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As filed with the Securities and Exchange Commission on December 29, 1998
Registration Statement No. 333_______
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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AFLAC INCORPORATED
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(Exact Name of Registrant as Specified in Its Charter)
Georgia
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(State or Other Jurisdiction of Incorporation or Organization)
58-1167100
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(I.R.S. Employer Identification Number)
1932 Wynnton Road, Columbus, Georgia 31999 706-323-3431
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(Address, Including Zip Code, and Telephone Number, Including
Area Code, of Registrant's Principal Executive Offices)
AFLAC NEW YORK ASSOCIATE STOCK BONUS PLAN
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(Full Title of the Plan)
DANIEL P. AMOS
Chief Executive Officer
AFLAC Incorporated
1932 Wynnton Road, Columbus, Georgia 31999 706-323-3431
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(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent for Service)
The Securities and Exchange Commission is requested to send copies of all
communication and notices to:
MICHAEL P. ROGAN, ESQ.
Skadden, Arps, Slate, Meagher & Flom LLP
1440 New York Avenue, N.W.
Washington, DC 20005
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Approximate date of commencement of proposed sale to the public: From
time to time after the effective date of this Registration Statement, in
connection with the AFLAC New York Associate Stock Bonus Plan described
herein.
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If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. ---------
If any of the securities being registered on this form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection
with dividend or interest reinvestment plans, check the following box. X
---
If this form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement number of
the earlier effective registration statement for the same offering.
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If this form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering.
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If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. --------
CALCULATION OF REGISTRATION FEE
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Proposed
Maximum Proposed
Title of Aggregate Maximum
Shares Amount Offering Aggregate Amount of
to be to be Price Offering Registration
Registered Registered(1) Per Share(2) Price Fee
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Common Stock, 500,000 $41.46875 $20,734,375 $5,764.16
$.10 par value shares
("Common Stock")
(1) 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.
(2) Based on the reported average high and low prices of the Common
Stock of AFLAC Incorporated as of December 22, 1998.
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The Registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the
Registrant shall file a further amendment which specifically states that
this Registration Statement shall thereafter become effective in accordance
with Section 8(a) of the Securities Act of 1933 or until the Registration
Statement shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
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AFLAC INCORPORATED
1932 Wynnton Road
Columbus, Georgia 31999
Telephone No. (706) 323-3431
AFLAC New York Associate Stock Bonus Plan
500,000 Shares of Common Stock
We will distribute these shares to certain associates, soliciting brokers,
sales coordinators and special associates of one of our wholly-owned
subsidiaries, American Family Life Assurance Company of New York ("AFLAC
NY"), pursuant to the AFLAC New York Associate Stock Bonus Plan (the "Bonus
Plan").
We will not receive any proceeds from the distribution of these shares.
We have not and will not pay any underwriting discounts in connection with
the distribution of these shares.
AFLAC NY will bear all expenses in connection with the registration and
distribution of shares.
The common stock of AFLAC Incorporated is traded on the New York Stock
Exchange under the symbol "AFL", the Pacific Stock Exchange under the
symbol "AFL" and the Tokyo Stock Exchange.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED IF
THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
December __, 1998
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Table of Contents
Page No.
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Important Information......................................... 3
Additional Information........................................ 3
Information Incorporated by Reference......................... 4
Description of the AFLAC New York Associate Stock Bonus Plan.. 5
General Information...................................... 5
Administration........................................... 5
Eligibility and Enrollment............................... 6
Contributions............................................ 7
Charges Against Participant Accounts..................... 8
Investments.............................................. 9
Participant Accounts..................................... 9
Vesting and Distribution of Benefits;
Forfeitures; Voting.................................... 10
Restrictions on Resale................................... 13
Transferability.......................................... 14
Amendment and Termination................................ 14
Mandatory Arbitration.................................... 14
Tax Consequences......................................... 15
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IMPORTANT INFORMATION
You should rely only on the information contained in this prospectus
or any supplement. We have not authorized anyone else to provide you with
any information that is different.
This prospectus is not an offer or solicitation in any state or
jurisdiction in which such an offer or solicitation is illegal.
You should not assume that the information in this prospectus or any
supplement is accurate as of any date other than the date on the front of
those documents.
ADDITIONAL INFORMATION
We have filed with the Securities and Exchange Commission (the "SEC")
a registration statement regarding the common shares to be distributed
pursuant to the Bonus Plan. This prospectus is a summary and does not
contain all the information set forth in the registration statement and its
exhibits. For additional information with respect to AFLAC Incorporated
and the Bonus Plan, please read the registration statement, including its
exhibits.
We also file annual, quarterly and special reports, proxy statements
and other information with the SEC. You may read and copy these reports,
including the registration statement, at the SEC's public reference rooms
in Washington, D.C., New York, New York and Chicago, Illinois. You can
request copies of these documents, upon payment of a duplication fee, by
writing to the SEC's Reference Section. Please call the SEC at 1-800-SEC-
0330 for further information on the operation of the public reference
rooms. Our filings with the SEC are also available on the SEC's internet
site (http://www.sec.gov).
Our common stock is listed on the New York Stock Exchange and the
Pacific Stock Exchange. You can inspect our reports, proxy statements and
other information filed with these exchanges at the offices of these
exchanges. Our common stock is also listed on the Tokyo Stock Exchange.
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INFORMATION INCORPORATED BY REFERENCE
AFLAC Incorporated has previously filed the following documents with
the SEC and hereby incorporates them by reference in this prospectus:
Our Annual Report on Form 10-K for the year ended December 31,
1997.
Our Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1998, June 30, 1998 and September 30, 1998.
All other reports we have filed pursuant to Sections 13(a) or
15(d) of the Exchange Act since December 31, 1997.
The description of the common stock contained in a registration
statement filed under the Exchange Act, and any amendments or
reports filed with the Commission for the purpose of updating
such description.
AFLAC Incorporated hereby incorporates by reference in this prospectus
the following documents which will be filed with the SEC in the future.
These documents will be incorporated by reference only if they are filed
prior to the filing of a post-effective amendment which (a) indicates that
all common stock to be distributed pursuant to the Bonus Plan has been
distributed or (b) which deregisters the common stock not so distributed
All documents we subsequently file pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Exchange Act, 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.
You should consider the documents incorporated by reference herein to
be modified or superseded to the extent that a statement in this
prospectus, or in any other subsequently filed document which is also
incorporated by reference herein, modifies or supersedes the earlier filed
document. Any such statements or documents do not constitute a part of
this prospectus except as modified or superseded.
You may request a copy of these reports, at no cost, by writing or
telephoning us at the following address:
AFLAC Incorporated
Investor Relations Department
1932 Wynnton Road
Columbus, Georgia 31999
Telephone: (800) 235-2667
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DESCRIPTION OF THE AFLAC NEW YORK ASSOCIATE STOCK BONUS PLAN
GENERAL INFORMATION:
AFLAC NY's Board of Directors adopted the Bonus Plan on December 28,
1998. The Bonus Plan became effective as of January 1, 1999. The purposes
of the Bonus Plan are to provide an incentive to associates, soliciting
brokers, sales coordinators and special associates of AFLAC NY to market
AFLAC NY's specialized insurance policies, and to enable AFLAC NY to retain
experienced sales and supervisory personnel. The Bonus Plan rewards these
individuals for sales of AFLAC NY insurance policies, and encourages them
to acquire and retain a proprietary interest in the success of AFLAC NY and
AFLAC Incorporated.
The Bonus Plan is not subject to any provisions of the Employee
Retirement Income Security Act of 1974.
Because this prospectus is a summary of the Bonus Plan, it may not
contain all the information that may be important to you. You should
therefore read the entire Bonus Plan and the related Trust agreement
carefully. You may request a copy of the Bonus Plan and related Trust
agreement, which we will provide without charge, by writing to the Stock
Bonus Department, 1932 Wynnton Road, Columbus, Georgia 31999, or by
calling the Stock Bonus Department at 1-800-99-AFLAC.
ADMINISTRATION:
THE BONUS PLAN
The Stock Bonus Management Committee will consist of three officers
designated by AFLAC NY's Board of Directors. To the extent permitted by
law, the Stock Bonus Management Committee's decisions on all matters within
the scope of its authority are final.
The AFLAC NY Board of Directors designates, and has the right to
remove, the members of the Stock Bonus Management Committee. The Stock
Bonus Management Committee may delegate its administrative duties and
responsibilities to such persons as it selects.
THE TRUST
The assets of the Bonus Plan are held by a Trust established under the
Bonus Plan. The Trust is administered by three Trustees chosen by AFLAC
NY's Board of Directors. Trustees are chosen for four-year terms, and each
is subject to removal by AFLAC NY's Board of Directors. The Trustees have
broad powers in the management of the Trust, including authority to acquire
and dispose of stock or other assets. The Trustees receive no compensation
for their services as trustees. The present Trustees are:
Paul S. Amos, Chairman of the Board of AFLAC Incorporated and
Member of the Board of AFLAC NY;
Daniel P. Amos, Chief Executive Officer and Vice Chairman of the
Board of AFLAC Incorporated and President and Chairman of the Board
of AFLAC NY; and
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Kriss Cloninger, III, Executive Vice President, Treasurer and
Chief Financial Officer of AFLAC Incorporated and Executive Vice
President of AFLAC NY.
INDEMNIFICATION
Under the Bonus Plan and the Trust, AFLAC NY has agreed to indemnify
the Trustees, the members of the Stock Bonus Management Committee and the
AFLAC NY Board of Directors, and any other party acting at the request of
AFLAC NY or the Stock Bonus Management Committee with respect to the Bonus
Plan. This indemnification covers their liability for their acts, omissions
or conduct in such capacities, except to the extent that their liability
results from their own willful misconduct or gross negligence.
ACCOUNT INFORMATION
Participants in the Bonus Plan receive quarterly reports of the
balances in their accounts if they have account activity during the
quarter. Upon request, Participants will also be provided with additional
copies of this prospectus, Bonus Plan financial statements, copies of the
Bonus Plan and related Trust agreement and other documents. AFLAC NY
provides all necessary forms and accounting and other services required to
carry out the proper administration of the Bonus Plan. You may obtain
additional information about the Bonus Plan and its administrators from the
Stock Bonus Department, 1932 Wynnton Road, Columbus, Georgia 31999. You
may make requests by telephone by calling 1-800-99-AFLAC.
ELIGIBILITY AND ENROLLMENT:
Each associate, soliciting broker and sales coordinator is eligible to
participate in the Bonus Plan.
An ASSOCIATE is any person or entity associated with AFLAC NY
pursuant to an Associate's Contract pertaining to services in the
United States, its territories and possessions, and any other location
or country designated by AFLAC NY, who is paid on a commission basis
and who is actively performing sales and servicing functions for AFLAC
NY.
A SOLICITING BROKER is an associate who is also providing
services to AFLAC NY pursuant to a standardized Soliciting Broker
Contract
A SALES COORDINATOR is an associate who is also providing
services to AFLAC NY pursuant to a contract as a district, regional or
state sales coordinator.
SPECIAL ASSOCIATES are persons or entities associated with AFLAC
NY pursuant to a special written agreement who are engaged in the sale
of insurance products for AFLAC NY and are paid on a commission basis.
Special associates are eligible to participate in the Bonus Plan only
if the written agreement between AFLAC NY and the special associate so
provides.
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Any associate, soliciting broker, sales coordinator or eligible
special associate shall become a participant in the Bonus Plan on the day
that he first becomes an associate, soliciting broker, sales coordinator or
special associate, unless he notifies AFLAC NY in writing that he does not
wish to become a participant. All persons or entities who participate in
the Bonus Plan are hereafter referred to as "Participants."
The Bonus Plan shall not be deemed to constitute a contract between
AFLAC NY and the Participant, or to be consideration, or an inducement, for
the association of any Participant with AFLAC NY . No provision of the
Bonus Plan shall be deemed to give any Participant the right to be retained
or employed in association with AFLAC NY, or be deemed to interfere with
the right of AFLAC NY to discharge any Participant at any time regardless
of the effect which such discharge will have upon the Participant. Each
Participant, for himself and his heirs, assigns and estate, shall be deemed
conclusively by his participation in the Bonus Plan to have agreed to and
accepted the terms and conditions of the Bonus Plan. A Participant may
terminate his participation in the Bonus Plan at any time by giving written
notice to AFLAC NY.
CONTRIBUTIONS:
Contributions to the Bonus Plan, if any, are made by AFLAC NY. The
Board of Directors of AFLAC NY may however authorize contributions from
other sources. No contributions may be made by any Participant.
AFLAC NY will generally credit contributions to Participant accounts
for certain insurance policies sold by a Participant. Contributions are
based on commissionable premiums which are actually collected by AFLAC NY
during the first twelve months of a policy.
Contributions are made only with respect to insurance policies
designated as "Bonus Policies" by AFLAC NY. A list of those policies which
are designated as Bonus Policies is included in the AFLAC NY Commission
Structure which is distributed periodically to sales coordinators. The
sales coordinators then communicate such information to associates and
soliciting brokers. Participants may obtain copies of the current list
from sales coordinators or the Marketing Department of AFLAC NY. Insurance
policies must have been issued on or after January 1, 1999, in order to be
considered Bonus Policies. AFLAC NY may, at any time and in its sole
discretion, change the insurance policies to be designated as Bonus
Policies.
