once he
makes a Stock Option Election, it will be irrevocable; (ii) whether (and if
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so, the extent to which) he wants shares of Company Stock resulting from
the Stock Option exercise to be considered Social Security Tax Shares;
(iii) that he will be permitted to exercise each of the designated Stock
Options to yield therefrom the specified number of Net Option Shares and
Social Security Tax Shares only by surrendering shares of Company Stock he
owns at the time of exercise; (iv) to surrender any shares of Company Stock
he acquired from a Participating Company, he must have owned such shares
for at least 6 months prior to the exercise date of the designated Stock
Option to which the surrender relates; (v) that he may surrender shares
either directly or indirectly by providing an affidavit as to his ownership
of the number of shares to be surrendered; (vi) that he will not exercise
any of such designated Stock Options with respect to the Net Option Shares
or Social Security Tax Shares before the end of the pre-exercise election
period described in subsection (b) hereof; and (vii) upon exercise of each
of the Stock Options and until distribution thereof, the deferred Net
Option Shares will be deemed invested in the Company Stock Fund.
(b) TIMING OF ELECTION. For a Participant's Stock Option
Election to be effective with respect to deferring the receipt of Net
Option Shares upon exercise of a designated Stock Option, the Participant
must complete such election and deliver it to the Company at least 6 months
before, and prior to the beginning of the calendar year in which, he
exercises such option. Once a Participant elects to defer the receipt of
Net Option Shares under a Stock Option, he may not exercise such Stock
Option with respect to such shares prior to the end of such pre-exercise
election period.
(c) TERM. Once made and submitted to the Administrative
Committee, a Participant's Stock Option Election will be irrevocable. Such
election will terminate upon the earlier of (i) the date all of the
designated Stock Options are fully exercised or expire, or (ii) the date
the Participant ceases to be an active Participant.
(d) EXERCISE OF STOCK OPTIONS. Upon the exercise of any of the
Stock Options in accordance with a Participant's Stock Option Election (as
described in this Section), the Administrative Committee shall credit to
the Participant's Account as of the date of such exercise, a number of
Company Stock Units equal to the number of Net Option Shares that would
have been payable to the Participant but for such election.
3.6 DEBITING OF DISTRIBUTIONS.
As of each Valuation Date, the Administrative Committee shall debit
each Participant's Account for any amount distributed from such Account
since the immediately preceding Valuation Date.
3.7 CREDITING OF EARNINGS.
As of each Valuation Date, the Administrative Committee shall credit
to each Participant's Account the amount of earnings and/or losses
applicable thereto for the period since the immediately preceding Valuation
Date. Such crediting of earnings and/or losses shall be effected as of
each Valuation Date, as follows:
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(a) GENERAL RULE.
(i) RATE OF RETURN. The Administrative Committee shall
first determine a rate of return for the period since the
immediately preceding Valuation Date for each of the Investment
Funds;
(ii) AMOUNT INVESTED. The Administrative Committee next
shall determine the amount of (i) each Participant's Account
that was deemed invested in each Investment Fund as of the
immediately preceding Valuation Date; minus (ii) the amount of
any distributions debited from the amount determined in clause
(i) since the immediately preceding Valuation Date; and
(iii) DETERMINATION OF AMOUNT. The Administrative
Committee shall then apply the rate of return for each Investment
Fund for such Valuation Date (as determined in subsection (a)
hereof) to the amount of the Participant's Account deemed
invested in such Investment Fund for such Valuation Date (as
determined in subsection (b) hereof), and the total amount of
earnings and/or losses resulting therefrom shall be credited to
such Participant's Account as of the applicable Valuation Date.
(b) CASH DIVIDENDS. For Company Stock Units that have been
credited to a Participant's Account on or before a record date for Company
Stock cash dividends and that remain credited to his Account through the
corresponding dividend payment date, the Administrative Committee shall
credit to such Participant's Account a dollar amount equal to the amount of
cash dividends that would have been paid on his Company Stock Units if each
Company Stock Unit constituted one share of Company Stock. Such dollar
amount then will be converted into a number of Company Stock Units equal to
the number of full and fractional shares of Company Stock that could have
been purchased, at fair market value on the dividend payment date, with
such dollar amount.
(c) ADJUSTMENTS FOR STOCK DIVIDENDS AND SPLITS. In the event of
any subdivision or combination of the outstanding shares of Company Stock,
by reclassification, stock split, reverse stock split or otherwise, or in
the event of the payment of a stock dividend on Company Stock, or in the
event of any other increase or decrease in the number of outstanding shares
of Company Stock, other than the issuance of shares for value received by
the Controlling Company or the redemption of shares for value, the number
of Stock Units credited to a Participant's Account shall be adjusted upward
or downward, as the case may be, to reflect the subdivision or combination
of the outstanding shares. The amount of increase or decrease in the
number of Company Stock Units in such event will be equal to the adjustment
that would have been made if each Company Stock Unit credited to a
Participant's Account immediately prior to the event constituted one share
of Company Stock.
