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Main Section Title [H1]
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Subsection Title [H2]
AFLAC INCORPORATED
2017 PROXY STATEMENT
56
2016 Summary Compensation Tables
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Potential Payments Up ermination or Change in Control
conduct by the NEO causing substantial injury to the Company; or (iii) the conviction of or plea of guilty by the
NEO to a felony. “Good reason” is defined to include (i) a material breach of the employment agreement by the
Company; (ii) a material diminution or change in the NEO’s title, duties, or authority; or (iii) a material relocation
of the Company’s principal offices (or in Mr. Kirsch’s case, the Company’s principal New York office or his own
office). Upon voluntary termination without “good reason” or termination by the Company for “good cause,” an
NEO is prohibited for a two-year period from directly or indirectly competing with the Company.
The NEOs’ employment agreements provide that compensation and benefits continue for certain specified periods
in the event the NEO becomes totally disabled. The amount of continued compensation for Messrs. Cloninger and
Paul S. Amos II will be reduced by 60% if they are eligible for the maximum benefit percentage under the SERP.
Mr. Cloninger has earned the maximum SERP benefit and, therefore, would be subject to this 60% reduction.
Upon the death of an NEO, the NEO’s estate is to be paid an amount, over a three-year period, equal to the NEO’s
base salary and any non-equity incentive awards actually paid during the last three years of the NEO’s life.
Upon a “change in control” of the Company, employment agreements for the NEOs (other than Mr. Daniel P. Amos)
are extended for an additional three-year period. If, following a change in control, the employment of an NEO (other
than Mr. Daniel P. Amos) with the Company is terminated by the Company without “good cause” or by the NEO for
“good reason,” the Company must pay to the NEO, among other payments but in lieu of any further salary payments,
a lump-sum severance payment equal to three times the sum of the NEO’s base salary and non-equity incentive
award under the MIP (as paid during periods specified in the agreement). If either of Messrs. Cloninger or Paul S.
Amos II has attained the maximum benefit percentage under the SERP at the time of his termination following a
change in control, he will not receive the lump sum award described above. Mr. Cloninger has earned the maximum
SERP benefit and, therefore, would not receive this amount. Amounts payable upon a change of control will be
reduced to the extent they are not deductible by the Company for income tax purposes. If, following a change of
control, the employment of an NEO with the Company is terminated by the Company without “good cause” or by the
NEO for “good reason,” all of that NEO’s outstanding equity awards (except in the case of Mr. Amos) will become fully
vested, and all performance criteria will be considered satisfied at the maximum performance level.
A “change in control” generally is deemed to occur when (i) a person or group acquires ownership of 50% or more
of the Common Stock; (ii) a person or group acquires ownership of 30% or more of the Common Stock over a
consecutive twelve- month period; (iii) during any period of twelve consecutive months, individuals who constitute the
Board are replaced without endorsement by a majority of the Board members at the beginning of the period; or (iv) a
person or group acquires ownership of 40% or more of the total gross fair market value of the Company’s assets.
Each of Messrs. Cloninger and Paul S. Amos II is a participant in the SERP, but Mr. Paul S. Amos II is not yet fully
vested. Under the SERP, in the event the Company terminates a participant’s employment within two years after
a change in control other than for cause, or a participant terminates employment during such period for good
reason, the participant will become 100% vested in his retirement benefits and entitled to receive a lump-sum
amount equal to the actuarial equivalent of the annual retirement benefit to which he would have been entitled
had he remained in the employ of the Company until (i) age 55 (in the case of a participant who is not yet 55); (ii)
age 60 (in the case of a participant who is at least 55, but not yet 60); or (iii) age 65 (in the case of a participant
who is at least 60, but not yet 65), as the case may be. A “change in control” will be deemed to occur under
the same circumstances described above but only with respect to the Company (and not with respect to any of
its subsidiaries). “Cause” for this purpose generally means (i) the participant’s continued failure to substantially
perform his duties with the Company (other than due to illness or after a participant gives notice of termination of
employment for “good reason”) after a written demand for substantial performance is delivered to the participant
by the Board, (ii) the participant’s engaging in conduct materially injurious to the Company, or (iii) the participant’s
conviction of, or plea of guilty or no contest to, a felony or crime involving moral turpitude. “Good reason” is
defined for this purpose to include various adverse changes in employment status, duties, or compensation and
benefits following a “change in control.”
The following table reflects the amount of compensation payable to each of the NEOs in the event of termination of
such executive’s employment under various termination scenarios. The amounts shown assume in all cases that
the termination was effective on December 31, 2016, and therefore include amounts earned through such time
and estimates of the amounts that would be paid to the NEOs upon their termination. Because a number of factors
affect the nature and amount of any benefits actually paid, amounts paid or distributed may be different from those
shown below. Messrs. Daniel P. Amos and Cloninger are the only NEOs who are eligible to receive immediate
retirement benefits. See “Pension Benefits” and “Nonqualified Deferred Compensation” above for more information
about these benefits.