Currently, AFLAC NY will contribute the following amount with respect
to Bonus Policies:
for associates and soliciting brokers, 3.5% of the first year
premiums actually received on Bonus Policies sold by the Participant;
for sales coordinators, .7% of the first year premiums actually
received on Bonus Policies sold by each Participant who is assigned in
writing to the sales coordinator; and
for special associates, the amount contributed with respect to
Bonus Policies sold is determined in accordance with the written
agreement between the special associate and AFLAC NY.
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The Stock Bonus Management Committee may, at any time and in its sole
discretion, change the amount to be contributed on behalf of associates,
soliciting brokers and sales coordinators. All contributions to the Bonus
Plan are made to the Trust. Contributions are made not later than the last
business day of the month (the "Allocation Date") following the month in
which first-year commissionable premiums are actually collected.
AFLAC NY bears all costs incurred in the operation of the Bonus Plan
and the Trust, other than brokerage and other fees directly related to the
purchase of shares of AFLAC Incorporated common stock or other permitted
investments. Such brokerage and other related fees are charged against the
investments prior to allocation to the Participant's accounts.
CHARGES AGAINST PARTICIPANT ACCOUNTS:
AFLAC NY may, in certain circumstances described below, make charges
against Participant's accounts.
In the event that AFLAC NY, for any reason and acting in its sole
discretion, determines to refund all or a part of the first-year premiums
collected on a Bonus Policy, it is entitled to recover from the Trust, and
there may be charged against the Participant's accounts, an amount equal to
the amount previously credited to the Participant with respect to the
first-year premiums which were refunded.
To the extent that any amounts recoverable by AFLAC NY as a result of
lapsed or cancelled Bonus Policies, refunds on such Policies or otherwise,
have been distributed to a Participant and cannot be recovered by a
reduction in the amount to be allocated in subsequent periods to a
Participant's accounts, then the amount of such distribution creates a
liability to AFLAC NY on the part of the Participant. This liability will
be charged back as a first lien against future earned commissions on first
year or renewal business written by the Participant, or will be paid to
AFLAC NY at the demand of AFLAC NY.
Subject to any applicable legal limitations, AFLAC NY has the right to
charge against any benefits owed to a Participant under the Bonus Plan the
amount of certain obligations of such Participant to AFLAC NY. Under the
terms of the Bonus Plan, "obligations" include any indebtedness of the
Participant to AFLAC NY including, but not limited to, any advances
(including advances pursuant to the Bonus Plan), loans, unearned
commissions or credits made by or from AFLAC NY to the Participant. In
addition, AFLAC NY will have a lien against assets or benefits which have
or may become due to such Participant (or his beneficiary) under the Bonus
Plan, which lien will be a first lien in favor of AFLAC NY as to such
assets or benefits. The Bonus Plan provides that, in consideration of the
right to participate in the Bonus Plan and the benefits paid under such
Plan to the Participant by AFLAC NY, each Participant grants and assigns to
AFLAC NY a security interest in all assets, rights and benefits which have
or may become due to the Participant pursuant to the Bonus Plan.
In the event of the insolvency of AFLAC NY, all assets contributed to
the Trust, including any forfeited amount that is credited to a
Participant's account, and income thereon then held pursuant to the Trust
shall be available for satisfaction of the claims of the general creditors
of AFLAC NY in accordance with state and federal laws. AFLAC NY will be
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considered insolvent if it is unable to pay its debts as they become due or
if it is subject to a pending proceeding as a debtor under the United
States Bankruptcy Code.
AFLAC NY will not receive the benefit of or have the right to any
portion of the assets of the Bonus Plan, except in the event of the
insolvency of AFLAC NY or in the event of a forfeiture or mistaken
contribution. All assets of the Bonus Plan must be held for the exclusive
purpose of providing benefits to Participants.
INVESTMENTS:
It is the express intent of the Bonus Plan, and the Trust established
thereunder, that contributions be invested in common stock of AFLAC
Incorporated. The Trust agreement provides that, if shares of common stock
of AFLAC Incorporated are not available or cannot be purchased under
applicable law, the assets of the Trust may be invested in cash or cash
equivalents. The Trustees may direct the Trust to acquire common stock of
AFLAC Incorporated through purchases either in the public trading market or
from the treasury.
PARTICIPANT ACCOUNTS:
Each Participant will have an individual fund account and an
individual shares account maintained in his name. We will also maintain
unallocated funds and unallocated shares accounts which will contain
contributions to which no Participant is initially entitled, forfeitures
and other amounts recoverable by AFLAC NY.
AFLAC NY contributions are credited to each Participant's fund account
as of the Allocation Date. The balance in the Participant's fund account
will then be reduced to as close to zero as possible to reflect the
allocation of shares of common stock of AFLAC Incorporated to the
Participant's shares account. AFLAC NY generally makes contributions to
the Trust, and the Trust generally purchases shares of common stock of
AFLAC Incorporated, either in the open market or from the treasury, several
times each month. For purposes of adjusting the accounts as of the
Allocation Date, the cost of shares of common stock of AFLAC Incorporated
to be charged against each Participant's fund account is deemed to be the
weighted average purchase price (including any brokerage and other fees
directly related thereto) of all shares of common stock of AFLAC
Incorporated purchased for the reporting month to which the Allocation Date
relates.
Shares of common stock of AFLAC Incorporated held as unallocated
shares (as a result of forfeitures or for any other reason) which are
subsequently transferred to a Participant's share account will be deemed to
have been purchased at a price equal to:
in the case of shares of common stock of AFLAC Incorporated which
were held as unallocated shares as a result of forfeiture, the
closing market price on the last business day of the reporting
month to which such forfeiture relates;
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in the case of shares of common stock of AFLAC Incorporated
surrendered as the result of obligations owed to AFLAC NY or as
the result of the distribution of cash in lieu of fractional
shares, the closing market price on the date of surrender; and
in the case of shares of common stock of AFLAC Incorporated which
were held as unallocated shares as a result of any other event,
the weighted average purchase price (including brokerage and
other fees directly related thereto) of all shares of common
stock of AFLAC Incorporated purchased for the reporting month to
which the event relates.
In the discretion of AFLAC NY, all cash and common stock of AFLAC
Incorporated held as unallocated funds and unallocated shares may revert
back to AFLAC NY, and become the sole property of AFLAC NY, subject only to
AFLAC NY's obligation to recontribute amounts to the Bonus Plan upon a
Participant's reassociation with AFLAC NY. AFLAC NY may instead decide to
use unallocated funds and unallocated shares to offset all or a part of the
unallocated funds and unallocated shares against its contribution
obligations under the Bonus Plan, or AFLAC NY may request that the Bonus
Plan purchase shares of common stock of AFLAC Incorporated held as
unallocated shares. In the case that AFLAC NY chooses either alternative
in the preceding sentence, the shares of common stock of AFLAC Incorporated
held as unallocated shares will be valued at a price equal to:
in the case of shares of common stock of AFLAC Incorporated which
were held as unallocated shares as a result of forfeiture, the
closing market price on the last business day of the reporting
month to which the forfeiture relates;
in the case of shares of common stock of AFLAC Incorporated
surrendered as the result of obligations owed to AFLAC NY or as
the result of the distribution of cash in lieu of fractional
shares, the closing market price on the date of surrender; and
in the case of shares of common stock of AFLAC Incorporated which
were held as unallocated shares as a result of any other event,
the weighted average purchase price (including brokerage and
other fees directly related thereto) of all shares of common
stock of AFLAC Incorporated purchased for the reporting month to
which the event relates.
Cash and stock dividends on common stock of AFLAC Incorporated held in
share accounts are allocated to such share accounts or the corresponding
fund accounts. Cash and stock dividends on common stock of AFLAC
Incorporated held as unallocated shares are designated as unallocated funds
or unallocated shares, respectively.
VESTING AND DISTRIBUTION OF BENEFITS; FORFEITURES; VOTING:
VESTING
The provisions of the Bonus Plan relating to vesting, distribution and
forfeiture of benefits for associates, soliciting brokers and sales
associates are described below. Special associates are also subject to
these provisions unless the written agreement between AFLAC NY and the
special associate provides otherwise.
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25% of a Participant's interest in the Bonus Plan will vest after
five years of credited service with AFLAC NY, and 100% will vest
after ten years of credited service.
100% of a Participant's interest will vest at death, retirement
at age 65 or over, or upon total and permanent disability while
still in service with AFLAC NY.
Any amounts related to Bonus Policies prior to the end of the
calendar month in which the termination date occurs will be
credited to the Participant's accounts. The accounts will then
be reduced to reflect any amounts recoverable by AFLAC NY with
respect to lapsed or cancelled policies and refunded premiums up
to the last business day of the calendar month in which the
termination occurred.
If a Participant's association with AFLAC NY is terminated for
cause in accordance with the terms and provisions of the written
contract or agreement between such Participant and AFLAC NY, the
Participant will be entitled to receive all amounts which vested
prior to the date of termination. Neither the Participant nor
any person claiming on behalf of such Participant will be
entitled to receive any other distribution or benefits under the
Bonus Plan.
Service credited for purposes of vesting includes all periods for
which a Participant is actively performing services for AFLAC NY
pursuant to a written contract as an associate, soliciting
broker, sales associate or special associate, subject to certain
special rules and exceptions. Periods for which a Participant
actively performed services pursuant to a written contract for
American Family Life Assurance Company of Columbus shall also be
included for purposes of vesting subject to certain special rules
and exceptions.
Length of service for purposes of vesting is determined by the
time elapsed from commencement of service to severance from
service, as determined under the Bonus Plan, in years and
fractions based on the number of days with 365 days constituting
a full year. If a Participant has a break in service, the period
of service before the break is credited as service for purposes
of vesting.
DISTRIBUTIONS
The following paragraphs describe the general timing and method
of distributions of benefits under the Bonus Plan. In any event,
no Bonus Plan benefits will be distributed to Participants prior
to the fiscal quarter ended March 31, 2000. In general,
distributions will be made within 45 days after the end of each
calendar quarter. We will use the closing market price on the
15th day of the month following the end of the quarter (if it is
a business day) to value the shares of stock. If the 15th day of
the month following the end of the quarter is not a business day,
then we will use the business day immediately following the 15th
day of the month.
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Whenever the market value of the shares to be distributed to a
Participant is less than $1,000, we will distribute cash to the
Participant instead of shares of stock.
After five years of service, the vested amount of whole shares of
common stock of AFLAC Incorporated (which includes amounts
allocated to his shares account for the third month of the
calendar quarter in which the Participant vests) will be
distributed to the Participant within 45 days after the end of
the calendar quarter. No further distributions will be made
until the Participant becomes 100% vested, through years of
service or otherwise.
After ten years of service, the vested amount of whole shares of
common stock of AFLAC Incorporated (which includes amounts
allocated to his shares account for the third month of the
calendar quarter in which the Participant vests) will be
distributed to the Participant within 45 days after the end of
the calendar quarter. The Participant shall thereafter be 100%
vested at all times in the balances of his accounts. Within 45
days after the end of each calendar year until the Participant
terminates his association with AFLAC NY, the Bonus Plan will
distribute to the Participant the balance of the Participant's
shares account as of the end of such year (including amounts
allocated to the account for the twelfth month of the calendar
year). Final distribution of balances of the Participant's
accounts will be made within 45 days after the end of the
calendar quarter in which such termination occurs.
If a Participant becomes 100% vested upon termination at age 65
or later, or as a result of death or total and permanent
disability, the vested amounts will be distributed to the
Participant or his estate within 45 days after the end of the
calendar quarter in which the date of termination occurs. If the
Participant is a corporation, partnership or other legal entity,
the Stock Bonus Management Committee shall determine rights to
distribution under these circumstances.
If the distribution is a final distribution, the Participant or
his estate will generally receive all whole shares of common
stock of AFLAC Incorporated credited to the participant's shares
account, cash in lieu of any fractional shares of stock held in
such account and the cash held in the Participant's fund account.
If the distribution is not a final distribution, the Participant
will receive only the whole shares of common stock of AFLAC
Incorporated credited to his individual shares account.
In limited extraordinary circumstances, AFLAC NY, in its sole
discretion, may accelerate the distribution of benefits to a
Participant.
The Stock Bonus Management Committee has absolute discretion to
determine the form of distribution under the Bonus Plan to a
Participant or estate who is at the time of distribution an
"affiliate" of the Company within the meaning of Rule 144 under
the Securities Act of 1933 ("1933 Act"), as amended. Shares of
common stock of AFLAC Incorporated acquired by affiliates will be
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subject to certain restrictions on resale. See "Restrictions on
Resale" below.
Benefits under the Bonus Plan may, to the extent permitted by law, be
applied to satisfy a Participant's obligations to AFLAC NY, before any
benefits are distributed directly to such Participant, in which case the
Trust pays such amounts directly to AFLAC NY. See "Additional Charges
Against Participant Accounts."
FORFEITURES
A Participant forfeits the portion of his accounts which is not vested
upon termination of his association with AFLAC NY. However, if a
Participant has a break in service of less than one year, then on the first
Allocation Date occurring after the break, the Participant's individual
fund account will be credited with the cash and the market value of the
shares common stock of AFLAC Incorporated held in the Participant's
accounts on the last business day of the month following the month in which
the Participant's termination of association previously occurred.
VOTING
Participants become entitled to exercise rights as stockholders of
AFLAC Incorporated upon distribution to them of shares of common stock of
AFLAC Incorporated to which they have vested rights under the Bonus Plan.