3.8 VALUE OF ACCOUNT
(a) GENERAL RULE. The value of a Participant's Account as of
any date shall be equal to the aggregate value of all contributions and all
investment earnings deemed credited to his Account as of such date,
determined in accordance with this Article III.
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(b) VALUE OF COMPANY STOCK.
(i) NEW YORK STOCK EXCHANGE. For all purposes under
the Plan for which the value of Company Stock must be determined
as of any particular date as of which Company Stock is trading
on the New York Stock Exchange, the fair market value per share
of Company Stock on such date shall be the closing price of
Company Stock on the New York Stock Exchange on such date. If,
for any reason, the fair market value per share of Company Stock
cannot be ascertained or is unavailable for a particular date,
the fair market value of Company Stock on such date shall be
determined as of the nearest preceding date on which the fair
market value of Company Stock on such date shall be determined
as of the nearest preceding date on which the fair market value
can be ascertained pursuant to the terms hereof.
(ii) OTHER EXCHANGE. For all purposes under the Plan
for which the value of Company Stock must be determined as of any
particular date on which Company Stock is not trading on the New
York Stock Exchange but on which Company Stock is trading on
another national securities exchange in the United States, the
fair market value per share of Company Stock shall be the closing
price of the Company Stock on such national securities exchange
on such date. If Company Stock is trading on such other national
securities exchange in the United States on such date but no
sales of shares of Company Stock occurred thereon, the fair
market value per share of Company Stock shall be the closing
price of the Company Stock on the nearest preceding date. If on
any particular date a public market shall exist for Company Stock
but Company Stock is not trading on a national securities
exchange in the United States, then, if Company Stock is listed
on the National Market List by the National Association of
Securities Dealers, Inc. (the "NASD"), the fair market value per
share of Company Stock shall be the last sale price for such
shares reflected on said market list for such date, and if
Company Stock is not listed on the National Market List of the
NASD, then the fair market value per share of Company Stock shall
be the mean between the bid and asked quotations in the over-the-
counter market for such shares on such date. If there is no bid
and asked quotation for Company Stock on such date, the fair
market value per share of Company Stock shall be the mean between
the bid and asked quotations in the over-the-counter market for
such shares on the nearest preceding date. If the fair market
value per share of Company Stock cannot otherwise be determined
under this Section as of a particular date, such value shall be
determined by the Administrative Committee, in its sole
discretion, based on all relevant available facts.
3.9 VESTING
(a) GENERAL. A Participant shall at all times be fully vested
in his Deferral Contributions and Stock Option Contributions, and the
earnings credited to his Account with respect to such Deferral and Stock
Option Contributions. Any Matching Contributions and/or Discretionary
Contributions credited to a Participant's Account and the earnings credited
with respect thereto shall vest in accordance with the vesting schedule(s)
specified and made effective for such contributions by the Compensation
Committee of the Board, in its sole discretion.
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(b) CHANGE IN CONTROL. If a Change in Control occurs with
respect to the Controlling Company, Participants shall be immediately 100%
vested in the Matching Contributions credited to their Accounts as of the
date of such Change in Control. Matching and Discretionary Contributions
credited to Participants' Account after the date of a Change in Control
shall continue to vest in accordance with the applicable vesting schedules
as applied to the Participant's Matching and Discretionary Accounts
pursuant to the Change in Control.
3.10 NOTICE TO PARTICIPANTS OF ACCOUNT BALANCES.
At least once for each Plan Year, the Administrative Committee shall
cause a written statement of a Participant's Account balance to be
distributed to the Participant.
3.11 GOOD FAITH VALUATION BINDING.
In determining the value of the Accounts, the Administrative Committee
shall exercise its best judgment, and all such determinations of value (in
the absence of bad faith) shall be binding upon all Participants and their
Beneficiaries.
3.12 ERRORS AND OMISSIONS IN ACCOUNTS.
If an error or omission is discovered in the Account of a Participant
or in the amount of a Participant's deferrals, the Administrative
Committee, in its sole discretion, shall cause appropriate, equitable
adjustments to be made as soon as administratively practicable following
the discovery of such error or omission.
