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As filed with the Securities and Exchange Commission on January 6, 1999
Registration Statement No. 333-16533
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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AMENDMENT NO. 1
TO
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 ASSOCIATE STOCK BONUS PLAN
AMENDED AND RESTATED AS OF JANUARY 1, 1999
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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 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. ___
__________
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. ____ _________________
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 Price Fee
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Common Stock, 4,000,000 (2) (2) (2)
$.10 par value shares
("Common Stock")
(1) Includes an indeterminate number of shares of Common Stock that may
be issuable by reason of stock splits, stock dividends, or similar
transactions in accordance with Rule 416 under the Securities Act of 1933.
(2) The 4,000,000 shares included in this Registration Statement have
been adjusted to reflect a 2-for-1 stock split declared on May 4, 1998 and
issued on June 8, 1998. The registration fee, which was paid at the time of
the filing of the Registration Statement on November 21, 1996 was calculated
on the basis of the average of the high and low prices of the Common Stock
as reported on the New York Stock Exchange on November 18, 1996.
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The Registrant hereby amends this Registration Statement on such
date or dates as may be necessary to delay its effective date until the
Registrant shall file a further amendment which specifically states that
this Registration Statement shall thereafter become effective in accordance
with Section 8(a) of the Securities Act of 1933 or until the Registration
Statement shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
AFLAC INCORPORATED
1932 Wynnton Road
Columbus, Georgia 31999
Telephone No. (706) 323-3431
AFLAC ASSOCIATE STOCK BONUS PLAN
AMENDED AND RESTATED AS OF JANUARY 1, 1999
4,000,000 Shares of Common Stock ($.10 Par Value)
o 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 Columbus ("AFLAC"), pursuant to the AFLAC Associate Stock Bonus
Plan (the "Bonus Plan").
o We will not receive any proceeds from the distribution of these
shares.
o We have not and will not pay any underwriting discounts in
connection with the distribution of these shares.
o AFLAC will bear all expenses in connection with the registration
and distribution of shares.
o 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.
January __, 1999
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Table of Contents
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Page No.
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Important Information............................................... 3
Additional Information.............................................. 3
Information Incorporated by Reference............................... 4
Description of the AFLAC Associate Stock Bonus Plan................. 5
General Information....................................... 5
Administration............................................ 5
Eligibility and Enrollment................................ 6
Contributions............................................. 7
Charges Against Participant Accounts...................... 8
Investments............................................... 10
Participant Accounts...................................... 10
Vesting and Distribution of Benefits; Forfeitures; Voting. 11
Restrictions on Resale.................................... 14
Transferability........................................... 15
Amendment and Termination................................. 15
Mandatory Arbitration..................................... 15
Tax Consequences.................................................... 16
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IMPORTANT INFORMATION
---------------------
o 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.
o This prospectus is not an offer or solicitation in any state or
jurisdiction in which such an offer or solicitation is illegal.
o 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:
o Our Annual Report on Form 10-K for the year ended December 31,
1997.
o Our Quarterly Reports on Form 10-Q for the quarters ended March
31, 1998, June 30, 1998 and September 30, 1998.
o All other reports we have filed pursuant to Sections 13(a) or
15(d) of the Exchange Act since December 31, 1997.
o 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:
o 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 ASSOCIATE STOCK BONUS PLAN
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General Information:
- -------------------
AFLAC's Board of Directors adopted the AFLAC Associate Stock Bonus
Plan on November 20, 1967, effective as of October 1, 1967. The AFLAC
Associate Stock Bonus Plan was amended and restated in its entirety on
November 10, 1992, effective as of October 1, 1992. On December 28, 1998,
the Board of Director's of AFLAC again amended and restated the Bonus Plan
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 to market AFLAC's specialized insurance
policies, and to enable AFLAC to retain experienced sales and supervisory
personnel. The Bonus Plan rewards these individuals for sales of AFLAC
insurance policies, and encourages them to acquire and retain a proprietary
interest in the success of AFLAC 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:
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The Bonus Plan
The Stock Bonus Management Committee consists of three officers
designated by AFLAC'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 following persons currently serve as
members of the Stock Bonus Management Committee: E. Stephen Purdom,
Executive Vice President, U.S. Operations; Joseph P. Kuechenmeister, Senior
Vice President, Director of Marketing; and Michael E. Bartow, Second Vice
President, Financial.
