STATE OF GEORGIA
COUNTY OF MUSCOGEE
EMPLOYMENT AGREEMENT
THIS AGREEMENT, made and entered into as of the 1st day of August, 1995,
by and between AFLAC Incorporated, a Georgia corporation, hereinafter referred
to as "Corporation," and ▇▇▇▇ ▇. ▇▇▇▇, a resident of said State and county,
hereinafter referred to as "Employee;"
W I T N E S S E T H T H A T:
WHEREAS, Employee has been employed as an executive by Corporation or
otherwise affiliated with the Corporation since 1956 in various capacities,
most recently in his position as Chairman of the Board; and
WHEREAS, Corporation and Employee desire to set forth the existing and
continuing terms and conditions of Employee's employment by Corporation as its
Chairman of the Board;
NOW, THEREFORE, the parties, for and in consideration of the mutual
covenants and agreements hereinafter contained, do contract and agree as
follows, to-wit:
1. PURPOSE AND EMPLOYMENT. The purpose of this Agreement is to define
the relationship between Corporation as an employer and Employee as an
employee and Chairman of the Board of Corporation.
2. DUTIES. Employee agrees to continue to provide executive management
services as Chairman of the Board of Corporation to Corporation and its
subsidiaries and affiliates on a full-time and exclusive basis; provided,
however, nothing shall preclude Employee from serving on boards of directors
of other corporations; engaging in charitable and community affairs or
managing his own or his family's personal investments.
3. PERFORMANCE. Employee agrees to devote all necessary time and his
best efforts in the performance of his duties as Chairman of the Board of
Corporation on behalf of Corporation and its subsidiaries and affiliates.
4. TERM. The term of employment under this Agreement shall begin August
1, 1995, and shall continue for a period of three (3) years until July 31,
1998, unless extended or sooner terminated as hereinafter provided. On an
annual basis beginning effective August 1, 1996, the scheduled term of this
Agreement shall be extended for successive one year periods unless written
notice of termination is given prior to such annual date of party to the
other party that the Agreement will not be extended by its terms.
Notwithstanding the foregoing, the term of employment shall not extend beyond
Employee's service as an active member of the Corporation's Board of
Directors.
5. BASE SALARY. For all the services rendered by Employee, Corporation
shall continue to pay Employee a base salary of $1,090,984.65 per year
commencing August 1, 1995 said salary to be payable in accordance with
Corporation's normal payroll procedures. Employee's base salary shall be
increased annually during the term of this Agreement and any extensions hereof
in the same general proportion as the annual increases in the base salaries of
other senior executive officers of Corporation as determined by the
Corporation's Compensation Committee acting on behalf of the Board of Directors
of Corporation (the "Board").
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6. ADJUSTMENTS TO BASE SALARY. Corporation and Employee shall, from time
to time, reflect increases in Employee's base salary as provided for in
Paragraph 5 by entering the change on the "Schedule of Compensation," attached
hereto as Exhibit "A" and made a part hereof. If an increase in compensation
is entered on said Schedule and duly signed by the proper officers of
Corporation and by Employee, said entry shall constitute an amendment to this
Employment Agreement as of the date of said entry and shall supersede the
base salary provided for in Paragraph 5 and any other increases in Employee's
base salary previously entered on said Schedule.
7. MANAGEMENT INCENTIVE PLAN. In addition to the base salary paid to
Employee in accordance with Paragraph 5, Corporation shall for each calendar
year of Employee's employment by Corporation, beginning with the calendar year
1995, continue to pay Employee, as performance bonus compensation, an amount
determined each year under Corporation's current Management Incentive Plan
(short-term Incentive Program) with a target level based on Seventy percent
(70%) of base salary. Nothing in this paragraph shall preclude Employee from
receiving additional discretionary bonuses approved by the Board.
8. EMPLOYEE BENEFITS. Employee shall be eligible to participate with
other employees of the Corporation in all fringe benefit programs applicable to
employees generally which may be authorized and adopted from time to time by
the Board, including without limitation: a qualified pension plan, a profit
sharing plan, a disability income or sick pay plan, a thrift and savings
plan, an accident and health plan (including medical reimbursement and
hospitalization and major medical benefits), and a group life insurance plan.
In addition, Corporation shall furnish to Employee such other "fringe" or
employee benefits as are provided to key executive employees of Corporation
and such additional employee benefits which the Compensation Committee of the
Board shall determine to be appropriate to Employee's duties and
responsibilities as Chief Executive Officer of Corporation, including,
without limitation, reimbursement of legal and accounting expenses incurred
by Employee in connection with the preparation of his employment or other
agreements with Corporation and any expenses for legal, accounting or
financial services incurred by Employee in connection with his employment.