ARTICLE IV
INVESTMENT FUNDS
4.1 SELECTION BY ADMINISTRATIVE COMMITTEE.
From time to time, the Administrative Committee shall select two or
more Investment Funds for purposes of determining the rate of return on
amounts deemed invested in accordance with the terms of the Plan. The
Administrative Committee may change, add or remove Investment Funds on a
prospective basis at anytime(s) and in any manner it deems appropriate.
4.2 PARTICIPANT DIRECTION OF DEEMED INVESTMENTS.
Each Participant generally may direct the manner in which his Account
shall be deemed invested in and among the Investment Funds; provided, any
deferrals of Net Option Shares shall be and at all times remain credited to
the Company Stock Fund. Any Participant investment directions permitted
hereunder shall be made in accordance with the following terms:
(a) NATURE OF PARTICIPANT DIRECTION. The selection of
Investment Funds by a Participant shall be for the sole purpose of
determining the rate of return to be credited to his Account, and shall not
be treated or interpreted in any manner whatsoever as a requirement or
direction to actually invest assets in any Investment Fund or any other
investment media. The Plan, as an unfunded, nonqualified deferred
compensation Plan, at no time shall have any actual investment of assets
relative to the benefits or Accounts hereunder.
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(b) INVESTMENT OF CONTRIBUTIONS. Each Participant may make an
Investment Election prescribing the percentage of the future contributions
that will be deemed invested in each Investment Fund. An initial
Investment Election of a Participant shall be made as of the date the
Participant commences participation in the Plan and shall apply to all
contributions credited to such Participant's Account after such date. Such
Participant may make subsequent Investment Elections as of any Business
Day, and each such election shall apply to all such specified contributions
credited to such Participant's Account after the Administrative Committee
(or its designee) has a reasonable opportunity to process such election
pursuant to such procedures as the Administrative Committee may determine
from time-to-time. Any Investment Election made pursuant to this
subsection with respect to future contributions shall remain effective
until changed by the Participant.
(c) INVESTMENT OF EXISTING ACCOUNT BALANCES. Each Participant
may make an Investment Election prescribing the percentage of his existing
Account balance that will be deemed invested in each Investment Fund. Such
Participant may make such Investment Elections as of any Business Day, and
each such election shall be effective after the Administrative Committee
(or its designee) has a reasonable opportunity to process such election.
Each such election shall remain in effect until changed by such
Participant.
(d) ADMINISTRATIVE COMMITTEE DISCRETION. The Administrative
Committee shall have complete discretion to adopt and revise procedures to
be followed in making such Investment Elections. Such procedures may
include, but are not limited to, the process of making elections, the
permitted frequency of making elections, the incremental size of elections,
the deadline for making elections and the effective date of such elections.
Any procedures adopted by the Administrative Committee that are
inconsistent with the deadlines or procedures specified in this Section
shall supersede such provisions of this Section without the necessity of a
Plan amendment.
ARTICLE V
PAYMENT OF ACCOUNT BALANCES
5.1 BENEFIT PAYMENTS UPON TERMINATION OF SERVICE FOR REASONS OTHER
THAN DEATH.
(a) GENERAL RULE CONCERNING BENEFIT PAYMENTS. In accordance
with the terms of subsection (b) hereof, if a Participant terminates his
employment with the Controlling Company and all of its Affiliates for any
reason other than death, he (or his Beneficiary, if he dies after such
termination of employment but before distribution of his Account) shall be
entitled to receive or begin receiving a distribution of the total of (i)
the entire vested amount credited to his Account, determined as of the
Valuation Date on which such distribution is processed; PLUS (ii) the
vested amount of Deferral, Matching, Discretionary and Stock Option
Contributions made since such Valuation Date. For purposes of this
subsection, the "Valuation Date on which such distribution is processed"
refers to the Valuation Date established for such purpose by administrative
practice, even if actual payment is made or commenced at a later date due
to delays in valuation, administration or any other procedure.
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(b) TIMING OF DISTRIBUTION.
(i) Except as provided in subsection (b)(ii) hereof, the
vested benefit payable to a Participant under this Section shall
be distributed as soon as administratively feasible after the date
the Participant terminates his employment with the Controlling
Company and all of its Affiliates for any reason other than death.