The AFLAC 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's Board of Directors. Trustees are chosen for four-year terms, and
each is subject to removal by AFLAC's Board of Directors. The Trustees have
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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:
o Paul S. Amos, Chairman of the Board of AFLAC Incorporated and
AFLAC;
o Daniel P. Amos, President and Chief Executive Officer of
AFLAC Incorporated and AFLAC; and
o Kriss Cloninger, III, Executive Vice President and Chief
Financial Officer of AFLAC Incorporated and AFLAC.
Indemnification
Under the Bonus Plan and the Trust, AFLAC has agreed to indemnify
the Trustees, the members of the Stock Bonus Management Committee and the
AFLAC Board of Directors, and any other party acting at the request of AFLAC
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 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.
o An associate is any person or entity associated with AFLAC
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, who is paid on
a commission basis and who is actively performing sales and
servicing functions for AFLAC.
o A soliciting broker is an associate who is also providing
services to AFLAC pursuant to a standardized Soliciting
Broker Contract
o A sales coordinator is an associate who is also providing
services to AFLAC pursuant to a contract as a district,
regional or state sales coordinator.
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o Special associates are persons or entities associated with
AFLAC pursuant to a special written agreement who are engaged
in the sale of insurance products for AFLAC and are paid on a
commission basis. Special associates are eligible to
participate in the Bonus Plan only if the written agreement
between AFLAC and the special associate so provides.
Any individual or entity who was a participant in the AFLAC
Associate Stock Bonus Plan prior to January 1, 1999 shall continue to be a
participant in the Bonus Plan. After January 1, 1999, any associate,
soliciting broker, sales coordinator or eligible special associate shall
become a participant in the Bonus Plan on the day that he or she first
becomes an associate, soliciting broker, sales coordinator or special
associate, unless he or she notifies AFLAC in writing that he or she 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 and the Participant, or to be consideration, or an inducement,
for the association of any Participant with AFLAC . No provision of the
Bonus Plan shall be deemed to give any Participant the right to be retained
or employed in association with AFLAC, or be deemed to interfere with the
right of AFLAC to discharge any Participant at any time regardless of the
effect which such discharge will have upon the Participant. Each
Participant, for himself or herself and his or her heirs, assigns and
estate, shall be deemed conclusively by his or her participation in the
Bonus Plan to have agreed to and accepted the terms and conditions of the
Bonus Plan. A Participant may terminate his or her participation in the
Bonus Plan at any time by giving written notice to AFLAC.
Contributions:
- -------------
Contributions to the Bonus Plan, if any, are generally made out of
the profits or accumulated profits of AFLAC. The Board of Directors of AFLAC
may however authorize contributions from other sources. No contributions may
be made by any Participant.
We will credit contributions to a Participant's account for
certain insurance policies sold by the Participant. In the case of policies
made effective prior to October 1, 1992, contributions are based on premiums
which are scheduled to be received by AFLAC for the first twelve months of
coverage after a policy is made effective at AFLAC's home office. In the
case of policies made effective on or after October 1, 1992, contributions
are based on commissionable premiums which are actually collected by AFLAC
during the first twelve months of a policy.
Contributions are made only with respect to insurance policies
designated as "Bonus Policies" by AFLAC. A list of those policies which are
designated as Bonus Policies is included in the AFLAC 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. AFLAC may, at any time
and in its sole discretion, change the insurance policies to be designated
as Bonus Policies.
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Currently, AFLAC will contribute the following amount with respect
to Bonus Policies:
o for associates and soliciting brokers, 3.5% of the first year
premiums scheduled to be received (in the case of Bonus
Policies made effective prior to October 1, 1992) or actually
received (in the case of Bonus Policies made effective on or
after October 1, 1992) on Bonus Policies sold by the
Participant;
o for sales coordinators, .7% of the first year premiums
scheduled to be received (in the case of Bonus Policies made
effective prior to October 1, 1992) or actually received (in
the case of Bonus Policies made effective on or after October
1, 1992) on Bonus Policies sold by each Participant who is
assigned in writing to the sales coordinator; and
o 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.
