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AFLAC INCORPORATED
2017 PROXY STATEMENT
74
Proposal 6: Proposal to Approve An Amended And R stated 2018 Management Incentive Plan
which the Committee determines should be appropriately excluded, such as restructuring or subsidiary conversion
charges, assessments by any state guaranty association or similar entity, or other nonrecurring charges, a
change in accounting standards required by GAAP, items of an unusual or infrequently recurring nature, changes
in applicable laws or regulations, or by excluding all or a portion of the effect of translating foreign currently of
business segments to U.S. dollars for financial reporting purposes; provided that with respect to awards that are
intended to satisfy the requirements for “qualified performance-based compensation” under Section 162(m) of
the IRC, the Committee shall not exercise any discretion with respect to such an award that would cause it to fail
to qualify as performance-based compensation. With respect to participants who are not covered employees,
performance goals under the 2018 MIP may also include such qualitative performance goals as the Committee
shall, from time to time, establish; and with respect to participants who are covered employees, the Committee
may, subject to attainment of performance goals under the 2018 MIP described above, impose additional
qualitative performance goals as the Committee shall, from time to time, establish.
The Committee will specify the performance goals applicable to each award and, if applicable, minimum, target
and maximum levels applicable to each performance goal. Awards may be expressed as a dollar amount or as
a percentage of the participant’s “annual base salary.” For any year “annual base salary” means: (i) with respect
to any executive officer, the annual rate of base salary of such executive officer in effect as of the first day of the
applicable performance period (or, if an executive officer was not employed as of the first day of the applicable
performance period, the annual rate of base salary in effect as of such executive officer’s first day of employment);
and (ii) with respect to any other participant, unless otherwise determined by the Company, the annualized base
salary paid to such participant in respect of the applicable performance period.
Awards will be paid to participants, in cash, within a reasonable period of time (but in any event within 2½
months) following the end of the period to which the awards relate. With respect to participants who are covered
employees under Section 162(m) of the IRC, unless otherwise determined by the Committee, payment will be
made only after achievement of the applicable performance goals has been certified by the Committee.
Unless an applicable employment agreement provides otherwise, in the event that within 24 months of a Change
in Control (as defined in the 2018 MIP), the Company shall cease to employ a participant due to a termination of
employment by the Company other than for Cause or by the participant for Good Reason (as those terms are
defined in the 2018 MIP, or in any applicable employment agreement), any performance period ongoing at the
time of such Change in Control will be deemed to have been completed, the maximum level of performance
with respect to the applicable performance goals will be deemed to have been attained and a pro rata portion
(based on the number of full and partial months that have elapsed with respect to each performance period) of
each outstanding award will become payable in cash to the participant. Such acceleration will also occur upon
consummation of a Change in Control if any successor to the Company declines to assume and continue the
awards.
The 2018 MIP may be amended, suspended or terminated at any time by the Board of Directors or the Committee,
provided, however, that no amendment that requires shareholder approval in order for the 2018 MIP to comply
with Section 162(m) of the IRC will be effective unless the amendment is so approved, and no amendment may
adversely affect any rights of a participant under an outstanding award without the participant’s consent.
The 2018 MIP will terminate at the end of the 2022 fiscal year, but payment with respect to all awards granted
under the 2018 MIP before that time will be paid out in accordance with their terms.
As explained above, the benefits to be provided under the 2018 MIP cannot be determined at this time. However,
non-equity incentive awards paid to the NEOs in respect of 2016 under the MIP, as in effect for that year, are noted
in the 2016 Summary Compensation Table within this Proxy. Non-equity incentive awards paid to the executive
officers as a whole (including the NEOs) under that plan in respect of 2016 totaled $14,910,994 and non-equity
incentive awards paid to all other plan participants in respect of 2016 totaled $18,479,029. The Non-employee
Director group will not be eligible to participate in the 2018 MIP.
The Board of Directors recommends unanimously a vote
“for”
approval of
the amended and restated 2018 management incentive plan.
FOR