Under its listing agreement with the New York Stock Exchange, AFLAC
Incorporated has agreed that the shares of common stock of AFLAC
Incorporated held by the Trust shall be voted by the Trustees at all
stockholders' meetings in favor of or against proposals made to
stockholders in proportion to the vote of the other holders of AFLAC
Incorporated's common stock.
RESTRICTIONS ON RESALE:
Shares of common stock of AFLAC Incorporated received upon
distribution of Participant accounts may, in general, be resold to the
public without registration or other restriction under the 1933 Act, if at
the time of resale the Participant (or his beneficiary) is not an
"affiliate" of the Company within the meaning of the 1933 Act. Such shares
may not, however, be resold to the public by an "affiliate" without
registration under the 1933 Act, except in compliance with the applicable
requirements of Rule 144 under the 1933 Act, or pursuant to any other
applicable exemption. An "affiliate" is a person who directly or
indirectly controls, or is controlled by, or is under common control with,
the Company.
Rule 144 generally requires that:
there be available adequate current public information about
AFLAC Incorporated (which requirement is satisfied by the filing
of reports under the Securities Exchange Act of 1934);
the amount of all issued securities sold by the affiliate during
any three-month period may not exceed the greater of one percent
of the outstanding shares or the average weekly reported volume
of trading in common stock of AFLAC Incorporated on all national
13
<PAGE>
securities exchanges during the four calendar weeks preceding the
filing of the required notice of proposed sale; and all securities
be sold in "brokers' transactions" (as defined in Rule 144).
TRANSFERABILITY:
The Bonus Plan provides that, except as provided therein or as
otherwise required by law, a Participant cannot assign or transfer his
interest in the Bonus Plan. Furthermore, a Participant's interest in the
Bonus Plan is not liable for or subject to his debts, contracts,
liabilities, engagements or torts other than obligations owed to AFLAC NY
or to the AFLAC Federal Credit Union (if the Participant secures a loan
therefrom with a pledge of his benefits).
AMENDMENT AND TERMINATION:
AFLAC NY expects the Bonus Plan to be continued indefinitely.
However, AFLAC NY has the right at any time to reduce or discontinue
permanently its contributions to the Bonus Plan or to amend or terminate
the Bonus Plan by action of its Board of Directors without the consent of
the Trustees or Participants. Unless necessary to meet the requirements of
any state or federal law or regulation, no modification or termination of
the Bonus Plan may:
cause or permit any part of the Trust to be used for, or diverted
to, purposes other than the exclusive benefit of Participants in
the Bonus Plan or their beneficiaries (subject to the events
described in "Charges Against Participant Accounts" above),
have the effect of revesting in or causing to inure to the
benefit of AFLAC NY any portion of the Trust (subject to the
events described in "Charges Against Participant Accounts" and
"Participant Accounts" above), or
operate to deprive any Participant or beneficiary of any vested
right.
Upon termination of the Bonus Plan, AFLAC NY will deliver a written
notice of termination of the Plan to the Trustees and will direct the
Trustees, as soon as practicable, to bring the balance of all accounts up
to date after allowing for amounts necessary and proper to pay the expenses
of the distribution and other expenses and liquidation costs of the Bonus
Plan and Trust. Upon completion of such accounting, the Trustees shall
disburse to each Participant or estate, as the case may be, the full amount
then standing to his credit in his fund account and the full number of
shares in his share account.
MANDATORY ARBITRATION
Any dispute arising under the Bonus Plan, to the maximum extent
permitted by applicable law, is subject to mandatory, binding arbitration
pursuant to the terms of the Federal Arbitration Act. The primary
arbitration terms are as follows:
Arbitration is the sole remedy for disputes regarding the Bonus
Plan.
14
<PAGE>
The decision of the arbitration panel shall be final and binding
as among the parties.
Any arbitration will be conducted in Columbus, Georgia.
The arbitrators may grant all relief allowable under law except
for temporary restraining orders, interlocutory or preliminary
injunctive relief, and punitive or exemplary damages.
Each party may select one arbitrator, who need not be neutral,
and, if either party so requests, the Senior Judge of the
Superior Court of Muscogee County, Georgia will also select a
neutral third arbitrator.
The arbitration panel shall provide for a hearing and a majority
of the arbitration panel shall render an award within 10 days of
the completion of the hearing.
Each party will pay for the fees and expenses of its arbitrator
and, if appointed, will split the fees and expenses of any
neutral third arbitrator.
The prevailing party in the arbitration shall be entitled to
recover its costs and attorneys' fees from the other party.
TAX CONSEQUENCES
The Bonus Plan is not eligible for treatment as a "qualified" employee
pension, profit sharing or stock bonus plan under section 401(a) of the
Internal Revenue Code of 1986, as amended ("Code"), because the Bonus Plan
covers associates who are independent contractors. Under section 83 of the
Code and the Treasury regulations thereunder, the value of the common stock
of AFLAC Incorporated is includible in the gross income of a Participant
when his ownership interest in the common stock becomes substantially
vested. Shares of common stock of AFLAC Incorporated received by a
Participant will have a tax basis in his hands for computing future gain or
loss equal to the amount includible in his gross income attributable to
such shares. Under sections 404(d) and/or 83(h) of the Code and the
Treasury regulations thereunder, AFLAC NY generally receives deductions
with respect to the common stock of AFLAC Incorporated at the time it is
includible in the gross income of a Participant.
Different rules may apply in the case of any Participant who is
subject to the reporting requirements of Section 16(a) of the Securities
Exchange Act of 1934, as amended.
The above is a summary only. Please refer to the Code and its
regulations for a complete statement of the relevant provisions. We urge
you to consult with your tax advisor regarding the consequences to you
under federal, state, local, and other law of participation in the Bonus
Plan.
15
<PAGE>
PART II: INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated expenses in connection with distribution of the
securities being registered, are as follows:
SEC registration fee $ 5,800.00
Legal fees and expenses 7,500.00
Accounting fees and expenses 5,500.00
Miscellaneous 15,000.00
---------
Total $33,800.00
Item 15. 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 stockholders 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.
16
<PAGE>
Item 16. EXHIBITS
The following exhibits are filed with this registration statement:
Exhibit No.
(per Exhibit
Table in
Item 601 of
Regulation S-K) Description of Exhibit
--------------- ----------------------
5.1 Opinion of Joey M. Loudermilk, Esq.
15 Letter of KPMG Peat Marwick LLP
Re: Unaudited Interim Financial
Information
23.1 Consent of Joey M. Loudermilk, Esq.
(included in Exhibit 5.1)
23.2 Consent of KPMG Peat Marwick LLP
99 AFLAC New York Associate Stock Bonus
Plan and Related Trust Agreement
Item 17. 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;
(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.
17
<PAGE>
(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 REPORTS 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.
18
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant has duly 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 28, 1998.
AFLAC INCORPORATED
Dated: December 28, 1998 By: /s/ Daniel P. Amos
----------------------- --------------------------------------
Daniel P. Amos
Chief Executive Officer
Dated: December 28, 1998 By: /s/ Kriss Cloninger, III
----------------------- --------------------------------------
Kriss Cloninger, III
Executive Vice President,
Chief Financial Officer and Treasurer
Dated: December 28, 1998 By: /s/ Norman P. Foster
----------------------- --------------------------------------
Norman P. Foster
Executive Vice President,
Corporate Finance
19
<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 Officer December 28, 1998
- ------------------------ and Vice Chairman of -----------------
Daniel P. Amos the Board
/s/ Paul S. Amos Chairman of the Board December 28, 1998
- ------------------------ -----------------
Paul S. Amos
/s/ John Shelby Amos, II Director December 28, 1998
- ------------------------
John Shelby Amos, II
/s/ Michael H. Armacost Director December 28, 1998
- ------------------------
Michael H. Armacost
/s/ M. Delmar Edwards, M.D. Director December 28, 1998
- ------------------------
M. Delmar Edwards, M.D.
/s/ George W. Ford, Jr. Director December 28, 1998
- ------------------------
George W. Ford, Jr.
/s/ Joe Frank Harris Director December 28, 1998
- ------------------------
Joe Frank Harris
/s/ Elizabeth J. Hudson Director December 28, 1998
- ------------------------
Elizabeth J. Hudson
/s/ Kenneth S. Janke, Sr. Director December 28, 1998
- ------------------------
Kenneth S. Janke, Sr.
/s/ Charles B. Knapp, Ph.D. Director December 28, 1998
- ------------------------
Charles B. Knapp, Ph.D.
20
<PAGE>
Director December 28, 1998
- ------------------------
Hisao Kobayashi
/s/ Yoshiki Otake Director December 28, 1998
- ------------------------
Yoshiki Otake
/s/ E. Stephen Purdom Director December 28, 1998
- ------------------------
E. Stephen Purdom
/s/ Barbara K. Rimer Director December 28, 1998
- ------------------------
Barbara K. Rimer
/s/ Henry C. Schwob Director December 28, 1998
- ------------------------
Henry C. Schwob
/s/ J. Kyle Spencer Director December 28, 1998
- ------------------------
J. Kyle Spencer
/s/ Glenn Vaughn, Jr. Director December 28, 1998
- ------------------------
Glenn Vaughn, Jr.
21
<PAGE>
EXHIBIT INDEX
NUMBER DESCRIPTION
-------- -------------
5.1 Opinion of Joey M. Loudermilk, Esq.
15 Letter of KPMG Peat Marwick LLP
Re: Unaudited Interim Financial Information
23.1 Consent of Joey M. Loudermilk, Esq.
(included in Exhibit 5.1)
23.2 Consent of KPMG Peat Marwick LLP
99 AFLAC New York Associate Stock Bonus Plan and
Related Trust Agreement
22
<PAGE>
EXHIBIT 5.1
December 28, 1998
The Board of Directors
AFLAC Incorporated
1932 Wynnton Road
Columbus, Georgia 31999
Re: Registration Statement on Form S-3
Ladies and Gentlemen:
I am Senior Vice President and General Counsel of AFLAC Incorporated,
a Georgia corporation (the "Company"). The Company is filing a
Registration Statement on Form S-3 (the "Registration Statement") with the
Securities and Exchange Commission relating to 500,000 shares of common
stock, par value $.10 per share (the "Common Stock"), of the Company (the
"Shares") issuable pursuant to the AFLAC New York Associate Stock Bonus
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 have reviewed such documents as I
have deemed necessary or appropriate as a basis for the opinion set forth
below. In my examination, I have assumed the genuineness of all
signatures, the legal capacity of all natural persons, the authenticity of
all documents submitted to me as originals, the conformity to original
documents of all documents submitted to me as certified or photostatic
copies, and the authenticity of the originals of such copies. As to any
facts material to this opinion that I did not independently establish or
verify, I have relied upon representations or certificates of the officers
and directors of the Company.
I am a member of the State Bar of Georgia and I express no opinion as
to the laws of any other jurisdiction.
Based upon the foregoing, and subject to the qualifications set forth
herein, I am of the opinion that the Shares have been duly and validly
authorized and when acquired from the Company by the Trust established
under the Plan as described in the Registration Statement, the Shares will
be validly issued, fully paid and nonassessable.
I hereby consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement and to the use of my name in the Prospectus that is
a part of the Registration Statement.
Very truly yours,
/s/ Joey M. Loudermilk
---------------------------
Joey M. Loudermilk
Senior Vice President and
General Counsel
<PAGE>
EXHIBIT 15
KPMG Peat Marwick LLP
303 Peachtree Street, N.E.
Suite 2000
Atlanta, Georgia 30308
The Board of Directors
AFLAC Incorporated
Columbus, Georgia
Gentlemen:
Re: Registration Statement Form S-3
With respect to the subject registration statement dated December 28,
1998, 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 reports prepared or certified by an accountant within
the meaning of sections 7 and 11 of the Act.
Very truly yours,
KPMG PEAT MARWICK LLP
Atlanta, Georgia
December 28, 1998
<PAGE>
EXHIBIT 23.2
KPMG Peat Marwick LLP
303 Peachtree Street, N.E.
Suite 2000
Atlanta, Georgia 30308
The Board of Directors
AFLAC Incorporated
Columbus, Georgia
We consent to incorporation by reference in the registration statement
dated December 28, 1998, on Form S-3 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.
KPMG PEAT MARWICK LLP
Atlanta, Georgia
December 28, 1998
<PAGE>
AFLAC NEW YORK ASSOCIATE
STOCK BONUS PLAN
WITH RELATED
TRUST AGREEMENT
JANUARY 1, 1999
<PAGE>
AFLAC NEW YORK ASSOCIATE STOCK BONUS PLAN
The AFLAC New York Associate Stock Bonus Plan is hereby adopted,
effective as of January 1, 1999, as follows:
ARTICLE 1
DEFINITIONS
As used herein, the following words and phrases shall have the meaning
indicated unless otherwise defined or required by the context:
1.1 "Active Association" shall mean the performance of services by an
Associate, Soliciting Broker, Sales Coordinator or Special Associate
pursuant to a written contract with the Plan Sponsor for the solicitation
of applications for certain insurance products of the Plan Sponsor, and the
servicing of accounts, prior to the effective date of any termination of
such contract whether for cause or without cause. Active Association shall
also include a period of employment as an employee of the Plan Sponsor to
the extent that such employment immediately precedes or follows a period of
Active Association defined above.
1.2 "Allocation Date" shall mean, with respect to each month, a day,
determined in the discretion of the Stock Bonus Management Committee, not
later than the last day of the following month.
