<PAGE>
As filed with the Securities and Exchange Commission on June 14, 1999
Registration Statement No. 033-64535
---------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
----------------------------------
POST EFFECTIVE AMENDMENT No. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------------------
AFLAC INCORPORATED
--------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Georgia
--------------------------------------------------------------
(State or Other Jurisdiction of Incorporation or Organization)
58-1167100
--------------------------------------------------------------
(IRS Employer Identification Number)
1932 Wynnton Road, Columbus, Georgia 31999 706-323-3431
--------------------------------------------------------------
(Address, Including Zip Code, and Telephone Number, Including
Area Code, of Registrant's Principal Executive Offices)
AFL STOCK PLAN
--------------------------------------------------------------
(Full Title of the Plan)
DANIEL P. AMOS
Chief Executive Officer
AFLAC INCORPORATED
1932 Wynnton Road, Columbus, Georgia 31999, 706-323-3431
--------------------------------------------------------------
(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 a
communication and notices to:
MICHAEL P. ROGAN, ESQ.
Skadden, Arps, Slate, Meager & Flom LLP
1440 New York Avenue, N.W.
Washington, DC 20005
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 AFL Stock Plan as defined herein.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. ___
<PAGE>
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 (the "Securities Act"), 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
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
Title of Proposed Proposed
Shares Aggregate Maximum Amount of
To Be Amount to be Price Per Aggregate Registration
Registered Registered (1) Unit Offering Price Fee
- --------------- -------------- ---------- -------------- ------------
Common Stock, 9,000,000 (2) (2) (2)
par value $.10 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) Pursuant to Rule 416 under the Securities Act, the 9,000,000 shares
included in this Registration Statement have been adjusted to reflect a 3
for 2 stock split declared on February 13, 1996 and issued on March 18, 1996
and 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 22, 1995 was estimated pursuant to Rule
457(c) of the Securities Act of 1933.
___________________________________
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.
i
<PAGE>
PROSPECTUS
AFLAC INCORPORATED
Worldwide Headquarters
1932 Wynnton Road
Columbus, Georgia 31999
(800) 235-2667
(706) 596-3589
AFL STOCK PLAN: A DIRECT STOCK PURCHASE AND DIVIDEND REINVESTMENT PLAN
We are offering you the opportunity to participate in our AFL Stock
Plan, a direct stock purchase and dividend reinvestment plan. The AFL Stock
Plan gives you a convenient method of investing cash dividends and making
optional cash investments to purchase shares of AFLAC Incorporated common
stock without payment of any brokerage commission or service charge. The
AFL Stock Plan is also the mechanism by which eligible AFLAC and AFLAC NY
Associates (as defined below under the heading "AFLAC Incorporated And Its
Subsidiaries") will receive the bonus contributions awarded to them under
the 1999 AFLAC Associate Stock Bonus Plan (the "Bonus Plan"). The principal
terms of the Bonus Plan are provided in Annex A to this Prospectus, for the
benefit of Associates reviewing this Prospectus.
This Prospectus explains how the AFL Stock Plan works and the steps you
must take in order to participate in it. Please review this Prospectus
carefully and retain it for future reference.
At our option, shares of common stock will be purchased under the AFL
Stock Plan from newly issued shares, shares held in the treasury of AFLAC
Incorporated or shares purchased in the open market. All purchases will be
done through an independent agent selected by AFLAC Incorporated. The price
of newly issued or treasury shares purchased for your account will be the
volume weighted average of the trading on the U.S. exchanges on the
applicable investment date for the AFL Stock Plan. The price of shares
purchased in the open market for your account will be the average cost of
all shares purchased by our independent agent on the open market with
respect to the applicable investment date. The closing price of the common
stock on June 11, 1999 on the New York Stock Exchange was $46.625.
Our common stock is listed on the New York Stock Exchange and the
Pacific Exchange under the symbol "AFL." Our common stock is also listed on
the Tokyo Stock Exchange.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
REGULATOR HAS APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
This Prospectus relates to 9,000,000 shares of common stock to be
distributed through the AFL Stock Plan. The date of this Prospectus is
June 14, 1999.
1
<PAGE>
IMPORTANT INFORMATION
You should rely only on the information contained in this prospectus or
any supplement. We have not authorized anyone else to provide you with
any information that is different.
This prospectus is not an offer or solicitation in any state or
jurisdiction in which such an offer or solicitation is illegal.
You should not assume that the information in this prospectus or any
supplement is accurate as of any date other than the date on the front
of those documents.
ADDITIONAL INFORMATION
We have filed with the Securities and Exchange Commission a
registration statement regarding the common shares to be distributed
pursuant to the AFL Stock 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 AFL Stock 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, NY and Chicago, IL. 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).
You can inspect our reports, proxy statements and other information
filed with the New York Stock Exchange and the Pacific Exchange at the
offices of these exchanges.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by us with the SEC are incorporated into
this Prospectus by reference:
(1) our Annual Report on Form 10-K for the year ended December
31, 1998;
(2) our Quarterly Report on Form 10-Q for the quarter ended
March 31, 1999; and
(3) the description of our common stock contained in a
registration statement filed under the Securities Exchange
Act of 1934, as amended, and any amendments or reports filed
with the SEC for the purpose of updating such description.
As long as we offer the AFL Stock Plan, we also incorporate by
reference additional reports, proxy statements, and other documents that we
may file with the SEC after the date of this prospectus under Section 13(a),
13(c), 14, or 15(d) of the Securities Exchange Act.
2
<PAGE>
We will provide to any person to whom this prospectus is delivered a
free copy of any of the documents incorporated by reference other than
exhibits to such documents (unless such exhibits are specifically
incorporated by reference). Copies may be retrieved from our web site at
http://www.aflac.com. You can also request copies by writing to our
Investor Relations Department at:
AFLAC Incorporated
Worldwide Headquarters
Investor Relations Department
1932 Wynnton Road
Columbus, Georgia 31999
or by calling the Investor Relations Department at (800) 235-2667 or (706)
596-3264.
AFLAC INCORPORATED AND ITS SUBSIDIARIES
We are an international holding company incorporated under the laws of
Georgia. We are an underwriter of supplemental insurance through our
principal subsidiary, American Family Life Assurance Company of Columbus
("AFLAC"), whose primary markets are the United States and Japan.
As used throughout this Prospectus, the term "Employees" means all
full-time employees of AFLAC Incorporated and its subsidiaries and
affiliates and the term "Associates" means all associates, soliciting
brokers, sales coordinators and special associates who have entered into
independent contracts with AFLAC or with American Family Life Assurance
Company of New York ("AFLAC NY"), both wholly-owned subsidiaries of AFLAC
Incorporated, pertaining to services in the United States, its territories,
and possessions, and any other location or country designated by AFLAC or
AFLAC NY, who are paid on a commission basis and who are actively performing
sales and servicing functions for AFLAC or AFLAC NY.
AFL STOCK PLAN
PURPOSE
The purpose of the AFL Stock Plan is to provide our existing and
potential investors, Associates and Employees with an expense-free and
convenient way to purchase shares of common stock and to reinvest all or a
portion of their cash dividends from the shares of common stock registered
in their name and credited to their accounts. The AFL Stock Plan also
provides the mechanism for Associates to receive bonus contributions awarded
under the Bonus Plan.
ADVANTAGES
You may purchase shares of common stock through the AFL Stock Plan
without having to pay any brokerage commissions or fees.
You may elect to have automatically reinvested all, a portion or none
of the cash dividends payable on your shares of common stock.
You may deposit common stock certificates, at no cost, in the AFL Stock
Plan for safekeeping and to facilitate the transfer or sale of shares
through the AFL Stock Plan in a convenient and efficient manner.
Your funds are fully invested in common stock through the purchase of
whole shares and fractional shares.
3
<PAGE>
You may direct our Shareholder Services Department to transfer, at no
cost, all or a portion of whole shares of common stock credited to your
AFL Stock Plan account (including those shares deposited into the Plan
for safekeeping).
You may sell shares of common stock credited to your account.
You will receive a statement after each AFL Stock Plan transaction.
DISADVANTAGES
You have no control over the time or price at which the common stock is
purchased or sold for your account.
As administrator of the AFL Stock Plan, the AFLAC Incorporated
Shareholder Services Department (the "Administrator") will invest all
cash investments paid by investors only twice each month, beginning on
the 1st and 15th of each month (or the business day immediately
preceding that day, if the scheduled day is not a business day). The
Administrator must receive your funds at least one business day before
the next scheduled investment date in order to invest your funds on
that investment date. Otherwise, the Administrator will hold your
funds and invest them on the next scheduled investment date.
Bonus contributions payable by AFLAC or AFLAC NY to the AFL Stock Plan
under the Bonus Plan to be used to purchase common stock on behalf of
Associates will be invested only once each month, on the 15th day of
the month (or the business day immediately preceding that day, if the
scheduled day is not a business day).
You will not earn interest on funds held by the Administrator pending
investment under the AFL Stock Plan. You bear the market risk
associated with fluctuations in the price of common stock.