9. RETIREMENT PLAN FOR SENIOR OFFICERS. Employee shall continue to
participate in Corporation's Retirement Plan for Senior Officers which provides
retirement, medical, and other benefits to certain senior officers of the
Corporation, upon all of the terms and conditions of the Plan, said Plan being
entitled Retirement Plan for Senior Officers (as amended and restated October
1, 1989).
10. STOCK OPTIONS.
Employee shall continue to be eligible to be awarded stock options to
purchase Corporation's common stock under Corporation's Stock Option Plans for
selected key employees and Directors during the term of this Agreement.
11. WORKING FACILITIES AND EXPENSES. Employee shall continue to be
provided with an office, books, periodicals, stenographic and technical help,
ground and air transportation, and such other facilities, equipment, supplies
and services suitable to his position and adequate for the performance of his
duties. The Corporation shall continue to pay Employee's dues in such social
and country clubs, civic clubs and business societies and associations as shall
be appropriate in facilitating Employee's job performance and in the best
interest of Corporation. The Corporation shall also continue to pay all
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appropriate business liability insurance and any business licenses and fees
pertaining to the services rendered by Employee hereunder.
Employee is encouraged and is expected, from time to time to incur
reasonable expenses for promoting the business of Corporation, including
expenses for social and civic club memberships and participation,
entertainment, travel and other activities associated with Employee's duties.
The cost of all such activities shall be the expense of Corporation unless
the Compensation Committee of the Board shall determine in advance that any
such expense of Employee should be paid by Employee.
12. VACATION. Employee shall continue to be entitled to his vacation time
with pay during each calendar year in accordance with Corporation's vacation
policy for senior executive employees. In addition, Employee shall be entitled
to such holidays as Corporation shall recognize for its employees generally.
13. SICKNESS AND TOTAL DISABILITY. Employee's absence from work because
of sickness or accident (not resulting in Employee becoming "totally
disabled," as that term is hereinafter defined) shall not result in any
adjustment in Employee's compensation or other benefits under this Agreement.
Should Employee become totally disabled as a result of sickness or
accident and unable to adequately perform his regular duties prescribed under
this Agreement, his base salary (which shall continue to be adjusted as
provided for in Paragraph 5), together with incentive bonuses under the
Corporation's Management Incentive Plan and his participation in Corporation's
employee benefit programs and retirement plans shall continue without reduction
except as hereinafter provided, during the continuance of such disability for
a period not exceeding the earlier of (1) the end of the term of this Agreement
or any extension hereof or (2) a period of one and one-half (1-1/2) years (547
calendar days) for each continuous disability. Payments pursuant to this
paragraph 13 shall be reduced by any amounts paid to Employee during any such
period of disability from time to time under any disability programs, plans or
policies maintained by Corporation, its subsidiaries or affiliates.
Should Employee's total disability continue for a period beyond the end of
the term of this Agreement or in excess of 547 calendar days, this Agreement
shall, at the end of such period which first occurs, be automatically
terminated. If, however, prior to such time, Employee's total disability shall
have ceased and he shall have resumed the adequate performance of his duties
hereunder, this Agreement shall continue in full force and effect and Employee
shall be entitled to continue his employment hereunder and to receive his full
compensation and other benefits as though he had not been disabled; provided,
however, unless Employee shall adequately perform his duties hereunder for a
continuous period of at least sixty (60) calendar days following a period of
total disability before Employee again becomes totally disabled, he shall not
be entitled to start a new 547-day period under this paragraph, but instead may
only continue under the remaining portion of the original 547-day period of
total disability. In the event Employee shall not adequately perform his
duties hereunder for a continuous period of at least sixty (60) calendar days
following a period of total disability, the running of the original 547-day
period shall cease during the time of Employee's adequate performance of his
duties hereunder before Employee again becomes totally disabled.
It is understood that for purposes of this Paragraph 13, Employee shall,
upon his becoming totally disabled, be given such additional "credited service"
if necessary to fully qualify Employee under Corporation's Retirement Plan for
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Senior Officers and to provide a survivor annuity to Employee's spouse under
the Plan.
For the purpose of this Agreement, the term "totally disabled" or "total
disability" shall mean Employee's inability to adequately perform his executive
and management duties hereunder on account of accident or illness. It is
understood that Employee's occasional sickness or other incapacity of short
duration may not result in his being or becoming "totally disabled;" however,
such illness or incapacity could constitute Employee's being or becoming
"totally disabled" if such illness or incapacity is prolonged or recurring.