1.3 "Associate" shall mean any person or entity associated with the
Plan Sponsor pursuant to an Associate's contract pertaining to services in
the United States, its territories and possessions, and any other location
or country designated by the Plan Sponsor, who is paid on a commission
basis and whose Active Association with the Plan Sponsor has not been
terminated.
1.4 "Board" shall mean the Board of Directors of American Family Life
Assurance Company of New York.
1.5 "Bonus Policy/Policies" shall mean those insurance policies
issued by the Plan Sponsor which the Plan Sponsor, acting in its sole
discretion, designates as "Bonus Policies."
1.6 "Break in Service" shall mean the period of time commencing on
the date on which a Participant's Active Association terminates for any
reason whatsoever, and ending on the day before the Participant's
subsequent Commencement Date.
1.7 "Commencement Date" shall mean the date on which one first begins
Active Association or, in the case of a Participant who has incurred a
Break in Service, the first date following such Break in Service on which
he or she again commences Active Association.
1.8 "First Year Premiums" shall mean premiums scheduled to be
received for the first twelve months of coverage after a Bonus Policy sold
by a Participant is made effective at the home office of the Plan Sponsor.
1
<PAGE>
1.9 "Forfeited Amount" shall mean (i) the cash held in a
Participant's Individual Fund Account, and (ii) the fair market value of
the number of shares of Stock held in the Participant's Individual Shares
Account, all determined on the last business day of the month following the
month in which the Participant's Active Association with the Plan Sponsor
is terminated.
1.10 "Individual Accounts" shall mean Participants' Individual Fund
Accounts and/or Individual Shares Accounts.
1.11 "Individual Fund Account" shall mean the Individual Fund Account
for a Participant as described in Section 4.1(b).
1.12 "Individual Shares Account" shall mean the Individual Shares
Account for a Participant as described in Section 4.1(a).
1.13 "Participant" shall mean any Associate, Soliciting Broker, Sales
Coordinator or Special Associate participating in this Plan.
1.14 "Plan" shall mean the AFLAC New York Associate Stock Bonus Plan,
as contained herein and as amended from time to time.
1.15 "Plan Sponsor" shall mean the American Family Life Assurance
Company of New York, a New York corporation, and any subsidiary or
affiliate corporation which may hereafter adopt the Plan with the
permission of the Board.
1.16 "Reporting Month" shall mean a period of time beginning on the
day following the close of the previous reporting month and ending on the
last day that policy accounting is performed for such month.
1.17 "Sales Coordinator" shall mean any Associate who is also
providing services to the Plan Sponsor pursuant to a contract as a District
Sales Coordinator, Regional Sales Coordinator, or State Sales Coordinator,
and who is paid on a commission basis.
1.18 "Soliciting Broker" shall mean any Associate who is also
providing services to the Plan Sponsor pursuant to a standardized
Soliciting Broker contract and who is paid on a commission basis.
1.19 "Special Associate" shall mean any person or entity associated
with the Plan Sponsor pursuant to a special written agreement, who is
engaged in the sale of the products of the Plan Sponsor and is paid on a
commission basis, and whose Active Association with the Plan Sponsor has
not been terminated.
1.20 "Stock" or "Shares of Stock" shall mean the common stock of
AFLAC Incorporated.
1.21 "Stock Bonus Management Committee" shall mean the Committee
which shall oversee the operation of this Plan and shall be composed of
three officers of the Plan Sponsor as designated from time to time by the
Board. The Board may remove any member of this Committee at any time in
its absolute discretion.
1.22 "Trust" shall mean the trust created and existing pursuant to
this Plan and designated as the Trust Agreement dated January 1, 1999, as
such Agreement may be amended from time to time.
2
<PAGE>
1.23 "Trustees" shall mean the Trustees of the Trust.
1.24 "Year of Service" shall mean a period of time in which a
Participant has accumulated 365 days of Active Association. Nonsuccessive
and less than whole year periods of Active Association shall be aggregated
on the basis that 365 days of Active Association equals one whole Year of
Service, and a Year of Service shall be expressed as a number of whole
years plus a fraction of a year, if any, computed on the same basis. In no
event will a Participant accumulate more than one Year of Service for any
12 consecutive-month period.
1.25 "Years of Credited Service" shall mean the Participant's Years
of Service (including whole years plus fractions of a year) during the
period from the Participant's Commencement Date until such Participant's
Active Association with the Plan Sponsor is terminated, subject to and
computed in accordance with the rules on computing Years of Credited
Service upon reassociation after a Break in Service as set forth in Section
5.6 of this Plan. "Years of Credited Service" shall also include a
Participant's Active Association pursuant to a written contract with
American Family Life Assurance Company of Columbus to the extent such
Active Association with American Family Life Assurance Company of Columbus
immediately precedes or follows a period of Active Association with Plan
Sponsor, subject to the same definitions, rules and conditions set forth
herein.
ARTICLE 2
ELIGIBILITY AND PARTICIPATION
2.1 CONDITIONS OF ELIGIBILITY. Each Associate, Soliciting Broker and
Sales Coordinator is eligible to become a Participant in the Plan. Special
Associates shall be eligible to participate in this Plan only if so
provided in the written agreement between the Special Associate and the
Plan Sponsor.
2.2 PARTICIPATION. As of the effective date of this Plan, any
current Associate, Soliciting Broker, Sales Coordinator or, subject to
Section 2.1, any Special Associate, shall immediately become a Participant,
unless he or she notifies the Plan Sponsor in writing that he or she will
not become a Participant. After the effective date of this Plan, any
Associate, Soliciting Broker, Sales Coordinator or, subject to Section 2.1,
any Special Associate, shall immediately become a Participant on his or her
Commencement Date, unless he or she notifies the Plan Sponsor in writing
that he or she will not become a Participant.
2.3 ACCEPTANCE. The Plan shall not be deemed to constitute a
contract between the Plan Sponsor and the Participant or to be
consideration, or an inducement, for the association of any Participant.
No provision of the Plan shall be deemed to give any Participant the right
to be retained in association with the Plan Sponsor, or to interfere with
the right of the Plan Sponsor to discharge any Participant at any time
regardless of the effect which such discharge will have upon him as a
Participant. Each Participant for himself or herself and his or her heirs
and assigns shall be deemed conclusively by his or her act of participation
herein, to have agreed to and accepted the terms and conditions of this
Plan.
3
<PAGE>
ARTICLE 3
CONTRIBUTIONS, INVESTMENTS AND EXPENSES
3.1 CONTRIBUTIONS BY PLAN SPONSOR. All contributions, if any, shall
be made by the Plan Sponsor. No contributions will be made by any
Participant.
3.2 COMPUTATION OF CONTRIBUTIONS FOR BONUS POLICIES. Subject to
Section 3.3, the amount of Plan Sponsor contributions to be made on or
before each Allocation Date shall be equal to the applicable percentage of
First Year Premiums actually collected on Bonus Policies issued on or after
January 1, 1999 by the Plan Sponsor during the month to which such
Allocation Date relates.
3.3 ADDITIONAL CONTRIBUTIONS. In addition to the contributions
required pursuant to Section 3.2, the Plan Sponsor shall contribute amounts
required pursuant to Section 5.6 relating to crediting of Forfeited Amounts
following a Break in Service of less than 12 months.
3.4 REFUNDS. In the event that the Plan Sponsor, for any reason and
acting in its sole discretion, determines to refund all or a part of the
First Year Premiums collected on a Bonus Policy, the Plan Sponsor shall be
entitled to recover from the Trust, and there may be charged against the
Participant's Individual Accounts, an amount equal to the applicable
percentage of such First Year Premiums which were refunded.
3.5 OFFSET AGAINST CONTRIBUTIONS; RECOVERY OF CREDITED AMOUNTS.
(a) Notwithstanding the provisions of Sections 3.2 and 3.3 , the
amount to be contributed by the Plan Sponsor may, in the sole discretion of
the Plan Sponsor, be reduced to reflect (1) the amounts recoverable by the
Plan Sponsor with respect to refunded First Year Premiums as provided for
in Section 3.4; or (2) amounts forfeited by Participants as provided in
Section 5.5. Alternatively, the Plan Sponsor may, with respect to all or
part of such reductions, request that the Plan pay to the Plan Sponsor an
amount equal to such reductions.
(b) On each Allocation Date, the amount to be allocated to a
Participant's Individual Fund Account shall be reduced by amounts
recoverable by the Plan Sponsor pursuant to Section 3.4 relating to
refunded First Year Premiums, for the month to which such Allocation Date
relates. If the amount of such reduction exceeds the amount otherwise
allocable to the Participant's Individual Fund Account, then the excess
shall be applied first to reduce the balance in the Individual Fund Account
to zero and then against the balance of the Participant's Individual Shares
Account. For purposes of reducing the balance of the Participant's
Individual Shares Account, the cost of Shares of Stock shall be deemed to
be the weighted average purchase price (including brokerage and other fees
directly related thereto) of all Shares of Stock purchased for the
Reporting Month to which the Allocation Date relates. If the Participant's
Individual Shares Account is thus reduced to zero and the full amount of
the reduction has not yet been made, the Participant's Individual Fund
Account shall have a negative balance equal to the remaining reduction
amount.
4
<PAGE>
(c) To the extent that the amounts recoverable by the Plan
Sponsor have been distributed to a Participant and cannot be recovered
pursuant to the procedures set forth in paragraph (b) above, then the
amount of such distribution shall create a liability to the Plan Sponsor on
the part of the Participant (1) to be charged back as a first lien against
future earned commissions on first year or renewal business written by the
Participant, or (2) to be paid to the Plan Sponsor on demand of the Plan
Sponsor.
3.6 APPLICABLE PERCENTAGE FOR BONUS POLICIES. Subject to Sections
3.2, 3.4 and 3.5, the applicable percentage of First Year Premiums received
on Bonus Policies shall be as follows:
(a) ASSOCIATES AND SOLICITING BROKERS. The Plan Sponsor shall
contribute three and one-half percent (3.5%) (or such other percentage as
is determined to be appropriate by the Stock Bonus Management Committee) of
the First Year Premiums actually received for each Bonus Policy sold by a
Participant.
(b) SALES COORDINATORS. The Plan Sponsor shall contribute
seven-tenths of one percent (.7%) (or such other percentage as is
determined to be appropriate by the Stock Bonus Management Committee) of
the First Year Premiums actually received for each Bonus Policy sold by a
Participant who is assigned in writing to a Sales Coordinator.
(c) SPECIAL ASSOCIATES. The applicable percentage of First Year
Premiums to be contributed with respect to Bonus Policies sold by a Special
Associate shall be determined in accordance with the written agreement
between the Special Associate and the Plan Sponsor.
3.7 DESIGNATION OF BONUS POLICIES. All Participants shall be
informed as to those policies that are designated as Bonus Policies for
purposes of the Plan.
3.8 INVESTMENT OF CONTRIBUTIONS; TRUST. All contributions or
advances made to the Plan shall be made to the Trust. The Trustees of the
Trust shall be appointed by the Board and may consist of one or more in
number. Trustees may be employees of the Plan Sponsor. Unless otherwise
determined by the Trustees, all amounts held by the Trust shall be invested
in Stock or in as much Stock as is available, and all Stock purchased by
the Trust shall be purchased in the open market or from AFLAC Incorporated
Treasury shares. Pending investment in Stock, amounts in the Trust shall
be held in cash or cash equivalents. The Trustees, in their sole
discretion, shall purchase Stock at such time and in such amounts as they
deem to be reasonable and practicable, provided all such purchases shall be
in accordance with applicable provisions of the federal securities law.
3.9 EXPENSES. Subject to the provisions of Section 7.3, the Plan
Sponsor shall bear all costs incurred in the operation of the Plan other
than brokerage and other fees directly related to the purchase of Shares of
Stock or other permitted investments. Such brokerage and other related
fees shall be charged against the investments prior to allocation to the
Participant's Individual Accounts.
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ARTICLE 4
PLAN ASSETS
4.1 INDIVIDUAL ACCOUNTS. Each Participant shall have two (2)
Individual Accounts in his name, designated and described as follows:
(a) INDIVIDUAL SHARES ACCOUNT. The balance in this Account
represents the number of Shares of Stock that have been allocated to the
Participant in accordance with the Plan, including Stock paid for with
amounts from the Participant's Individual Fund Account and Stock received
as a result of Stock dividends or Stock splits on Stock allocated to the
Individual Shares Account.
(b) INDIVIDUAL FUND ACCOUNT. The balance in this Account
represents the portion of Plan Sponsor contributions allocated to the
Participant on account of his sale of Bonus Policies, any Plan Sponsor
contribution allocated to this Account in accordance with Section
5.6(a)(1), and cash dividends on Shares of Stock which are allocated to the
Participant's Individual Shares Account, less any amounts used to pay for
Shares of Stock.
4.2 UNALLOCATED AMOUNTS. Amounts not allocated to Individual
Accounts shall be designated and described as follows:
(a) UNALLOCATED FUNDS. The balance of Unallocated Funds at any
time represents Plan Sponsor contributions prior to allocation to
Individual Accounts, forfeited portions of Individual Fund Accounts and
cash dividends on Unallocated Shares, less any amounts used to pay for
Shares of Stock.
