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AFLAC INCORPORATED
2017 PROXY STATEMENT
73
Proposal 6: Proposal to Approve An Amended And R stated 2018 Management Incentive Plan
The 2018 MIP will be administered by the Committee. The Committee will (1) select the employees who participate
in the 2018 MIP, (2) grant all awards under the 2018 MIP, (3) determine the duration of the performance period
applicable to any award, (4) determine the terms and conditions, including the performance goals, of such awards
(which need not be identical), (5) certify whether the performance goals have been attained, (6) determine whether,
to what extent, and under what circumstances an award under the 2018 MIP may be settled, canceled, forfeited,
or surrendered, (7) construe and interpret the 2018 MIP and awards thereunder, (8) make rules and regulations in
connection with the administration and operation of the 2018 MIP, and (9) make all other determinations necessary
or desirable in administering the 2018 MIP.
The Committee, in its sole discretion, will determine which employees will be eligible to receive awards under the
2018 MIP and what the terms of those awards will be. All of the employees of the Company and its subsidiaries
(currently approximately 10,212 individuals) are potentially eligible for participation in the 2018 MIP. However, because
no determination has yet been made concerning which employees will receive awards (if any) under the 2018 MIP or
what their terms will be, the benefits to be provided under the 2018 MIP cannot be determined at this time.
The Committee may establish the performance period for any award as the fiscal year of the Company or, in
the case of an employee who on the date of grant of the award is the Company’s chief investment officer (or
the employee with duties typically reserved for a chief investment officer) or directly or indirectly reports to such
employee, a period of one, two or three consecutive fiscal years. No employee during any fiscal year of the
Company will be granted more than one award; however, to the extent the performance period under an award
exceeds one year, any participant may be subject to multiple awards at any time (where, for example, awards with
three-year performance periods are granted in consecutive years). In any event, the maximum amount that may
become payable to an employee subject to the deduction limits of Section 162(m) of the IRC for any fiscal year of
the Company in respect of all awards whose performance period ends with or within such year is $9 million (the
same limit that presently applies under the MIP).
The Committee will establish the performance goals that must be met during a performance period as a condition
of receipt of awards under the 2018 MIP. The performance goals, which are the same as those as proposed for our
Amended and Restated LTIP pursuant to Proposal 5, may include any or all of the following: new premium sales;
premium income; investment income; revenues; total insurance benefits (cash claims, increase in future benefits and
incurred but not reported claims); expense levels; premium payment levels; persistency rate (based on premiums or
policies); policy renewals; profit margins; operating earnings (excluding in the Committee’s sole discretion the effects
of one or more of the following items: realized gains or losses on investments, the impact from passive derivative
activities and hedging, the change in fair value of the interest rate component of cross-currency swaps, and items
considered by the Committee to be nonrecurring in nature, such as restructuring or subsidiary conversion charges,
assessments by a state guaranty association or similar entity, or other nonrecurring charges, or items excluded
from the presentation of operating earnings in the information filed or furnished by the Company with the United
States Securities and Exchange Commission from time to time); net earnings (either before or after provision for the
cumulative effect of required accounting changes for the applicable period); return on equity (operating earnings
excluding the impact of foreign exchange divided by the average of common shareholders’ equity in the Company
as of the beginning and end of the applicable period, excluding in the Committee’s sole discretion accumulated
comprehensive income as recognized under ASC 320); new money investment yield; return on invested assets;
shareholders’ equity; operating return on shareholders’ equity; regulatory capital levels; return on regulatory capital;
risk-based capital levels or ratios; solvency margin ratio; stock price; total return to shareholders; or, to the extent
an award is made to an individual who is not a covered employee under Section 162(m) of the IRC, such other
performance goals as the Committee shall deem appropriate.
As determined by the Committee, achievement of performance goals under the 2018 MIP may be measured (a)
individually, alternatively or in any combination, (b) with respect to the Company, a subsidiary, division, business
unit or segment, product line, product, or any combination of the foregoing, (c) on an absolute basis, or relative
to a target, to growth levels, to a designated comparison group, to results in other periods, to an index, or to
other external measures, and (d) on an aggregate or per-share basis. Performance goals may include a threshold
level of performance below which no award will be earned, levels of performance at which an award will become
partially earned and a level at which an award will be fully earned. To the extent required to qualify payment under
an award as performance-based compensation within the meaning of Section 162(m) of the IRC, awards whose
vesting or exercise is conditioned on the attainment of performance goals shall become vested only after the
attainment of such performance goals has been certified by the Committee. The Committee may provide that the
achievement of performance goals shall be determined without regard to the impact of any event or occurrence