14. TERMINATION OF EMPLOYMENT.
A. TERMINATION BY CORPORATION. Corporation may, when acting in
accordance with resolutions adopted by a two-third's (2/3) majority vote of its
entire Board acting at a meeting called for the purpose of considering
Employee's termination, terminate this Agreement, at any time, with or without
"good cause" ("good cause" being hereinafter defined), by giving at least sixty
(60) days' written notice to Employee of its intention to terminate Employee's
employment without "good cause" or at least five (5) days' written notice to
Employee of its intention to terminate Employee's employment for "good cause";
provided, however, Corporation may, at its election, terminate Employee's
actual employment (so that Employee no longer renders services on behalf of
Corporation) at any time during said sixty (60) day or five (5) day period; and,
(1) In the event such termination is for "good cause,"
Corporation shall be obligated only to:
(a) pay Employee his base salary as provided for in Paragraph 5 of this
Agreement up to the termination date stated in said written notice;
provided, however, if Corporation does not elect to terminate
Employee's employment during said five (5) day period, but Employee,
after receiving such notice of termination from Corporation, elects to
leave the employ of Corporation prior to the end of said five (5) day
period without the approval of Corporation, then Corporation shall pay
said base salary only up to the date on which Employee actually
terminates his employment;
(b) pay Employee any performance bonus due Employee under Paragraph 7 of
this Agreement for the period ending on the termination date stated in
said written notice or on such earlier date of Employee's actual
termination of his employment prior to the end of said five (5) day
period if such termination is without the approval of Corporation.
The amount of said bonus, if any, shall be calculated on a pro rata
basis, using the number of days Employee was actually employed during
such period, and the amount so calculated shall be paid to Employee
within a reasonable time after the end of Corporation's fiscal year in
which written notice of Employee's termination is given;
(c) continue to honor all fully vested stock options, subject to the terms
thereof, granted to Employee prior to the termination date stated in
said written notice or prior to such earlier date of Employee's actual
termination of his employment prior to the end of said five (5) day
period if such termination is without the approval of the Corporation;
(d) continue to pay all of Employee's fringe and other employee benefits
as provided for in this Agreement up to the termination date sated in
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said written notice or up to such earlier date of Employee's actual
termination of his employment prior to the end of said five (5) day
period if such termination is without the approval of the Corporation
(e) For purposes of this subparagraph (1) and Paragraph 19 hereof, "good
cause" shall mean: (i) the willful and deliberate failure by Employee
to substantially perform his executive and management duties hereunder
for a continuous period of more than sixty (60) days for reasons other
than Employee's sickness, injury or disability; (ii) the willful and
deliberate conduct by Employee which is intended by Employee to cause,
and which does in fact result in substantial injury or damage to
Corporation; or (iii) the conviction or plea of guilty by Employee of
a felony crime involving moral turpitude.
Prior to the Corporation's decision to terminate Employee's
employment for "good cause" as hereinabove provided, the Board shall give
written notice to Employee setting forth the specific charges against Employee
being considered by the Board to constitute "good cause" as defined in this
subparagraph and the Board shall, within thirty (30) days after such notice,
give Employee an opportunity to fully respond and defend himself against such
charges before the Board. Within fifteen (15) days after the last day on which
Employee is given the opportunity to defend himself before the Board, the Board,
acting in good faith, shall make its determination as to whether or not the
charges against Employee constitute "good cause" and shall notify Employee in
writing of its determination together with a full explanation of the basis
thereof.
(2) In the event such termination is without "good cause," as
defined in subparagraph (1)(e) of this Paragraph and, if applicable, subject to
the terms of Paragraph 19 Corporation shall be obligated to:
(a) pay Employee his base salary as provided for in Paragraph 5 of this
Agreement up to the end of the scheduled term of this Agreement;
(b) pay Employee his performance bonus compensation as provided for in
Paragraph 7 of this Agreement up to the end of the scheduled term of
this Agreement;
(c) continue to honor all stock options, subject to the terms thereof,
granted to Employee prior to the termination date stated in said
written notice, all of said options to be or become fully vested as
of the termination date stated in said written notice;
(d) continue to pay or provide to Employee all of the retirement, health,
life and disability benefits, as are provided for in this Agreement or
under any programs, plans or policies covering Employee at the time of
any such notice of termination, up to the end of the scheduled term of
this Agreement; and
(e) pay Employee and, if elected by Employee, his wife such retirement
benefits as provided for in the Retirement Plan for Senior Officers
under Paragraph 9 hereof, said benefits to commence on the first (1st)
day of the month immediately following the scheduled termination date
of this Agreement. For purposes of this subparagraph, Employee shall
continue to accrue "credited service" as an employee under the
Retirement Plan for Senior Officers up through the scheduled
termination date of this Agreement.
