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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, such other performance goals as the Committee shall deem
appropriate. As determined by the Committee, achievement of the performance goals 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 Code, Awards whose vesting or exercise is conditioned on the attainment of
performance goals shall become vested or exercisable (as the case may be) 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 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 U.S. generally accepted accounting principles (“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 Code Section 162(m), 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 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 described above, impose additional qualitative performance goals as the Committee
shall, from time to time, establish.
(b)
Change in Control.
Unless an employment agreement between the Company or an Affiliate and the
Participant provides otherwise, but in any event subject to the provisions of Section 3(d) hereof, in the event
that within 24 months of a Change in Control, the Company shall cease to employ the Participant due to
a termination of employment other than by (i) the Company for Cause, or (ii) the Participant without Good
Reason, then:
(i) any Award carrying a right to exercise that was not previously exercisable and vested shall become
fully exercisable and vested, except that as to each Award with respect to which performance goals are
imposed, a pro rata portion of such Award (based on the number of full and partial months that have
elapsed with respect to each performance period) shall become fully exercisable and vested as of the
date of such termination, and any performance goals imposed with respect to Awards shall be measured
as of the date of such termination of employment; and
(ii) the restrictions, deferral limitations, payment conditions, and forfeiture conditions applicable to any other
Award granted under the Plan shall lapse and such Awards shall be deemed fully vested, except that as
to each Award with respect to which performance goals are imposed, a pro rata portion of such Award
(based on the number of full and partial months that have elapsed with respect to each performance
Appendix A
AFLAC INCORPORATED
2017 PROXY STATEMENT
87