(ii) A Participant may elect, at the time he makes his
initial Deferral, Annual Bonus or Stock Option Election, to have
his benefit payable under this Section paid (or commenced) on any
date (whether before or after the date his employment terminates,
but not earlier than 1 year after the end of the Plan Year for
which such election applies) specified in such election. A
Participant may elect a different benefit commencement date with
respect to his Deferral and Annual Bonus Elections and his Stock
Option Elections; provided, unless determined otherwise by the
Administrative Committee, a Participant may elect no more than 2
different benefit commencement dates with respect to his Deferral
and Annual Bonus Elections and may elect only 1 commencement date
with respect to his Stock Option Elections. The Administrative
Committee shall pay (or commence the payment of) the Participant's
benefit as soon as administratively feasible after the time
specified in such election; provided, with respect to each initial
scheduled benefit commencement date, (as determined in accordance
with the preceding sentence or subsection (b)(i) hereof), the
Participant may make a one-time election in writing, at least 1
year before such initial scheduled benefit commencement date, to
delay the payment (or commencement) of his total benefit payable
on such date to a later date, and such total benefit shall be paid
(or commenced) as soon as administratively feasible after such
delayed date.
5.2 FORM OF DISTRIBUTION.
(a) SINGLE-SUM PAYMENT. Except as provided in subsection (b)
hereof, the benefit payable to a Participant under Section 5.1 shall be
distributed in the form of a single-sum payment.
(b) ANNUAL INSTALLMENTS. A Participant may elect, at the time
he makes his initial Deferral, Annual Bonus or Stock Option Election, to
have his benefit payable under Section 5.1 paid in the form of annual
installment payments. If a Participant does not initially elect the
installment form of distribution for any portion of his benefit, that
portion of his benefit shall be paid in the form of a single-sum payment
unless, at least 1 year before his initial scheduled benefit commencement
date (as determined in accordance with Section 5.1), the Participant makes
a one-time election in writing to receive such benefit in the form of
installment payments (in accordance with the terms of this subsection).
The following terms and conditions shall apply to installment payments made
under the Plan:
(i) The installment payments shall be made in substantially
equal annual installments (adjusted for investment income between
payments in the manner described in Section 3.7); provided, in no
event shall such payments be made over a period in excess of 10
years. The initial value of the obligation for the installment
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payments shall be equal to the amount of the Participant's Account
balance calculated in accordance with the terms of Section 5.1(a).
(ii) If a Participant dies after payment of his benefit
from the Plan has begun, but before his entire benefit has been
distributed, the remaining amount of his Account balance shall be
distributed to the Participant's designated Beneficiary in the
form of a single-sum payment.
(iii) Notwithstanding any election under this Section
5.2(b) to the contrary, any Participant whose benefit as of the
date it is scheduled to commence in accordance with Section 5.1(b)
is less than $10,000 per year, or such other minimum amount as may
be determined by the Administrative Committee in its sole
discretion, such benefit shall be paid in a single sum payment.
(c) MULTIPLE FORMS OF DISTRIBUTION. To the extent a Participant
elects multiple benefit commencement dates in accordance with Section
5.1(b)(ii), such Participant may elect, with respect to the total benefit
corresponding to each benefit commencement date, to receive such total
benefit in the form of either a single-sum payment or annual installments
as set forth above.
(d) CHANGE IN CONTROL. Notwithstanding anything in Section 5.1
or this Section 5.2 or any election made by the Participant to the
contrary, any Participant (i) who terminates employment with all Affiliates
for a reason other than his death within the 12 month period beginning on
the date a Change in Control occurs, or (ii) whose installment payments as
elected under Section 5.2(b) have commenced or are scheduled to commence as
of the date of the Change in Control, will receive a full distribution of
the benefit payable under Section 5.1(a) in the form of a single sum
payment. Such payment shall be made as soon as administratively feasible
after the date the Participant terminates employment with all Affiliates
for any reason other than death or the date of the Change in Control, as
applicable.
(e) FORM OF ASSETS. All distributions shall be made in the form
of cash, except for amounts deemed invested in the Company Stock Fund which
shall be distributed in whole shares of Company Stock with fractional
shares paid in cash.
5.3 DEATH BENEFITS.
If a Participant dies before payment of his benefit from the Plan is
made or commenced, the Beneficiary or Beneficiaries designated by such
Participant in his latest beneficiary designation form filed with the
Administrative Committee shall be entitled to receive a distribution of the
total of (i) the entire vested amount credited to such Participant's
Account, determined as of the Valuation Date on which such distribution is
processed; PLUS (ii) the vested amount of Deferral, Matching, Discretionary
and Stock Option Contributions made since such Valuation Date. For
purposes of this Section, the "Valuation Date on which such distribution is
processed" refers to the Valuation Date established for such purpose by
administrative practice, even if actual payment is made or commenced at a
later date due to delays in valuation, administration or any other
procedure. The benefit shall be distributed to such Beneficiary or
Beneficiaries, as soon as administratively feasible after the date of the
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Participant's death, in the form of a single-sum payment in cash or Company
Stock as prescribed in Section 5.2(e).