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B. TERMINATION BY EMPLOYEE. Employee may terminate this Agreement,
at any time, by giving at least sixty (60) days' written notice to Corporation
of his intention to terminate his employment; and
(1) in the event such termination by Employee shall be without
"good reason" (as defined in Paragraph 19 hereof) and with a bona fide intent to
retire or to work or engage in a business or activity which is not in
competition with Corporation or any of its subsidiaries or affiliates,
Corporation shall be obligated to:
(a) pay Employee his base salary due him under Paragraph 5 of this
Agreement up to the termination date stated in said written notice;
(b) pay Employee any performance bonus compensation due him under
Paragraph 7 of this Agreement for the period ending on the termination
date stated in said written notice. The amount of such performance
bonus, if any, shall be calculated on a pro rata basis, using the
number of days Employee was actually employed by Corporation during
such year of termination; and the amount so calculated shall be paid
to Employee within a reasonable time after the end of Corporation's
fiscal year in which Employee's notice of termination is given;
(c) continue to honor all stock options, subject to the terms thereof,
granted to Employee which are fully vested prior to the termination
date stated in said written notice;
(d) pay Employee, and if elected by Employee, his wife such retirement
benefits as are provided for in the Retirement Plan for Senior
Officers under Paragraph 9 hereof, said benefits to commence at such
time as provided for under the Retirement Plan. For purposes of this
subparagraph, Employee shall continue to accrue "credited service" as
Employee under the Retirement Plan for Senior Officers up through the
termination date stated in said written notice.
(2) In the event such termination by Employee shall be for "good
reason" (as defined in paragraph 19 hereof), the Corporation shall be obligated
to provide employee with the payments, benefits and rights specified in
subparagraphs a.(2)(a)-(e) of this Paragraph 14 hereof.
(3) In the event such termination by Employee shall be without
"good reason" (as defined in paragraph 19 hereof) and with the intention or
purpose to work or invest, directly or indirectly, in a business or activity
which is in competition, directly or indirectly, with Corporation or any of its
subsidiaries or affiliates or, irrespective of Employee's intention at the time
of his termination, if Employee shall violate his covenant not to compete under
Paragraph 16 or the requirements of paragraph 17, then Corporation shall not be
obligated to make or provide any further payments or benefits to Employee under
this Agreement except as herein provided in this subparagraph.
(a) Subject to Corporation's rights under Paragraphs 16 and 17,
Corporation shall pay Employee his base salary due him under Paragraph
5 of this Agreement up to the termination date stated in said written
notice;
(b) Subject to Corporation's rights under Paragraphs 16 and 17 hereof,
Corporation shall continue to honor all stock options, subject to the
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terms thereof, granted to Employee which are fully vested prior to the
termination date stated in said written notice;
(c) Corporation shall, subject to consent of the Board, pay Employee, and
if elected by Employee, his wife such retirement benefits as are
provided for in the Retirement Plan for Senior Officers under
Paragraph 9 hereof, said benefits to commence at such time as provided
for under the Retirement Plan.
C. TERMINATION WHILE DISABLED. If Employee is totally disabled at the
time any such notice of termination is given, then, notwithstanding the
provisions of this Paragraph 14, Corporation shall nevertheless continue to pay
Employee, as his sole compensation hereunder, the compensation and other
benefits for the remaining period of Employee's total disability as provided for
in Paragraph 13 hereinabove. It is understood that in no event shall such
disabled Employee be entitled to compensation under this Paragraph 14 in
addition to the continuation of his compensation under Paragraph 13.
D. COOPERATION AFTER NOTICE OF TERMINATION. Following any such notice
of termination, Employee shall fully cooperate with Corporation in all matters
relating to the winding up of his pending work on behalf of Corporation and the
orderly transfer of any such pending work to other employees of Corporation as
may be designated by the Board; and to that end, Corporation shall be entitled
to such full-time or part-time services of Employee as Corporation may
reasonably require during all or any part of the 60-day period following any
such notice of termination.