(b) UNALLOCATED SHARES. The balance of Unallocated Shares at
any time represents the number of Shares of Stock that have been (i)
forfeited from Individual Shares Accounts or paid for with amounts from
Unallocated Funds, (ii) received as a result of Stock dividends or Stock
splits on Unallocated Shares, (iii) surrendered pursuant to the provisions
of Section 3.5(b), (iv) surrendered pursuant to Section 5.3, or (v)
surrendered as a result of obligations owed to the Plan Sponsor pursuant to
Section 8.1.
4.3 EXPRESSED IN DOLLARS OR SHARES. Individual Fund Accounts and
Unallocated Funds shall be expressed in dollars and cents. Individual
Shares Accounts and Unallocated Shares shall be expressed in the number of
Shares of Stock held calculated to three decimal places.
4.4 DIVIDENDS. In the event that cash or Stock is paid to the Trust
as a dividend or Stock split with respect to Stock held by the Trust, the
amount of such cash or Stock (a) with respect to Stock allocated to
Individual Shares Accounts shall be allocated to Individual Accounts, cash
dividends to Individual Fund Accounts and Stock to Individual Shares
Accounts, in proportion to the number of Shares of Stock held for the
Participants in their Individual Shares Accounts, and (b) with respect to
Unallocated Shares shall be allocated to Unallocated Funds and Unallocated
Shares, respectively.
4.5 MONTHLY ADJUSTMENT OF ACCOUNTS. As of the Allocation Date for
each month, the accounts in the Trust shall be adjusted as follows:
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(a) Plan Sponsor contributions made during the month shall be
credited to each Individual Fund Account based on the applicable percentage
of First Year Premiums actually received on Bonus Policies sold by the
Participant, subject to reduction as provided in Sections 3.4 and 3.5.
(b) Each Participant's Individual Fund Account shall then be
reduced by the cost of the Shares of Stock which are purchased with funds
from such Account. Similarly, the Unallocated Funds shall be reduced by
the cost of the Shares of Stock which are purchased with Unallocated Funds
or, in the event of a distribution of cash pursuant to Section 5.3, the
cost of the Shares of Stock which are transferred out of Individual Shares
Accounts thus becoming Unallocated Shares. For purposes of adjusting the
accounts, the cost of Shares of Stock shall be deemed to be the weighted
average purchase price (including brokerage and other fees directly related
thereto) of all Shares of Stock purchased for the Reporting Month to which
the Allocation Date relates. Shares of Stock held as Unallocated Shares
(as a result of forfeitures or for any other reason) which are transferred
to Individual Shares Accounts shall be deemed to have been purchased by the
Plan at a price equal to (1) the closing market value on the last business
day of the Reporting Month to which the forfeiture relates in the case of
Shares of Stock which were held as Unallocated Shares as a result of
forfeiture, (2) the closing market value on the date of surrender in the
case of Shares of Stock which were held as Unallocated Shares as a result
of surrender pursuant to Section 5.3 or 8.1, and (3) the weighted average
purchase price (including brokerage and other fees directly related
thereto) of all Shares of Stock purchased for the Reporting Month to which
the event relates in the case of Shares of Stock which were held as
Unallocated Shares as a result of an event other than forfeiture or
surrender pursuant to Section 5.3 or 8.1.
(c) Cash and Stock paid to the Trust during the month as a
dividend or Stock split with respect to Stock held by the Trust shall be
credited and allocated to accounts in accordance with Section 4.4.
(d) The forfeited portions of the Individual Fund Accounts and
Individual Shares Accounts of Participants who terminated Active
Association with the Plan Sponsor during the previous month shall become
Unallocated Funds and Unallocated Shares, respectively.
(e) All cash held as Unallocated Funds and all Shares of Stock
held as Unallocated Shares shall, in the discretion of the Plan Sponsor,
revert back to the Plan Sponsor, and upon transfer to the Plan Sponsor
shall thereupon become the sole property of the Plan Sponsor, subject only
to the Plan Sponsor's obligation to recontribute amounts to the Plan upon a
Participant's reassociation as a Participant as provided in Section 5.6.
Alternatively, the Plan Sponsor may (1) offset all or a part of the cash
held as Unallocated Funds and/or Shares of Stock held as Unallocated Shares
against the Plan Sponsor's contribution obligations under the Plan, or (2)
request that the Plan purchase Shares of Stock held as Unallocated Shares;
for purposes of (1) or (2), the Shares of Stock held as Unallocated Shares
shall be valued at a price equal to (1) the closing market value on the
last business day of the Reporting Month to which the forfeiture relates in
the case of Shares of Stock which were held as Unallocated Shares as a
result of forfeiture, (2) the closing market value on the date of surrender
in the case of Shares of Stock which were held as Unallocated Shares as a
result of surrender pursuant to Section 5.3 or 8.1, and (3) the weighted
average purchase price (including brokerage and other fees directly related
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thereto) of all Shares of Stock purchased for the Reporting Month to which
the event relates in the case of Shares of Stock which were held as
Unallocated Shares as a result of an event other than forfeiture or
surrender pursuant to Section 5.3 or 8.1.
4.6 REPORTING. The Plan Sponsor shall report to each Participant the
cash and total number of Shares of Stock held in the Participant's
Individual Accounts. Such reporting shall be made quarterly, and shall be
mailed, first class mail, to each Participant who has account activity
during the subject quarter.
ARTICLE 5
VESTING, DISTRIBUTION AND FORFEITURES
5.1 VESTING AND TIMING OF DISTRIBUTIONS. Upon completing the number
of Years of Credited Service specified in paragraphs (a) and (b) below or
upon the occurrence of the events specified in paragraphs (c), (d) or (e)
below, and subject to the provisions of Sections 5.3 and 5.6, a Participant
shall become vested (subject to the provisions of Sections 3.5, 5.5, 8.1,
9.1 and 10.4) in the percentage specified below of the balances, if any, of
the Participant's Individual Accounts, including any portion of such
balances deemed to be advances.
(a) FIVE YEARS OF CREDITED SERVICE. On the day on which a
Participant completes five Years of Credited Service, he or she shall
become vested in 25% of the balance, if any, of his or her Individual
Shares Account. Beginning with the quarter ended March 31, 2000, and
subject to the provisions of Section 5.3 for values less than $1,000.00,
the vested amount of whole Shares (which shall include amounts allocated to
the Account for the third month of the calendar quarter in which a
Participant vests) shall be distributed to the Participant within 45 days
after the end of such calendar quarter. Following such distribution, the
Participant shall have no vested interest in his or her Individual
Accounts, except as vesting may occur under paragraphs (b), (c), (d), and
(e) below.
(b) TEN YEARS OF CREDITED SERVICE. On the day on which a
Participant completes ten Years of Credited Service, he or she shall become
vested in 100% of the then existing balances, if any, of his or her
Individual Accounts. Beginning with the quarter ended March 31, 2000 and
subject to the provisions of Section 5.3 for values less than $1,000.00,
the vested amount of whole Shares (which shall include amounts allocated to
a Participant's Individual Shares Account for the third month of the
calendar quarter in which a Participant vests) shall be distributed to the
Participant within 45 days after the end of such calendar quarter. The
Participant shall thereafter be 100% vested at all times in the balances of
his or her Individual Accounts and, within 45 days after the end of each
calendar year until the Participant terminates his or her Active
Association with the Plan Sponsor, the Plan shall distribute to the
Participant the balance of the Participant's Individual Shares Account as
of the end of such year (including amounts allocated to the Account for the
twelfth month of the calendar year). Final distribution of balances of the
Participant's Individual Accounts shall be made within 45 days after the
end of the calendar quarter in which such termination occurs.
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(c) AGE 65. Each Participant who, on or after the Participant's
65th birthday, terminates his or her Active Association with the Plan
Sponsor, shall be 100% vested in the balances of the Participant's
Individual Accounts on the date of termination. Beginning with the quarter
ended March 31, 2000, and subject to the provisions of Section 5.3, the
vested amounts shall be distributed to the Participant within 45 days after
the end of the calendar quarter in which the date of termination occurs.
(d) DEATH. In the event of the death of a Participant, the
Participant shall be deemed to be 100% vested in the balances of his or her
Individual Accounts on the day prior to the day of such death. Beginning
with the quarter ended March 31, 2000, and subject to the provisions of
Section 5.3, the vested amounts shall be distributed to the Participant's
estate, within 45 days after the end of the calendar quarter in which the
death of the Participant occurs.
(e) TOTAL AND PERMANENT DISABILITY. In the event of a
Participant's termination of Active Association with the Plan Sponsor by
reason of the Participant's total and permanent disability, such
Participant shall be 100% vested in the balances of his or her Individual
Accounts on the date of such termination. Disability shall mean any
medically determinable physical or mental impairment which totally disables
the Participant from performing any "compensable work" as defined by the
Social Security Act, as amended. The determination as to the existence of
any Participant's total and permanent disability shall be made solely by
the Stock Bonus Management Committee which may require such medical and
other evidence as in its judgment is necessary to make the determination.
Beginning with the quarter ended March 31, 2000, and subject to the
provisions of Section 5.3, the vested amounts shall be distributed to the
Participant within 45 days after the end of the calendar quarter in which
(1) the date of termination occurs, or (2) if later, the date on which the
Stock Bonus Management Committee determines that the Participant is totally
and permanently disabled.
(f) In the event of a termination pursuant to this Section 5.1,
the Participant will be credited with First-Year Premiums on Bonus Policies
prior to the end of the calendar month in which the termination date
occurs, and the Participant's Accounts will be reduced to reflect amounts
recoverable by the Plan Sponsor with respect to refunded First Year
Premiums (as provided for in Section 3.4) up to the last business day of
the calendar month in which the date of termination occurs.
(g) The Stock Bonus Management Committee shall determine whether
vesting has occurred under paragraphs (c), (d) and (e) of this Section 5.1
if the Participant is a corporation, partnership or other legal entity.
(h) All payments and distributions of a Participant's Individual
Account due or made after the death of a Participant shall be to
Participant's estate, notwithstanding any prior or other designations of
beneficiaries other than Participant's estate.
5.2 SPECIAL DISTRIBUTIONS. Nothing set forth in this Article 5 shall
prevent the Plan Sponsor from distributing at any time, in addition to the
distributions set forth in Section 5.1, any part or all of the balances in
the Individual Accounts of one or more Participants, subject to whatever
conditions the Plan Sponsor, in its discretion, may impose.
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5.3 FORM OF DISTRIBUTIONS. In the event of a final distribution, the
Participant or his estate shall receive all whole Shares of Stock credited
to the Participant's Individual Shares Account, cash in lieu of any
fractional Shares of Stock held in such Account, and the cash held in the
Participant's Individual Fund Account. If the distribution is not a final
distribution, the Participant shall receive only the whole Shares of Stock
credited to his Individual Shares Account. Only the Participant or his
estate shall be entitled to receive a distribution under the Plan.
Distributions shall be made within 45 days following the end of each
calendar quarter and shall be valued by using the closing market value
price as of the 15th day of the month following the end of each quarter, or
the business day immediately following the 15th day of the month.
Notwithstanding the foregoing, in the event that the market value of all
Shares of Stock to be distributed is less than $1,000, the distribution
shall be paid in the form of cash, in lieu of Shares of Stock.
5.4 DISTRIBUTIONS TO AFFILIATES. The Stock Bonus Management
Committee shall have absolute discretion to determine the form of
distribution under the Plan to a Participant who is at the time of
distribution an "affiliate" of AFLAC Incorporated within the meaning of
Rule 144 under the Securities Act of 1933, as amended. The Stock Bonus
Management Committee shall determine which Participants are covered by this
provision. In so doing, the Stock Bonus Management Committee shall take
into account any information and conclusions furnished to it by the Plan
Sponsor and AFLAC Incorporated, and may in its discretion seek advice of
counsel.
5.5 FORFEITURES.
(a) Subject to the provisions of Section 5.1, any portion of a
Participant's Individual Accounts which is not vested on the date the
Participant's Active Association with the Plan Sponsor is terminated, shall
be forfeited.
(b) Notwithstanding any provision to the contrary in this Plan,
in the event that a Participant's Active Association with the Plan Sponsor
is terminated for cause in accordance with the terms and provisions of the
written contract or agreement between such Participant and the Plan
Sponsor, the Participant will be entitled to receive all amounts which
vested prior to the date of termination, but neither the Participant nor
his estate (nor any person claiming on behalf of such Participant or his
estate) is entitled to receive any other distribution or benefits under the
Stock Bonus Plan.
(c) In the event that Participant or Participant's license to
sell insurance is suspended so that Participant is unable to sell Plan
Sponsor's policies of insurance, Participants shall forfeit all rights to
any stock accruals or appreciations in stock during the time of such
suspension and the time period for the suspension shall not be counted for
purposes of computing Years of Credited Service. At such time as the
suspension is lifted and Participant actively begins selling Plan Sponsor's
insurance again, then stock accruals will continue under the Stock Bonus
Plan and time shall again be counted for the purpose of computing Years of
Credited Service. The rules for Vesting Upon Reassociation set forth in
Section 5.6 shall apply at such time as well.
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5.6 VESTING UPON REASSOCIATION. If a Participant's Active
Association with the Plan Sponsor is terminated, and the Participant
subsequently again enters into Active Association with the Plan Sponsor,
the following rules shall apply:
(a) BREAK OF LESS THAN 12 MONTHS. In the event that the
Participant's Break in Service is for a period of less than twelve (12)
consecutive months, then:
(1) On the first Allocation Date occurring after the
Participant again enters into Active Association with the Plan Sponsor, the
Participant's Individual Fund Account shall be credited with the
Participant's Forfeited Amount, and
(2) All of the Participant's Years of Credited Service
prior to the Break in Service shall be counted for purposes of computing
Years of Credited Service.