WHO WILL ADMINISTER THE PLAN?
Our Shareholder Services Department will administer the AFL Stock Plan.
The Shareholder Services Department is responsible for receiving all cash
investments (including bonus contributions awarded to Associates under the
Bonus Plan to be used to purchase common stock under the AFL Stock Plan),
maintaining records of each account, issuing statements and performing other
duties required by the AFL Stock Plan. The Shareholder Services Department
will forward funds to be used to purchase shares of common stock to an
independent agent selected by us (an "Independent Agent" that is an agent
independent of the issuer, as that term is defined in the rules and
regulations under the Securities Exchange Act). Additionally, the
Shareholder Services Department will promptly forward sales instructions to
the Independent Agent. The Independent Agent is responsible for purchasing
and selling shares of common stock for your account in accordance with the
provisions of the AFL Stock Plan.
You can contact the Shareholder Services Department by writing:
AFLAC Incorporated
Worldwide Headquarters
Shareholder Services Department
1932 Wynnton Road
Columbus, Georgia 31999
4
<PAGE>
or by telephoning toll-free (800) 235-2667 or in Columbus (706) 596-3589
between 8 a.m. and 5 p.m., Monday through Friday, Eastern Time. Written
communications may also be sent by fax to (706) 596-3488.
Neither AFLAC Incorporated nor any Independent Agent will be liable for
any act done in good faith or for the good faith omission to act in
connection with the AFL Stock Plan, including, without limitation, liability
caused by:
our failure to terminate your account upon your death before we have
received written notice of your death;
the prices or times at which the Independent Agent purchases or sells
shares of common stock for your account; or
any loss or fluctuation in the market value after the purchase or
sale of shares for your account.
If we believe, in our sole discretion, that you are using or
considering using the optional cash payment investment mechanism against the
best interests of AFLAC Incorporated or our shareholders, then we may refuse
to issue additional shares to you. If you or someone acting on your behalf
tenders an optional cash payment under these circumstances, we may:
refuse to issue any shares, returning the full payment tendered as
promptly as practicable and without interest;
issue a portion of the shares, returning the uninvested part of the
payment tendered as promptly as practicable and without interest; or
issue all shares for which payment has been tendered.
WHO CAN JOIN AND HOW?
You can join the AFL Stock Plan if you are a resident in the United
States. If you reside outside the United States, its territories and
possessions, you should determine whether you are subject to any
governmental regulation prohibiting you from joining.
If you currently own shares of common stock registered in your name,
you may join the AFL Stock Plan by returning a completed Enrollment Form to
our Administrator, making sure that each registered owner of the shares
signs his or her name on the Enrollment Form exactly as that name appears on
the common stock certificates. If your stock is held in a brokerage, bank,
or other intermediary account, you can instruct the broker, bank or
intermediary to register some or all of your common stock directly in your
name, and you can then get started in the AFL Stock Plan with respect to
those shares by returning a completed Enrollment Form to the Administrator.
In addition, anyone may join the AFL Stock Plan by completing the
Enrollment Form and making an initial cash investment of at least $1,000 (or
$50 in the case of eligible Associates and Employees, as described further
below).
If you are a participant in the Bonus Plan, you will be enrolled in the
AFL Stock Plan for the purpose of receiving bonus contributions awarded
under the Bonus Plan. Once each month, on a scheduled investment date, we
5
<PAGE>
will deliver to the Independent Agent the aggregate amount of the accrued
bonus contribution (if it equals or exceeds $50) then payable under the
Bonus Plan to be used to purchase shares of common stock in the same manner
and at the same price that all other shares are purchased by the Independent
Agent on that investment date. Bonus contributions totaling less than $50
will be distributed directly to the participant through their accounting
statement.
As a participant in the AFL Stock Plan, you will have the option, at
your sole discretion, to reinvest any cash dividends on those shares or to
purchase additional shares of common stock, but you are not obligated to do
so. The receipt of the bonus contribution to be awarded to participants in
the Bonus Plan is not in any way conditioned upon reinvestment of cash
dividends on the shares purchased on your behalf or upon your purchase of
any additional shares through the AFL Stock Plan. For Associates who are
automatically enrolled in the AFL Stock Plan for the purpose of receiving
bonus contributions under the Bonus Plan, we will automatically reinvest the
dividends you earn on the shares in your AFL Stock Plan account unless you
have already elected to receive cash dividends or we receive a specific
written request from you that your dividends not be reinvested in additional
shares. You may make a written request to receive your dividends in a cash
payment simply by indicating this preference on the appropriate portion of
the Enrollment Form and returning it to us.
Once enrolled, any participant in the AFL Stock Plan may make optional
cash investments during any month by delivering to the Administrator (a) a
completed optional cash investment stub which is attached to each statement
you receive from us or an Enrollment Form and (b) a personal check or money
order payable to the AFL Stock Plan. DO NOT SEND CASH. You can also pre-
authorize the Administrator to deduct a set amount from a U.S. checking,
savings, or credit union account that is a member of the Automated Clearing
House ("ACH") network. To set up that automatic deduction, you must
complete and sign an Automatic Investment Form, which is attached to the
Enrollment Form, and return it to the Administrator with a voided blank
check or deposit slip for the account from which funds are to be drafted.
Forms will be processed and will become effective as promptly as
practicable. Once effective, funds will be drafted on the 25th day of each
month (or, if the 25th day is not a business day, the first business day
thereafter), and the funds will be invested in common stock on the next
scheduled investment date.
In addition, Employees may opt to make monthly investments through
payroll deductions, and eligible Associates may opt to make monthly
investments through their accounting statement deductions, as follows:
If you are an Employee, you are eligible to participate in the AFL
Stock Plan immediately upon employment with a minimum investment of
$50 per month automatically deducted from your paycheck.
If you are an Associate, you may make optional investments of at
least $50 per month through automatic deductions from your monthly
accounting statement (or statements) if you have been contracted with
AFLAC or AFLAC NY for one year or more and have an average monthly
accounting statement balance for the previous six months of at least
$150.
6
<PAGE>
No participant in the AFL Stock Plan may make an optional cash
investment of less than $50 or make initial or optional cash investments in
excess of $120,000 in any calendar year (except that, in the case of
Associates, the $120,000 amount does not include the value of bonus
contributions awarded under the Bonus Plan). There is no obligation to make
any optional cash investment. If you wish to change your participation, you
must submit a new Enrollment Form.
To the extent required by applicable law in certain jurisdictions,
including Arizona, Florida and North Dakota, shares of common stock offered
under the AFL Stock Plan to persons not presently record holders of common
stock are offered only through a registered broker/dealer.
AM I REQUIRED TO JOIN?
No. If you hold AFLAC Incorporated common stock but choose not to
participate you will continue to receive cash dividends, as declared, in the
usual manner. However, participants in the Bonus Plan will not be entitled
to receive their bonus contributions greater than $50 as described in Annex
A by any mechanism other than through an account under the AFL Stock Plan.
WHAT HAPPENS TO CASH PAYMENTS PENDING INVESTMENT BY THE PLAN?
Pending investment pursuant to the AFL Stock Plan, initial cash
investments, optional cash investments and bonus contributions will be
credited to your account and held in a trust account which will be separated
from any other funds or monies of AFLAC Incorporated. Cash investments not
invested in common stock within 15 business days of receipt will be promptly
returned to you. All cash investments are subject to collection by the
Administrator of full face value in U.S. funds and will be deemed received
when actually received by the Administrator.
If you request in writing, you may receive a refund of an initial or
any optional cash investment which has not already been invested, provided
the request is received by the Administrator at least two business days
prior to the applicable investment date. However, no refund of a check or
money order will be made until the Administrator has collected the funds
from those instruments.
WHEN WILL SHARES BE PURCHASED THROUGH THE PLAN?
An "investment date" will occur twice every month beginning on the 1st
and 15th day of the month or, if that day is not a business day, the
business day immediately preceding that day. Optional and initial cash
investments will be invested in common stock beginning on the first
investment date following receipt of the investment by the Administrator;
provided that the investment is received by the Administrator on the
business day before an investment date. Otherwise, the investment will be
held by the Administrator and invested on the next investment date. No
interest will be paid on funds held by the Administrator pending investment.
Dividend and voting rights will start upon settlement, which is ordinarily
three business days after purchase.
For Associates, bonus contributions (equal to or greater than $50)
awarded under the Bonus Plan will be credited once each month to your AFL
Stock Plan accounts in accordance with the terms of the Bonus Plan, as
explained in greater detail in Annex A to this prospectus, which is being
delivered to participants in the Bonus Plan.
7
<PAGE>
WHAT DOES IT COST TO BUY AND SELL SHARES IN THE PLAN?
You will incur no brokerage commission or service charges for purchases
made under the AFL Stock Plan. We will pay all costs of administration of
the AFL Stock Plan, including purchase of shares of common stock. The
commission on any shares purchased will be reported as a taxable item. You
will incur brokerage commission charges and applicable taxes when the
Administrator sells your shares through the Independent Agent.