15. DEATH OF EMPLOYEE. In the event of Employee's death during the term
of this Agreement or any extension hereof, this Agreement shall terminate
immediately, and Employee's estate shall be entitled to receive terminal pay in
an amount equal to the amount of Employee's base salary and any performance
bonus compensation actually paid by Corporation to Employee during the last
thirty-six (36) months of his life, said terminal pay to be paid in thirty-six
(36) equal monthly installments beginning on the first day of the month next
following the month during which Employee's death occurs. Terminal pay as
herein provided for in this paragraph shall be in addition to amounts otherwise
receivable by Employee or his estate under this or any other agreements with
Corporation or under any employee benefit or retirement plans established by
Corporation and in which Employee is participating at the time of his death. In
addition, Corporation shall honor all stock options, subject to the terms
thereof, granted to Employee prior to his death and Employee or his estate
shall, if not otherwise vested, become fully vested in said options as of the
date of Employee's death. For purposes of this Paragraph, Employee shall, upon
his death, be given such additional "credited service" as necessary to fully
qualify Employee under Corporation's Retirement Plan for Senior Officers and to
provide a survivor annuity to Employee's spouse under the Plan.
16. AGREEMENT NOT TO COMPETE. It is specifically agreed that, in the
event Employee shall voluntarily terminate his employment without "good reason"
(as defined in paragraph 19) or be terminated by Corporation for "good cause"
(as defined in Paragraph 14), Employee shall not work for a period of two (2)
years from the date of such termination as a manager, officer, owner, partner or
employee or render any services as a consultant or advisor or engage or invest,
directly or indirectly, in any business activity which is in competition,
directly or indirectly, with Corporation, its subsidiaries or affiliates within
the United States of America (excluding any state in which Corporation, its
subsidiaries, and affiliates have not been engaged in business activities within
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one (1) year prior to the date of Employee's termination of employment), the
country of Japan, or within two hundred (200) miles of any office of
Corporation, its subsidiaries or affiliates outside the United States of America
or Japan which was in existence, or in the process of being established, at the
time of Employee's termination of employment. Provided, however, it is agreed
that Employee may invest in the publicly traded securities of any corporation,
partnership or trust which is in competition with Corporation so long as such
investment does not exceed three percent (3%) of such securities at any time.
It is specifically agreed that if, after Employee's termination of employment,
Employee engages in any such prohibited activity at any time during said two (2)
year period, Corporation shall, in addition to any other rights it may have
under this contract and applicable law, be entitled to injunctive relief or, if
Corporation shall so elect (due to the difficulty of determining damages) be
entitled to liquidated damages in the amount of One Million Dollars
($1,000,000.00) which Employee agrees to promptly pay to Corporation upon
demand.
17. NONDISCLOSURE OF TRADE SECRETS AND CONFIDENTIAL INFORMATION. Employee
agrees to protect the business interest of Corporation, its subsidiaries and
affiliates, and not to disclose any trade secrets, confidential information or
any organizations, operating, marketing, product design, or businesses know-how
which Employee has access to or knowledge of as a result of his employment by
Corporation. It is specifically agreed that if, at any time during the term of
this Agreement and for a period of two (2) years after the date of Employee's
termination of employment with Corporation for any reason, Employee shall
violate the provisions of this Paragraph 17, Corporation shall, in addition to
any rights it may have under this contract and applicable law, be entitled to
liquidated damages of One Million Dollars ($1,000,000.00) which employee agrees
to promptly pay Corporation upon demand. It is understood and agreed that
Corporation's remedies under this Paragraph 17 shall be separate and in addition
to the remedies provided to Corporation under Paragraph 16 hereof. It is also
understood and agreed that, notwithstanding the foregoing two (2) year period,
Employee shall not ▇▇▇ or disclose any written confidential information or any
policyholder lists at any time or times hereafter, except in the performance of
Employee's obligations to the Corporation.
18. RIGHT TO ACQUIRE INSURANCE. If Employee shall terminate his
employment hereunder for any reason other than death, he may, at his election,
acquire any insurance policies upon his life owned by the Corporation by giving
written notice of his election to Corporation within ninety (90) days after his
termination of employment. Such policies shall be transferred to the employee
upon his payment to Corporation of the then interpolated terminal reserve value
of said insurance. In the event any policies transferred to Employee as herein
provided shall not have an interpolated terminal reserve value, then the amount
to be paid by Employee shall be its then fair market value.
19. CHANGE IN CONTROL.
A. IN GENERAL. In the event there is a Change in Control (as defined
in this Paragraph) of Corporation, this Agreement shall, in order to help
eliminate the uncertainties and concerns which may arise at such time, be
automatically extended upon all of the same terms and provisions contained
herein, for an additional period of three (3) years, beginning on the first day
of the month during which such Change in Control shall occur.