5.4 IN-SERVICE DISTRIBUTIONS.
(a) HARDSHIP DISTRIBUTIONS. Upon receipt of an application for
an in-service hardship distribution and the Administrative Committee's
decision, made in its sole discretion, that a Participant has suffered a
Financial Hardship, the Administrative Committee shall cause the
Controlling Company to pay an in-service distribution to such Participant.
Such distribution shall be paid in a single-sum payment, in cash or Company
Stock as prescribed in Section 5.2(e), as soon as administratively feasible
after the Administrative Committee determines that the Participant has
incurred a Financial Hardship. The amount of such single-sum payment shall
be limited to the amount reasonably necessary to meet the Participant's
requirements resulting from the Financial Hardship. The amount of such
distribution shall reduce the Participant's Account balance as provided in
Section 3.6.
(b) DISTRIBUTIONS WITH FORFEITURE. Notwithstanding any other
provision of this Article V to the contrary, a Participant may elect, at
any time prior to termination of his employment with the Controlling
Company and all of its Affiliates, to receive a distribution of a portion
of the total of (i) the entire vested amount credited to his Account,
determined as of the Valuation Date on which such distribution is
processed; PLUS (ii) the vested amount of Deferral, Matching, Discretionary
and Stock Option Contributions made since such Valuation Date. Such
distribution shall be made in the form of a single-sum payment, in cash or
Company Stock as prescribed in Section 5.2(e), as soon as administratively
feasible after the date of the Participant's election under this subsection
(b). At the time such distribution is made, an amount equal to 10% of the
amount distributed shall be permanently and irrevocably forfeited (and, if
the distribution request is for 90% or more of such Participant's Account,
the forfeiture amount shall be deducted from his distribution amount to the
extent there otherwise will be an insufficient remaining Account balance
from which to deduct this forfeiture). In addition, the Participant
receiving such distribution shall immediately cease to actively participate
in the Plan and shall not be eligible to resume active participation in the
Plan for a period of 1 year after such distribution. Such participant may
resume active participation in the Plan on the first day of the calendar
month coincident with or next following the 1-year anniversary of such
distribution by making a new Deferral, Annual Bonus and/or Stock Option
Election and satisfying any other procedures for admission hereunder. If
such Participant fails to make any such election on a timely basis, he
shall be deemed to have elected not to participate in the Plan at that
time.
5.5 BENEFICIARY DESIGNATION.
(a) GENERAL. Participants shall designate and from time to time
may redesignate their Beneficiaries in such form and manner as the
Administrative Committee may determine.
(b) NO DESIGNATION OR DESIGNEE DEAD OR MISSING. In the event
that:
(i) a Participant dies without designating a Beneficiary;
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(ii) the Beneficiary designated by a Participant is not
surviving when a payment is to be made to such person under the
Plan, and no contingent Beneficiary has been designated; or
(iii) the Beneficiary designated by a Participant cannot
be located by the Administrative Committee within 1 year from the
date benefits are to be paid to such person; then, in any of
such events, the Beneficiary of such Participant with respect to
any benefits that remain payable under the Plan shall be
the Participant's Surviving Spouse, if any, and if not, the estate
of the Participant.
5.6 TAXES.
If the whole or any part of any Participant's or Beneficiary's
benefit hereunder shall become subject to any estate, inheritance, income
or other tax which the Participating Company shall be required to pay or
withhold, the Participating Company shall have the full power and authority
to withhold and pay such tax out of any monies or other property in its
hand for the account of the Participant or Beneficiary whose interests
hereunder are so affected. Prior to making any payment, the Participating
Company may require such releases or other documents from any lawful taxing
authority as it shall deem necessary.
ARTICLE VI
CLAIMS
6.1 CLAIMS.
(a) INITIAL CLAIM. Claims for benefits under the Plan may be
filed with the Administrative Committee on forms or in such other written
documents, as the Administrative Committee may prescribe. The
Administrative Committee shall furnish to the claimant written notice of
the disposition of a claim within 90 days after the application therefor is
filed. In the event the claim is denied, the notice of the disposition of
the claim shall provide the specific reasons for the denial, citations of
the pertinent provisions of the Plan, and, where appropriate, an
explanation as to how the claimant can perfect the claim and/or submit the
claim for review.
(b) APPEAL. Any Participant or Beneficiary who has been denied
a benefit shall be entitled, upon request to the Administrative Committee,
to appeal the denial of his claim. The claimant (or his duly authorized
representative) may review pertinent documents related to the Plan and in
the Administrative Committee's possession in order to prepare the appeal.