HOW ARE PAYMENTS WITH INSUFFICIENT FUNDS HANDLED?
If the Administrator does not receive your payment because of
insufficient funds in your account, it will remove the shares purchased for
you from your account. If the net proceeds from the sale of these shares
are insufficient to satisfy the balance of the uncollected amounts, the
Administrator may sell additional shares from your account to satisfy the
uncollected balance. In addition, an "insufficient funds" fee of $20 will
be charged. The Administrator may place a hold on your account until the
"insufficient funds" fee is received from you, or may sell shares from your
account to satisfy any uncollected amounts.
WHAT IS THE SOURCE OF SHARES?
Shares of common stock purchased for you under the AFL Stock Plan will
be either newly issued shares, shares held in the treasury of AFLAC
Incorporated or shares purchased in the open market by the Independent
Agent. As of the date of this Prospectus, shares of common stock purchased
under the AFL Stock Plan will be purchased from treasury.
HOW IS THE PRICE OF SHARES PURCHASED DETERMINED?
The purchase price of common stock purchased from AFLAC Incorporated,
whether newly issued or treasury shares, will be the volume weighted average
of the trading on the U.S. exchanges on the investment date. The price of
any shares of common stock purchased in the open market will be the average
price per share of the aggregate number of shares purchased for the AFL
Stock Plan by the Independent Agent with respect to the applicable
investment date. The Independent Agent will make open market purchases with
respect to an investment date within 15 days of the investment date.
Your funds will be commingled with those of other participants for the
purpose of executing purchases for shares under the AFL Stock Plan. The
number of shares (including any fraction of a share rounded to three decimal
places) of common stock credited to your account will be determined by
dividing the total amount of cash dividends, optional cash investments
and/or initial cash investments to be invested for you by the relevant
purchase price per share.
WILL I RECEIVE A CERTIFICATE FOR SHARES PURCHASED THROUGH THE PLAN?
All shares purchased through the AFL Stock Plan will be held by the AFL
Stock Plan. You can obtain a certificate for all or part of the whole
shares of common stock credited to your AFL Stock Plan account by making a
request to the Administrator. No certificates for fractional shares will be
issued.
8
<PAGE>
CAN MY DIVIDENDS BE REINVESTED?
You may elect to invest in common stock by reinvesting all or a portion
of cash dividends paid on shares of common stock registered in your name or
in the Plan. If you elect partial reinvestment of cash dividend payments
you must designate the whole number of shares for which reinvestment is
desired. Once you elect reinvestment, cash dividend payments made on the
designated shares of common stock will be invested in shares of common
stock. The amount to be reinvested will be reduced by any amount that is
required to be withheld under any applicable tax or other statutes. If you
have specified partial reinvestment, that portion of cash dividend payments
not designated for reinvestment will be sent to you by check in the usual
manner, or by electronic direct deposit, if you elected the direct deposit
option.
Dividend payments will be invested in common stock beginning either on
the date of payment, if the payment date is an investment date, or on the
first investment date following such payment. Dividend payments not
invested in common stock within 15 business days of receipt will be promptly
returned to you. Cash dividends pending investment pursuant to the AFL
Stock Plan will be credited to your account and held in a trust account that
will be separated from any other funds or monies of AFLAC Incorporated. No
interest will be paid on funds held by the Administrator pending investment.
As noted above, for Associates who are automatically enrolled in the
AFL Stock Plan for purposes of receiving bonus contributions under the Bonus
Plan, the dividends earned on the shares purchased on your behalf with the
bonus contribution will be automatically reinvested, unless you submit an
Enrollment Form on which you elect to receive cash dividends instead.
CAN I HAVE DIVIDENDS THAT ARE NOT REINVESTED DIRECT DEPOSITED?
If you elect not to reinvest cash dividends distributed on shares of
common stock you can receive the non-reinvested cash dividends by electronic
deposit to your designated bank, savings, or credit union account that is a
member of the ACH network. To receive a direct deposit of funds, you must
complete and sign a Direct Deposit Authorization Form and return it to the
Administrator with a voided check or deposit slip for the account for which
funds are to be deposited. Direct deposit will become effective as soon as
practicable after our receipt of the Direct Deposit Authorization Form. You
can change designated direct deposit accounts by contacting the
Administrator.
Cash dividends on shares of common stock not designated for
reinvestment and not directly deposited will be paid by check on the
dividend payment date.
WHAT ARE THE TAX CONSEQUENCES OF PARTICIPATING IN THE PLAN?
Cash dividends reinvested under the AFL Stock Plan are considered
taxable income, even though you have not actually received them in cash.
Expenses and fees paid for you by AFLAC Incorporated will be included as
income, for tax purposes, and these expenses and fees will be added to the
cost basis of the shares purchased through the AFL Stock Plan. The
information return sent to you and the Internal Revenue Service ("IRS") at
year-end will show the amount of dividends reinvested through the AFL Stock
Plan, as well as these fees and expenses.
9
<PAGE>
You generally will recognize gain or loss when you sell whole shares or
fractional shares credited to your account. The sale of any whole or
fractional shares through the AFL Stock Plan will be reported to the IRS and
you on Form 1099-B.
If the shares credited to your account were purchased with a bonus
contribution made under the Bonus Plan, the value of the bonus contribution
is includible in your gross income at the time it is credited to your AFL
Stock Plan account. The tax basis that you will have in the shares of AFLAC
Incorporated common stock purchased on your behalf (which is used for
computing future gain or loss) will be equal to the purchase price of the
shares, which will equal, in the aggregate, the amount of the bonus
contributions transferred to the AFL Stock Plan on your behalf. Bonus
contributions from the Bonus Plan that are distributed directly to you
(through your accounting statement) will be includible in your gross income
at the time of distribution.
You should consult with your personal tax advisor for advice applicable
to your particular situation.
CAN I DEPOSIT MY SHARES FOR SAFEKEEPING?
If you participate in the AFL Stock Plan, you may deposit into the AFL
Stock Plan for safekeeping common stock that you hold in certificated form
by delivering your stock certificates unendorsed to the Administrator and
requesting those shares be credited to your account. This feature is
offered at no charge and eliminates the risk associated with the loss of
stock certificates. If certificates were lost, stolen or destroyed, the
shares represented by such certificates could not be sold or transferred
without first obtaining replacement certificates, a process that could be
costly and could take several weeks to complete. Shares represented by
certificates deposited in the AFL Stock Plan are treated in the same manner
as shares purchased through the AFL Stock Plan, and may be conveniently and
efficiently sold or transferred through the AFL Stock Plan.
CAN I SELL SHARES HELD IN MY PLAN ACCOUNT?
You can request at any time that all or a portion of the shares of
common stock credited to your account be sold by furnishing the
Administrator with written instructions, either by mail or by fax, signed by
all registered holders. You can sell only whole shares, not fractional
shares, if the sale is for less than all of the shares in your account. We
cannot sell any certificated shares owned by you unless the certificates are
first deposited in the AFL Stock Plan. We will forward the sale
instructions to the Independent Agent within five business days of receipt.
The Independent Agent will sell shares as soon as practicable and a check
for the proceeds of the sale (less brokerage fees and any withholding taxes)
will be mailed to you.
Unless you are an Associate or Employee with monthly deductions for
investment or an Associate receiving bonus contributions under the Bonus
Plan, IF YOU DISPOSE OF ALL WHOLE SHARES OF COMMON STOCK CREDITED TO YOUR
AFL STOCK PLAN ACCOUNT AND REGISTERED IN YOUR NAME, YOU WILL NO LONGER BE
ELIGIBLE TO PARTICIPATE IN THE AFL STOCK PLAN UNLESS YOU MAKE A NEW INITIAL
INVESTMENT. A check equal to the current market value of any remaining
fractional shares will be issued to you, less any brokerage fees and any
applicable withholding taxes.
10
<PAGE>
CAN I TRANSFER SHARES HELD IN THE PLAN?
If you wish to change the ownership of all or part of the shares
through gift, private sale or otherwise, you can do so by delivering a
written request to the Administrator. The transfer will be done as soon as
practicable following the Administrator's receipt of the required
documentation. No fractional shares of common stock credited to your
account can be transferred unless your entire account is transferred.
Requests for account transfers are subject to the same requirements as for
the transfer of securities, including the requirement of a Medallion
signature guarantee on the request. If the recipient is not already a
participant in the AFL Stock Plan, the Administrator will open an account in
the recipient's name. The recipient will receive a plan prospectus and a
statement showing the number of shares held in the recipient's account.
Gift certificates are also available on request to the Administrator.
WHEN CAN I MAKE CHANGES OR WITHDRAW FROM THE PLAN?
You can change investment options or withdraw some or all of the common
stock credited to your account at any time by delivering written
instructions to the Administrator.
You can at any time terminate participation in the AFL Stock Plan.
Unless you request that the shares held in your account be sold, the
Administrator will send a stock certificate for the number of whole shares
in your account and a check equal to the current market value of any
fractional shares.