B. Notwithstanding the terms of subparagraphs A(2) and B(2) of
Paragraph 14, and in lieu of the obligations of the Corporation under such
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Paragraphs, if, after a Change in Control, Employee's employment is terminated
by Corporation without "good cause" (as defined in Paragraph 4), or is
terminated by Employee for "good reason" (as defined in this Paragraph 19), any
such termination by Corporation to be made only in accordance with the
requirements specified by paragraph 14A, Employee shall be entitled to the
following:
(1) The Corporation shall pay Employee's full base salary to
Employee though the date of termination stated in Corporation's written notice
required pursuant to Paragraph 14A hereof (hereinafter in this Paragraph the
"Termination Date") at the rate in effect on the date such notice is given and,
additionally shall pay Employee all compensation and benefits payable to
Employee under the terms of any compensation or benefit plan, program or
arrangement maintained by the Corporation during such period through the
Termination Date.
(2) The Corporation shall pay Employee all compensation and
benefits due Employee under Corporation's retirement, insurance and other
compensation or benefit plans, programs or arrangements as such payments become
due. The amount of such compensation and benefits shall be determined under,
and paid in accordance with, Corporation's retirement, insurance and other
compensation or benefit plans, programs and arrangements.
(3) In lieu of any further salary payments to Employee for periods
subsequent to the Termination Date, the Corporation shall pay to Employee,
immediately after the Termination Date, a lump sum severance payment, in cash,
equal to three times the sum of (i) Employee's annual base salary in effect
immediately prior to the Change in Control and (ii) the higher of the amount
paid to Employee pursuant to the Corporation's Management Incentive Plan (or any
successor plan thereto) for the year preceding the year in which the Termination
Date occurs or paid in the year preceding the year in which the Change in
Control occurs.
(4) The Corporation shall pay to Employee, immediately after the
Termination Date, a lump sum amount, in cash, equal to a pro rata portion (based
on the number of days Employee is an employee during the year in which the
Termination Date Occurs) of the aggregate value of the maximum annual target
amount of all contingent incentive compensation awards to Employee for all
uncompleted periods under the Corporation's Management Incentive Plan (or
successor plan thereto).
(5) For a thirty-six (36) month period after the Termination date,
the Corporation shall provide Employee with life, disability, accident and
health insurance benefits substantially similar to and equal or greater in
economic value than such benefits which Employee is receiving immediately prior
to the Termination Date (without giving effect to any reduction in such benefits
subsequent to a Change in Control which reduction in benefits would constitute
"good reason" as defined in this Paragraph). Benefits required to be provided
to Employee pursuant to this subparagraph B5 shall be reduced by or made
available to Employee without cost during such thirty-six (36) month period and
any such benefit actually received by Employee shall be reported to the
Corporation by Employee.
C. In addition to the payments provided for in subparagraph B of this
Paragraph 19, in the event that after a Change in Control Employee's employment
by the Corporation is terminated by the Corporation without "good cause" or by
Employee for "good reason," the Corporation shall continue to honor all stock
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options granted to Employee (subject to the terms of such options) prior to the
Termination Date, and all stock options granted to Employee prior to the
Termination Date shall become fully vested and exercisable as of the Termination
Date.
D. Notwithstanding any other provision of this Agreement, in the event
that any payment or benefit received or to be received by Employee in connection
with a Change in Control or the termination of Employee's employment (whether
pursuant to the terms of this Agreement or any other plan, arrangement or
agreement with the Corporation, any Person whose actions result in a Change in
Control or any Person affiliated with the Corporation or such Person) (all such
payments and benefits being hereinafter called "Total Payments") would not be
deductible (in whole or in part) by the Corporation, an affiliate or Person
making such payment or providing such benefits as a result of section 280G of
the Internal Revenue Code of 1986 (the "Code") then, to the extent necessary to
make such portion of the Total Payments deductible (and after taking into
account any reduction in the Total Payment provided by reason of Section 280G of
the Code in such other plan, arrangement or agreement), adjustments in such
payments shall be made as follows: (1) the cash payments provided pursuant to
subparagraph B.(3) and B.(4) of this Paragraph 19 shall first be reduced (if
necessary, to zero), and (2) benefits provided under subparagraph B.(5) of this
Paragraph 19 shall next be reduced. For purposes of this limitation (i) no
portion of the Total Payments the receipt or enjoyment of which Employee shall
have effectively waived in writing prior to the date of termination of
employment shall be taken into account, (ii) no portion of the Total Payments
shall be taken into account which in the opinion of tax counsel selected by the
Corporation's independent auditors and reasonably acceptable to Employee does
not constitute a "parachute payment" within the meaning of section 280G(b) (2)
of the Code, including by reason of section 280G(b) (4) (A) of the Code, (iii)
the payments and benefits provided under subparagraphs B.(3)-(5) of this
Paragraph 19 shall be reduced only to the extent necessary so that the Total
Payments (other than those referred to in clauses (i) or (ii)) in their entirety
constitute reasonable compensation for services actually rendered within the
meaning of section 280G(b) (4) (B) of the Code or are otherwise not subject to
disallowance as deductions, in the opinion of the tax counsel referred to in
clause (ii); and (iv) the value of any non-cash benefit or any deferred payment
or benefit included in the Total Payments shall be determined by the
Corporation's independent auditor in accordance with the principles of sections
280G(d) (3) and (4) of the Code. In no event shall the Corporation's obligation
to continue to honor all stock options granted to Employee prior to the
Termination Date nor the vesting of stock options in accordance with Paragraph
19.C hereof be effected by this Paragraph 19.D.
