Document:

EX-10.9

Aflac
Incorporated 2008 Form 10-K

EXHIBIT 10.9

AFLAC INCORPORATED

EXECUTIVE DEFERRED COMPENSATION PLAN

	 	 	 
	 

	 	As amended and restated
	 

	 	effective January 1, 2009

 

 

AFLAC INCORPORATED

EXECUTIVE DEFERRED COMPENSATION PLAN

     Effective as of the 1st day of January, 2009, Aflac Incorporated (the “Controlling Company”)
hereby amends and restates the Aflac Incorporated Executive Deferred Compensation Plan (the
“Plan”).

BACKGROUND AND PURPOSE

     A. Background. The Plan was initially adopted effective as of January 1, 1999, and
was subsequently amended. Effective January 1, 2009, the Plan, as set forth in this document, is
intended and should be construed as a restatement and continuation of the Plan as previously in
effect.

     B. Goal. The Controlling Company desires to provide its designated key management
employees (and those of its affiliated companies that participate in the Plan) with an opportunity
(i) to defer the receipt and income taxation of a portion of such employees’ annual compensation,
and (ii) to the extent (if any) determined from time-to-time by the Controlling Company, to receive
additional deferred compensation provided by the respective employers.

     C. Purpose. The purpose of the Plan document is to set forth the terms and conditions
pursuant to which these deferrals may be made and to describe the nature and extent of the
employees’ rights to their deferred amounts.

     D. Type of Plan. The Plan constitutes an unfunded, nonqualified deferred compensation
plan that benefits certain designated employees who are within a select group of key management or
highly compensated employees. It is intended that this Plan comply with the requirements of
Section 409A of the Internal Revenue Code of 1986, as amended.

STATEMENT OF AGREEMENT

     To amend and restate the Plan with the purposes and goals as hereinabove described, the
Controlling Company hereby sets forth the terms and provisions of the Plan as follows:

 

 

AFLAC INCORPORATED

EXECUTIVE DEFERRED COMPENSATION PLAN

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	ARTICLE I DEFINITIONS
	 	 	1	 
	1.1   Account
	 	 	1	 
	1.2   Administrative Committee
	 	 	1	 
	1.3   Affiliate
	 	 	1	 
	1.4   Annual Bonus
	 	 	1	 
	1.5   Annual Bonus Contributions
	 	 	1	 
	1.6   Annual Bonus Election
	 	 	1	 
	1.7   Base Salary
	 	 	2	 
	1.8   Base Salary Contributions
	 	 	2	 
	1.9   Beneficiary
	 	 	2	 
	1.10 Board
	 	 	2	 
	1.11 Business Day
	 	 	2	 
	1.12 Change in Control
	 	 	2	 
	(a) General Definition
	 	 	2	 
	(b) Payment Definition Under Code Section 409A
	 	 	3	 
	1.13 Code
	 	 	5	 
	1.14 Company Stock
	 	 	5	 
	1.15 Company Stock Fund
	 	 	5	 
	1.16 Company Stock Unit
	 	 	6	 
	1.17 Compensation Committee
	 	 	6	 
	1.18 Controlling Company
	 	 	6	 
	1.19 Deferral Contributions
	 	 	6	 
	1.20 Discretionary Contributions
	 	 	6	 
	1.21 Effective Date
	 	 	6	 
	1.22 Eligible Employee
	 	 	6	 
	1.23 Eligible TD Participant
	 	 	6	 
	1.24 ERISA
	 	 	6	 
	1.25 FICA Tax
	 	 	6	 
	1.26 Financial Hardship
	 	 	6	 
	1.27 Investment Election
	 	 	7	 
	1.28 Investment Funds
	 	 	7	 
	1.29 Key Employee
	 	 	7	 
	1.30 Matching Contributions
	 	 	7	 
	1.31 Participating Company
	 	 	7	 
	1.32 Participant
	 	 	7	 
	1.33 Payment Date
	 	 	7	 
	1.34 Plan
	 	 	8	 
	1.35 Plan Year
	 	 	8	 

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	 	 	Page
	1.36 Post 409A Account
	 	 	8	 
	1.37 Pre-409A Account
	 	 	8	 
	1.38 Salary Deferral Election
	 	 	8	 
	1.39 Separate from Service or Separation from Service
	 	 	8	 
	(a) Leaves of Absence
	 	 	8	 
	(b) Status Change
	 	 	8	 
	(c) Termination of Employment
	 	 	9	 
	1.40 Stock Option Contributions
	 	 	9	 
	1.41 Surviving Spouse
	 	 	9	 
	1.42 Trust or Trust Agreement
	 	 	9	 
	1.43 Trust Fund
	 	 	9	 
	1.44 Trustee
	 	 	9	 
	1.45 Valuation Date
	 	 	10	 
	 
	 	 	 	 
	ARTICLE II ELIGIBILITY AND PARTICIPATION
	 	 	11	 
	2.1 Eligibility
	 	 	11	 
	(a) Annual Participation
	 	 	11	 
	(b) Interim Plan Year Participation
	 	 	11	 
	2.2 Procedure for Admission
	 	 	11	 
	2.3 Cessation of Eligibility
	 	 	11	 
	 
	 	 	 	 
	ARTICLE III PARTICIPANTS’ ACCOUNTS; DEFERRALS AND CREDITING
	 	 	12	 
	3.1 Participants’ Accounts
	 	 	12	 
	(a) Establishment of Accounts
	 	 	12	 
	(b) Nature of Contributions and Accounts
	 	 	12	 
	(c) Several Liabilities
	 	 	12	 
	(d) General Creditors
	 	 	12	 
	3.2 Deferral Contributions
	 	 	12	 
	(a) Effective Date
	 	 	13	 
	(b) Term and Irrevocability of Election
	 	 	13	 
	(c) Amount
	 	 	14	 
	(d) Crediting of Deferral Contributions
	 	 	14	 
	3.3 Matching Contributions
	 	 	15	 
	(a) Matching Contributions for Territory Directors
	 	 	15	 
	(b) Other Matching Contributions
	 	 	15	 
	3.4 Discretionary Contributions
	 	 	15	 
	3.5 Debiting of Distributions
	 	 	15	 
	3.6 Crediting of Earnings
	 	 	16	 
	(a) General Rule
	 	 	16	 
	(b) Cash Dividends
	 	 	16	 
	(c) Adjustments for Stock Dividends and Splits
	 	 	16	 
	3.7 Value of Account
	 	 	17	 
	(a) General Rule
	 	 	17	 
	(b) Value of Company Stock
	 	 	17	 
	3.8 Vesting
	 	 	18	 
	(a) General
	 	 	18	 
	(b) Change in Control
	 	 	18	 

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	 	 	Page
	(c) Individual Agreements
	 	 	18	 
	3.9 Notice to Participants of Account Balances
	 	 	18	 
	3.10 Good Faith Valuation Binding
	 	 	18	 
	3.11 Errors and Omissions in Accounts
	 	 	18	 
	 
	 	 	 	 
	ARTICLE IV INVESTMENT FUNDS
	 	 	19	 
	4.1 Selection by Administrative Committee
	 	 	19	 
	4.2 Participant Direction of Deemed Investments
	 	 	19	 
	(a) Nature of Participant Direction
	 	 	19	 
	(b) Investment of Contributions
	 	 	19	 
	(c) Investment of Existing Account Balances
	 	 	19	 
	(d) Administrative Committee Discretion
	 	 	20	 
	 
	 	 	 	 
	ARTICLE V PAYMENT OF POST-409A ACCOUNT BALANCES
	 	 	21	 
	5.1 Amount of Benefit Payments for Post-409A Account
	 	 	21	 
	5.2 Timing and Form of Distribution of Post-409A Account
	 	 	21	 
	(a) Timing of Distributions
	 	 	21	 
	(b) Form of Distribution for Post-409A Account Balances
	 	 	21	 
	(c) Modifications of Form and Timing
	 	 	22	 
	(d) Medium of Payment
	 	 	23	 
	(e) Order of Distribution
	 	 	23	 
	(f) Cash-out
	 	 	23	 
	5.3 Change in Control
	 	 	24	 
	5.4 Death Benefits
	 	 	24	 
	5.5 Distribution of Post-409A Account Discretionary Contributions
	 	 	24	 
	(a) Participant Election
	 	 	24	 
	(b) No Deferral Election
	 	 	25	 
	5.6 Hardship Withdrawals
	 	 	25	 
	5.7 Taxes
	 	 	26	 
	(a) Amounts Payable Whether or Not Account is in Pay Status
	 	 	26	 
	(b) Amounts Payable Only if Account is in Pay Status
	 	 	26	 
	5.8 Offset of Post-409A Account by Amounts Owed to the Company
	 	 	26	 
	5.9 No Acceleration of Post-409A Account Payments
	 	 	26	 
	 
