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Main Section Title [H1]
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Subsection Title [H2]
AFLAC INCORPORATED
2017 PROXY STATEMENT
58
2016 Summary Compensation Tables
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Potential Payments Up ermination or Change in Control
(1) Each of Messrs. Crawford, Paul S. Amos II and Kirsch are entitled to salary continuation and non-equity incentive award payments for the remaining term
of their respective employment agreements. Such payments would not be paid to Mr. Daniel P. Amos, who voluntarily gave up his right to such payments, or
Mr. Cloninger, who has earned the maximum percentage of benefits available under the SERP. Health and welfare benefits would continue for the remainder
of the contract term, except for Mr. Daniel P. Amos, who is entitled to health and welfare benefits under the RPSO. The table also reflects the value of
continued medical benefits for Mr. Cloninger’s spouse and dependents payable under his employment agreement.
(2) Termination for good cause eliminates the salary continuation and non-equity incentive award obligation for the remainder of the contract period, and the
executive (except for Mr. Daniel P. Amos) forfeits his participation in any supplemental retirement plan. In addition, all equity awards, whether vested or
unvested, are forfeited.
(3) Voluntary termination by the executive without good reason eliminates the salary continuation and non-equity incentive award obligations for the remainder
of the contract term. In addition, nonvested equity awards will be forfeited, except in the case of Messrs. Daniel P. Amos and Cloninger, who are retirement-
eligible under the terms of the Company’s equity agreements and will vest in all equity awards granted at least one year before the date employment
terminates (subject to satisfaction of performance goals).
(4) Any executive who competes with the Company after termination will forfeit the right to any further salary and non-equity incentive award payments and
any benefits under the RPSO and SERP. In addition, nonvested equity awards will be forfeited, except in the case of Messrs. Daniel P. Amos and Cloninger,
who are retirement-eligible under the terms of the Company’s equity agreements and will vest in all equity awards granted at least one year before the date
employment terminates (subject to satisfaction of performance goals).
(5) Upon the executive’s death, his estate is entitled to receive terminal pay (paid in equal installments over 36 months) equal to the amount of the executive’s
base pay and non-equity incentive award paid in the previous 36 months of his life, or if the executive was employed less than 36 months, the amount
he would have been paid if he had survived for the full 36-month period. Additionally, retirement benefits in this column include the present value of the
accumulated benefit obligation for a surviving spouse annuity under the RPSO for Mr. Daniel P. Amos and under the SERP for Messrs. Cloninger and Paul
S. Amos II. Messrs. Crawford and Kirsch do not participate in the SERP. Mr. Crawford participates in a Company-funded EDCP, which will vest at death. The
NEOs and other officers also are eligible for life insurance benefits along with, and on the same basis as, the Company’s other salaried employees.
(6) Disability benefits are generally payable for 18 months, while the executive remains employed during his disability. Any disability benefits paid in the form
of salary continuation or non-equity incentive awards would be offset by the maximum annual amount allowed ($144,000) under the Company-sponsored
disability income plan. Mr. Crawford participates in a Company-funded EDCP, which would vest at disability. Mr. Cloninger’s benefit is reduced by 60% since
he has qualified for the maximum percentage of benefits available under the SERP.
(7)Upon termination after a change in control, Messrs. Crawford, Kirsch and Paul S. Amos II would each be entitled a lump-sum severance payment of three
times the sum of: (i) annual base salary in effect immediately prior to the change in control, and (ii) the higher of the non-equity incentive award paid in the
year preceding the termination date or the year preceding the change in control. Mr. Daniel P. Amos has waived his severance payment. Mr. Cloninger would
not receive this severance payment since he has reached the maximum percentage of benefits available under the SERP.
(8) The non-equity incentive award amounts on this line do not include the 2016 non-equity incentive awards that were paid to the NEOs in March 2017, and
which were nonforfeitable as of December 31, 2016, under all circumstances other than termination for competition.
(9) Amounts in this row generally include (i) the present value of the applicable benefits payable under the RPSO and SERP, and (ii) certain additional amounts
determined under the executive’s employment agreement in lieu of continued participation in the Company’s broad-based retirement plans. However,
amounts included in this column reflecting benefits payable under the SERP may differ from the amounts shown in the Pension Benefits table due to
reduced SERP benefits payable upon termination for “good cause” or death, and, for Mr. Paul S. Amos II, because he has less than the required years of
credited service to qualify for certain pension benefits.
(10) Amounts in this row generally represent the estimated lump sum present value of all premiums that would be paid by the Company for applicable health
and welfare benefits. The value shown for Mr. Daniel P. Amos includes his post-employment medical benefits under the RPSO for his life and the life of
his spouse; the value of certain other welfare benefits; and non-medical fringe benefits (including office space) for his life. These amounts would not be
payable if Mr. Daniel P. Amos became engaged in any activity that competes with the Company. The value of health coverage for each of Mr. Cloninger,
Mr. Paul S. Amos II, Mr. Crawford, and Mr. Kirsch is the monthly cost of Company-paid premiums for active employee coverage under the health plan
multiplied by the number of months of Company-paid continued coverage for which he is eligible as determined under his employment agreement. The
value of Mr. Cloninger’s health coverage also includes the actuarially calculated value of the Company’s obligation to provide continued medical coverage
for his spouse and dependent children pursuant to the terms of his employment agreement.
(11) Represents the estimated value of accelerated vesting of stock options and restricted stock awards. The value for stock options and restricted stock
awards was determined as follows: for stock options, the excess of the per share closing price on the NYSE on the last business day of the year over the
per share option exercise price, multiplied by the number of unvested option shares; for restricted stock awards, the number of unvested stock awards
multiplied by the same per share closing price used for options. The values of these awards that are performance-based assume maximum performance
goals were achieved.