E. Definitions.
(1) "Beneficial Owner" has the meaning provided in Rule 13d-3
under the Exchange Act.
(2) "Change in Control" means the occurrence of either (a),
(b), (c) or (d), as hereinafter set forth:
(a) any Person is or becomes the Beneficial Owner, directly or indirectly,
of securities of the Corporation (not including in the securities
beneficially owned by such Person any securities acquired directly
from the Corporation, subsidiaries or its affiliates) representing 30%
or more of the combined voting power of the Corporation's then
outstanding securities; or
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(b) during any period of two consecutive years (not including any period
prior to the execution of this Agreement), individuals who at the
beginning of such period constitute the Board and any director (other
than a director designated by a Person who has entered into an
agreement with the Corporation to effect a transaction described in
clause (a), (c) or (d) of this subparagraph) whose election by the
Board or nomination for election by the Corporation's stockholders was
approved by a vote of at least two-thirds (2/3) of the members of the
Board (or, if Board nominations are not voted on by the full Board,
members of the Board Committee voting on such nominations) then still
in office who either were members of the Board at the beginning of the
period or whose election or nomination for elections was previously so
approved, cease for any reason to constitute a majority of the Board;
or
(c) the shareholders of the Corporation approve a merger or consolidation
of the Corporation with any other Corporation, other than (i) a merger
or consolidation which would result in the voting securities of the
Corporation outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into
voting securities or the surviving entity), in combination with the
ownership of any trustee or other fiduciary holding securities under
an employee benefit plan of the Corporation, at least 75% of the
combined voting power of the voting securities of the Corporation or
such surviving entity outstanding immediately after such merger or
consolidation, or (ii) a merger or consolidation effected to implement
a recapitalization of the Corporation (or similar transaction) in
which no Person acquires more than 30% of the combined voting power of
the Corporation's then outstanding securities; or
(d) the shareholders of the Corporation approve a plan of complete
liquidation of the Corporation or an agreement for the sale or
disposition by the Corporation of all or substantially all the
Corporation's assets.
(3) "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
(4) "Person" shall have the meaning given in Section 3(a) (9) of
the Exchange Act, as modified and used in Sections 13(d) and 14(d) of the
Exchange Act; however, a Person shall not include (a) the Corporation or any of
its subsidiaries, (b) a trustee or other fiduciary holding securities under an
employee benefit plan of the Corporation or any of its subsidiaries, (c) an
underwriter temporarily holding securities pursuant to an offering of such
securities, or (d) a corporation owned, directly or indirectly, by the
stockholders of the Corporation in substantially the same proportions as their
ownership of stock of the Corporation.
(5) "Good reason" shall mean the termination of employment by
Employee upon the occurrence of any one or more of the following events:
(a) Any breach by Corporation of the terms and conditions of this
Agreement affecting Employee's salary and bonus compensation, any
employee benefit, stock options or the loss of any of Employee's
titles or positions with Corporation;
(b) A significant diminution of Employee's duties and responsibilities;
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(c) The assignment to Employee of any duties inconsistent with or
significantly different from his duties and responsibilities existing
at the time of a Change in Control.
(d) Any purported termination of Employee's employment by Corporation
other than as permitted by this Agreement;
(e) The relocation of Corporation's principal office or of Employee's own
office to any place beyond twenty-five (25) miles from the current
principal office of Corporation in Columbus, Georgia;
(f) The failure of any successor to Corporation to expressly assume and
agree to discharge Corporation's obligations to Employee under this
Agreement as extended under this Paragraph, in form and substance
satisfactory to Employee.