	 	 	 	 
	ARTICLE VI PAYMENT OF PRE-409A ACCOUNT BALANCES
	 	 	27	 
	6.1 Benefit Payments of Pre-409A Accounts Upon Termination of Service for Reasons Other Than Death
	 	 	27	 
	(a) General Rule Concerning Benefit Payments
	 	 	27	 
	(b) Timing of Distribution
	 	 	27	 
	6.2 Form of Distribution for Pre-409A Account
	 	 	28	 
	(a) Single-Sum Payment
	 	 	28	 
	(b) Annual Installments
	 	 	28	 
	(c) Multiple Forms of Distribution
	 	 	28	 
	(d) Change in Control
	 	 	28	 
	(e) Form of Assets
	 	 	29	 
	(f) Order of Distribution
	 	 	29	 
	6.3 Death Benefits
	 	 	29	 

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	 	 	Page	 
	6.4 In-Service Distributions
	 	 	29	 
	(a) Hardship Distributions
	 	 	29	 
	(b) Distributions with Forfeiture
	 	 	29	 
	6.5 Taxes
	 	 	30	 
	 
	 	 	 	 
	ARTICLE VII CLAIMS
	 	 	31	 
	7.1 Rights
	 	 	31	 
	7.2 Claim Procedure
	 	 	31	 
	(a) Initial Claim
	 	 	31	 
	(b) Appeal
	 	 	31	 
	7.3 Satisfaction of Claims
	 	 	32	 
	 
	 	 	 	 
	ARTICLE VIII SOURCE OF FUNDS; TRUST
	 	 	33	 
	8.1 Source of Funds
	 	 	33	 
	8.2 Trust
	 	 	33	 
	(a) Establishment
	 	 	33	 
	(b) Distributions
	 	 	33	 
	(c) Status of the Trust
	 	 	33	 
	(d) Change in Control
	 	 	33	 
	8.3 Funding Prohibition under Certain Circumstances
	 	 	34	 
	 
	 	 	 	 
	ARTICLE IX ADMINISTRATIVE COMMITTEE
	 	 	35	 
	9.1 Action
	 	 	35	 
	9.2 Rights and Duties
	 	 	35	 
	9.3 Compensation, Indemnity and Liability
	 	 	36	 
	 
	 	 	 	 
	ARTICLE X AMENDMENT AND TERMINATION
	 	 	37	 
	10.1 Amendments
	 	 	37	 
	10.2 Termination of Plan
	 	 	37	 
	(a) Freezing
	 	 	37	 
	(b) Termination
	 	 	37	 
	 
	 	 	 	 
	ARTICLE XI MISCELLANEOUS
	 	 	38	 
	11.1 Beneficiary Designation
	 	 	38	 
	(a) General
	 	 	38	 
	(b) No Designation or Designee Dead or Missing
	 	 	38	 
	11.2 Distribution Pursuant to Domestic Relations Order
	 	 	38	 
	11.3 Taxation
	 	 	38	 
	11.4 Elections Prior to 2009
	 	 	39	 
	11.5 No Employment Contract
	 	 	39	 
	11.6 Headings
	 	 	39	 
	11.7 Gender and Number
	 	 	39	 
	11.8 Assignment of Benefits
	 	 	39	 
	11.9 Legally Incompetent
	 	 	39	 
	11.10 Governing Law
	 	 	40	 

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	 	 	Page	 
	EXHIBIT A
	 	 	A-1	 

v 

 

ARTICLE I

DEFINITIONS

     For purposes of the Plan, the following terms, when used with an initial capital letter, shall
have the meaning set forth below unless a different meaning plainly is required by the context.

     1.1 Account shall mean, with respect to a Participant or Beneficiary, the total dollar
amount or value evidenced by the last balance posted in accordance with the terms of the Plan to
the account record established for such Participant or Beneficiary. As determined by the
Administrative Committee, an Account may be divided into separate subaccounts.

     1.2 Administrative Committee means the committee designated by the Compensation
Committee to act on behalf of the Company to administer the Plan. If at any time the Compensation
Committee has not designated an Administrative Committee, the Compensation Committee shall serve as
the Administrative Committee. Subject to the limitation in Section 9.1 relating to decisions which
affect solely their own benefits under the Plan, individuals who are management level employees
and/or Participants may serve as members of the Administrative Committee. The Administrative
Committee shall act on behalf of the Controlling Company to administer the Plan, all as provided in
Article IX.

     1.3 Affiliate shall mean (i) with respect to a Participating Company, any corporation
or other entity that is required to be aggregated with such Participating Company under Code
Sections 414(b) or (c), and (ii) except as used in Sections 3.2(b), 5.2(f), 5.3 and 5.8, any other
entity in which the Controlling Company has an ownership interest and which the Controlling Company
designates as an Affiliate for purposes of the Plan. Notwithstanding the foregoing, for purposes
of determining whether a Separation from Service has occurred with any Participating Company, the
term “Affiliate” shall include such Participating Company and all entities that would be treated as
a single employer with such Participating Company under Code Sections 414(b) or (c), but
substituting “at least 50 percent” instead of “at least 80 percent” each place it appears in
applying such rules.

     1.4 Annual Bonus shall mean, for a Participant for any Plan Year, that portion of an
Eligible Employee’s compensation for that Plan Year payable before the Participant’s Separation
from Service as an annual bonus under (i) the Aflac Management Incentive Plan or any successor plan
thereto; or (ii) any annual sales-based bonus plan.

     1.5 Annual Bonus Contributions shall mean, for a Participant for any Plan Year, that
portion of such Participant’s Annual Bonus deferred under the Plan pursuant to Section 3.2.

     1.6 Annual Bonus Election shall mean a written, electronic or other form of election
permitted by the Administrative Committee, pursuant to which a Participant may elect to defer under
the Plan all or a portion of his Annual Bonus.

1

 

     1.7 Base Salary shall mean, for a Participant for any Plan Year, the total of such
Participant’s base salary, prior to any deductions, for such Plan Year payable before the
Participant’s Separation from Service.

     1.8 Base Salary Contributions shall mean, for a Participant for each Plan Year, the
portion of such Participant’s Base Salary deferred under the plan pursuant to Section 3.2.

     1.9 Beneficiary shall mean, with respect to a Participant, the person(s) designated in
accordance with Section 11.1 to receive any death benefits that may be payable under the Plan upon
the death of the Participant.

     1.10 Board shall mean the Board of Directors of the Controlling Company.

     1.11 Business Day shall mean each day on which the Trustee operates, and is open to
the public, for its business.

     1.12 Change in Control.

          (a) General Definition. For purposes of a Participant’s Pre-409A Account, Change in
Control shall mean the occurrence of any of the following events:

          (i) Any Person is or becomes the beneficial owner, directly or indirectly, of
securities of the Controlling Company representing 30% or more of the combined voting power
of the Controlling Company’s then outstanding securities; provided, for purposes of this
subsection (i), securities acquired directly from the Controlling Company or its Affiliates
shall not be taken into account as securities beneficially owned by such Person;

          (ii) During any period of 2 consecutive years, individuals who at the beginning of such
period constitute the Board and any new director (other than a director designated by a
Person who has entered into an agreement with the Controlling Company to effect a
transaction described in subsection (i), (iii) or (iv) hereof) whose election by the Board
or nomination for election by the Controlling Company’s shareholders was approved by a vote
of at least 2/3 of the directors then still in office who either were directors at the
beginning of the period or whose election or nomination for election was previously so
approved, cease for any reason to constitute a majority thereof;

          (iii) The shareholders of the Controlling Company approve a merger or consolidation of
the Controlling Company with any other corporation, other than (A) a merger or consolidation
which would result in the voting securities of the Controlling Company outstanding
immediately prior thereto continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity), in combination with the
ownership of any trustee or other fiduciary holding securities under an employee benefit
plan of the Controlling Company, at least 75% of the combined voting power of the voting
securities of the Controlling Company or such surviving entity outstanding immediately after
such merger or consolidation; or (B) a merger or consolidation effected to implement a
recapitalization of the Controlling

2

 

Company (or similar transaction) in which no Person acquires more than 50% of the
combined voting power of the Controlling Company’s then outstanding securities; or

          (iv) The shareholders of the Controlling Company approve a plan of complete liquidation
of the Controlling Company or an agreement for the sale or disposition by the Controlling
Company of all or substantially all of the Controlling Company’s assets.

As used herein, the term “Person” shall have the meaning given in Section 3(a)(9) of the Securities
Exchange Act of 1934, as modified and used in Sections 13(d) and 14(d) thereof; provided, a Person
shall not include (A) the Controlling Company or any of its subsidiaries; (B) a trustee or other
fiduciary holding securities under an employee benefit plan of the Controlling Company 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 shareholders of the
Controlling Company in substantially the same proportions as their ownership of stock of the
Controlling Company.

          (b) Payment Definition Under Code Section 409A. For purposes of a Participant’s
Post-409A Account, “Change in Control” shall mean any of the events specified in (i), (ii), (iii)
or (iv) below, subject to the rules described in subsection (v) below:

          (i) Any one person, or more than one person acting as a group (as described below),
acquires ownership of stock of the Controlling Company that, together with stock held by
such person or group constitutes more than 50 percent of the total fair market value or
total voting power of the stock of the Controlling Company. However, if any one person, or
more than one person acting as a group, is considered to own more than 50 percent of the
total fair market value or total voting power of the stock of the Controlling Company, the
acquisition of additional stock by the same person or persons is not considered to cause a
Change in Control. An increase in the percentage of stock owned by any one person, or
persons acting as a group, as a result of a transaction in which the Controlling Company
acquires its stock in exchange for property will be treated as an acquisition of stock for
purposes of this subsection. This subsection applies only when there is a transfer of stock
of the Controlling Company (or issuance of stock of the Controlling Company) and stock in
the Controlling Company remains outstanding after the transaction.