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 the Bonus Policy is made effective at AFLAC's home office (in
the case of Bonus Policies made effective prior to October 1, 1992) or in
which first-year commissionable premiums are actually collected (in the case
of Bonus Policies made effective on or after October 1, 1992).
If the effective date of the Bonus Policy is prior to October 1,
1992, we will make contributions based upon the first-year premiums
scheduled to be received on the Bonus Policy made effective during the month
to which the Allocation Date relates. Such contributions are treated as
advances by us until we actually collect all of the first-year premiums. If
the effective date of the Bonus Policy is on or after October 1, 1992, we
will make contributions based upon the first-year premiums actually
collected by us during the month to which the Allocation Date relates.
AFLAC 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 may, in certain circumstances described below, make charges
against Participant's accounts.
In the event that a Bonus Policy made effective prior to October
1, 1992 lapses or is cancelled before all first-year premiums are collected
by us, we will recover from the Trust and charge against the Participant's
accounts an amount equal to the amount previously credited to the
Participant for premiums which were not collected by us. If a lapsed or
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cancelled Bonus Policy made effective prior to October 1, 1992 is reinstated
during the twelve months immediately following the date on which it was
first made effective, we will contribute to the Plan and credit to the
Participant's accounts an amount equal to the applicable percentage of
first-year premiums scheduled to be received during the months which remain
from the date of reinstatement to the expiration of the initial twelve-month
period. A Policy will be deemed to have lapsed at the time and subject to
the conditions as set forth in the Policy. We may, however, subject to the
terms of each Policy, change this time and the conditions in our sole
discretion.
In the event that AFLAC, 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 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 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 at
the demand of AFLAC.
Subject to any applicable legal limitations, AFLAC 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. Under the
terms of the Bonus Plan, "obligations" include any indebtedness of the
Participant to AFLAC including, but not limited to, any advances (including
advances pursuant to the Bonus Plan), loans, unearned commissions or credits
made by or from AFLAC to the Participant. In addition, AFLAC will have a
lien against assets or benefits which have or may become due to such
Participant under the Bonus Plan, which lien will be a first lien in favor
of AFLAC 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, each Participant grants
and assigns to AFLAC 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, all assets contributed to
the Trust on or after October 1, 1992, including any forfeited amount that
is credited to a Participant's account on or after October 1, 1992, and
income thereon then held pursuant to the Trust shall be available for
satisfaction of the claims of the general creditors of AFLAC in accordance
with state and federal laws. Any cash and stock dividends on assets
contributed to the Trust prior to October 1, 1992 (and any contributions
that are made as the result of stock splits of shares of Company Common
Stock held in the Trust prior to October 1, 1992) shall not be subject to
the claims of AFLAC's creditors regardless of whether such dividends or
contributions occur on or after October 1, 1992. AFLAC will be 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.
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AFLAC 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 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 or her 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.
AFLAC 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 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:
o 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;
o in the case of shares of common stock of AFLAC Incorporated
surrendered as the result of obligations owed to AFLAC or as
the result of the distribution of cash in lieu of fractional
shares, the closing market price on the date of surrender;
and
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o 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, all cash and common stock of AFLAC
Incorporated held as unallocated funds and unallocated shares may revert
back to AFLAC, and become the sole property of AFLAC, subject only to
AFLAC's obligation to recontribute amounts to the Bonus Plan upon a
Participant's reassociation with AFLAC. AFLAC 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 may request that the Bonus Plan
purchase shares of common stock of AFLAC Incorporated held as unallocated
shares. In the case that AFLAC 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:
o 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;
o in the case of shares of common stock of AFLAC Incorporated
surrendered as the result of obligations owed to AFLAC or as
the result of the distribution of cash in lieu of fractional
shares, the closing market price on the date of surrender;
and
o 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 and the special
associate provides otherwise.
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o 25% of a Participant's interest in the Bonus Plan will vest
after five years of credited service with AFLAC, and 100%
will vest after ten years of credited service.
o 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.
o 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
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.
o If a Participant's association with AFLAC is terminated for
cause in accordance with the terms and provisions of the
written contract or agreement between such Participant and
AFLAC, 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.
o Service credited for purposes of vesting includes all periods
for which a Participant is actively performing services for
AFLAC pursuant to a written contract as an associate,
soliciting broker, sales associate or special associate,
subject to certain special rules and exceptions.
o 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
o The following paragraphs describe the general timing and
method of distributions of benefits under the Bonus Plan. 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.
o 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 beginning with the
quarter ended March 31, 1999.