F. CONTINUATION OF COMPENSATION AND BENEFIT. If Corporation shall
attempt to terminate Employee's employment at any time after a Change in Control
and such termination is in good faith disputed by Employee, Corporation shall
continue to pay Employee all of his compensation and benefits provided for in
this Agreement until the dispute is finally resolved, either by mutual written
agreement or by final judgment, order or decree of a court of competent
jurisdiction.
20. NO REQUIREMENT TO SEEK EMPLOYMENT AND NO OFFSET. Corporation agrees
that, if Employee's employment is terminated by Corporation during the term of
this Agreement, Employee is not required to seek other employment or attempt in
any way to reduce the amounts payable to Employee by Corporation pursuant to the
applicable terms of this Agreement; it being understood and agreed that the
amount of any payment or benefit to Employee provided for hereunder shall not be
reduced by any compensation or other benefits earned by Employee as a result of
his employment by another employer or, after a Change in Control, by
Corporation's attempt to offset any amount claimed to be owed by Employee to
Corporation or otherwise.
21. WAIVER OF BREACH OR VIOLATION NOT DEEMED CONTINUING. The waiver by
either party of a breach or violation of any provisions of this Agreement shall
not operate as or be construed to be a waiver of any subsequent breach hereof.
22. NOTICES. Any and all notices required or permitted to be given under
this Agreement will be sufficient if furnished in writing, sent by registered or
certified mail to his last known residence in the case of Employee or to its
principal office in Columbus, Georgia, in the case of the Corporation.
23. AUTHORITY. The provisions of this Agreement required to be approved
by the Board of Directors of Corporation have been so approved and authorized.
24. ARBITRATION. Except for any dispute or matter arising after a Change
in Control, as defined in Paragraph 19, any dispute arising under this
Agreement, to the maximum extent allowed by applicable law, shall be subject to
arbitration and prior to commencing any court action, the parties agree that
they shall arbitrate all controversies. The arbitration shall be pursuant to
the terms of the Federal Arbitration Act. The parties shall notify each other
of the existence of an arbitrable controversy by certified mail and shall
attempt in good faith to resolve their differences within fifteen (15) days
after the receipt of such notice. Notice to Employee shall be sent to
Employee's address as it appears in Corporation's records and notice to
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Corporation shall be sent to: Arbitration Officer, AFLAC Incorporated, AFLAC
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇. If the dispute cannot be
resolved within said fifteen (15) day period, either party may file a written
demand for arbitration with the other party. The party filing such demand shall
simultaneously specify his or its arbitrator, giving the name, address and
telephone number of said arbitrator. The party receiving such notice shall
notify the party demanding the arbitration of his or its arbitrator giving the
name, address, and telephone number of said arbitrator within five (5) days of
the receipt of such demand. The arbitrator named by the respective parties need
not be neutral. The Senior Judge of the Superior Court of Muscogee County,
Georgia, on request by either party, shall appoint a neutral person to serve as
the third arbitrator and shall also appoint an arbitrator for any party failing
or refusing to name his arbitrator within the time herein specified. The
arbitrators thus constituted shall promptly meet, select a chairperson, fix the
time and place of the hearing, and notify the parties. The majority of the
panel shall render an award within ten (10) days of the completion of the
hearing, and shall promptly transmit an executed copy of the award to the
respective parties. Such an award shall be binding and conclusive upon the
parties hereto, in the absence of fraud or corruption. Each party shall have
the right to have the award made the judgment of a court of competent
jurisdiction.
25. GOVERNING LAW. This Agreement shall be interpreted, construed and
governed according to the laws of the State of Georgia.
26. PARAGRAPH HEADINGS. The paragraph headings contained in this
Agreement are for convenience only and shall in no manner be construed as part
of this Agreement.
27. TWO ORIGINALS. This Agreement is executed in two (2) originals, each
of which shall be deemed an original and together shall constitute one and the
same Agreement, with one original being delivered to each party hereto.
IN WITNESS WHEREOF, Corporation has hereunto caused its name to be signed
and its seal t be affixed by its duly authorized officers, and Employee has
hereunto set his hand and seal, all being done in duplication original with one
original being delivered to each party as of the 1st day of August, 1995.
/s/ ▇▇▇▇ ▇. ▇▇▇▇
----------------------(L.S.)
▇▇▇▇ ▇. ▇▇▇▇ AFLAC Incorporated
EMPLOYEE
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, III
----------------------------
Executive Vice President
Attest /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
------------------------
Secretary
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