CAN THE PLAN ADMINISTRATOR TERMINATE MY ACCOUNT?
The Administrator reserves the right to terminate your participation in
the AFL Stock Plan at any time for any reason upon written notice to you at
the address appearing on their records (excluding participants in the Bonus
Plan, whose participation in the AFL Stock Plan may be terminated only in
accordance with the provisions of the Bonus Plan).
If you dispose of all of the shares of common stock in your AFL Stock
Plan account and registered in your name, your AFL Stock Plan account will
be terminated, unless you are a participant in the AFL Stock Plan as a
result of your receipt of bonus contributions under the Bonus Plan.
WHEN WILL I RECEIVE A STATEMENT ON MY ACCOUNT?
A statement will be provided when you make an optional cash investment,
deposit, transfer, or withdraw shares of common stock, have cash dividend
payments reinvested in common stock, or receive a bonus contribution awarded
under the Bonus Plan which is transferred to the AFL Stock Plan. You should
retain these statements in order to establish the cost basis, for tax
purposes, for shares of common stock acquired under the AFL Stock Plan.
You will also receive copies of all communications sent to holders of
common stock. This may include quarterly reports, annual reports, proxy
material, consent solicitation material and IRS information, if appropriate,
for reporting dividend income. All notices, statements and other
communications will be addressed to the latest address of record; therefore,
it is important that you promptly notify the Administrator in writing of any
change of address.
11
<PAGE>
WILL I BE ENTITLED TO STOCK DIVIDENDS AND SPLITS?
Any stock dividends or split shares of common stock distributed by
AFLAC Incorporated on AFL Stock Plan shares will be credited to your account
in the same manner as shareholders who are not participants in the AFL Stock
Plan.
WILL I HAVE VOTING RIGHTS FOR THE SHARES HELD IN MY PLAN ACCOUNT?
Prior to each shareholder meeting, you will be mailed a proxy
representing the shares of common stock held in your AFL Stock Plan account
combined with any other shares of common stock registered in your name on
the record date for such meeting. Shares of common stock credited to your
account will not be voted unless you provide voting instructions by proxy
for your shares.
All shares of common stock held in your account will be entitled to one
vote per share, unless you have held the shares for 48 continuous months, in
which case they will be entitled to ten votes per share.
CAN THE PLAN BE CHANGED?
AFLAC Incorporated can suspend, modify or terminate the AFL Stock Plan
at any time. You will be sent a written notice of any significant changes.
In the event the AFL Stock Plan is terminated for the purpose of
establishing another stock purchase and/or dividend reinvestment plan, we
will automatically enroll you in the other plan. Shares credited to your
AFL Stock Plan account will be credited automatically to the other plan,
unless the Administrator receives notice from you to the contrary.
HOW DOES THE BONUS PLAN WORK?
The Bonus Plan provides an incentive to Associates who have entered
into contracts with AFLAC or AFLAC NY, both wholly-owned subsidiaries of
AFLAC Incorporated, for the purpose of marketing their specialized insurance
policies, and to enable the companies to retain experienced sales and
supervisory personnel. The plan rewards those individuals for sales of
insurance policies, and encourages them to acquire and retain a proprietary
interest in the success of AFLAC Incorporated. Once each month, on an
investment date, the aggregate amount of the accrued bonus contribution then
payable under the plan will be delivered to the Independent Agent (if this
aggregate amount equals at least $50) to be used to purchase shares of
common stock in the same manner and at the same price that all other shares
are purchased by the Independent Agent on that investment date.
The Bonus Plan applies only to Associates and does not affect the
ability of any other participant in the AFL Stock Plan to make purchases or
sales of AFLAC Incorporated common stock under the AFL Stock Plan or to
reinvest cash dividends for shares of common stock credited to their
accounts. Annex A to this prospectus describes in more detail how the plan
works, and is being provided with this prospectus to the participants in the
Bonus Plan.
WHAT IF I HAVE ADDITIONAL QUESTIONS?
You should direct questions concerning the AFL Stock Plan to our
Administrator. You should include in all correspondence your shareholder
12
<PAGE>
account number, taxpayer identification number (social security number), and
a daytime telephone number where we may contact you during normal working
hours to facilitate a prompt response.
You should recognize that we cannot assure you of a profit or protect
you against a loss on the shares purchased under the AFL Stock Plan.
Although we currently intend to continue the payment of quarterly
dividends on the common stock, the payment of dividends will depend upon
future earnings, our financial condition and other factors.
INTERPRETATION AND REGULATION OF THE PLANS
Our officers are authorized to take such actions as may be consistent
with the terms and conditions of the AFL Stock Plan and the Bonus Plan. We
reserve the right to interpret and regulate the AFL Stock Plan and the Bonus
Plan as we deem desirable or necessary in connection with the operations of
the AFL Stock Plan and the Bonus Plan.
USE OF PROCEEDS
If treasury shares or newly issued shares of common stock are purchased
under the AFL Stock Plan, we will use the proceeds from those sales for
general corporate purposes. We will not receive any proceeds when shares of
common stock are purchased under the AFL Stock Plan in the open market.
PLAN OF DISTRIBUTION
The AFL Stock Plan provides for the purchase of shares of common stock,
which may be either newly issued shares, shares held in our treasury, or
shares purchased on the open market by the Independent Agent. As of the
date of this Prospectus, shares of common stock purchased for participants
under the AFL Stock Plan are being purchased from our treasury. The AFL
Stock Plan provides that we may not change our determination regarding the
source of purchases of shares under the AFL Stock Plan more than once in any
three-month period. The primary consideration in determining the source of
shares of common stock to be used for purchases under the AFL Stock Plan is
expected to be our need to increase equity capital. If we do not need to
raise funds externally or if financing needs are satisfied using non-equity
sources of funds to maintain our targeted capital structure, shares of
common stock purchased for participants under the AFL Stock Plan will be
purchased on the open market, subject to the limitation on changing the
source of shares of common stock.
EXPERTS
Our consolidated financial statements and schedules included in our
Annual Report on Form 10-K for the year ended December 31, 1998 are
incorporated by reference in this Prospectus in reliance upon the report of
KPMG LLP, independent auditors, given upon the authority of that firm as
experts in accounting and auditing.
LEGAL OPINIONS
Certain legal matters in connection with the common stock offered by
this Prospectus have been passed upon for us by Joey M. Loudermilk, Senior
Vice President and General Counsel of AFLAC Incorporated.
13
<PAGE>
ANNEX A
1999 AFLAC ASSOCIATE STOCK BONUS PLAN
The Boards of Directors of American Family Life Assurance Company of
Columbus ("AFLAC") and American Family Life Assurance Company of New York
("AFLAC NY") adopted the 1999 AFLAC Associate Stock Bonus Plan on June 3,
1999, effective as of July 1, 1999 (the "Bonus Plan"). This is a new plan
that replaces in their entirety the AFLAC Associate Stock Bonus Plan and the
AFLAC New York Associate Stock Bonus Plan, both of which were terminated
effective June 30, 1999 (collectively, the "Terminated Plans"). In
accordance with the provisions of the Terminated Plans, the related Trusts
will be dissolved and their assets distributed. All shares, including
fractional shares, credited to a participant's individual share account
under the Terminated Plans will be automatically transferred to a new
account established for the participant under the AFL Stock Plan if the
value of the participant's account equals or exceeds $1,000. If the value
of a participant's account is less than $1,000, a check for the full value
of the account will be distributed directly to the participant.
The purpose of the Bonus Plan is to provide an incentive to associates,
soliciting brokers, sales coordinators and special associates of AFLAC and
AFLAC NY, both wholly-owned subsidiaries of AFLAC Incorporated, for the
purpose of marketing their specialized insurance policies and to enable
AFLAC and AFLAC NY to retain experienced sales and supervisory personnel.
The Bonus Plan rewards these individuals for sales of the insurance policies
and encourages them to acquire and retain a proprietary interest in the
success of AFLAC, AFLAC NY and AFLAC Incorporated.
The Bonus Plan is not subject to any provisions of the Employee
Retirement Income Security Act of 1974 and is not qualified under Section
401(a) of the Internal Revenue Code of 1986, as amended.
Because this 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 carefully. You may request a copy of the Bonus Plan,
which we will provide without charge, by writing to the Shareholder Services
Department, 1932 Wynnton Road, Columbus, Georgia 31999, or by calling 1-800-
235-2667 or 706-596-3589.
ADMINISTRATION:
The Stock Bonus Management Committee consists of officers designated by
the Boards of Directors of AFLAC and AFLAC NY. 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; David L. Hewitt, Senior Vice
President, Marketing, for AFLAC NY; Michael E. Bartow, Second Vice
President, Financial; and Patricia A. Bell, Second Vice President,
Shareholder Services.
The AFLAC Board of Directors and AFLAC NY Board of Directors
designates, and has the right to remove, the members of the Stock Bonus
14
<PAGE>
Management Committee. The Stock Bonus Management Committee may delegate its
administrative duties and responsibilities to such persons as it selects.