12
<PAGE>
o After five years of service, the vested amount of whole
shares of common stock of AFLAC Incorporated (which includes
amounts allocated to his or her 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.
o After ten years of service, the vested amount of whole shares
of common stock of AFLAC Incorporated (which includes amounts
allocated to his or her 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 or her
accounts. Within 45 days after the end of each calendar year
until the Participant terminates his or her association with
AFLAC, 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.
o 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 or her 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.
o If the distribution is a final distribution, the Participant
or his or her 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 or her individual shares account.
o In limited extraordinary circumstances, AFLAC, in its sole
discretion, may accelerate the distribution of benefits to a
Participant.
o 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 subject to certain restrictions on resale.
See "Restrictions on Resale" below.
13
<PAGE>
Benefits under the Bonus Plan may, to the extent permitted by law,
be applied to satisfy a Participant's obligations to AFLAC, before any
benefits are distributed directly to such Participant, in which case the
Trust pays such amounts directly to AFLAC. See "Additional Charges Against
Participant Accounts."
Forfeitures
A Participant forfeits the portion of his or her accounts which
are not vested upon termination of his or her association with AFLAC.
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 of 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 or her 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:
o 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);
o 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
securities exchanges during the four calendar weeks preceding the
filing of the required notice of proposed sale; and
14
<PAGE>
o 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 or
her interest in the Bonus Plan. Furthermore, a Participant's interest in the
Bonus Plan is not liable for or subject to his or her debts, contracts,
liabilities, engagements or torts other than obligations owed to AFLAC or to
the AFLAC Federal Credit Union (if the Participant secures a loan therefrom
with a pledge of his or her benefits).
Amendment and Termination:
- -------------------------
AFLAC expects the Bonus Plan to be continued indefinitely.
However, AFLAC 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:
o 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 (subject to the events
described in "Charges Against Participant Accounts" above),
o have the effect of revesting in or causing to inure to the
benefit of AFLAC any portion of the Trust (subject to the
events described in "Charges Against Participant Accounts"
and "Participant Accounts" above), or
o operate to deprive any Participant of any vested right.
Upon termination of the Bonus Plan, AFLAC 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 or her credit in his or her fund account and the full number
of shares in his or her 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:
15
<PAGE>
o Arbitration is the sole remedy for disputes regarding the
Bonus Plan.
o The decision of the arbitration panel shall be final and
binding as among the parties.
o Any arbitration will be conducted in Columbus, Georgia.
o The arbitrators may grant all relief allowable under law
except for temporary restraining orders, interlocutory or
preliminary injunctive relief, and punitive or exemplary
damages.
o 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.
o 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.
o 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.
o 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 or her 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 or her hands for computing
future gain or loss equal to the amount includible in his or her gross
income attributable to such shares. Under sections 404(d) and/or 83(h) of
the Code and the Treasury regulations thereunder, AFLAC 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.
16
<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 $ none
Legal fees and expenses 7,500.00
Accounting fees and expenses 3,750.00
Printing, Postage and Miscellaneous 30,000.00
----------
Total $41,250.00
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.
17
<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 LLP Re: Unaudited
Interim Financial Information
23.1 Consent of Joey M. Loudermilk, Esq. (included
in Exhibit 5.1)
23.2 Consent of KPMG LLP
99 AFLAC Associate Stock Bonus Plan and Related
Trust Agreement as of January 1, 1999
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.
(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.
18
<PAGE>
(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.
19
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Columbus, State of Georgia, on
January 6, 1999.