          (ii) Any one person, or more than one person acting as a group, acquires (or has
acquired during the 12-month period ending on the date of the most recent acquisition by
such person or persons) ownership of stock of the Controlling Company possessing 30 percent
or more of the total voting power of the stock of the Controlling Company. However, if any
one person, or more than one person acting as a group, is considered to own more than 50
percent of the total fair market value or total voting power of the stock of the Controlling
Company, the acquisition of additional stock by the same person or persons is not considered
to cause a Change in Control.

          (iii) A majority of members of the Controlling Company’s board of directors is replaced
during any 12-month period by directors whose appointment or

3

 

election is not endorsed by a majority of the members of the Controlling Company’s
board of directors before the date of the appointment or election.

          (iv) Any one person, or more than one person acting as a group acquires (or has
acquired during the 12-month period ending on the date of the most recent acquisition by
such person or persons) assets from the Controlling Company that have a total gross fair
market value equal to or more than 40 percent of the total gross fair market value of all of
the assets of the Controlling Company immediately before such acquisition or acquisitions.
For this purpose, gross fair market value means the value of the assets of the Controlling
Company, or the value of the assets being disposed of, determined without regard to any
liabilities associated with such assets.

          (A) There is no Change in Control under this subsection (iv) when there is a
transfer to an entity that is controlled by the shareholders of the Controlling
Company immediately after the transfer, as provided in this subsection. A transfer
of assets by the Controlling Company is not treated as a change in the ownership of
such assets if the assets are transferred to:

          (1) A shareholder of the Controlling Company (immediately before the
asset transfer) in exchange for or with respect to its stock;

          (2) An entity, 50 percent or more of the total value or voting power of
which is owned, directly or indirectly, by the Controlling Company;

          (3) A person, or more than one person acting as a group, that owns,
directly or indirectly, 50 percent or more of the total value or voting
power of all the outstanding stock of the Controlling Company; or

          (4) An entity, at least 50 percent of the total value or voting power
of which is owned, directly or indirectly, by a person described in
subsection (3) above.

          (B) For purposes of this subsection (iv) and except as otherwise provided in
Treasury Regulations, a person’s status is determined immediately after the transfer
of the assets. For example, a transfer to a company in which the Controlling
Company has no ownership interest before the transaction, but that is a
majority-owned subsidiary of the Controlling Company after the transaction, is not
treated as a Change in Control.

4

 

          (v) Additional Rules.

          (A) Persons Acting as a Group. Persons will not be considered to be
acting as a group solely because they purchase assets of the same corporation at the
same time with respect to subsection (iv), or solely because they purchase or own
stock of the same corporation at the same time with respect to subsections (i), (ii)
and (iii). However, persons will be considered to be acting as a group if they are
owners of a corporation that enters into a merger, consolidation, purchase or
acquisition of assets (with respect to subsection (iv)) or stock (with respect to
subsections (i), (ii) and (iii)), or similar business transaction with the
Controlling Company. If a person, including an entity shareholder, owns stock in
both corporations that enter into a merger, consolidation, purchase or acquisition
of assets (with respect to subsection (iv)) or stock (with respect to subsections
(i), (ii) and (iii)), or similar transaction, such shareholder is considered to be
acting as a group with other shareholders in a corporation only to the extent of the
ownership in that corporation before the transaction giving rise to the change and
not with respect to the ownership interest in the other corporation.

          (B) Attribution of Stock Ownership. For purposes of this section, Code
Section 318(a) applies to determine stock ownership. Stock underlying a vested
option is considered owned by the individual who holds the vested option (and the
stock underlying an unvested option is not considered owned by the individual who
holds the unvested option). For purposes of the preceding sentence, however, if a
vested option is exercisable for stock that is not substantially vested (as defined
by Treasury Regulations Section 1.83-3(b) and (j)), the stock underlying the option
is not treated as owned by the individual who holds the option.

          (C) Acquisition of Additional Control. If any one person, or more than
one person acting as a group, is considered to effectively control the Controlling
Company (as determined under subsections (ii) and (iii)), the acquisition of
additional control of the Controlling Company by the same person or persons is not
considered to cause a Change in Control under subsections (i), (ii) or (iii).

     1.13 Code shall mean the Internal Revenue Code of 1986, as amended, and any succeeding
federal tax provisions.

     1.14 Company Stock shall mean the $.10 par value common stock of the Controlling
Company.

     1.15 Company Stock Fund shall mean an Investment Fund, the rate of return of which
shall be determined as if the amounts deemed invested therein have been invested in shares of
Company Stock. The aggregate of all Company Stock Units under the Plan shall constitute the
Company Stock Fund.

5

 

     1.16 Company Stock Unit shall mean an accounting entry that is equal in value at any
time to the current fair market value of one share of Company Stock, and that represents an
unsecured obligation to pay that amount to a Participant in accordance with the terms of the Plan.
A Company Stock Unit shall not carry any voting, dividend or other similar rights and shall not
constitute an option or any other right to acquire any equity securities of the Controlling
Company.

     1.17 Compensation Committee shall mean the Compensation Committee of the Board.

     1.18 Controlling Company shall mean Aflac Incorporated, a Georgia corporation with its
principal place of business in Columbus, Georgia.

     1.19 Deferral Contributions shall mean, for each Plan Year, a Participant’s Base
Salary Contributions and Annual Bonus Contributions deferred under the Plan pursuant to Section
3.2.

     1.20 Discretionary Contributions shall mean the amount (if any) credited to a
Participant’s Account pursuant to Section 3.4.

     1.21 Effective Date shall mean January 1, 2009, the date that this amendment and
restatement of the Plan shall be effective. The Plan was initially effective on January 1, 1999.

     1.22 Eligible Employee shall mean, for a Plan Year, an individual who is a U.S.-based
employee of a Participating Company and who is an officer (other than an Assistant Vice President)
of such Participating Company. The Compensation Committee, from time to time and in its sole
discretion, may designate such other individuals, on an individual basis or as part of a specified
group, as eligible to participate in the Plan.

     1.23 Eligible TD Participant shall mean, for the allocation of Matching Contributions
under Section 3.3(a), any Participant who during a Plan Year is classified as a Territory Director
by the Participating Company that employs him and either (i) is actively employed as a Territory
Director by an Affiliate as of the last day of such Plan Year, or (ii) is not in the active employ
of an Affiliate on the last day of such Plan Year due to his death during such Plan Year.

     1.24 ERISA shall mean the Employee Retirement Income Security Act of 1974, as amended.

     1.25 FICA Tax shall mean the Federal Insurance Contributions Act tax imposed under
Code Sections 3101, 3121(a) and 3121(v)(2).

     1.26 Financial Hardship shall mean a severe financial hardship to the Participant
resulting from a sudden and unexpected illness or accident of the Participant or of the
Participant’s dependent [as defined in Code Section 152(a)] or, with respect to distributions upon
Financial Hardship from a Participant’s Post-409A Account, the Participant’s Beneficiary, loss of
the Participant’s property due to casualty, or other similar extraordinary and unforeseeable
circumstances arising as a result of events beyond the control of the Participant. Financial
Hardship shall be determined by the Administrative Committee on the basis of the facts of each

6

 

case, including information supplied by the Participant in accordance with uniform guidelines
prescribed from time to time by the Administrative Committee; provided, the Participant will be
deemed not to have a Financial Hardship to the extent that such hardship is or may be relieved:

          (a) Through reimbursement or compensation by insurance or otherwise;

          (b) By liquidation of the Participant’s assets, to the extent the liquidation of assets would
not itself cause severe financial hardship; or

          (c) By cessation of deferrals under the Plan.

Examples of what are not considered Financial Hardships include the need to send a Participant’s
child to college or the desire to purchase a home.

     1.27 Investment Election shall mean an election, made in such form as the
Administrative Committee may direct, pursuant to which a Participant may elect the Investment Funds
in which the amounts credited to his Account shall be deemed to be invested.

     1.28 Investment Funds shall mean the investment funds selected from time to time by
the Administrative Committee for purposes of determining the rate of return on amounts deemed
invested pursuant to the terms of the Plan.

     1.29 Key Employee shall mean a Participant who is a “specified employee” as defined in
Code Section 409A as of: (i) for a Participant who Separates from Service on or after the first
day of a calendar year and before the first day of the fourth month of such calendar year, the
December 31 of the second calendar year preceding the calendar year in which such Participant
Separates from Service; or (ii) for any other Participant, the preceding December 31. For purposes
of identifying Key Employees, the Participant’s compensation shall mean all of the items listed in
Treasury Regulations Section 1.415(c)-2(b), and excluding all of the items listed in Treasury
Regulations Section 1.415(c)-2(c).