(b) BREAK OF 12 MONTHS OR MORE. In the event the Participant's
Break in Service is equal to or greater than twelve (12) consecutive
months, then:
(1) When the Participant again enters into Active
Association with the Plan Sponsor, his or her Individual Accounts shall not
be credited with the Forfeited Amount, and
(2) All of the Participant's Years of Credited Service
prior to the Break in Service shall be counted for purposes of computing
Years of Credited Service.
5.7 VESTING, DISTRIBUTION AND FORFEITURES FOR SPECIAL ASSOCIATES.
Notwithstanding anything to the contrary in this Article 5, if the written
agreement between the Plan Sponsor and a Special Associate includes
provisions regarding vesting, distribution and forfeiture of benefits which
are inconsistent with the provisions of this Article 5, the provisions of
such written agreement shall govern with respect to such Special Associate.
ARTICLE 6
ADMINISTRATION OF PLAN
6.1 ADMINISTRATION.
(a) The Stock Bonus Management Committee shall administer and
have complete control of the Plan, subject to the provisions hereof, with
all powers necessary to enable it properly to carry out its duties in that
respect. Not in limitation, but in amplification of the foregoing, the
Stock Bonus Management Committee shall have the power to construe the Plan
and to determine all questions that may arise hereunder, including all
questions relating to the eligibility of Associates, Soliciting Brokers,
Sales Coordinators or Special Associates to participate in the Plan and the
amount of benefit to which any Participant may become entitled hereunder.
The decision of the Stock Bonus Management Committee upon all matters
within the scope of its authority shall be final.
(b) The Stock Bonus Management Committee may establish uniform
rules and procedures to be followed by Participants regarding any matter
required to administer the Plan.
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(c) The Stock Bonus Management Committee shall prepare and
distribute information concerning the Plan to the Participants in such
manner as it shall deem appropriate and as required by law.
(d) The Stock Bonus Management Committee shall be entitled to
rely upon all certificates and reports, if any, furnished by the consultant
or actuary of the Plan Sponsor, and upon all opinions given by any legal
counsel, accountant or doctor selected or approved by the Plan Sponsor; any
action taken or suffered by the Stock Bonus Management Committee in good
faith in reliance upon the advice or opinion of such consultant, actuary,
legal counsel, accountant or doctor shall be conclusive upon each of them
and upon all Participants or other persons interested in the Plan.
6.2 RECORDS. All material acts and determinations of the Stock Bonus
Management Committee shall be duly recorded and all such records, together
with such other documents as may be necessary for the administration of the
Plan, shall be preserved in the custody of the Plan Sponsor. The Plan
Sponsor shall provide all necessary forms, and accounting, clerical and
other such services required to carry out the proper administration of the
Plan.
6.3 FINANCIAL STATEMENTS. The Trustees shall cause financial
statements of the Trust to be prepared annually and at such other times as
they deem appropriate. All accounting for the Trust shall be on an accrual
basis.
6.4 DELEGATION OF AUTHORITY AND EXEMPTION FROM LIABILITY. The
administrative duties and responsibilities set forth in this Article 6 may
be delegated by the Stock Bonus Management Committee in whatever manner and
to whatever extent it chooses to such persons as the Stock Bonus Management
Committee selects. To the extent permitted by law, the Plan Sponsor shall
indemnify and hold harmless the Trustees, each member of the Stock Bonus
Management Committee, any member of the Board of Directors of the Plan
Sponsor, and any other party acting with respect to the Plan at the request
of the Plan Sponsor or the Stock Bonus Management Committee, against any
and all claims, demands, suits, loss, damages, expense and liability
arising from any act or failure to act with respect to the Plan, including
any act or failure to act which is deemed to be a breach of such
individual's fiduciary responsibilities, unless the same is determined to
be due to gross negligence or willful misconduct.
ARTICLE 7
AMENDMENT AND TERMINATION OF PLAN
7.1 AMENDMENT OF THE PLAN. The Plan Sponsor shall have the right at
any time to modify, alter, or amend the Plan in whole or in part by
instrument in writing duly executed; provided, however, that unless it is
necessary to meet the requirements of any state or federal law or
regulation, no amendment shall (i) cause or permit any part of the Trust to
be used for, or diverted to, purposes other than the exclusive benefit of
the Participants (subject to the provisions of Section 9.1 hereof), (ii)
have the effect of revesting in or causing to inure to the benefit of the
Plan Sponsor any portion of the Trust (subject to the provisions of
Sections 4.5(e), 8.1 and 9.1 hereof), or (iii) operate to deprive any
Participant of any vested right under this Plan.
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7.2 TERMINATION OF THE PLAN. The Plan Sponsor has adopted this Plan
with the intent that it be continued indefinitely; however, the Plan
Sponsor reserves the right at any time to reduce or to discontinue
permanently the Plan Sponsor contributions to the Plan or to terminate the
Plan by action of the Board. Such reduction or permanent discontinuance of
Plan Sponsor contributions or termination may be made without the consent
of the Trustees, the Participants , or any other persons.
7.3 DISTRIBUTION ON TERMINATION. The distribution of Plan assets on
termination of the Plan shall be determined as follows. Upon termination
of the Plan, the Plan Sponsor shall deliver a written notice of termination
of the Plan to the Trustees and shall direct the Trustees, as soon as
practicable and not later than the last day of the calendar quarter in
which the Trustees are so notified, to reduce to cash the assets of the
Trust, if any, other than the Shares of Stock held by the Trust, and to pay
or provide for all liabilities and obligations of the Trust, including the
expenses of the distribution and other expenses and liquidation costs of
the Plan and Trust. If the amount of Unallocated Funds is insufficient to
pay or provide for any liabilities and expenses, such liabilities and
expenses shall be paid or provided for out of Unallocated Shares. If
Unallocated Funds and Unallocated Shares are exhausted, liabilities and
expenses may be paid first from the Individual Fund Accounts, on a pro rata
basis, and, if necessary, then from the Individual Shares Accounts, on a
pro rata basis. The balance of all Individual Accounts shall be brought up
to date in accordance with Section 4.5 as of the last day of the calendar
quarter in which the Trustees are notified of the termination, after
payment or provision for all liabilities and expenses as aforesaid. Upon
completion of such accounting, the Trustees shall disburse to each
Participant the full amount then standing to his credit in his Individual
Fund Account and the full number of Shares of Stock then standing to his
credit in his Individual Shares Account, including any portion of such
balances deemed to be advances; provided that cash shall be distributed in
lieu of any fractional Shares of Stock held in any Individual Shares
Account.
ARTICLE 8
PLAN SPONSOR'S RIGHT OF SETOFF AGAINST
PARTICIPANT'S VESTED BENEFITS
8.1 RIGHT OF SETOFF; GRANT OF SECURITY INTEREST. Subject to any
applicable legal limitations, the Plan Sponsor shall have the right to
charge against any benefits owed to a Participant under this Plan the
amount of certain obligations of such Participant to the Plan Sponsor. The
Plan Sponsor may exercise such right by notifying the Trustees of the claim
and the exercise of such right, and directing that the Trustees promptly
deliver to the Plan Sponsor all or a part of the Plan assets held in the
Trust for such Participant. The Trustees shall thereupon, and without
further notice to such Participant, deliver such Plan assets to the Plan
Sponsor for application against obligations owed to the Plan Sponsor by the
Participant. For purposes of this Section 8.1, "obligations" shall include
any indebtedness of the Participant to the Plan Sponsor including, but not
limited to, any advances, loans, unearned commissions or credits made by or
from the Plan Sponsor to the Participant. In addition, the Plan Sponsor
shall have a lien against Plan assets or benefits which have, or may
become, due to such Participant under this Plan, which lien shall be a
first lien in favor of the Plan Sponsor as to such assets or benefits. In
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consideration of the right to participate in this Plan and for the benefits
paid hereunder to the Participant by the Plan Sponsor, each Participant
grants and assigns the Plan Sponsor a security interest in all assets,
rights and benefits which have, or may become, due to the Participant
pursuant to this Plan.
ARTICLE 9
RIGHTS OR CREDITORS OF PLAN SPONSOR AND AFLAC INCORPORATED
9.1 CREDITORS' RIGHTS UPON INSOLVENCY. Notwithstanding anything to
the contrary herein, in the event of the insolvency of the Plan Sponsor,
all assets contributed to the Trust, including any Forfeited Amount that is
credited to a Participant's Individual Fund Account, and income thereon
then held pursuant to the Trust shall be available for satisfaction of the
claims of the general creditors of the Plan Sponsor in accordance with
state and federal laws. For purposes of this Section, the Plan Sponsor
shall be considered insolvent if it is either (i) unable to pay its debts
as they become due, or (ii) subject to a pending proceeding as a debtor
under the United States Bankruptcy Code.
ARTICLE 10
MISCELLANEOUS
10.1 HEADINGS. The headings and subheadings in the Plan have been
inserted for convenience of reference only and are to be ignored in any
construction of the provisions hereof.
10.2 CONSTRUCTION. In the construction of the Plan, the masculine
shall include the feminine and the singular the plural in all cases where
such meanings would be appropriate. The Plan shall be construed in
accordance with the laws of the State of Georgia.
10.3 INCORPORATION, ETC. In the event that an individual
Participant's business as an Associate is transferred to a corporation,
partnership, or other legal entity that becomes an Associate and
Participant hereunder, such entity shall, if the Stock Bonus Management
Committee so determines, succeed to the individual Participant's benefits
and rights hereunder, and the entity's Years of Credited Service may, at
the Stock Bonus Management Committee's discretion, include the individual's
service as an Associate. Conversely, in the event that an Associate that
is a corporation, partnership, or other legal entity ceases to be an
Associate, any individual Associate who succeeds to the business of that
entity shall, if the Stock Bonus Management Committee so determines,
succeed to the benefits and rights of that entity hereunder, and such
individual Associate's Years of Credited Service may, at the Stock Bonus
Management Committee's discretion, include the entity's service as an
Associate.
10.4 SPENDTHRIFT CLAUSE. Except as provided in the Plan or as
otherwise required by law, no benefits under the Plan shall be subject in
any manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance or charge and any attempt to so anticipate, alienate, sell,
transfer, assign, pledge, encumber or charge shall be void; provided,
however, that an Associate may pledge his benefits to the AFLAC Federal
Credit Union to secure a loan. No such benefit shall in any manner be
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liable for or subject to the debts, contracts, liabilities, engagements, or
torts of the person entitled to such benefit except as specifically
provided in the Plan.
10.5 LEGALLY INCOMPETENT. If any Participant is in the judgment of
the Stock Bonus Management Committee legally incapable of personally
receiving and giving a valid receipt for any payment due him hereunder, the
Stock Bonus Management Committee may, unless and until claim shall have
been made by a guardian of such person duly appointed by a court of
competent jurisdiction, direct that payment or any part thereof be made to
such person or to such person's spouse, child, parent, brother or sister,
or other person deemed by the Stock Bonus Management Committee to be a
proper person to receive such payment. If the Stock Bonus Management
Committee is unable, after reasonable effort, to ascertain the identity,
whereabouts or existence of any Participant to whom a benefit is payable
under this Plan, the benefits otherwise payable to such person shall be
forfeited, anything to the contrary contained elsewhere in this Plan
notwithstanding. However, if a claim is subsequently made by such person,
or if satisfactory proof of death of such person is received by the Stock
Bonus Management Committee, the Plan Sponsor shall make a contribution to
the Plan which, notwithstanding any provision of this Plan to the contrary,
shall be for and so as to enable such benefit to be paid to such person or
his estate, as the case may be. Any benefits lost by reason of escheat
under applicable state law shall also be forfeited, but shall not be
subject to reinstatement.
10.6 ARBITRATION. Except for temporary restraining orders and
interlocutory or preliminary injunctive relief, any claim, controversy or
dispute with respect to this Plan, including any alleged tort related to
this Plan or the activities associated with this Plan, to the maximum
extent allowed by applicable law and irrespective of the form of relief
sought, shall be submitted to and resolved by arbitration. Such
arbitration shall be the sole remedy with respect to such matter. The
arbitration shall be conducted in Columbus, Georgia, and shall be conducted
pursuant to the terms of the Federal Arbitration Act, except as otherwise
specified herein including, without limitation, the exception that the
arbitrators cannot award punitive or exemplary damages or any damages other
than compensatory. Any party may notify the other party at any time of the
existence of an arbitrable controversy by certified mail and shall attempt
in good faith to resolve their differences within 15 days after the receipt
of such notice. Notice to the Participant shall be sent to Participant's
address as it appears in the records of AFLAC New York and notice to AFLAC
New York shall be sent to: Arbitration Officer, AFLAC New York, 1932
Wynnton Road, Columbus, Georgia 31999. If the dispute cannot be resolved
within the 15-day period, any party may file a written demand for
arbitration with the other party. The party filing such demand shall
simultaneously specify its arbitrator, giving the name, address and
telephone number of said arbitrator. The party receiving such notice shall
notify the party demanding the arbitration of its arbitrator, giving the
name, address and telephone number of the arbitrator within five days of
the receipt of such demand. The arbitrators named by the respective
parties need not be neutral. The Senior Judge of the Superior Court of
Muscogee County, Georgia, on request by either party, shall appoint a
neutral person to serve as the third arbitrator, and shall also appoint an
arbitrator for any party failing or refusing to name his arbitrator within
the time herein specified. Each party shall pay the fees and expenses of
the arbitrator selected by that party or appointed for that party. The
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fees and expenses of the neutral arbitrator appointed by the Senior Judge
of the Superior Court of Muscogee County, Georgia shall be paid equally by
the parties. The arbitrators thus constituted shall promptly meet, select
a chairperson, fix the time and place of the hearing, and notify the
parties. To the extent practical, the arbitrators shall provide for the
hearing to commence within 60 days after the arbitrators have been
empaneled. The majority of the panel shall render an award within 10 days
of the completion of the hearing, and shall promptly transmit an executed
copy of the award to the respective parties. The award of the arbitrators
shall be final, binding and conclusive upon the parties hereto. The
prevailing party shall be entitled to recover its costs and attorneys' fees
which shall be taxed by the arbitrators within 30 days after the award.