AFLAC INCORPORATED
Dated January 6, 1999 By: /s/ Daniel P. Amos
------------------------ --------------------------------------
Daniel P. Amos
Chief Executive Officer
Dated January 6, 1999 By: /s/ Kriss Cloninger, III
------------------------ --------------------------------------
Kriss Cloninger, III
Executive Vice-President,
Chief Financial Officer and Treasurer
Dated January 6, 1999 By: /s/ Norman P. Foster
------------------------ --------------------------------------
Norman P. Foster
Executive Vice-President,
Corporate Finance
20
<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 January 6, 1999
- ------------------------- Officer and Vice -----------------
Daniel P. Amos Chairman of the
Board
/s/ Paul S. Amos Chairman of January 6, 1999
- ------------------------- the Board -----------------
Paul S. Amos
Director
- ------------------------- -----------------
J. Shelby Amos
/s/ Michael H. Armacost Director January 6, 1999
- ------------------------- -----------------
Michael H. Armacost
/s/ M. Delmar Edwards Director January 6, 1999
- ------------------------- -----------------
M. Delmar Edwards, M.D.
/s/ George W. Ford, Jr. Director January 6, 1999
- ------------------------------ -----------------
George W. Ford, Jr.
/s/ Joe Frank Harris Director January 6, 1999
- ------------------------- -----------------
Joe Frank Harris
/s/ Elizabeth J. Hudson Director January 6, 1999
- ------------------------- -----------------
Elizabeth J. Hudson
/s/ Kenneth S. Janke, Sr. Director January 6, 1999
- ------------------------- -----------------
Kenneth S. Janke, Sr.
/s/ Charles B. Knapp Director January 6, 1999
- ------------------------- -----------------
Charles B. Knapp
21
<PAGE>
Director
- ------------------------- -----------------
Hisao Kobayashi
/s/ Yoshiki Otake Director January 6, 1999
- ------------------------- -----------------
Yoshiki Otake
/s/ E. Stephen Purdom Director January 6, 1999
- ------------------------- -----------------
E. Stephen Purdom
/s/ Barbara K. Rimer Director January 6, 1999
- ------------------------- -----------------
Barbara K. Rimer
/s/ Henry C. Schwob Director January 6, 1999
- ------------------------- -----------------
Henry C. Schwob
Director
- ------------------------- -----------------
J. Kyle Spencer
/s/ Glenn Vaughn, Jr. Director January 6, 1999
- ------------------------- -----------------
Glenn Vaughn, Jr.
22
<PAGE>
EXHIBIT INDEX
-------------
NUMBER DESCRIPTION
- ------ -----------
5.1 Opinion of Joey M. Loudermilk, Esq.
15 Letter of KPMG LLP
Re: Unaudited Interim Financial Information
23.1 Consent of Joey M. Loudermilk, Esq. (included in Exhibit 5.1)
23.2 Consent of KPMG LLP
99 AFLAC Associate Stock Bonus Plan and Related Trust Agreement
as of January 1, 1999
23
<PAGE>
EXHIBIT 5.1
January 6, 1999
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
an amended Registration Statement on Form S-3 (the "Registration Statement")
with the Securities and Exchange Commission relating to 4,000,000 shares of
common stock, par value $.10 per share (the "Common Stock"), of the Company
(the "Shares") issuable pursuant to the AFLAC Associate Stock Bonus Plan
amended and restated as of January 1, 1999 (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>
EXH 15
KPMG LLP
303 Peachtree Street, N.E.
Suite 2000
Atlanta, Georgia 30308
The Board of Directors
AFLAC Incorporated
Columbus, Georgia
Re: Registration Statement Form S-3
With respect to the subject registration statement dated January
6, 1999, 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.
KPMG LLP
Atlanta, Georgia
January 6, 1999
<PAGE>
EXHIBIT 23.2
KPMG LLP
303 Peachtree Street, N.E.
Suite 2000
Atlanta, Georgia 30308
The Board of Directors
AFLAC Incorporated
Columbus, Georgia
We consent to the incorporation by reference in AFLAC
Incorporated's ("AFLAC") Amendment No. 1 on Form S-3 dated January 6, 1999
of our report dated January 29, 1998, relating to the consolidated balance
sheets of AFLAC 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 herein by reference.
KPMG LLP
Atlanta, Georgia
January 6, 1999
<PAGE>
AFLAC ASSOCIATE
STOCK BONUS PLAN
WITH RELATED
TRUST AGREEMENT
AMENDED AND RESTATED AS OF JANUARY 1, 1999
<PAGE>
AFLAC ASSOCIATE STOCK BONUS PLAN
The AFLAC Associate Stock Bonus Plan is hereby amended and
restated, 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 Columbus.