     1.30 Matching Contributions shall mean, the amount (if any) credited to a
Participant’s Account pursuant to Section 3.3.

     1.31 Participating Company shall mean, as of the Effective Date, the Controlling
Company and its Affiliates that are designated by the Controlling Company on Exhibit A hereto as
Participating Companies herein. In addition, any other Affiliate in the future may adopt the Plan
with the consent of the Compensation Committee, and such Affiliate’s name shall be added to Exhibit
A without the necessity of amending the Plan.

     1.32 Participant shall mean any person who has been admitted to, and has not been
removed from, participation in the Plan pursuant to the provisions of Article II.

     1.33 Payment Date shall mean the date on which all or a portion of the Participant’s
benefit is scheduled to be paid (in the case of a lump-sum payment) or commenced (in the case of
installment payments) pursuant to the terms of the Plan.

7

 

     1.34 Plan shall mean the Aflac Incorporated Executive Deferred Compensation Plan, as
contained herein and all amendments hereto. For tax purposes and purposes of Title I of ERISA, the
Plan is intended to be an unfunded, nonqualified deferred compensation plan covering certain
designated employees who are within a select group of key management or highly compensated
employees.

     1.35 Plan Year shall mean the 12-consecutive-month period ending on December 31 of
each year.

     1.36 Post 409A Account shall mean the portion of a Participant’s Account that is not
the Participant’s Pre-409A Account.

     1.37 Pre-409A Account shall mean the portion of a Participant’s Account attributable
to the balance of the Participant’s Account that was earned and vested as of December 31, 2004.

     1.38 Salary Deferral Election shall mean a written, electronic or other form of
election permitted by the Administrative Committee, pursuant to which a Participant may elect to
defer under the Plan a portion of his Base Salary.

     1.39 Separate from Service or Separation from Service shall mean that a
Participant separates from service with the Participating Company that is his employer and its
Affiliates as defined in Code Section 409A and guidance issued thereunder. Generally, a
Participant Separates from Service if the Participant dies, retires or otherwise has a termination
of employment with all Affiliates, determined in accordance with the following:

          (a) Leaves of Absence. The employment relationship is treated as continuing intact
while the Participant is on military leave, sick leave, or other bona fide leave of absence if the
period of such leave does not exceed 6 months, or, if longer, so long as the Participant retains a
right to reemployment with an Affiliate under an applicable statute or by contract. A leave of
absence constitutes a bona fide leave of absence only while there is a reasonable expectation that
the Participant will return to perform services for an Affiliate. If the period of leave exceeds 6
months and the Participant does not retain a right to reemployment under an applicable statute or
by contract, the employment relationship is deemed to terminate on the first date immediately
following such 6-month period. Notwithstanding the foregoing, where a leave of absence is due to
any medically determinable physical or mental impairment that can be expected to result in death or
can be expected to last for a continuous period of not less than 6 months, where such impairment
causes the Participant to be unable to perform the duties of his or her position of employment or
any substantially similar position of employment, a 29-month period of absence shall be substituted
for such 6-month period.

          (b) Status Change. Generally, if a Participant performs services both as an employee
and an independent contractor, such Participant must Separate from Service both as an employee, and
as an independent contractor pursuant to standards set forth in Treasury Regulations, to be treated
as having a Separation from Service. However, if a Participant provides services to Affiliates as
an employee and as a member of the Board of Directors, the services provided as a director are not
taken into account in determining whether the Participant has a Separation from Service as an
employee for purposes of this Plan.

8

 

          (c) Termination of Employment. Whether a termination of employment has occurred is
determined based on whether the facts and circumstances indicate that the Affiliates and the
Participant reasonably anticipate that (i) no further services will be performed after a certain
date, or (ii) the level of bona fide services the Participant will perform after such date (whether
as an employee or as an independent contractor) will permanently decrease to less than 50 percent
of the average level of bona fide services performed (whether as an employee or an independent
contractor) over the immediately preceding 36-month period (or the full period of services to all
Affiliates if the Participant has been providing services to all Affiliates less than 36 months).
Facts and circumstances to be considered in making this determination include, but are not limited
to, whether the Participant continues to be treated as an employee for other purposes (such as
continuation of salary and participation in employee benefit programs), whether similarly situated
service providers have been treated consistently, and whether the Participant is permitted, and
realistically available, to perform services for other service recipients in the same line of
business. For periods during which a Participant is on a paid bona fide leave of absence and has
not otherwise terminated employment as described in subsection (a) above, for purposes of this
subsection the Participant is treated as providing bona fide services at a level equal to the level
of services that the Participant would have been required to perform to receive the compensation
paid with respect to such leave of absence. Periods during which a Participant is on an unpaid
bona fide leave of absence and has not otherwise terminated employment are disregarded for purposes
of this subsection (including for purposes of determining the applicable 36-month (or shorter)
period).

     1.40 Stock Option Contributions shall mean, with respect to a Participant who held an
option to purchase shares of the Controlling Company awarded to the Participant under a stock
option program of the Controlling Company that was earned and vested as of (or before) December 31,
2004, as determined under Code Section 409A, shares of Company Stock payable to the Participant
upon his exercise of such option that were deferred under the Plan and contributed to the
Participant’s Pre-409A Account pursuant to the terms of the Plan as in effect before January 1,
2009.

     1.41 Surviving Spouse shall mean, with respect to a Participant, the person who is
treated as married to such Participant under the laws of the state in which the Participant
resides. The determination of a Participant’s Surviving Spouse shall be made as of the date of
such Participant’s death.

     1.42 Trust or Trust Agreement shall mean the separate agreement or agreements
between the Controlling Company and the Trustee governing the Trust Fund, and all amendments
thereto.

     1.43 Trust Fund shall mean the total amount of cash and other property held by the
Trustee (or any nominee thereof) at any time under the Trust Agreement.

     1.44 Trustee shall mean the party or parties so designated from time to time pursuant
to the terms of the Trust Agreement.

9

 

     1.45 Valuation Date shall mean each Business Day; provided, the value of an Account on
a day other than a Valuation Date shall be the value determined as of the immediately preceding
Valuation Date.

10

 

ARTICLE II

ELIGIBILITY AND PARTICIPATION

     2.1 Eligibility.

          (a) Annual Participation. Each individual who is an Eligible Employee as of the first
day of a Plan Year shall be eligible to participate in the Plan for the entire Plan Year.

          (b) Interim Plan Year Participation. Each individual who becomes an Eligible Employee
during a Plan Year shall be eligible to participate in the Plan for a portion of such Plan Year.
Such individual’s participation shall become effective as of the first day of the calendar month
coinciding with or next following the date he becomes an Eligible Employee.

     2.2 Procedure for Admission.

          The Administrative Committee may require a Participant to complete such forms and provide such
data as the Administrative Committee determines in its sole discretion. Such forms and data may
include, without limitation, a Salary Deferral Election, an Annual Bonus Election, the Eligible
Employee’s acceptance of the terms and conditions of the Plan, and the designation of a Beneficiary
to receive any death benefits payable hereunder.

     2.3 Cessation of Eligibility.

          The Administrative Committee may remove an employee from active participation in the Plan if
he ceases to satisfy the criteria which qualified him as an Eligible Employee, in which case his
contributions under the Plan shall not apply to compensation earned in any Plan Year after the Plan
Year in which he ceases to satisfy the criteria which qualified him as an Eligible Employee.
Following a Participant’s Separation from Service, no further Deferral Contributions will be made
to the Plan for such Participant. Even if his active participation in the Plan ends, an employee
shall remain an inactive Participant in the Plan until the earlier of (i) the date the full amount
of his vested Account (if any) is distributed from the Plan, or (ii) the date he again becomes an
Eligible Employee and recommences active participation in the Plan. During the period of time that
an employee is an inactive Participant in the Plan, his Account shall continue to be credited with
earnings as provided for in Section 3.6.

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ARTICLE III

PARTICIPANTS’ ACCOUNTS; DEFERRALS AND CREDITING

     3.1 Participants’ Accounts.

          (a) Establishment of Accounts. The Administrative Committee shall establish and
maintain an Account on behalf of each Participant. Each Account shall be credited with (i)
Deferral Contributions (separated as necessary or helpful into Base Salary Contributions and Annual
Bonus Contributions), (ii) Matching Contributions, (iii) Discretionary Contributions, (iv) Stock
Option Contributions, and (v) earnings attributable to such Account, and shall be debited by the
amount of all distributions. Each Account shall be subdivided into a Pre-409A Account and a
Post-409A Account, which shall be separately accounted for under the Plan. Each Account of a
Participant shall be maintained until the value thereof has been distributed to or on behalf of
such Participant or his Beneficiary.

          (b) Nature of Contributions and Accounts. The amounts credited to a Participant’s
Account shall be represented solely by bookkeeping entries. Except as provided in Article VIII,
no monies or other assets shall actually be set aside for such Participant, and all payments to a
Participant under the Plan shall be made from the general assets of the Participating Companies.