Under the Bonus Plan, AFLAC and AFLAC NY have agreed to indemnify the
members of the Stock Bonus Management Committee and the AFLAC Board of
Directors, the AFLAC NY Board of Directors and any other party acting at the
request of AFLAC, AFLAC NY or the Stock Bonus Management Committee with
respect to the Bonus Plan. This indemnification covers their liability for
their acts, omissions or conduct in such capacities, except to the extent
that their liability results from their own willful misconduct or gross
negligence.
Participants in the Bonus Plan receive account statements for their AFL
Stock Plan account in the same manner as other participants in the AFL Stock
Plan. Accordingly, a statement will be provided when your account is
credited with shares of stock purchased with the bonus contribution awarded
under the Bonus Plan, when you make an optional cash investment, deposit,
transfer, or withdraw shares of common stock or have cash dividend payments
reinvested in common stock. AFLAC Incorporated 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 Shareholder Services
Department, 1932 Wynnton Road, Columbus, Georgia 31999. You may make
requests by telephone by calling 1-800-235-2667 or 706-596-3589.
ELIGIBILITY AND ENROLLMENT:
Each associate, soliciting broker and sales coordinator is eligible to
participate in the Bonus Plan, as specified below:
An associate is any person or entity associated with AFLAC or AFLAC
NY pursuant to an Associate's Contract in effect on or after July 1,
1999 pertaining to services in the United States, its territories and
possessions, and any other location or country designated by AFLAC or
AFLAC NY, who is paid on a commission basis and who is actively
performing sales and servicing functions for AFLAC or AFLAC NY.
A soliciting broker is an associate who is also providing services to
AFLAC or AFLAC NY pursuant to a standardized Soliciting Broker
Contract in effect on or after July 1, 1999.
A sales coordinator is an associate who is also providing services to
AFLAC or AFLAC NY as a district, regional or state sales coordinator
pursuant to a contract in effect on or after July 1, 1999.
Special associates are persons or entities associated with AFLAC or
AFLAC NY pursuant to a special written agreement in effect on or
after July 1, 1999 who are engaged in the sale of insurance products
for AFLAC or AFLAC NY and are paid on a commission basis. Special
associates are eligible to participate in the Bonus Plan only if the
written agreement between AFLAC or AFLAC NY and the special associate
so provides.
Any associate, soliciting broker, sales coordinator or eligible special
associate who was a participant in the Terminated Plans as of the
termination date of the Terminated Plans will automatically become enrolled
in the Bonus Plan, unless that person or entity notifies AFLAC or AFLAC NY
in writing that the person or entity does not wish to become a participant.
15
<PAGE>
Any person or entity who becomes an associate, soliciting broker, sales
coordinator or eligible special associate on or after July 1, 1999 will also
automatically become a participant, unless that person or entity notifies
AFLAC or AFLAC NY in writing that the person or entity does not wish to
become a participant. If an associate, soliciting broker, sales coordinator
or eligible special associate was eligible to be a participant in the
Terminated Plans but opted not to become a participant, and the individual
is eligible to participate in the Bonus Plan, that person or entity must
notify AFLAC or AFLAC NY in writing that the person or entity opts to enroll
in the Bonus Plan. 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 or AFLAC NY and the participant, or to be consideration, or an
inducement, for the association of any participant with AFLAC or AFLAC NY.
No provision of the Bonus Plan shall be deemed to give any participant the
right to be retained or contracted in association with AFLAC or AFLAC NY, or
be deemed to interfere with the right of AFLAC or AFLAC NY to discharge any
participant at any time regardless of the effect which such discharge will
have upon the participant. Each participant, for himself 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 or AFLAC NY.
BONUS CONTRIBUTIONS:
Bonus contributions awarded under the Bonus Plan, if any, are made by
AFLAC and AFLAC NY. The Board of Directors of AFLAC and AFLAC NY may
however authorize bonus contributions from other sources. No contributions
may be made by any participant.
In the case of policies with issue dates prior to July 1, 1999, bonus
contributions are based on premiums which are applied by AFLAC or AFLAC NY
to the policy for the first twelve months of coverage after a policy is made
effective at the home office of AFLAC or AFLAC NY, and will be credited to
Associates on a monthly basis. In the case of policies with issue dates on
or after July 1, 1999, bonus contributions are based on annualized premiums
and are credited when the difference between the issue date and the "paid
to" date is thirteen months. The "paid to" date is the date to which
coverage provided by a policy will remain in force based on premiums applied
to the policy. We will make the bonus contribution only if you continue to
be an active associate at the time at which the bonus contribution becomes
payable under this schedule. We will also continue to pay the bonus
contribution on policies that you have sold if you die, become disabled, or
are terminated and at the time of the death, disability or termination, you
have become vested for commission purposes under your agreement with us.
Bonus contributions are made only with respect to insurance policies
designated as "Bonus Policies" by AFLAC or AFLAC NY. A list of those
policies which are designated as Bonus Policies is included in the
Commission Structure which is made available to associates, sales
coordinators, soliciting brokers and special associates. Participants may
obtain copies of the current list from sales coordinators or the Marketing
Department of AFLAC or AFLAC NY. AFLAC and AFLAC NY may, at any time and in
their sole discretion, change the insurance policies to be designated as
Bonus Policies.
16
<PAGE>
Currently, AFLAC or AFLAC NY will contribute the following amount with
respect to Bonus Policies:
for associates and soliciting brokers, 3.5% of the first year
premiums applied by AFLAC or AFLAC NY on Bonus Policies sold by the
participant which have issue dates prior to July 1, 1999, and 3.5% of
annualized first year premiums as of the date on which the time
period between the issue date and the "paid to" date is thirteen
months with respect to Bonus Policies sold by the participant which
have issue dates on or after July 1, 1999, and allocated among
participants on the same basis as the allocations that are properly
designated on a new business transmittal form submitted with the
Bonus Policy;
for sales coordinators, .7% of the first year premiums applied by
AFLAC or AFLAC NY, or of the annualized first year premiums,
depending on the effective date of the policy, on Bonus Policies sold
by each participant or other individual who is assigned in writing to
the sales coordinator, and allocated among sales coordinators as
necessary based on any allocation among Associates; and
for special associates, the amount contributed with respect to Bonus
Policies sold is determined in accordance with the written agreement
between the special associate and AFLAC or AFLAC NY.
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 bonus contributions awarded
under the Bonus Plan are transferred to the AFL Stock Plan if the bonus
contribution due in any one month period equals or exceeds $50. Bonus
contributions totaling less than $50 will be credited to the participant's
accounting statement. Bonus contributions are made not later than 45 days
following the date on which the bonus contribution becomes due under the
schedule described above. The AFL Stock Plan will purchase shares on the
15th of every month, or if such date is not a business day, the business day
immediately preceding that day.
All costs incurred in the operation of the Bonus Plan, including
brokerage and other fees directly related to the purchase of shares of AFLAC
Incorporated common stock, will be paid by AFLAC or AFLAC NY, as the
sponsors of the Bonus Plan, or by AFLAC Incorporated, as the sponsor of the
AFL Stock Plan. However, participants will incur the brokerage commission
charges and applicable taxes when the participant sells shares through the
Independent Agent.
The total amount of the bonus contribution due to an associate may be
reduced by an amount that reflects any bonus contribution previously made
that was based on premiums that were later refunded.
INVESTMENTS:
It is the express intent of the Bonus Plan that bonus contributions be
invested in common stock of AFLAC Incorporated in accordance with the terms
of the AFL Stock Plan, as summarized in this Prospectus.
17
<PAGE>
Transfers and Distributions
In general, transfers of bonus contributions awarded under the Bonus
Plan will be made to the AFL Stock Plan within 45 days after the end
of each month in which an associate is granted a bonus contribution
under the Bonus Plan. The Plan sponsors will not pay interest on
funds pending transfer to the AFL Stock Plan.
If the bonus contribution for an associate equals $50 or more, this
amount will be transferred to the AFLAC Incorporated Shareholder
Services Department to be invested in AFLAC Incorporated common stock
on your behalf. If the bonus contribution is less than $50, you will
receive the bonus contribution amount from AFLAC or AFLAC NY, as the
case may be, through your accounting statement.
After the bonus contribution is transferred to the AFL Stock Plan, if
the AFL Stock Plan purchases treasury shares or newly issues shares,
the purchase price will be the volume weighted average of the trading
on the U.S. exchanges on the applicable investment date for AFLAC
Incorporated common stock, as determined by the Independent Agent for
the AFL Stock Plan. If the AFL Stock Plan purchases shares in the
open market, the purchase price will be the average cost of all
shares purchased by the Independent Agent on the open market with
respect to the applicable investment date.
VOTING:
Participants become entitled to exercise rights as stockholders of
AFLAC Incorporated at the time that shares of AFLAC Incorporated are
purchased on their behalf and credited to their accounts in the AFL Stock
Plan.