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.
1.9 "Forfeited Amount" shall mean (i) the cash held in a
Participant's Individual Fund Account, and (ii) the fair market value of the
-2-
<PAGE>
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 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 Columbus, a Georgia 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 the
Plan Sponsor's Executive Vice President in charge of domestic operations,
its Director of Marketing and its Controller, and/or such other persons 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 Amended and Restated Trust Agreement
effective as of January 1, 1999, as such Agreement may be amended from time
to time.
-3-
<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.
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. An individual or entity who was a Participant
prior to the effective date of this Plan shall continue to be a Participant.
After October 1, 1992, 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.
ARTICLE 3
CONTRIBUTIONS, INVESTMENTS AND EXPENSES
3.1 CONTRIBUTIONS BY PLAN SPONSOR. All contributions, if any,
shall be made out of profits or accumulated profits of the Plan Sponsor;
provided, however, that the Board may authorize contributions from other
sources. No contributions will be made by any Participant.
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3.2 COMPUTATION OF CONTRIBUTIONS FOR BONUS POLICIES MADE EFFECTIVE
PRIOR TO OCTOBER 1, 1992.
(a) Subject to this Section 3.2 and Section 3.4, with
respect to Bonus Policies made effective prior to October 1, 1992, the
amount of Plan Sponsor contributions made on or before each Allocation Date
were equal to the applicable percentage of aggregate First Year Premiums
scheduled to be received by the Plan Sponsor on Bonus Policies made
effective at the Plan Sponsor's home office during the month to which such
Allocation Date related. Such contributions shall be treated as advances by
the Plan Sponsor to the Trust until the Plan Sponsor's actual collection of
all of such First Year Premiums.
(b) In the event that a Bonus Policy made effective prior to
October 1, 1992 is lapsed or canceled before all First Year Premiums are
collected by the Plan Sponsor, then the Plan Sponsor shall be entitled to
recover from the Trust, and there shall be charged against the Participant's
Individual Accounts, an amount equal to the applicable percentage of such
First Year Premiums which were not collected by the Plan Sponsor.
(c) In the event a lapsed or canceled Bonus Policy made
effective prior to October 1, 1992 is reinstated during the twelve (12)
months immediately following the date on which such Policy was first made
effective, the Plan Sponsor shall contribute to the Plan and credit to the
Participant's Individual Fund Account an amount for such Bonus Policy equal
to the applicable percentage of First Year Premiums scheduled to be received
during the months which remain from the date of reinstatement of such Policy
to the expiration of the initial twelve (12) month period in order to allow
for an offset only for the period of months that such Policy may have
actually lapsed during the initial twelve (12) month period.
(d) For purposes of this Section 3.2, a Bonus Policy shall
be deemed to have lapsed at the time, and subject to the conditions, set
forth in such Policy; provided, however, that, subject to the terms of such
Policy, such time and conditions may be changed by the Plan Sponsor in its
sole discretion.
3.3 COMPUTATION OF CONTRIBUTIONS FOR BONUS POLICIES MADE
EFFECTIVE ON OR AFTER OCTOBER 1, 1992. Subject to Section 3.4, with respect
to Bonus Policies made effective on or after October 1, 1992, 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 by the Plan Sponsor during the month to which such Allocation Date
relates.
3.4 ADDITIONAL CONTRIBUTIONS. In addition to the contributions
required pursuant to Section 3.2 or 3.3, 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.
3.5 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.
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3.6 OFFSET AGAINST CONTRIBUTIONS; RECOVERY OF CREDITED AMOUNTS.
(a) Notwithstanding the provisions of Sections 3.2, 3.3 and
3.4, 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 lapsed or canceled Bonus
Policies as provided for in Section 3.2(b); (2) the amounts recoverable by
the Plan Sponsor with respect to refunded First Year Premiums as provided
for in Section 3.5; or (3) 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 the sum of amounts
recoverable by the Plan Sponsor (1) pursuant to Section 3.2(b) for advances
relating to lapsed or canceled Bonus Policies, and (2) pursuant to Section
3.5 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.
(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.