          (c) Several Liabilities. Each Participating Company shall be severally (and not
jointly) liable for the payment of benefits under the Plan in an amount equal to the total of (i)
all undistributed Deferral Contributions, (ii) all undistributed Matching Contributions, (iii) all
undistributed Discretionary Contributions, (iv) all undistributed Stock Option Contributions, and
(v) all investment earnings attributable to the amounts described in clauses (i)-(iv) hereof. The
Administrative Committee shall allocate the total liability to pay benefits under the Plan among
the Participating Companies, and the Administrative Committee’s determination shall be final and
binding.

          (d) General Creditors. Any assets which may be acquired by a Participating Company in
anticipation of its obligations under the Plan shall be part of the general assets of such
Participating Company. A Participating Company’s obligation to pay benefits under the Plan
constitutes a mere promise of such Participating Company to pay such benefits, and a Participant or
Beneficiary shall be and remain no more than an unsecured, general creditor of such Participating
Company.

     3.2 Deferral Contributions.

          Subject to the suspension period provided in Section 6.4(b), each Eligible Employee who is
eligible to participate in the Plan for all or any portion of a Plan Year may elect to have
Deferral Contributions made on his behalf for such Plan Year by completing and delivering to the
Administrative Committee (or its designee) a Salary Deferral Election and/or an Annual Bonus
Election, setting forth the terms of his election(s). Subject to the terms and conditions set
forth below, a Salary Deferral Election may provide for the reduction of an

12

 

Eligible Employee’s Base Salary earned during the Plan Year for which the Salary Deferral
Election is in effect, and an Annual Bonus Election shall provide for the reduction of an Eligible
Employee’s Annual Bonus earned during the Plan Year for which the Annual Bonus Election is in
effect. The following terms shall apply to such elections:

          (a) Effective Date.

          (i) General Deadline. A Participant’s Salary Deferral Election and Annual
Bonus Election for the compensation earned during a Plan Year must be made before the first
day of such Plan Year, except as provided in subsection (ii) below.

          (ii) Special Rule for New Participants.

          (A) Salary Deferrals. If a Participant initially becomes an Eligible
Employee (determined in accordance with Code Section 409A) and does not make an
initial Salary Deferral Election within the time period set forth in subsection (i)
above, such Participant may make a prospective Salary Deferral Election (but not an
Annual Bonus Election, except as provided in subsection (B)) either before or within
30 days after the date on which his participation becomes effective. Such election
will apply to the Participant’s Base Salary for services performed after the Salary
Deferral Election is made, starting with the second payroll period that begins after
the 30-day period commencing on the date on which the Participant’s participation
becomes effective.

          (B) Bonus Deferrals. If an individual is newly hired as an Eligible
Employee during a Plan Year and is classified, on his or her hire date, as a
Territory Director, and such Participant does not make an initial Annual Bonus
Election within the time period set forth in subsection (i) above, such Participant
may make a prospective Annual Bonus Election either before or within 30 days after
the date on which his participation becomes effective. The amount of the
Participant’s Annual Bonus deferred for the initial year of participation will not
exceed the amount of the Annual Bonus, prorated for the portion of the performance
period remaining in the Plan Year on the date when the Annual Bonus Election is
made.

          (C) Rehires. If a former Eligible Employee again becomes an Eligible
Employee under the Plan within 24 months after he ceased to be eligible under the
Plan, such individual shall not be treated as newly eligible under the Plan upon
return to eligible status for purposes of this subsection (ii).

          (b) Term and Irrevocability of Election. An Eligible Employee may change his Salary
Deferral Election and/or Annual Bonus Election for the Plan Year any time prior to the deadlines
specified in subsections (a)(i) or (a)(ii) above (as applicable to the Participant), only to the
extent (if any) permitted by, and subject to any restrictions or procedures determined by, the
Administrative Committee. Upon the latest of the deadlines specified in (a)(i) or (a)(ii) above
that applies to an Eligible Employee, such Eligible Employee’s Salary Deferral Election and/or
Annual Bonus Election, or failure to elect, shall become irrevocable for the Plan Year

13

 

except as provided under this subsection (b). Each Participant’s Salary Deferral Election and
Annual Bonus Election shall remain in effect only for the Plan Year for which it is made. A
Participant’s Salary Deferral Election and Annual Bonus Election shall be cancelled on the date the
Participant receives a hardship distribution under an Affiliate’s tax-qualified retirement plan,
but only to the extent that plan provides that a hardship distribution will be deemed necessary to
satisfy an immediate and heavy financial need if the employee is prohibited from making elective
contributions and employee contributions to all plans maintained by his employer for a period
following the hardship distribution. A Participant’s Salary Deferral Election and Annual Bonus
Election shall also be cancelled on the date the Participant Separates from Service. A
Participant’s Salary Deferral Election and Annual Bonus Election may be cancelled in the discretion
of the Administrative Committee as permitted under Code Section 409A (for example, on the date the
Participant receives an unforeseeable emergency distribution pursuant to Code Section 409A, or
hardship distribution under Treasury Regulations Section 1.401(k)-1(d)(3), under any plan
maintained by an Affiliate); provided, the Participant shall not have a direct or indirect election
regarding whether his Salary Deferral Election or Annual Bonus Election will be calculated pursuant
to this sentence. If a Participant is transferred from the employment of one participating company
to the employment of another participating company, his Salary Deferral Election and Annual Bonus
Election with the first participating company will remain in effect and will apply to his
compensation from the second participating company until terminated in accordance with this
subsection.

          (c) Amount.

          (i) Salary Deferrals. A Participant may elect to defer his Base Salary payable
in each regular paycheck in 1% increments, up to a maximum of 75% (or such other maximum
percentage and/or amount, if any, established by the Administrative Committee from Plan Year
to Plan Year). An Eligible TD Participant may elect, in lieu of a percentage, to defer a
specified dollar amount from his Base Salary payable in each regular paycheck.
Notwithstanding the foregoing, a Participant’s deferral for a paycheck shall not exceed the
amount of his Base Salary payable in such paycheck equal to the amount remaining after
required FICA Tax withholdings and any income tax withholding related to such FICA Tax
amount.

          (ii) Bonus Deferrals. The Participant may elect to defer his Annual Bonus up
to 100% (or such other maximum percentage and/or amount, if any, established by the
Administrative Committee from Plan Year to Plan Year). An Eligible TD Participant may
elect, in lieu of a percentage, to defer a specified dollar amount from his Annual Bonus,
but not more than the total amount of the Annual Bonus. Any percentage election shall be
applied to the Participant’s gross Bonus without reduction for any FICA Tax applicable to
the Bonus, but the deferral amount shall be deducted after any FICA Tax applicable to the
Bonus and other tax withholding related to the amount of such FICA Taxes as permitted under
Code Section 409A, and shall not exceed the remaining amount of the Bonus after reduction
for FICA Taxes and such related tax withholding.

          (d) Crediting of Deferral Contributions. For each Plan Year that a Participant has a
Salary Deferral Election or Annual Bonus Election in effect, the Administrative Committee shall
credit the amount of such Participant’s Deferral Contributions to his Account

14

 

on, or as soon as practicable after, the Valuation Date on which such amount would have been
paid to him but for his Salary Deferral Election or Annual Bonus Election.

     3.3 Matching Contributions.

          (a) Matching Contributions for Territory Directors. With respect to each Eligible TD
Participant who defers all or part of his Base Salary and/or Annual Bonus for a Plan Year, the
Participating Company will make a Matching Contribution. The amount of such Matching Contribution
will equal 100% of the first $100,000 (or any lesser amount) of the Eligible TD Participant’s Base
Salary and/or Annual Bonus for such Plan Year that such Eligible TD Participant elects to
contribute to the Plan as a Deferral Contribution. For clarity, the “Annual Bonus for a Plan Year”
includes the Annual Bonus earned during such Plan Year and paid in the following Plan Year, and not
any Annual Bonus paid during such Plan Year that was earned in a prior year. Any Matching
Contributions made pursuant to this subsection (a) will be 100% vested at the time they are
credited to the applicable Eligible TD Participant’s Account and will be distributed to such
Eligible TD Participant at the same time and in the same form as the Deferral Contributions to
which such Matching Contributions relate are distributed pursuant to Articles V and VI. Matching
Contributions for a Plan Year made pursuant to this subsection (a) will be credited to an Eligible
TD Participant’s Account during the first calendar quarter after the end of such Plan Year, and
will be allocated to Annual Bonus deferrals first, then to Base Salary deferrals to the extent that
the amount of Annual Bonus deferred for the year is less than $100,000.

          (b) Other Matching Contributions. If and to the extent the Chief Executive Officer
(to the extent duly authorized), his duly authorized designee, or the Compensation Committee
determines that, in addition to the Matching Contributions for certain Territory Directors as
described in subsection (a) hereof, the Controlling Company will make Matching Contributions for
some or all Participants, then as of the end of each payroll period (or such other date or time as
the Administrative Committee, in its sole discretion, determines from time-to-time), the
Administrative Committee shall credit to each Participant’s Account for such period a Matching
Contribution equal to the amount of the Matching Contribution so determined.

     3.4 Discretionary Contributions.

          The amount of a Discretionary Contribution (if any) shall be determined by the Chief Executive
Officer of the Controlling Company (to the extent duly authorized) or his duly authorized designee,
and/or by the Compensation Committee, in his or its sole discretion. The Administrative Committee
shall credit any such Discretionary Contribution to the Account of a Participant as of any
Valuation Date.