TRANSFERABILITY:
The Bonus Plan provides that, except as provided in the Bonus Plan or
as otherwise required by law (for example, laws governing levies and
garnishments), 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 AFLAC NY.
AMENDMENT AND TERMINATION:
AFLAC and AFLAC NY expect the Bonus Plan to be continued indefinitely.
However, AFLAC and AFLAC NY have the right at any time to reduce or
discontinue permanently the bonus contributions awarded under the Bonus Plan
or to amend or terminate the Bonus Plan by action of their Boards of
Directors without the consent of participants.
Upon termination of the Bonus Plan, AFLAC and AFLAC NY shall disburse
to each participant or estate, as the case may be, through the AFL Stock
Plan the full accrued and unpaid amount then standing to his or her credit.
MANDATORY ARBITRATION:
Any dispute arising under the Bonus Plan, to the maximum extent
permitted by applicable law, is subject to mandatory, binding arbitration
18
<PAGE>
pursuant to the terms of the Federal Arbitration Act. The primary
arbitration terms are as follows:
Arbitration is the sole remedy for disputes regarding the Bonus Plan.
The decision of the arbitration panel shall be final and binding as
among the parties.
Any arbitration will be conducted in Columbus, Georgia.
The arbitrators may grant all relief allowable under law except for
temporary restraining orders, interlocutory or preliminary injunctive
relief, and punitive or exemplary damages.
Each party may select one arbitrator, who need not be neutral, and,
if either party so requests, the Senior Judge of the Superior Court
of Muscogee County, Georgia will also select a neutral third
arbitrator.
The arbitration panel shall provide for a hearing and a majority of
the arbitration panel shall render an award within 10 days of the
completion of the hearing.
Each party will pay for the fees and expenses of its arbitrator and,
if appointed, will split the fees and expenses of any neutral third
arbitrator.
The prevailing party in the arbitration shall be entitled to recover
its costs and attorneys' fees from the other party.
TAX CONSEQUENCES:
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 transferable, or is not subject to a substantial risk
of forfeiture, which will occur when the bonus contribution is transferred
to the participant's AFL Stock Plan account. The tax basis that you will
have in these shares (which is used for computing future gain or loss) will
be equal to the purchase price of the shares, which will equal, in the
aggregate, the amount of the bonus contributions transferred to the AFL
Stock Plan on your behalf. Bonus contributions awarded under the Bonus Plan
that are distributed to a participant (through the accounting statement)
will be includible in the participant's gross income at the time of
distribution. Under sections 404(d) and/or 83(h) of the Code and the
Treasury regulations thereunder, AFLAC and AFLAC NY generally receive
deductions with respect to the common stock of AFLAC Incorporated at the
time it is includible in the gross income of a participant.
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.
19
<PAGE>
AFLAC INCORPORATED
9,000,000 SHARES
COMMON STOCK
PROSPECTUS
AFL STOCK PLAN:
A DIRECT STOCK PURCHASE
AND
DIVIDEND REINVESTMENT PLAN
JUNE 14, 1999
20
<PAGE>
You should rely only on the information in this document or that we
have referred you to. We have not authorized anyone to provide you with
information that is different.
TABLE OF CONTENTS
Prospectus
----------
Page No.
--------
Additional Information 2
Incorporation of Certain Documents by Reference 2
AFLAC Incorporated and its Subsidiaries 3
AFL Stock Plan 3
Use of Proceeds 13
Plan of Distribution 13
Experts 13
Legal Opinions 13
Annex 14
21
<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 $ -0-
Legal fees and expenses 27,000
Accounting fees and expenses 5,000
Printing, Postage and Miscellaneous 22,500
-------
Total $ 54,500
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.
Item 16. EXHIBITS
The following exhibits are filed with this registration statement:
Exhibit No.
(per Item 601
of Regulation S-K) Description of Exhibit
----------------- -----------------------
4.1 Articles of Incorporation of AFLAC
Incorporated, as amended. Filed as Exhibit
3.0 to AFLAC Incorporated's Annual Report on
Form 10-Q for the quarter ended March 31, 1997
and incorporated herein by reference.
5.1* Opinion of Joey M. Loudermilk, Esq.
5.2 Opinion of Joey M. Loudermilk, Esq. regarding
post-effective amendment.
23.1* Consent of KPMG LLP.
22
<PAGE>
23.2* Letter of KPMG LLP re: Unaudited
Interim Financial Information.
23.3* Consent of Joey M. Loudermilk, Esq. (included
in the Opinion of Counsel filed as Exhibit
5.1).
23.4 Consent of KPMG LLP for post-effective
amendment.
23.5 Consent of Joey M. Loudermilk, Esq.
(included in the Opinion of Counsel filed as
Exhibit 5.2 hereto).
24.1* Power of Attorney, as set forth on the
signature page of the original S-3 filing.
99.1 1999 AFLAC Associate Stock Bonus Plan.
* Previously provided in original S-3 filing.
Item 17. UNDERTAKINGS
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.
(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.
23
<PAGE>
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.
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.
24
<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
June 14, 1999.
AFLAC INCORPORATED
Dated: June 14, 1999 By: /s/ Daniel P. Amos
------------------- --------------------------------
Daniel P. Amos
Chief Executive Officer
and President
Dated: June 14, 1999 By: /s/ Kriss Cloninger, III
------------------- --------------------------------
Kriss Cloninger, III
Executive Vice President
and Chief Financial
Officer
Dated: June 14, 1999 By: /s/ Norman P. Foster
------------------- --------------------------------
Norman P. Foster
Executive Vice President
of Corporate Finance
25
<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 June 14, 1999
- ------------------------- Officer and Vice -----------------
Daniel P. Amos Chairman of the
Board
/s/ Paul S. Amos Chairman of June 14, 1999
- ------------------------- the Board -----------------
Paul S. Amos
/s/ J. Shelby Amos Director June 14, 1999
- ------------------------- -----------------
J. Shelby Amos
/s/ Michael H. Armacost Director June 14, 1999
- ------------------------- -----------------
Michael H. Armacost
Director
- ------------------------- -----------------
M. Delmar Edwards, M.D.
/s/ Joe Frank Harris Director June 14, 1999
- ------------------------------ -----------------
Joe Frank Harris
Director
- ------------------------- -----------------
Elizabeth J. Hudson
/s/ Kenneth S. Janke, Sr. Director June 14, 1999
- ------------------------- -----------------
Kenneth S. Janke, Sr.
/s/ Charles B. Knapp Director June 14, 1999
- ------------------------- -----------------
Charles B. Knapp
Director
- ------------------------- -----------------
Hisao Kobayashi
26
<PAGE>
Director
- ------------------------- -----------------
Yoshiki Otake
/s/ E. Stephen Purdom Director June 14, 1999
- ------------------------- -----------------
E. Stephen Purdom
/s/ Barbara K. Rimer Director June 14, 1999
- ------------------------- -----------------
Barbara K. Rimer
/s/ Henry C. Schwob Director June 14, 1999
- ------------------------- -----------------
Henry C. Schwob
/s/ J. Kyle Spencer Director June 14, 1999
- ------------------------- -----------------
J. Kyle Spencer
/s/ Glenn Vaughn, Jr. Director June 14, 1999
- ------------------------- -----------------
Glenn Vaughn, Jr.
/s/ Robert L. Wright Director June 14, 1999
- ------------------------- -----------------
Robert L. Wright
27
<PAGE>
EXHIBIT INDEX
Number Description
- ------ -----------
4.1 Articles of Incorporation of AFLAC Incorporated, as amended.
Filed as Exhibit 3.0 to AFLAC Incorporated's Annual Report on
Form 10-Q for the quarter ended March 31, 1997 and
incorporated herein by reference.
5.1* Opinion of Joey M. Loudermilk, Esq.
5.2 Opinion of Joey M. Loudermilk, Esq. regarding post-effective
amendment.
23.1* Consent of KPMG LLP
23.2* Letter of KPMG LLP re: Unaudited Interim Financial Information.
23.3* Consent of Joey M. Loudermilk, Esq. (included in the opinion of
Counsel filed as Exhibit 5.1).
23.4 Consent of KPMG LLP for post-effective amendment.
23.5 Consent of Joey M. Loudermilk, Esq. (included in the Opinion of
Counsel filed as Exhibit 5.2 hereto).
24.1* Power of Attorney, as set forth on the signature page of the
original S-3 filing.
99.1 1999 AFLAC Associate Stock Bonus Plan
* Previously provided in original S-3 filing.
28
<PAGE>
Exhibit 5.2
June 14, 1999
AFLAC Incorporated
1932 Wynnton Road
Columbus, Georgia 31999
Re: Post Effective Amendment No. 1 Registration Statement on Form S-3
Ladies and Gentlemen:
I am Senior Vice President and General Counsel of AFLAC Incorporated, a
Georgia corporation (the "Company"). The Company is filing a Post-Effective
Amendment No. l Registration Statement on Form S-3 (the "Registration
Statement") with the Securities and Exchange Commission relating to
9,000,000 shares of common stock, par value $.10 per share (the "Common
Stock"), of the Company (the "Shares") issuable pursuant to the Company's
Direct Stock Purchase and Dividend Reinvestment Plan (the "Plan").