3.7 APPLICABLE PERCENTAGE FOR BONUS POLICIES. Subject to Sections
3.2, 3.3, 3.5 and 3.6, 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 scheduled to be received (for purposes of Section
3.2(a)) or actually received (for purposes of Section 3.3) 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 scheduled to be received (for purposes of Section 3.2(a)) or
actually received (for purposes of Section 3.3) for each Bonus Policy sold
by a Participant who is assigned in writing to a Sales Coordinator.
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(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.
3.8 DESIGNATION OF BONUS POLICIES. All Participants shall be
informed as to those policies that are designated as Bonus Policies for
purposes of the Plan.
3.9 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.
3.10 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.
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
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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 3.6(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:
(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 scheduled to be received (for purposes of
Section 3.2(a)) or actually received (for purposes of Section 3.3) on Bonus
Policies sold by the Participant, subject to reduction as provided in
Sections 3.2, 3.5 and 3.6.
(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)
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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 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 3.6,
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.
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(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. 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. 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.
(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. 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. 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. Subject
to the provisions of Section 5.3, the vested amounts shall be distributed to
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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 lapsed or canceled
Bonus Policies (as provided for in Section 3.4(a)) and refunded First Year
Premiums (as provided for in Section 3.5) 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.
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 and beginning with distributions for the
quarter ended March 31, 1999, 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.
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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 is 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 this 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.
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.
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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.
(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.
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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.
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
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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 (including advances pursuant to Section 3.2 of this
Plan), 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 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 on or after October 1, 1992, including
any Forfeited Amount that is credited to a Participant's Individual Fund
Account on or after October 1, 1992, 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; provided, however, that any cash and stock dividends on assets
contributed to the Trust prior to October 1, 1992 and any contributions that
are made as the result of stock splits of Shares of Stock held in the Trust
prior to October 1, 1992 shall not be subject to such claims regardless of
whether such dividends or contributions occur on or after October 1, 1992.
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.
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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 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.
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<PAGE>
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 and notice to AFLAC shall be sent to:
Arbitration Officer, American Family Life Assurance Company (AFLAC),
Worldwide Headquarters, 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 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 empanelled. 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
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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, as amended and
restated or the Amended and Restated 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.
IN WITNESS WHEREOF, the Plan Sponsor has caused the Plan to be
signed and adopted, as amended and restated, this 28th day of December,
1998, effective as of January 1, 1999.
AMERICAN FAMILY LIFE ASSURANCE
COMPANY OF COLUMBUS
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
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IN WITNESS WHEREOF, the Trustees of the AFLAC Associate Stock
Bonus Plan acknowledge receipt of the Plan as signed and adopted, as amended
and restated, 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
December 28, 1998 /s/ Daniel P. Amos
------------------------------
Daniel P. Amos, Trustee
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TRUST AGREEMENT
THIS AMENDED AND RESTATED TRUST AGREEMENT (the "Agreement"),
effective as of January 1, 1999, entered into by and between American Family
Life Assurance Company of Columbus ("Plan Sponsor"), an insurance
corporation organized under the laws of the State of Georgia with its
principal office in Columbus, Georgia 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 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 amended and restated, as of January
1, 1999 said Plan (hereinafter, as so amended and restated, called the
"Plan"), and it is desired to so amend and restate 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 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 on or
after October 1, 1992 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
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Plan. Such duties shall be discharged with the care, skill, prudence and due
diligence under the 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
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particular type of asset, to make payments to the Plan 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;
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<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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<PAGE>
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 on or
after October 1, 1992 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 contributed on or after October 1,
1992 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 contributed on or after
October 1, 1992 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 contributed on or after October 1, 1992 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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(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
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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 COLUMBUS
By: /s/ Daniel P. Amos
-----------------------------------
Daniel P. Amos, CEO
Attest:
/s/ Joey M. Loudermilk
- -----------------------------
Joey M. Loudermilk
Secretary
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IN WITNESS WHEREOF, the Trustees of the AFLAC 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
- ------------------------ ---------------------------------------
Date Paul S. Amos, Trustee
December 28, 1998 /s/ Kriss Cloninger, III
- ------------------------ ---------------------------------------
Date Kriss Cloninger, III, Trustee
December 28, 1998 /s/ Daniel P. Amos
- ------------------------ ---------------------------------------
Date Daniel P. Amos, Trustee
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