     3.5 Debiting of Distributions.

          As of each Valuation Date, the Administrative Committee shall debit each Participant’s Account
for any amount distributed from such Account since the immediately preceding Valuation Date.

15

 

     3.6 Crediting of Earnings.

          As of each Valuation Date, the Administrative Committee shall credit to each Participant’s
Account the amount of earnings and/or losses applicable thereto for the period since the
immediately preceding Valuation Date. Such crediting of earnings and/or losses shall be effected
as of each Valuation Date, as follows:

          (a) General Rule.

          (i) Rate of Return. The Administrative Committee shall first determine a rate
of return for the period since the immediately preceding Valuation Date for each of the
Investment Funds;

          (ii) Amount Invested. The Administrative Committee next shall determine the
amount of (i) each Participant’s Account that was deemed invested in each Investment Fund as
of the immediately preceding Valuation Date; minus (ii) the amount of any distributions
debited from the amount determined in clause (i) since the immediately preceding Valuation
Date; and

          (iii) Determination of Amount. The Administrative Committee shall then apply
the rate of return for each Investment Fund for such Valuation Date (as determined in
subsection (a) hereof) to the amount of the Participant’s Account deemed invested in such
Investment Fund for such Valuation Date (as determined in subsection (b) hereof), and the
total amount of earnings and/or losses resulting therefrom shall be credited to such
Participant’s Account as of the applicable Valuation Date.

          (b) Cash Dividends. For Company Stock Units that have been credited to a
Participant’s Account on or before a record date for Company Stock cash dividends and that remain
credited to his Account through the corresponding dividend payment date, the Administrative
Committee shall credit to such Participant’s Account (in the subaccount where the related Company
Stock Units are held) a dollar amount equal to the amount of cash dividends that would have been
paid on his Company Stock Units if each Company Stock Unit constituted one share of Company Stock.
Such dollar amount then will be converted into a number of Company Stock Units equal to the number
of full and fractional shares of Company Stock that could have been purchased, at fair market value
on the dividend payment date, with such dollar amount.

          (c) Adjustments for Stock Dividends and Splits. In the event of any subdivision or
combination of the outstanding shares of Company Stock, by reclassification, stock split, reverse
stock split or otherwise, or in the event of the payment of a stock dividend on Company Stock, or
in the event of any other increase or decrease in the number of outstanding shares of Company
Stock, other than the issuance of shares for value received by the Controlling Company or the
redemption of shares for value, the number of Company Stock Units credited to a Participant’s
Account shall be adjusted upward or downward, as the case may be, to reflect the subdivision or
combination of the outstanding shares. The amount of increase or decrease in the number of Company
Stock Units in such event will be equal to the adjustment that would have

16

 

been made if each Company Stock Unit credited to a Participant’s Account immediately prior to
the event constituted one share of Company Stock.

     3.7 Value of Account.

          (a) General Rule. The value of a Participant’s Account as of any date shall be equal
to the aggregate value of all contributions and all investment earnings deemed credited to his
Account as of such date, determined in accordance with this Article III.

          (b) Value of Company Stock.

          (i) New York Stock Exchange. For all purposes under the Plan for which the
value of Company Stock must be determined as of any particular date as of which Company
Stock is trading on the New York Stock Exchange, the fair market value per share of Company
Stock on such date shall be the closing price of Company Stock on the New York Stock
Exchange on such date. If, for any reason, the fair market value per share of Company Stock
cannot be ascertained or is unavailable for a particular date, the fair market value of
Company Stock on such date shall be determined as of the nearest preceding date on which the
fair market value can be ascertained pursuant to the terms hereof.

          (ii) Other Exchange. For all purposes under the Plan for which the value of
Company Stock must be determined as of any particular date on which Company Stock is not
trading on the New York Stock Exchange but on which Company Stock is trading on another
national securities exchange in the United States, the fair market value per share of
Company Stock shall be the closing price of the Company Stock on such national securities
exchange on such date. If Company Stock is trading on such other national securities
exchange in the United States on such date but no sales of shares of Company Stock occurred
thereon, the fair market value per share of Company Stock shall be the closing price of the
Company Stock on the nearest preceding date. If on any particular date a public market
shall exist for Company Stock but Company Stock is not trading on a national securities
exchange in the United States, then, if Company Stock is listed on the National Market List
by the National Association of Securities Dealers, Inc. (the “NASD”), the fair market value
per share of Company Stock shall be the last sale price for such shares reflected on said
market list for such date, and if Company Stock is not listed on the National Market List of
the NASD, then the fair market value per share of Company Stock shall be the mean between
the bid and asked quotations in the over-the-counter market for such shares on such date.
If there is no bid and asked quotation for Company Stock on such date, the fair market value
per share of Company Stock shall be the mean between the bid and asked quotations in the
over-the-counter market for such shares on the nearest preceding date. If the fair market
value per share of Company Stock cannot otherwise be determined under this Section as of a
particular date, such value shall be determined by the Administrative Committee, in its sole
discretion, based on all relevant available facts.

17

 

     3.8 Vesting.

          (a) General. A Participant shall at all times be fully vested in his Deferral
Contributions, Stock Option Contributions and, for an Eligible TD Participant, his Matching
Contributions made pursuant to Section 3.3(a), and the earnings credited to his Account with
respect to such Deferral, Stock Option and Matching Contributions. Any Matching Contributions made
pursuant to Section 3.3(b) and/or Discretionary Contributions credited to a Participant’s Account
and the earnings credited with respect thereto shall vest in accordance with the vesting
schedule(s) specified and made effective for such contributions by the Chief Executive Officer of
the Controlling Company (to the extent duly authorized) or his duly authorized designee, or the
Compensation Committee, as applicable, in its sole discretion.

          (b) Change in Control. If a Change in Control occurs with respect to the Controlling
Company, Participants shall be or become immediately 100% vested in the Matching Contributions made
pursuant to Section 3.3(b) and the Discretionary Contributions credited to their Accounts as of the
date of such Change in Control. Matching Contributions made pursuant to Section 3.3(b) and
Discretionary Contributions credited to Participants’ Account after the date of a Change in Control
shall continue to vest in accordance with the applicable vesting schedules as applied to such
Matching and Discretionary Accounts before the Change in Control.

          (c) Individual Agreements. In addition to the vesting dates provided in subsections
(a) and (b), a Participant’s Matching Contributions made pursuant to Section 3.3(b) and/or
Discretionary Contributions, and the earnings credited with respect thereto, shall vest at the time
or times provided in any employment agreement, offer letter or other valid written agreement
between the Participant and an Affiliate.

     3.9 Notice to Participants of Account Balances.

          At least once for each Plan Year, the Administrative Committee shall cause a written statement
of a Participant’s Account balance to be distributed to the Participant.

     3.10 Good Faith Valuation Binding.

          In determining the value of the Accounts, the Administrative Committee shall exercise its best
judgment, and all such determinations of value (in the absence of bad faith) shall be binding upon
all Participants and their Beneficiaries.

     3.11 Errors and Omissions in Accounts.

          If an error or omission is discovered in the Account of a Participant, the Administrative
Committee, in its sole discretion, shall cause appropriate, equitable adjustments to be made as
soon as administratively practicable following the discovery of such error or omission.

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ARTICLE IV

INVESTMENT FUNDS

     4.1 Selection by Administrative Committee.

          From time to time, the Administrative Committee shall select two or more Investment Funds for
purposes of determining the rate of return on amounts deemed invested in accordance with the terms
of the Plan. The Administrative Committee may change, add or remove Investment Funds on a
prospective basis at any time(s) and in any manner it deems appropriate.

     4.2 Participant Direction of Deemed Investments.

          Each Participant generally may direct the manner in which his Account shall be deemed invested
in and among the Investment Funds; provided, (i) any Stock Option Contributions shall be and at all
times remain credited to the Company Stock Fund, and (ii) any amounts credited to the Company Stock
Fund shall at all times remain credited to such fund until the date such amount is distributed to
the Participant or his Beneficiary. Any Participant investment directions permitted hereunder
shall be made in accordance with the following terms:

          (a) Nature of Participant Direction. The selection of Investment Funds by a
Participant shall be for the sole purpose of determining the rate of return to be credited to his
Account, and shall not be treated or interpreted in any manner whatsoever as a requirement or
direction to actually invest assets in any Investment Fund or any other investment media. The
Plan, as an unfunded, nonqualified deferred compensation plan, at no time shall have any actual
investment of assets relative to the benefits or Accounts hereunder.

          (b) Investment of Contributions. Each Participant may make an Investment Election
prescribing the percentage of the future contributions that will be deemed invested in each
Investment Fund. An initial Investment Election of a Participant shall be made as of the date the
Participant commences participation in the Plan and shall apply to all contributions credited to
such Participant’s Account after such date. Such Participant may make subsequent Investment
Elections as of any Business Day, and each such election shall apply to all such specified
contributions credited to such Participant’s Account after the Administrative Committee (or its
designee) has a reasonable opportunity to process such election pursuant to such procedures as the
Administrative Committee may determine from time-to-time. Any Investment Election made pursuant to
this subsection with respect to future contributions shall remain effective until changed by the
Participant.