This opinion is delivered in accordance with the requirements of Item
601(b)(5) of Regulation S-K under the Securities Act of 1933, as amended
(the "Act").
In connection with this opinion, I have reviewed such documents as I
have deemed necessary or appropriate as a basis for the opinion set forth
below. In my examination, I have assumed the genuineness of all signatures,
the legal capacity of all natural persons, the authenticity of all documents
submitted to me as originals, the conformity to original documents of all
documents submitted to me as certified or photostatic copies, and the
authenticity of the originals of such copies. As to any facts material to
this opinion that I did not independently establish or verify, I have relied
upon representations or certificates of the officers and directors of the
Company.
I am a member of the State Bar of Georgia and I express no opinion as
to the laws of any other jurisdiction.
Based upon the foregoing, and subject to the qualifications set forth
herein, I am of the opinion that the Shares have been duly and validly
authorized and when the certificates for the Shares have been duly executed,
delivered and paid for in accordance with the Plan, the Shares will be duly
and validly issued, fully paid and nonassessable.
I hereby consent to the filing of this opinion as Exhibit 5.2 to the
Registration Statement and to the use of my name in the Prospectus that is a
part of the Registration Statement.
Very truly yours,
/s/ Joey M. Loudermilk
---------------------------
Joey M. Loudermilk
Senior Vice President and
General Counsel
<PAGE>
Exhibit 23.4
KPMG LLP
303 Peachtree Street, N.E.
Suite 2000
Atlanta, Georgia 30308
The Board of Directors
AFLAC Incorporated
Columbus, Georgia 31999
We consent to the incorporation by reference in AFLAC Incorporated's
("AFLAC") Post-Effective Amendment No. 1 on Form S-3 dated June 14, 1999 of
our report dated January 28, 1999, with respect to the consolidated balance
sheets of AFLAC and subsidiaries as of December 31, 1998 and 1997, and the
related consolidated statements of earnings, stockholders' equity, cash
flows and comprehensive income for each of the years in the three-year
period ended December 31, 1998, which report appears in the December 31,
1998 annual report on Form 10-K of AFLAC, and to the reference to our firm
under the heading "Experts" in the prospectus.
KPMG LLP
Atlanta, Georgia
June 14, 1999
<PAGE>
1999 AFLAC ASSOCIATE
STOCK BONUS PLAN
EFFECTIVE AS OF JULY 1, 1999
<PAGE>
1999 AFLAC ASSOCIATE STOCK BONUS PLAN
The 1999 AFLAC Associate Stock Bonus Plan is hereby adopted,
effective as of July 1, 1999, as follows:
ARTICLE I
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, who
is properly licensed by the applicable regulatory authority, pursuant to a
written contract with the Plan Sponsor for the solicitation of applications
for certain insurance products of the Plan Sponsor, 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 as it is 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 45 days following the end of such 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 or of American Family Life Assurance
Company of New York, as the case may be.
1.5 "Bonus Policy/Policies" shall mean those insurance policies
issued by the Plan Sponsor that the Plan Sponsor, acting in its sole
discretion, designates as "Bonus Policies." "Bonus Policies" shall not
include conversions, upgrades or riders made effective as of a date later than
twelve months from the original Issue Date on policies otherwise designated
as a "Bonus Policy," unless the Plan Sponsor shall provide otherwise.
1.6 "Commencement Date" shall mean the date on which one first
begins Active Association.
1.7 "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 issued at the home office of the Plan Sponsor.
1.8 "Issue Date" shall mean the date on which a Bonus Policy is
made effective.
1
<PAGE>
1.9 "New Business Transmittal" shall mean the new business
transmittal form that is submitted to the Plan Sponsor with each application
for a policy and which includes information concerning all Associates sharing
commissions with respect to such policy.
1.10 "Paid to Date" shall mean the date to which coverage provided
by a policy shall remain in force based on premiums applied by the Plan
Sponsor to the policy.
1.11 "Participant" shall mean any Associate, Soliciting Broker,
Sales Coordinator or Special Associate participating in this Plan.
1.12 "Plan" shall mean the 1999 AFLAC Associate Stock Bonus Plan,
as contained herein and as amended from time to time.
1.13 "Plan Sponsor" shall mean the American Family Life Assurance
Company of Columbus, a Georgia corporation, American Family Life Assurance
Company of New York, a New York corporation, and any subsidiary or affiliate
corporation that may hereafter adopt the Plan with the permission of their
respective Boards.
1.14 "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.
1.15 "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.
1.16 "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.
1.17 "Stock" or "Shares of Stock" shall mean the common stock of
AFLAC Incorporated.
1.18 "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.
1.19 "Vested for Commission" shall mean that a Participant has a
vested right, pursuant to the terms of the Participant's Associates Agreement,
to receive renewal commissions that are payable on policies sold by the
Participant (regardless of whether such vested amount is less than 100%, or is
for a limited time period).
2
<PAGE>
ARTICLE II
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. Any Associate, Soliciting Broker, Sales
Coordinator or, subject to Section 2.1, any Special Associate, shall become a
Participant under the following circumstances: (i) if such individual was a
Participant under either the AFLAC New York Associate Stock Bonus Plan,
effective as of January 1, 1999, or the AFLAC Associate Stock Bonus Plan,
amended and restated as of January 1, 1999, as of the termination date of such
Plans, such individual shall automatically become a Participant on the
effective date of this Plan, or (ii) if such individual's Commencement Date is
on or after July 1, 1999, such individual shall automatically become a
Participant upon his or her Commencement Date. In either case, if such
individual chooses not to become a Participant, he or she must notify the Plan
Sponsor in writing that he or she will not become a Participant. If an
individual was qualified to be a Participant under either the AFLAC New York
Associate Stock Bonus Plan or the AFLAC Associate Stock Bonus Plan but opted
not to become a Participant, and such individual qualifies to participate in
this Plan, such individual must notify the Plan Sponsor in writing that he or
she opts to enroll in the Plan. Such individual will become enrolled within
30 days of the receipt by the Plan Sponsor of such notice.
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 III
CONTRIBUTIONS AND EXPENSES
3.1 CONTRIBUTIONS BY PLAN SPONSOR. All contributions, if any,
shall be made by the Plan Sponsor; provided, however, that the Board may
authorize contributions from other sources. No contributions shall be made by
any Participant.
3.2 COMPUTATION OF CONTRIBUTIONS FOR BONUS POLICIES WITH ISSUE
DATES PRIOR TO JULY 1, 1999. With respect to Bonus Policies with an Issue
Date prior to July 1, 1999, the amount of Plan Sponsor contributions to be
made on or before each Allocation Date shall be equal to the applicable
percentage (as described in Section 3.5) of First Year Premiums applied to the
policy by the Plan Sponsor during the month to which such Allocation Date
relates.
3
<PAGE>
3.3 COMPUTATION OF CONTRIBUTIONS FOR BONUS POLICIES WITH ISSUE
DATES ON OR AFTER JULY 1, 1999. With respect to Bonus Policies with an Issue
Date on or after July 1, 1999, the amount of Plan Sponsor contributions to be
made on or before each Allocation Date shall be equal to the applicable
percentage (as described in Section 3.5) of annualized First Year Premiums as
of the date on which the period of time between the Issue Date and the Paid to
Date equals thirteen months.
3.4 OFFSET AGAINST CONTRIBUTIONS; RECOVERY OF CREDITED AMOUNTS.
(a) Notwithstanding the provisions of Sections 3.2 and 3.3,
the amount to be contributed by the Plan Sponsor may, in the sole discretion
of the Plan Sponsor, be reduced to reflect the applicable percentage (as
described in Section 3.5) of any First Year Premiums that the Plan Sponsor
may, for any reason acting in his sole discretion, determine to refund.
(b) On each Allocation Date, the amount to be allocated to a
Participant shall be reduced by the sum of amounts recoverable by the Plan
Sponsor relating to refunded First Year Premiums for any period prior to such
Allocation Date.
(c) To the extent that the amounts recoverable by the Plan
Sponsor have been distributed to a Participant or transferred to the AFL Stock
Plan on behalf of 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 by the Participant on demand of the Plan
Sponsor.
3.5 APPLICABLE PERCENTAGE FOR BONUS POLICIES. Subject to Sections
3.2, 3.3, and 3.4, 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 a total of 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 applied by the Plan Sponsor to the
policy (pursuant to the terms of, and for purposes of, Section 3.2) or of the
annualized First Year Premiums (pursuant to the terms of, and for purposes of,
Section 3.3) for each Bonus Policy properly sold by a Participant in
accordance with the policies and procedures of the Plan Sponsor. Such 3.5%
contribution shall be allocated among applicable Participants on the same
basis as the percentage allocation among Associates that is properly
designated on the New Business Transmittal.