The request for review, together with written statement of the claimant's
position, must be filed with the Administrative Committee no later than 60
days after receipt of the written notification of denial of a claim
provided for in subsection (a). The Administrative Committee's decision
shall be made within 60 days following the filing of the request for
review. If unfavorable, the notice of the decision shall explain the
reasons for denial and indicate the provisions of the Plan or other
documents used to arrive at the decision.
(c) SATISFACTION OF CLAIMS. Any payment to a Participant or
Beneficiary shall to the extent thereof be in full satisfaction of all
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claims hereunder against the Administrative Committee and the Participating
Companies, any of whom may require such Participant or Beneficiary, as a
condition to such payment, to execute a receipt and release therefor in
such form as shall be determined by the Administrative Committee or the
Participating Companies. If receipt and release is required but the
Participant or Beneficiary (as applicable) does not provide such receipt
and release in a timely enough manner to permit a timely distribution in
accordance with the general timing of distribution provisions in the Plan,
the payment of any affected distribution may be delayed until the
Administrative Committee or the Participating Companies receive a proper
receipt and release.
ARTICLE VII
SOURCE OF FUNDS; TRUST
7.1 SOURCE OF FUNDS.
Except as provided in this Section and Section 7.2 (relating to
the Trust), each Participating Company shall provide the benefits described
in the Plan from its general assets. However, to the extent that funds in
such Trust allocable to the benefits payable under the Plan are sufficient,
the Trust assets may be used to pay benefits under the Plan. If such Trust
assets are not sufficient to pay all benefits due under the Plan, then the
appropriate Participating Company shall have the obligation, and the
Participant or Beneficiary, who is due such benefits, shall look to such
Participating Company to provide such benefits.
7.2 TRUST.
(a) ESTABLISHMENT. To the extent determined by the Controlling
Company, the Participating Companies shall transfer the funds necessary to
fund benefits accrued hereunder to the Trustee to be held and administered
by the Trustee pursuant to the terms of the Trust Agreement. Except as
otherwise provided in the Trust Agreement, each transfer into the Trust
Fund shall be irrevocable as long as a Participating Company has any
liability or obligations under the Plan to pay benefits, such that the
Trust property is in no way subject to use by the Participating Company;
provided, it is the intent of the Controlling Company that the assets held
by the Trust are and shall remain at all times subject to the claims of the
general creditors of the Participating Companies.
(b) DISTRIBUTIONS. Pursuant to the Trust Agreement, the Trustee
shall make payments to Plan Participants and Beneficiaries in accordance
with a payment schedule provided by the Participating Company. The
Participating Company shall make provisions for the reporting and
withholding of any federal, state or local taxes that may be required to be
withheld with respect to the payment of benefits pursuant to the terms of
the Plan and shall pay amounts withheld to the appropriate taxing
authorities or determine that such amounts have been reported, withheld and
paid by the Participating Company.
(c) STATUS OF THE TRUST. No Participant or Beneficiary shall
have any interest in the assets held by the Trust or in the general assets
of the Participating Companies other than as a general, unsecured creditor.
Accordingly, a Participating Company shall not grant a security interest in
the assets held by the Trust in favor of the Participants, Beneficiaries or
any creditor.
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(d) CHANGE IN CONTROL. Notwithstanding anything in this Article
VII to the contrary, in the event of a Change in Control, each of the
Participating Companies shall immediately transfer to the Trustee an amount
equal to the aggregate of all benefit amounts (determined as of the
Valuation Date as of which the Change in Control occurs) of all
Participants for which such Participating Company is liable for payment in
accordance with the terms of Section 3.1(c). The funds so transferred
shall be held and administered by the Trustee pursuant to the terms of the
Trust Agreement and the foregoing provisions of this Section 7.2.
ARTICLE VIII
ADMINISTRATIVE COMMITTEE
8.1 ACTION.
Action of the Administrative Committee may be taken with or
without a meeting of committee members; provided, action shall be taken
only upon the vote or other affirmative expression of a majority of the
committee members qualified to vote with respect to such action. If a
member of the committee is a Participant or Beneficiary, he shall not
participate in any decision which solely affects his own benefit under the
Plan. For purposes of administering the Plan, the Administrative Committee
shall choose a secretary who shall keep minutes of the committee's
proceedings and all records and documents pertaining to the administration
of the Plan. The secretary may execute any certificate or any other
written direction on behalf of the Administrative Committee.