Each party shall have the right to have the award enforced by any court of
competent jurisdiction.
10.7 CORRECTION OF ERRORS. If any change in records or error results
in any Participant being credited with or receiving from the Plan more or
less than the person would have been entitled to had the records been
correct or had the error not been made, the Stock Bonus Management
Committee, upon discovery of such error, shall adjust, as far as
practicable, the account or payments, as the case may be, in such a manner
as to correct the error. Any Plan Sponsor contribution made by mistake of
fact shall be returned to the Plan Sponsor.
10.8 EXCLUSIVE BENEFIT. Except as otherwise specifically provided in
this Plan, all assets of the Plan and Trust and all contributions of the
Plan Sponsor under the Plan shall be held and used for the exclusive
purpose of providing benefits for Participants, and no portion of the Trust
shall inure to the benefit of or revert to the Plan Sponsor.
10.9 LIABILITY OF PLAN SPONSOR AND AFLAC INCORPORATED.
Notwithstanding any provision to the contrary in this Plan or the Trust
Agreement, the Plan Sponsor shall at all times remain liable to each
Participant for the payment of any vested amounts distributable pursuant to
the terms of this Plan to such Participant which are not so distributed by
the Trust in accordance with the terms of this Plan. In addition, AFLAC
Incorporated hereby guarantees the payment of such amounts.
10.10 PARTIAL INVALIDITY. If any provision of this Plan is held
invalid or unenforceable, its invalidity or unenforceability shall not
affect any other provision and this Plan shall be construed and enforced as
if such provision had not been included.
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IN WITNESS WHEREOF, the Plan Sponsor has caused the Plan to be signed
and adopted, this 28th day of December, 1998, effective as of January 1,
1999.
AMERICAN FAMILY LIFE ASSURANCE
COMPANY OF NEW YORK
By: /s/ Daniel P. Amos
------------------------------------
Daniel P. Amos
President
Attest: /s/ Joey M. Loudermilk
--------------------------------
Joey M. Loudermilk
Secretary
IN WITNESS WHEREOF, AFLAC Incorporated hereby agrees and consents to
the provisions of Section 10.9 hereof as of this 28th day of December,
1998, effective as of January 1, 1999.
AFLAC INCORPORATED
By: /s/ Daniel P. Amos
--------------------------------
Daniel P. Amos
President
Attest: /s/ Joey M. Loudermilk
----------------------------
Joey M. Loudermilk
Secretary
IN WITNESS WHEREOF, the Trustees of the AFLAC New York Associate Stock
Bonus Plan acknowledge receipt of the Plan as signed and adopted the day
affixed next to their name, effective as of January 1, 1999.
December 28, 1998 /s/ Paul S. Amos
-----------------------------
Paul S. Amos, Trustee
December 28, 1998 /s/ Kriss Cloninger, III
-----------------------------
Kriss Cloninger, III, Trustee
December 28, 1998 /s/ Daniel P. Amos
-----------------------------
Daniel P. Amos, Trustee
17
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TRUST AGREEMENT
THIS TRUST AGREEMENT (the "Agreement"), effective as of January 1,
1999, entered into by and between American Family Life Assurance Company of
New York ("Plan Sponsor"), an insurance corporation organized under the
laws of the State of New York with its principal office in Albany, New York
and Paul S. Amos, Kriss Cloninger, III and Daniel P. Amos, the Trustees
(hereinafter called individually "Trustee" and collectively the
"Trustees"),
W I T N E S S E T H T H A T:
WHEREAS, the Plan Sponsor has adopted the AFLAC New York Associate
Stock Bonus Plan for the benefit of Participants as defined in said Plan;
WHEREAS, said Plan provides that investment of all contributions made
to said Plan and payment of benefits thereunder will be accomplished by a
Trust Agreement, as it may be amended from time to time, which shall
constitute a part of said Plan, and
WHEREAS, the Plan Sponsor has adopted, as of January 1, 1999, said
Plan (hereinafter called the "Plan"), and it is desired to so adopt the
related Trust Agreement between the Plan Sponsor and the Trustees.
NOW THEREFORE, in consideration of the premises and the further
obligations and undertakings hereinafter set forth, it is agreed as
follows:
ARTICLE 1
THE TRUST
(a) The Plan Sponsor, in accordance with the terms of the Plan, which
Plan is made a part of this Agreement, hereby establishes with the
Trustees, a trust which shall be designated the AFLAC New York Associate
Stock Bonus Trust (hereinafter called the "Trust"), in which the Trustees
shall hold such cash, securities and other property as shall from time to
time constitute the assets of the Plan (hereinafter called the "Fund").
The Fund shall be held, managed, and administered by the Trustees in trust
for the purpose of discharging the Plan Sponsor's legal obligations under
the Plan and in accordance with the Plan and the provisions of this
Agreement. The Trust is intended to be a grantor trust, of which the Plan
Sponsor is the grantor, within the meaning of subpart E, part I, subchapter
J, chapter 1, subtitle A, of the Internal Revenue Code of 1986, as amended
from time to time, and shall be construed accordingly.
(b) Subject to the right of the Plan Sponsor as set forth in the Plan
to charge against the Trust assets in order to satisfy obligations owed to
the Plan Sponsor by a Participant (whether arising under this Plan or
otherwise) and to the right of creditors of the Plan Sponsor to assert
claims against assets of the Trust that were contributed to the Trust and
the income thereon held pursuant to the Trust in the case of the Insolvency
of the Plan Sponsor (as herein defined), the Trustees shall discharge their
duties hereunder solely in the interests of the Participants of the Plan,
for the exclusive purpose of providing benefits to Participants and
defraying certain specified expenses of the Plan. Such duties shall be
discharged with the care, skill, prudence and due diligence under the
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circumstances then prevailing that a prudent man acting in the like
capacity and familiar with such matters would use in the conduct of an
enterprise with like aims. Prior to the satisfaction of all liabilities
with respect to benefits of Participants, no part of the corpus or income
of the Fund other than (i) such part as is required to pay taxes and
expenses as set forth in Article 9 hereof, (ii) such part as is permitted
to be reached by the creditors of the Plan Sponsor in the event of
Insolvency as set forth in Article 6 hereof, or (iii) such part as is
permitted to be paid to the Plan Sponsor or to charge against amounts owed
by the Participant to the Plan Sponsor pursuant to the provisions of the
Plan, shall be used for, or diverted to, purposes other than the exclusive
benefit of such Participants.
(c) To the extent permitted by law, the Trustees shall not be liable
for the making, retention, or sale of any investment or reinvestment of
assets of the Fund made by them nor for any loss to or diminution of the
Fund, and the Trustees, and each Trustee, shall be free from all liability,
joint or several, for their acts, omissions and conduct, and for the acts,
omissions and conduct of their duly constituted agents, in the
administration of the Trust. The Plan Sponsor shall indemnify and save
them, and each of them, harmless from effects and consequences of their
acts, omissions and conduct in their official capacity, except to the
extent that such effects and consequences shall result from their own
willful misconduct or gross negligence.
(d) In addition to every power and discretion conferred upon the
Trustees by any other provisions of this Agreement, the Trustees will have
all the usual powers conferred by law on trustees; provided, however, that
if an insurance policy is held as an asset of the Trust, the Trustees shall
have no power to name a beneficiary of the policy other than the Trust, to
assign the policy (as distinct from conversion of the policy to a different
form) other than to a successor Trustee, or to loan to any person the
proceeds of any borrowing against such policy. The duties and obligations
of the Trustees with respect to the Plan and Trust are limited to those
assumed by the Trustees by the terms of this Agreement and imposed by
applicable law or regulation. The Trustees shall not be deemed by virtue
hereof to be Administrator or Sponsor of the Plan, and shall not be
responsible for receiving any order or consent of any court, for filing any
reports, returns or disclosures with any government agency, for reporting
to any court, or for giving any bond.
(e) Each Trustee, by accepting this Trust, hereby acknowledges that
he has received notification of the Plan Sponsor's lien and security
interest in the Trust assets for the purpose of satisfying obligations the
Participant may owe the Plan Sponsor.
ARTICLE 2
CONTRIBUTIONS TO TRUSTEES
Contributions shall be paid by the Plan Sponsor into the Fund from
time to time in accordance with the terms of the Plan. It shall be the
duty of the Trustees to receive, hold, invest and reinvest the assets of
the Fund, to collect all interest, dividend and other income thereon, to
hold the assets from time to time constituting the Fund under such
conditions of custody and safekeeping as the Trustees shall deem
appropriate for the particular type of asset, to make payments to the Plan
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Sponsor as permitted pursuant to the Plan or this Agreement, to make
payments to creditors of the Plan Sponsor as permitted pursuant to the Plan
or this Agreement, and to make payments and distributions from the Fund,
all in accordance with the provisions of this Agreement and the Plan. The
Trustees shall be under no duty to enforce payment of any contribution to
the Fund, and shall be accountable only for money, securities and other
property actually received by them.
ARTICLE 3
MANAGEMENT OF FUND
(a) In accordance with the provisions of the Plan, the funding policy
of the Trust shall be to invest wholly in shares of Common Stock of AFLAC
Incorporated (the "Stock"), but in the event that Stock is not available or
cannot be purchased, temporarily, under any applicable law, then and in
that event the Trustees shall invest the assets of the Fund in cash or cash
equivalents.
(b) Neither by way of limitation nor in derogation but in
amplification of any powers granted herein, the Trustees are further
authorized:
(1) to hold cash awaiting investment and to keep such portion of
the Fund in cash or cash balances in such amounts as the Trustees may from
time to time deem to be reasonable and necessary to meet anticipated
distributions or costs without liability for interest or to be otherwise in
the best interest of the Trust;
(2) to sell for cash or credit, redeem, exchange for other
property, convey, transfer or otherwise dispose of any property held in the
Fund in any manner and at any time, by private contract or at public
auction or otherwise;
(3) to enter into contracts for or to make commitments either
alone or in company with others to purchase or sell at any future date any
property acquired for the Fund;
(4) to vote or to refrain from voting upon any stocks, bonds or
other securities held in the Fund, to give general or special proxies or
powers of attorney with or without power of substitution with respect to
such securities (provided, however, that if the Plan Sponsor or AFLAC
Incorporated has entered into any binding agreement with respect to the
manner in which shares of Stock held in the Plan shall be voted, the
Trustees shall vote such shares of Stock in accordance with such
agreement), to exercise any conversion privileges, subscription rights or
other options or privileges with respect to such securities and make any
payments incidental thereto, to oppose or consent to or otherwise
participate in corporate reorganizations or other changes affecting
corporate securities held in the Fund, delegate discretionary powers,
deposit securities under a deposit agreement, pay any assessments or
charges in connection therewith, and accept, hold and retain any securities
or other property which may be so acquired, and generally to exercise,
personally or by general or limited power of attorney, any of the powers of
an owner with respect to stocks, bonds, securities or other property held
in the fund at any time;
20
<PAGE>
(5) to register any investment of the Fund in their own name or
in the name of a nominee or nominees and to hold any investment in bearer
form, to deposit or arrange for the deposit of such securities in a
qualified central depository even though, when so deposited, such
securities may be merged and held in bulk in the name of the nominee of
such depository with other securities deposited therein by any other
person, but the books and records of the Trustees shall at all times show
that all such investments are part of the Fund;
(6) to enforce by suit or otherwise or to waive any right or
claim on behalf of the Trustees or the Fund, to extend the time of payments
of any obligation at any time owing to the Fund, to sell, compromise,
adjust or submit to arbitration any claim or right in favor of or against
the Trustees or the Fund, to commence or defend suits or legal proceedings
whenever in the Trustees' judgment any interest of the Fund requires it,
and to represent the Fund in all suits or legal proceedings in any court of
law or equity or before any body or tribunal;
(7) to employ suitable consultants, depositories, agents, legal
counsel and auditors, provided that the reasonable expenses and
compensation incurred in connection therewith shall be paid by the Plan
Sponsor;
(8) to construe this Agreement and determine all questions that
may arise hereunder, and to establish such rules, regulations and
procedures as they deem to be required to administer the Trust in
accordance with provisions of the Plan and the Trust and applicable laws;
and
(9) to do any and all acts and things, including but not limited
to making, executing, acknowledging and delivering any and all documents of
transfer and conveyance and any and all other instruments, such as
contracts, waivers, or releases, which they may deem necessary or proper
and to exercise any and all powers herein granted.