(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 applied by the Plan Sponsor to the policy (pursuant to the terms of,
and for purposes of, Section 3.2) or of the annualized First Year Premiums
(pursuant to the terms of, and for purposes of, Section 3.3) for each Bonus
Policy properly sold by a Participant or other individual who is assigned in
writing to a Sales Coordinator at the time the policy is sold. Such .7% con-
tribution shall be allocated among applicable Participants as necessary based
on any allocation among Associates that is properly designated on the New
Business Transmittal.
4
<PAGE>
(c) SPECIAL ASSOCIATES. The applicable percentage of First
Year Premiums applied by the Plan Sponsor to the policy or annualized 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.
3.6 DESIGNATION OF BONUS POLICIES. Bonus Policies will be
designated as such by the Plan Sponsor on the schedule of commissions that is
made available to Associates, Sales Coordinators, Soliciting Brokers and
Special Associates.
3.7 ACTIVE ASSOCIATION. Except as provided in Sections 3.8 and
3.9, contributions will be made only on behalf of Participants who are in
Active Association with the Plan Sponsor.
3.8 DEATH AND DISABILITY. In the event of the death or the total
and permanent disability of a Participant, contributions will continue to be
made on behalf of the Participant with respect to Bonus Policies sold by the
Participant if the Participant, at the time of such death or total and
permanent disability, has become Vested for Commission. If the Participant
has not become Vested for Commission, contributions will be made on behalf of
the Participant through the end of the calendar month in which such death or
total and permanent disability occurs.
3.9 TRANSFER OR TERMINATION. In the event of the transfer of a
Participant to a position of employment with the Plan Sponsor other than as an
Associate, Soliciting Broker, Sales Coordinator or Special Associate, or in
the event of a termination of a Participant other than as a result of death or
total and permanent disability, if the Participant is not Vested for
Commission, contributions will be made on behalf of the Participant through
the end of the calendar month in which the transfer or termination date
occurs, and the contribution will be reduced to reflect amounts recoverable by
the Plan Sponsor with respect to refunded First Year Premiums (as provided for
in Section 3.4) up to the last business day of the calendar month in which the
date of termination occurs. In the event of a transfer or termination of a
Participant who is Vested for Commission, contributions will continue to be
made on behalf of the Participant with respect to Bonus Policies sold by the
Participant.
3.10 EXPENSES. 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 paid by AFLAC Incorporated pursuant
to the terms of the AFL Stock Plan.
ARTICLE IV
PLAN CONTRIBUTIONS
4.1 CREDITING OF CONTRIBUTIONS. Plan Sponsor contributions made
during the month shall be credited to each Participant based on the applicable
percentage of First Year Premiums applied by the Plan Sponsor to the policy
(pursuant to the terms of, and for purposes of, Section 3.2) or of the
annualized First Year Premiums (pursuant to the terms of, and for purposes of,
Section 3.3) on Bonus Policies properly sold by the Participant, subject to
reduction as provided in Section 3.4. The contributions shall be allocated to
5
<PAGE>
Participants as necessary based on any allocation among Associates that is
properly designated on the New Business Transmittal. On a monthly basis the
balance of this contribution amount will be transferred to the Participant's
AFL Stock Plan account to purchase Shares of Stock pursuant to the terms of
the AFL Stock Plan, or distributed directly to the Participant, as provided in
Section 5.1.
4.2 EXPRESSED IN DOLLARS. Contributions shall be expressed in
dollars and cents.
4.3 REPORTING. The Participant shall receive reports pursuant to
the terms of the AFL Stock Plan with respect to the amount of cash contributed
on such Participant's behalf and the total number of Shares of Stock held in
the Participant's account under the AFL Stock Plan.
ARTICLE V
TRANSFERS AND DISTRIBUTIONS
5.1 TRANSFER AND DISTRIBUTION OF CONTRIBUTIONS. On a monthly
basis, the balance of the contribution owed on behalf of each Participant
shall be transferred to the AFL Stock Plan for investment in Shares of Stock
on behalf of such Participant if the balance of such contribution equals or
exceeds $50 as of an Allocation Date. If the balance totals less than $50 as
of an Allocation Date, the contribution balance shall be distributed directly
to the Participant by means of the Participant's monthly commission statement.
The Plan Sponsor will not pay interest on funds pending transfer to the AFL
Stock Plan. All investments by the AFL Stock Plan shall be made pursuant to
the terms of such plan.
5.2 DATE OF TRANSFERS AND DISTRIBUTIONS. Transfers shall be made
to the AFL Stock Plan, or distributions made to the Participant, within 45
days following the end of each month in which a bonus becomes due.
5.3 DISTRIBUTIONS UPON DEATH. Subject to the terms of Section 3.8,
in the event of the death of a Participant, contributions of less than $50
will continue to be paid by means of the Participant's monthly commission
statement. If the Participant's contribution balance equals or exceeds $50,
the balance will continue to be transferred to the AFL Stock Plan. The
provisions of the AFL Stock Plan will govern the payment of accumulated
balances in the Participant's AFL Stock Plan account.
5.4 DISTRIBUTIONS TO AFFILIATES. The Stock Bonus Management
Committee shall have absolute discretion to determine the form of distribution
under the Plan to a Participant who is at the time of distribution an
"affiliate" of AFLAC Incorporated within the meaning of Rule 144 under the
Securities Act of 1933, as amended. The Stock Bonus Management Committee
shall determine which Participants are covered by this provision. In so
doing, the Stock Bonus Management Committee shall take into account any
information and conclusions furnished to it by the Plan Sponsor and AFLAC
Incorporated, and may in its discretion seek advice of counsel.
5.5 DISTRIBUTION 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 distribution of
benefits which are inconsistent with the provisions of this Article 5, the
6
<PAGE>
provisions of such written agreement shall govern with respect to such Special
Associate.
ARTICLE VI
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 benefits 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 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 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
7
<PAGE>
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 VII
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 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
Participants or any other persons.
7.3 TRANSFER AND DISTRIBUTION ON TERMINATION. Upon termination of
the Plan, the balance of all contributions due to Participants shall be
brought up to date as of the last day of the month in which the termination
occurs. All contributions shall be distributed to the Participants, or
transferred to the AFL Stock Plan on behalf of the Participants, in accordance
with the provisions of this Plan.
ARTICLE VIII
PLAN SPONSOR'S RIGHT OF SETOFF AGAINST
PARTICIPANT'S 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, prior to the
transfer of any bonus to the AFL Stock Plan on behalf of such Participant, the
amount of certain obligations of such Participant to the Plan Sponsor. For
purposes of this Section 8.1, "obligations" shall include any indebtedness of
the Participant to the Plan Sponsor including, but not limited to, any
advances, loans, unearned commissions or credits made by or from the Plan
Sponsor to the Participant. In addition, the Plan Sponsor shall have a lien
against contributions or benefits which have, or may become, due to such
Participant under this Plan, prior to the transfer of any bonus to the AFL
Stock Plan on behalf of such Participant, which lien shall be a first lien in
favor of the Plan Sponsor as to such contributions 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 contributions, rights
and benefits which have, or may become, due to the Participant pursuant to
this Plan, prior to the transfer of such contributions to the AFL Stock Plan
or to the Participant, as the case may be.
8
<PAGE>
ARTICLE IX
MISCELLANEOUS
9.1 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.
9.2 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.
9.3 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. 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.
9.4 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. 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.
9.5 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.
9.6 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
9
<PAGE>
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 the Participant's address as it appears in the records of
AFLAC Incorporated and notice to AFLAC Incorporated shall be sent to:
Arbitration Officer, American Family Life Assurance Company of Columbus
(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 empaneled. The majority of the panel shall render an
award within 10 days of the completion of the hearing, and shall promptly
transmit an executed copy of the award to the respective parties. The award
of the arbitrators shall be final, binding and conclusive upon the parties
hereto. The prevailing party shall be entitled to recover its costs and
attorneys' fees which shall be taxed by the arbitrators within 30 days after
the award. Each party shall have the right to have the award enforced by any
court of competent jurisdiction.
9.7 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
contributions or transfer 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.
9.8 EXCLUSIVE BENEFIT. Except as otherwise specifically provided
in this Plan, all contributions of the Plan Sponsor under the Plan shall be
held and used for the exclusive purpose of providing benefits for
Participants.
10
<PAGE>
9.9 LIABILITY OF PLAN SPONSOR. Notwithstanding any provision to
the contrary in this Plan, 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 in accordance with the terms of this Plan.
9.10 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, this 3rd day of June, 1999, effective as of July 1,
1999.
AMERICAN FAMILY LIFE ASSURANCE
COMPANY OF COLUMBUS
By: /s/ Kriss Cloninger, III
--------------------------------
Attest: /s/ Kathelen Spencer
--------------------------------
AMERICAN FAMILY LIFE ASSURANCE
COMPANY OF NEW YORK
By: /s/ Joey M. Loudermilk
--------------------------------
Attest: /s/ Kathelen Spencer
--------------------------------
11