8.2 RIGHTS AND DUTIES.
The Administrative Committee shall administer the Plan and shall
have all powers necessary to accomplish that purpose, including (but not
limited to) the following:
(a) To construe, interpret and administer the Plan;
(b) To make determinations required by the Plan, and to maintain
records regarding Participants' and Beneficiaries' benefits hereunder;
(c) To compute and certify to the Participating Company the
amount and kinds of benefits payable to Participants and Beneficiaries, and
to determine the time and manner in which such benefits are to be paid;
(d) To authorize all disbursements by the Participating Company
pursuant to the Plan;
(e) To maintain all the necessary records of the administration
of the Plan;
(f) To make and publish such rules for the regulation of the
Plan as are not inconsistent with the terms hereof;
(g) To delegate to other individuals or entities from time to
time the performance of any of its duties or responsibilities hereunder;
(h) To hire agents, accountants, actuaries, consultants and
legal counsel to assist in operating and administering the Plan.
20
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The Administrative Committee shall have the exclusive right to
construe and interpret the Plan, to decide all questions of eligibility for
benefits and to determine the amount of such benefits, and its decisions on
such matters shall be final and conclusive on all parties.
8.3 COMPENSATION, INDEMNITY AND LIABILITY.
The Administrative Committee and its members shall serve as such
without bond and without compensation for services hereunder. All expenses
of the Administrative Committee shall be paid by the Participating
Companies. No member of the committee shall be liable for any act or
omission of any other member of the committee, nor for any act or omission
on his own part, excepting his own willful misconduct. The Participating
Companies shall indemnify and hold harmless the Administrative Committee
and each member thereof against any and all expenses and liabilities,
including reasonable legal fees and expenses, arising out of his membership
on the committee, excepting only expenses and liabilities arising out of
his own willful misconduct.
ARTICLE IX
AMENDMENT AND TERMINATION
9.1 AMENDMENTS.
The Administrative Committee shall have the right, in its sole
discretion, to amend the Plan in whole or in part at any time and from time
to time; provided, any amendment that may result in significantly increased
expenses under the Plan must be approved by the Board. Any amendment shall
be in writing and executed by a duly authorized officer of the Controlling
Company. An amendment to the Plan may modify its terms in any respect
whatsoever, and may include, without limitation, a permanent or temporary
freezing of the Plan such that the Plan shall remain in effect with respect
to existing Account balances without permitting any new contributions;
provided, no such action may reduce the amount already credited to a
Participant's Account without the affected Participant's written consent.
All Participants and Beneficiaries shall be bound by such amendment.
9.2 TERMINATION OF PLAN.
The Controlling Company expects to continue the Plan but reserves
the right to discontinue and terminate the Plan at any time, for any
reason. Any action to terminate the Plan shall be taken by the Board in the
form of a written Plan amendment executed by a duly authorized officer of
the Controlling Company. If the Plan is terminated, each Participant shall
become 100 % vested in his Account which shall be distributed in a single-
sum as soon as practicable after the date the Plan is terminated. The
amount of any such distribution shall be determined as of the Valuation
Date such termination distribution is to be processed. Such termination
shall be binding on all Participants and Beneficiaries.
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ARTICLE X
MISCELLANEOUS
10.1 TAXATION.
It is the intention of the Controlling Company that the benefits
payable hereunder shall not be deductible by the Participating Companies
nor taxable for federal income tax purposes to Participants or
Beneficiaries until such benefits are paid by the Participating Company, or
the Trust, as the case may be, to such Participants or Beneficiaries. When
such benefits are so paid, it is the intention of the Controlling Company
that they shall be deductible by the Participating Companies under Code
Section 162.
10.2 NO EMPLOYMENT CONTRACT.
Nothing herein contained is intended to be nor shall be construed
as constituting a contract or other arrangement between a Participating
Company and any Participant to the effect that the Participant will be
employed by the Participating Company for any specific period of time.
10.3 HEADINGS.
The headings of the various articles and sections in the Plan are
solely for convenience and shall not be relied upon in construing any
provisions hereof. Any reference to a section shall refer to a section of
the Plan unless specified otherwise.
10.4 GENDER AND NUMBER.
Use of any gender in the Plan will be deemed to include all
genders when appropriate, and use of the singular number will be deemed to
include the plural when appropriate, and vice versa in each instance.
10.5 ASSIGNMENT OF BENEFITS.
The right of a Participant or his Beneficiary to receive payments
under the Plan may not be anticipated, alienated, sold, assigned,
transferred, pledged, encumbered, attached or garnished by creditors of
such Participant or Beneficiary, except by will or by the laws of descent
and distribution and then only to the extent permitted under the terms of
the Plan.
10.6 LEGALLY INCOMPETENT.
The Administrative Committee, in its sole discretion, may direct
that payment be made to an incompetent or disabled person, whether because
of minority or mental or physical disability, to the guardian of such
person or to the person having custody of such person, without further
liability on the part of the Participating Company for the amount of such
payment to the person on whose account such payment is made.