          (c) Investment of Existing Account Balances. Each Participant may make an Investment
Election prescribing the percentage of his existing Account balance that will be deemed invested in
each Investment Fund. Such Participant may make such Investment Elections as of any Business Day,
and each such election shall be effective after the Administrative Committee (or its designee) has
a reasonable opportunity to process such election. Each such election shall remain in effect until
changed by such Participant.

19

 

          (d) Administrative Committee Discretion. The Administrative Committee shall have
complete discretion to adopt and revise procedures to be followed in making such Investment
Elections. Such procedures may include, but are not limited to, the process of making elections,
the permitted frequency of making elections, the incremental size of elections, the deadline for
making elections and the effective date of such elections. Any procedures adopted by the
Administrative Committee that are inconsistent with the deadlines or procedures specified in this
Section shall supersede such provisions of this Section without the necessity of a Plan amendment.

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ARTICLE V

PAYMENT OF POST-409A ACCOUNT BALANCES

     5.1 Amount of Benefit Payments for Post-409A Account.

          Payment of a benefit amount from a Participant’s Post-409A Account as of any Payment Date
hereunder shall be calculated by determining the vested amount credited to the Participant’s
Post-409A Account that is payable on such Payment Date, determined as of the Valuation Date on
which the distribution is processed. For purposes of this subsection, the “Valuation Date on which
such distribution is processed” refers to the Valuation Date established for such purpose by
administrative practice, even if actual payment is made or commenced at a later date due to delays
in valuation, administration or any other procedure.

     5.2 Timing and Form of Distribution of Post-409A Account.

          (a) Timing of Distributions.

          (i) Default Timing of Distribution. Except as provided in Sections 5.3, 5.4
and 5.5, and subsections (a)(ii) and (c) hereof, the Payment Date for a Participant’s
Post-409A Account shall be: (i) within 90 days after the date the Participant Separates
from Service, in the case of a Participant who is not a Key Employee on the date he
Separates from Service; or (ii) 6 months after the date the Participant Separates from
Service, in the case of a Participant who is a Key Employee on the date he Separates from
Service.

          (ii) Payment Date Election. A Participant may elect, at the time he makes a
Salary Deferral Election or Annual Bonus Election, to have the Payment Date for the portion
of his Post-409A Account balance attributable to such election (including any vested
Matching Contributions related to Deferral Contributions made pursuant to such Salary
Deferral Election or Annual Bonus Election, respectively) be a specified date that is after
the one-year period following the end of the Plan Year to which the election applies.
Notwithstanding the foregoing election timing requirements, if the Participant elected a
Payment Date before January 1, 2009, such Payment Date election shall apply in accordance
with transition rules under Code Section 409A. A Participant may elect a different Payment
Date with respect to his Salary Deferral Election and with respect to his Annual Bonus
Election for each Plan Year.

          (b) Form of Distribution for Post-409A Account Balances.

          (i) Single-Sum Payment. Except as provided in Section 5.5 and subsections
(b)(ii) and (c) hereof, the portion of a Participant’s Post-409A Account payable on a given
Payment Date shall be distributed in the form of a single lump-sum payment.

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          (ii) Annual Installments.

          (A) Election of Annual Installments. A Participant may elect, at the
time he makes a Salary Deferral Election or Annual Bonus Election, to receive the
benefit attributable to such election (including any vested Matching Contributions
related to Deferral Contributions made pursuant to the Salary Deferral Election or
Annual Bonus Election) in the form of annual installments. A Participant may elect
a different form of payment with respect to his Salary Deferral Election and with
respect to his Annual Bonus Election for each Plan Year. Notwithstanding the
foregoing election timing requirements, if the Participant elected a form of payment
before January 1, 2009, such election shall apply in accordance with transition
rules under Code Section 409A.

          (B) Installment Periods. The installment payments shall be made in
substantially equal annual installments over a period of not less than 2 years and
not more than 10 years (adjusted for earnings between payments in the manner
described in Section 3.6), beginning on the applicable Payment Date. The number of
annual installment payments elected by the Participant shall be specified at the
time the Participant makes the deferral election in which the installment payments
are elected.

          (c) Modifications of Form and Timing.

          (i) Availability of Election. A Participant may make one or more elections to
(i) delay the payment (or commencement) of the portion of his Post-409A Account attributable
to a selected Plan Year’s Salary Deferral Election or Annual Bonus Election, and/or
(ii) change the form of payment to: (A) have the portion of his Post-409A Account
attributable to such election paid in the form of annual installment payments as described
above, (B) change the number of installment payments elected, or (C) change installments to
a lump sum. Any election under this subsection shall specify the number of installment
payments elected, if any.

          (ii) Delay in Payment Date. In the event of an election under subsection (i),
the Payment Date for the portion of the Participant’s Post-409A Account attributable to such
election shall be delayed to 5 years after the date of payment that applied prior to the
election, or such later date as may be elected by the Participant under subsection (i).

          (iii) Restrictions. Any election under this subsection (c) shall not take
effect until 12 months after the date on which the election is made, and, if made within 12
months before the payment was scheduled to begin or be made under the previous payment
terms, shall not be effective. In the case of an amount payable on a specified calendar
date selected under Section 5.2(a)(ii) or subsection (c)(i), an election under this
subsection (c) shall be made at least 1 year before such specified date.

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          (d) Medium of Payment. All distributions shall be made in the form of cash, except
for amounts deemed invested in the Company Stock Fund, which shall be distributed in whole shares
of Company Stock with fractional shares paid in cash.

          (e) Order of Distribution. If any portion of a Participant’s Post-409A Account is
deemed invested in the Company Stock Fund, any partial distributions from such Participant’s
Post-409A Account shall be made first from such amounts. After all amounts deemed invested in the
Company Stock Fund have been distributed, any remaining amounts shall be distributed in cash.

          (f) Cash-out.

          (i) Employee Deferral Cashout. Except as provided in subsection (v) below, if
at any time a Participant’s Post-409A Account balance attributable to the aggregate of his
Deferral Contributions does not exceed the applicable dollar amount under Code Section
402(g)(1)(B), the Administrative Committee may elect, in its sole discretion, to pay the
Participant’s entire Post-409A Account balance attributable to Deferral Contributions in an
immediate single-sum payment. For purposes of determining the amount of Deferral
Contributions in a Participant’s Post-409A Account in order to apply this provision, any
deferrals of compensation that the Participant has elected under this or any other
nonqualified deferred compensation plan maintained by an Affiliate that is an “account
balance plan” subject to Code Section 409A shall be considered as part of the Participant’s
Post-409A Account balance attributable to Deferral Contributions hereunder.

          (ii) Cashout of Employer Contributions. Except as provided in subsection (v)
below, if at any time a Participant’s Post-409A Account balance, other than amounts
attributable to Deferral Contributions, does not exceed the applicable dollar amount under
Code Section 402(g)(1)(B), the Administrative Committee may elect, in its sole discretion,
to pay such portion of the Participant’s Post-409A Account balance in an immediate
single-sum payment. For purposes of determining the amount of a Participant’s Post-409A
Account other than Deferral Contributions in order to apply this provision, any deferrals of
compensation other than Participant elective deferrals under this or any other nonqualified
deferred compensation plan maintained by an Affiliate that is an “account balance plan”
subject to Code Section 409A shall be considered as part of the Participant’s Post-409A
Account balance other than amounts attributable to Deferral Contributions hereunder.

          (iii) Documentation of Determination. Any exercise of the Administrative
Committee’s discretion pursuant to subsections (i) and (ii) shall be evidenced in writing no
later than the date of the distribution.

          (iv) Mandatory Cash-Out. Notwithstanding anything in this section 5.2 or a
Participant’s election to the contrary, if a Participant’s total vested Post-409A Account
balance is less than $25,000 on the date of the Participant’s Separation from Service, such
Participant’s Post-409A Account shall be distributed in a single lump sum payment within 90
days after the date of the Participant’s Separation from Service.

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          (v) Six Month Delay for Key Employees. Notwithstanding the foregoing, to the
extent provided by Code Section 409A, with respect to a Participant who is a Key Employee on
the date he Separates from Service, no payment under this subsection (f) made on account of
such Participant’s Separation from Service shall be made within 6 months after the date the
Participant Separates from Service.

     5.3 Change in Control.

          If a Participant who is employed by an Affiliate of the Controlling Company Separates from
Service during the 1-year period immediately following a Change in Control, such Participant’s
Post-409A Account shall be paid in a single lump sum, and the Payment Date for such Participant’s
Post-409A Benefit shall be (i) the 30th day after the date the Participant Separates
from Service, in the case of a Participant who is not a Key Employee on the date he Separates from
Service; or (ii) 6 months after the date the Participant Separates from Service, in the case of a
Participant who is a Key Employee on the date he Separates from Service; provided, to the extent
provided by Code Section 409A, each time a Participant makes an election under Section 5.2(c) to
change the form or timing of payment of a portion of his Post-409A Account, the Payment Date under
this Section 5.3 for the portion of the Participant’s Post-409A Account attributable to such
election shall be delayed to 5 years after the date of payment that applied prior to the election.