(c) Notwithstanding any powers granted to the Trustees pursuant to
this Trust Agreement or applicable law, the Trustees shall not have any
power that could give this Trust the objective of carrying on a business
and dividing the gains therefrom, within the meaning of Section 301.7701-2
of the Procedure and Administrative Regulations promulgated pursuant to the
Internal Revenue Code.
ARTICLE 4
VALUATION
For each calendar quarter, as the Plan Sponsor may request in writing,
and as may be required by law, the Trustees shall report to the Plan
Sponsor in writing the value of the Fund and the balances of all accounts
maintained under the Plan in terms of the number of shares of Stock, the
fair market value, as determined by the Trustees, of the balance of other
investments, including any cash, and the amount of any liabilities or
obligations of the Trust.
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ARTICLE 5
DISBURSEMENTS
The Trustees shall make payments from the Fund to such persons, in
such manner and in such amounts as the Plan Sponsor may direct in writing
from time to time. The Trustees shall be fully protected in acting upon
any such written direction without inquiry or investigation, and shall have
no duty or authority to determine the rights or benefits of any Participant
and Beneficiary under the Plan, or to inquire into the right or power of
the Plan Sponsor to direct any payment from the Fund. If any check in
payment of a benefit hereunder, which had been mailed by regular U.S. mail
to the last address of the payee, is returned undelivered, the Trustees
shall so notify the Plan Sponsor and shall discontinue further payments to
such payee until they receive further instructions from the Plan Sponsor.
The Trustees shall have no duty to locate Participants.
ARTICLE 6
INSOLVENCY
(a) The Plan Sponsor shall be considered "Insolvent" for purposes of
this Trust Agreement if it is (i) unable to pay its debts as they become
due, or (ii) subject to a pending proceeding as a debtor under the United
States Bankruptcy Code.
(b) At all times during the continuance of this Trust, as provided in
Article 1(f) hereof, the assets contributed to the Trust and the income
thereon held pursuant to the Trust shall be subject to claims of general
creditors of the Plan Sponsor under federal and state law as set forth
below.
(1) The Board of Directors and the Chief Executive Officer of
the Plan Sponsor shall have the duty to inform the Trustees in writing of
the Insolvency of the Plan Sponsor. If a person claiming to be a creditor
of the Plan Sponsor alleges in writing to the Trustees that the Plan
Sponsor has become Insolvent, the Trustees shall determine whether the
allegation is true and, pending such determination, the Trustees shall
discontinue payment of benefits to Participants of assets and the income
thereon held pursuant to the Trust.
(2) Unless the Trustees have actual knowledge of the Insolvency
of the Plan Sponsor, or have received notice from the Plan Sponsor or a
person claiming to be a creditor alleging the insolvency of the Plan
Sponsor or AFLAC Incorporated, the Trustees shall have no duty to inquire
whether the Plan Sponsor is Insolvent. The Trustees may in all events rely
on such evidence concerning solvency as may be furnished to the Trustees
and that provides the Trustees with a reasonable basis for making a
determination concerning solvency.
(3) If at any time the Trustees have determined that the Plan
Sponsor is Insolvent, the Trustees shall (i) discontinue payments to
Participants under this Trust Agreement of assets and the income thereon
held pursuant to the Trust and (ii) hold such assets together with the
accumulated income thereon then held pursuant to the Trust for the benefit
of the Plan Sponsor's general creditors. Nothing in this Trust Agreement
shall in any way diminish any rights of Participants to pursue their rights
as general creditors of the Plan Sponsor with respect to benefits due under
the Plan or otherwise.
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(4) The Trustees shall resume the payment of benefits to
Participants of assets and the income thereon held pursuant to the Trust in
accordance with the terms of this Trust Agreement only after the Trustees
have determined that the Plan Sponsor is not Insolvent (or is no longer
Insolvent).
(c) Provided there are sufficient assets, if the Trustees discontinue
the payment of benefits from the Trust pursuant to Article 6(b) hereof and
subsequently resume such payments, the first payment following such
discontinuance shall include the aggregate amount of all payments due to
Participants under the terms of the Plan for the period of such
discontinuance that were not made, less the aggregate amount of any
payments made to Participants by the Plan Sponsor or AFLAC Incorporated in
lieu of the payments provided for hereunder during any such period of
discontinuance.
ARTICLE 7
SPENDTHRIFT CLAUSE
Except for obligations which may be owed to the Plan Sponsor, as to
which obligations benefits may, subject to any applicable legal
limitations, be applied by the Plan Sponsor, no benefits under the Plan
shall be subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, or charge, and any attempt to so
anticipate, alienate, sell, transfer, assign, pledge, encumber or charge
shall be void. No such benefit shall in any manner be liable for or
subject to the debts, contract, liabilities, engagements or torts of the
person entitled to such benefit except as specifically provided in the
Plan.
ARTICLE 8
ACCOUNTING BY TRUSTEES
(a) The Trustees shall keep accurate and detailed accounts of all
investments, receipts, disbursements and other transactions hereunder,
including all transactions in all accounts maintained under the Plan, and
all accounts, books and records relating thereto shall be open to
inspection and audit at all reasonable times by any person designated by
the Plan Sponsor. For each calendar year, the Trustees shall file with the
Plan Sponsor a written statement setting forth all investments, receipts,
disbursements and other transactions, and all adjustments to all the
accounts maintained under the Plan, effected since the previous statement.
Such a statement setting forth all investments, receipts, disbursements and
other transactions shall also be filed within 60 days after the death,
removal or resignation of all the Trustees at one time. The Plan Sponsor
shall, upon request, be entitled to further statements or statements at
more frequent intervals from the Trustees, provided that such additional
accounting is reasonable or is necessary to enable the Plan Sponsor to
determine compliance of the Trustees with applicable laws and regulations.
(b) Except to the extent otherwise provided by applicable law, no one
other than the Plan Sponsor may require the Trustees to account or may
institute an action or proceeding to account against the Trustees or the
Fund, provided, however, that nothing herein shall in any way limit the
Trustees' right to bring any action or proceeding to settle their account
or for such other relief as they may deem appropriate.
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(c) Upon the expiration of 90 days from the date of filing by the
Trustee with the Plan Sponsor of a statement of accounting with respect to
the Trust, the Trustees shall, to the extent permitted by law, be forever
released and discharged from all liability and accountability to anyone
with respect to the propriety of their acts and transactions shown in such
statement, except with respect to any acts or transactions as to which the
Plan Sponsor shall file with the Trustees written objection within such 90-
day period.
ARTICLE 9
EXPENSES
The expenses incurred by the Plan Sponsor in the installation,
administration and revision of the Plan and in the installation and
revision of this Agreement, including fees for legal, accounting, actuarial
or other professional services rendered to the Trustees in connection
therewith, and such compensation, if any, to the Trustees as may be agreed
upon in writing from time to time between the Plan Sponsor and the
Trustees, shall be paid by the Plan Sponsor. Expenses incurred by the
Trustees in the performance of their duties and all other proper charges
and disbursements of the Trustees, authorized by the Trustees, shall be
paid for by the Plan Sponsor. All commissions and fees on acquisitions or
dispositions of securities and similar expenses of investment and
reinvestment of the Fund, and all taxes of any and all kinds whatsoever
that may be levied or assessed under existing or future laws upon or in
respect of the Fund or the income thereof shall be paid from the Fund.
ARTICLE 10
TRUSTEES
(a) The Trustees shall be three in number and shall be elected by the
Board of Directors of the Plan Sponsor. Each Trustee shall serve a term of
four years.
(b) A Trustee may resign at any time upon 60 days written notice
delivered to the other Trustees and the Board. A Trustee may be removed by
the Board upon written notice to the Trustee by the Board.
(c) Upon the resignation, death or removal of a Trustee, the Board
shall elect a Successor Trustee to serve the unexpired term. Upon the
expiration of the term of a Trustee, the Board shall elect a Successor
Trustee to serve a term of eight years. Upon acceptance in writing of
appointment as a Successor Trustee, such Successor Trustee shall succeed to
the powers, duties and responsibilities of the former Trustee as fully as
if he had been originally named as a Trustee hereunder.
(d) In the event that all of the Trustees die, are removed or resign
at any one time, and successors are appointed hereunder, the Trustees shall
assign, transfer and pay over to such successors the funds and properties
then constituting the Fund, or the Plan Sponsor shall promptly establish an
alternative funding medium and the Trustees shall assign, transfer and pay
over the Fund, as then constituted, upon the directions of the Plan
Sponsor. The Trustees shall continue to have the powers and duties as set
forth in this Agreement until the assets constituting the Fund have been
forwarded to Successor Trustees or an alternative funding medium.
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<PAGE>
(e) Action by the Trustees shall be upon the majority vote of all the
Trustees, and the Trustees shall maintain minutes of all meetings of the
Trustees; provided, however, that a Trustee who is also a Participant or
Beneficiary under the Plan shall not vote upon matters relating
specifically to his or her benefits under the Plan.
ARTICLE 11
AMENDMENT AND TERMINATION
(a) The Plan Sponsor reserves the right at any time and from time to
time to amend, in whole or part, any or all of the provisions of this
Agreement by written instrument signed by the Plan Sponsor and delivered to
and acknowledged by the Trustees, provided that no amendment which affects
the rights, duties or responsibilities of the Trustees may be made without
their written consent, and provided further that unless it is necessary to
meet the requirements of any state or federal law or regulation, no
amendment shall authorize or permit, at any time prior to the satisfaction
of all liabilities with respect to benefits of Participants, any part of
the corpus or income of the Fund, other than as specifically provided in
the Plan or in this Agreement, to be used for, or diverted to, purposes
other than for the exclusive benefit of such Participants.
(b) The Plan Sponsor reserves the right at any time to terminate the
Plan as to any or all of the companies constituting the Plan Sponsor, upon
written notice to the Trustees. Upon receipt of such notice, the Trustees
shall continue to administer the Fund as herein provided and shall
distribute the Fund at such time and manner as the Plan Sponsor shall
determine in accordance with the terms of the Plan and notify the Trustees
in writing. Following distribution of the entire Fund, this Agreement
shall terminate.
ARTICLE 12
MISCELLANEOUS
(a) Unless the context of this Agreement clearly indicates otherwise,
all terms defined in the Plan shall have the same meaning herein.
(b) If any provision of this Agreement shall be held legally invalid
or unenforceable, such invalidity or unenforceability shall not affect any
other provisions hereof, and the remainder of this Agreement shall continue
in effect and be construed and enforced as if such provision had not been
included.
(c) This Agreement shall be administered, construed and enforced
according to the laws of the State of Georgia.
(d) Whenever the words "Plan Sponsor" are used herein, they shall be
construed to include the Stock Bonus Management Committee appointed in
accordance with the provisions of the Plan.
(e) When the Plan Sponsor gives instructions, requests, directions,
requisitions or moneys or certificates to the Trustees, said communications
shall be in writing, signed by such person as may have been previously
designated in writing by the Plan Sponsor to sign on its behalf, unless
otherwise agreed by the Trustees. When receiving a communication as
25
<PAGE>
provided for in the preceding sentence, the Trustees shall be entitled to
rely thereon as the authorized action of the Plan Sponsor, and the Plan
Sponsor shall hold harmless, indemnify and defend the Trustees in respect
of any action taken by them in reliance thereon. The Trustees shall incur
no liability for failure to act without such a written communication.
(f) Notwithstanding any other provisions of this Agreement, the
Trustees may condition their delivery, transfer or distribution of any
assets of the Fund, or any other action which they may take or are directed
to take with respect to the Plan, Trust or Fund, upon the Trustees
receiving assurances satisfactory to them that the approval of appropriate
governmental or other authorities has been secured, that such action has
been properly approved and authorized in accordance with the Plan and this
Agreement, and that all notices or other procedures required by the Plan,
this Agreement, or applicable law have been complied with.
(g) No person dealing with the Trustees will be obligated to see to
the application for any property paid or delivered to the Trustees or to
inquire into the validity, expediency or propriety of any transaction or
the Trustees' authority to consummate the same, except as may specifically
be required by law.
(h) The persons executing this Agreement on behalf of the Plan
Sponsor certify thereby that they are authorized by the Plan Sponsor
consistent with the terms of the Plan to do so. The Plan Sponsor, by
executing this Agreement, certifies that no provision hereof is
inconsistent with the terms of the Plan, that all conditions and
limitations in the Plan which would limit the actions of the Trustees are
expressly contained herein, and that the Plan Sponsor will promptly notify
the Trustees of any amendments made to the Plan.
IN WITNESS WHEREOF, the Plan Sponsor, by its duly authorized officers,
has caused this Agreement to be executed, on this 28th day of December,
1998, effective as of January 1, 1999.
AMERICAN FAMILY LIFE ASSURANCE
COMPANY OF NEW YORK
By: /s/ Daniel P. Amos
-----------------------------------
Daniel P. Amos, CEO
Attest:
/s/ Joey M. Loudermilk
- ----------------------------
Joey M. Loudermilk
Secretary
26
<PAGE>
IN WITNESS WHEREOF, the Trustees of the AFLAC New York Associate Stock
Bonus Plan, by execution hereof, do hereby accept appointment as a Trustee
of said Plan the day affixed next to their name, effective as of the 1st
day of January, 1999.
December 28, 1998 /s/ Paul S. Amos
--------------------------------
Paul S. Amos, Trustee
December 28, 1998 /s/ Kriss Cloninger, III
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Kriss Cloninger, Trustee
December 28, 1998 /s/ Daniel P. Amos
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Daniel P. Amos, Trustee
27