10.7 GOVERNING LAW.
The Plan shall be construed, administered and governed in all
respects in accordance with applicable federal law (including ERISA) and,
22
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to the extent not preempted by federal law, in accordance with the laws of
the State of Georgia. If any provisions of this instrument shall be held
by a court of competent jurisdiction to be invalid or unenforceable, the
remaining provisions hereof shall continue to be fully effective.
IN WITNESS WHEREOF, the Controlling Company has caused the Plan to be
executed by its duly authorized officer on the 1st day of December, 1998.
AFLAC INCORPORATED
By: /s/ Kriss Cloninger, III
--------------------------
Title: Executive Vice President
Chief Financial Officer
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EXHIBIT A
PARTICIPATING COMPANIES
(See Subsection 1.27)
COMPANY NAMES EFFECTIVE DATE
- -------------- --------------
Communicorp, Inc. Effective Date of the Plan
American Family Life Assurance Company
of New York Effective Date of the Plan
AFLAC International, Inc. Effective Date of the Plan
American Family Life Assurance Company
of Columbus Effective Date of the Plan
<PAGE>
EXHIBIT 5
December 18, 1998
The Board of Directors
AFLAC Incorporated
Worldwide Headquarters
1932 Wynnton Road
Columbus, Georgia 31999-0001
Ladies and Gentlemen:
I have represented AFLAC INCORPORATED, a Georgia corporation (the
"Company"), in connection with the registration with the Securities and
Exchange Commission under the Securities Act of 1933 of deferred
compensation obligations (the "Obligations") to be issued by the Company
from time to time pursuant to the AFLAC Incorporated Executive Deferred
Compensation Plan (the "Plan").
This opinion is delivered in accordance with the requirements of Item
601(b)(5) of Regulation S-K under the Securities Act of 1933, as amended
(the "Act").
In connection with this opinion, I am familiar with the corporate
proceedings taken by the Company in connection with the authorization of the
Plan and the Obligations, and have made such other examinations of law and
fact as considered necessary in order to form a basis for the opinion
hereafter expressed.
Based upon the foregoing, I am of the opinion that the Obligations have
been duly authorized, and upon the issuance of the Obligations under the
terms of the Plan, such Obligations will be legally valid and binding
obligations of the Company, except as may be limited by the effect of
bankruptcy, insolvency, reorganization, moratorium or other similar laws now
or hereafter in effect relating to or affecting the rights or remedies of
creditors; the effect of general principles of equity, whether enforcement
is considered in a proceeding in equity or at law, and the discretion of the
court before which any proceeding therefor may be brought; and the effect of
the laws of usury or other laws or equitable principles relating to or
limiting the interest rate payable on indebtedness.
I am admitted to the Bar of the State of Georgia, and I express no
opinion as to the laws of any other jurisdiction.
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/ Joey M. Loudermilk
------------------------------
Joey M. Loudermilk
<PAGE>
EXHIBIT 15
KPMG PEAT MARWICK LLP
Certified Public Accountants
303 Peachtree Street, N.E.
Suite 2000 Telephone: 404-222-3000
Atlanta, Georgia 30308 Telefax: 404-222-3050
The Board of Directors
AFLAC Incorporated
Columbus, Georgia
Re: Registration Statement Form S-8
Ladies and Gentlemen:
With respect to the subject registration statement, we acknowledge our
awareness of the use therein of our reports dated May 4, 1998, July 27, 1998
and October 26, 1998 related to our reviews of interim financial
information.
Pursuant to Rule 436(c) under the Securities Act of 1933, such reports
are not considered a part of a registration statement prepared or certified
by an accountant or a report prepared or certified by an accountant within
the meaning of sections 7 and 11 of the Act.
Very truly yours,
/s/ KPMG Peat Marwick LLP
------------------------------
KPMG Peat Marwick LLP
Atlanta, Georgia
December 18, 1998
<PAGE>
EXHIBIT 23.1
The Board of Directors
AFLAC Incorporated
We consent to incorporation by reference in the registration statement on
Form S-8 of AFLAC Incorporated of our report dated January 29, 1998,
relating to the consolidated balance sheets of AFLAC Incorporated and
subsidiaries as of December 31, 1997 and 1996, and the related consolidated
statements of earnings, shareholders' equity, cash flows and comprehensive
income for each of the years in the three-year period ended December 31,
1997, which report appears in the December 31, 1997, annual report on Form
10-K of AFLAC Incorporated, incorporated herein by reference and to the
reference to our firm under the heading "Experts" in the prospectus.
/s/ KPMG Peat Marwick LLP
------------------------------
KPMG Peat Marwick LLP
Atlanta, Georgia
December 18, 1998