     5.4 Death Benefits.

          If a Participant dies before full payment of his Post-409A Account is made, the Beneficiary or
Beneficiaries designated by such Participant in his latest beneficiary designation form filed with
the Administrative Committee shall be entitled to receive a distribution of the entire vested
amount credited to such Participant’s Post-409A Account. The Post-409A Account shall be
distributed to such Beneficiary or Beneficiaries in the form of a single-sum payment, and the
Payment Date shall be the 30th day after the date of the Participant’s death.

     5.5 Distribution of Post-409A Account Discretionary Contributions.

          (a) Participant Election. Subject to Section 5.2(f), if permitted by the
Administrative Committee, a Participant may elect (i) to have the Payment Date for the portion of
his Post-409A Account balance attributable to Discretionary Contributions be a specified date that
is after the one-year period following the end of the Plan Year in which the Discretionary
Contribution is made, and/or (ii) to receive such benefit in the form of annual installments, all
as provided in this subsection.

          (i) Timing. An election under this subsection (a) must be made before the
beginning of the Plan Year in which the services to which the Discretionary Contribution is
attributable began. Notwithstanding the foregoing election timing requirements, if the
Participant elected a Payment Date before January 1, 2009, such Payment Date election shall
apply in accordance with transition rules under Code Section 409A. A Participant may elect
a different Payment Date and/or form of payment with respect to his Discretionary
Contributions for each Plan Year, subject to the election timing rules in this subsection.
Any payment election under this subsection (a) shall

24

 

remain in effect from Plan Year to Plan Year until the earlier of (A) the date the
election is modified or revoked by the Participant with respect to Discretionary
Contributions attributable to services performed beginning in a future Plan Year, or (B) the
date of the Participant’s Separation from Service.

          (ii) Installment Periods. The installment payments shall be made in
substantially equal annual installments over a period of not less than 2 years and not more
than 10 years (adjusted for earnings between payments in the manner described in Section
3.6), beginning on the applicable Payment Date. The number of annual installment payments
elected by the Participant shall be specified at the time the Participant makes the
installment payment election.

          (b) No Deferral Election. To the extent that the Participant does not make an
election as provided in subsection (a), his vested Discretionary Contribution shall be distributed
in a single lump sum payment within 90 days after his Separation from Service.

     5.6 Hardship Withdrawals.

          Upon receipt of an application for an in-service hardship distribution and the Administrative
Committee’s decision, made in its sole discretion, that a Participant has suffered a Financial
Hardship, the Administrative Committee shall cause the applicable Participating Company to pay an
in-service distribution to such Participant from the Participant’s vested Post-409A Account. Such
distribution shall be paid in a lump sum payment within 90 days after the date that the
Administrative Committee determines that a Financial Hardship exists, which must be prior to the
Participant’s Separation from Service. The amount of such lump sum payment shall be limited to the
amount of such Participant’s vested Post-409A Account reasonably necessary to meet the
Participant’s requirements resulting from the Financial Hardship. Determinations of amounts
reasonably necessary to satisfy the emergency need shall take into account any additional
compensation that is available under the Plan due to cancellation of a deferral election upon a
payment due to a Financial Hardship. However, the determination of amounts reasonably necessary to
satisfy the emergency need shall not take into account any additional compensation that due to the
Financial Hardship is available under the Plan or another nonqualified deferred compensation plan
but has not actually been paid. If payment is made hereunder upon a Financial Hardship, it shall
be so designated at the time of payment. The amount of such distribution shall reduce the
Participant’s Post-409A Account balance as provided in Section 3.5.

25

 

     5.7 Taxes.

          (a) Amounts Payable Whether or Not Account is in Pay Status. If the whole or any part
of any Participant’s or Beneficiary’s Post-409A Account hereunder shall become subject to FICA Tax
or any state, local or foreign tax obligations, which a Participating Company shall be required to
pay or withhold prior to the time the Participant’s Post-409A Account becomes payable hereunder,
the Participating Company shall have the full power and authority to withhold and pay such tax and
related taxes as permitted under Code Section 409A.

          (b) Amounts Payable Only if Account is in Pay Status. If the whole or any part of
any Participant’s or Beneficiary’s Post-409A Account hereunder is subject to any taxes which a
Participating Company shall be required to pay or withhold at the time the Post-409A Account
becomes payable hereunder, the Participating Company shall have the full power and authority to
withhold and pay such tax out of any monies or other property that the Participating Company holds
for the account of the Participant or Beneficiary, excluding, except as provided in this Section,
any portion of the Participant’s Post-409A Account that is not then payable.

     5.8 Offset of Post-409A Account by Amounts Owed to the Company.

          Notwithstanding anything in the Plan to the contrary, the Administrative Committee may, in its
sole discretion, offset any benefit payment or payments of a Participant’s or Beneficiary’s
Post-409A Account under the Plan by any amount owed by such Participant or Beneficiary (whether or
not such obligation is related to the Plan) to any Affiliate; provided, no such offset will apply
before the Post-409A Account is otherwise payable under the Plan, unless the following requirements
are satisfied: (i) the debt owed to the Affiliate was incurred in the ordinary course of the
relationship between the Participant and the Affiliate, (ii) the entire amount of offset to which
this sentence applies in a single taxable year does not exceed $5,000, and (iii) the offset occurs
at the same time and in the same amount as the debt otherwise would have been due and collected
from the Participant or Beneficiary.

     5.9 No Acceleration of Post-409A Account Payments.

          Except as otherwise provided in this Section, no payment scheduled to be made under this
Article V may be accelerated. Notwithstanding the foregoing, the Administrative Committee, in its
sole discretion, may accelerate any payment scheduled to be made under this Article V in accordance
with Code Section 409A (for example, upon certain terminations of the Plan, limited cashouts or to
avoid certain conflicts of interest); provided, a Participant may not elect whether his scheduled
payment will be accelerated pursuant to this sentence.

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ARTICLE VI

PAYMENT OF PRE-409A ACCOUNT BALANCES

     6.1 Benefit Payments of Pre-409A Accounts Upon Termination of Service for Reasons Other
Than Death.

          (a) General Rule Concerning Benefit Payments. In accordance with the terms of
subsection (b) hereof, if a Participant terminates his employment with the Controlling Company and
all of its Affiliates for any reason other than death, he (or his Beneficiary, if he dies after
such termination of employment but before distribution of his Account) shall be entitled to receive
or begin receiving a distribution of the entire vested amount credited to his Pre-409A Account,
determined as of the Valuation Date on which such distribution is processed. For purposes of this
subsection, the “Valuation Date on which such distribution is processed” refers to the Valuation
Date established for such purpose by administrative practice, even if actual payment is made or
commenced at a later date due to delays in valuation, administration or any other procedure.

          (b) Timing of Distribution.

          (i) Except as provided in subsection (b)(ii) hereof, the Pre-409A Account payable to a
Participant under this Section shall be distributed as soon as administratively feasible
after the date the Participant terminates his employment with the Controlling Company and
all of its Affiliates for any reason other than death.

          (ii) A Participant was permitted to elect, at the time he made his initial Salary
Deferral or Annual Bonus Election or election to make Stock Option Contributions, to have
his Pre-409A Account payable under this Section paid (or commenced) on any date (whether
before or after the date his employment terminates, but not earlier than 1 year after the
end of the Plan Year for which such election applies) specified in such election. A
Participant was permitted to elect a different benefit commencement date with respect to his
Salary Deferral and Annual Bonus Elections and his Stock Option Contributions; provided,
unless determined otherwise by the Administrative Committee, a Participant may elect no more
than 2 different benefit commencement dates with respect to his Salary Deferral and Annual
Bonus Elections and may elect only 1 commencement date with respect to his Stock Option
Contributions. The Administrative Committee shall pay (or commence the payment of) the
Participant’s Pre-409A Account as soon as administratively feasible after the time specified
in such election; provided, with respect to each initial scheduled benefit commencement
date, (as determined in accordance with the preceding sentence or subsection (b)(i) hereof),
the Participant may make a one-time election in writing, at least 1 year before such initial
scheduled benefit commencement date, to delay the payment (or commencement) of his total
benefit payable on such date to a later date, and such total benefit shall be paid (or
commenced) as soon as administratively feasible after such delayed date.

27

 

     6.2 Form of Distribution for Pre-409A Account.

          (a) Single-Sum Payment. Except as provided in subsection (b) hereof, the Pre-409A
Account payable to a Participant under Section 6.1 shall be distributed in the form of a single-sum
payment.

          (b) Annual Installments. A Participant was permitted to elect, at the time he made
his initial Salary Deferral or Annual Bonus Election or election to make Stock Option Contributions
to have his Pre-409A Account payable under Section 6.1 paid in the form of annual installment
payments. If a Participant did not initially elect the installment form of distribution for any
portion of his benefit, that portion of his benefit shall be paid in the form of a lump sum payment
unless, at least 1 year before his initial scheduled benefit commencement date (as determined in
accordance with Section 6.1), the Participant makes a one-time election in writing to receive such
benefit in the form of installment payments (in accordance with the terms of this subsection). The
following terms and conditions shall apply to installment payments made with respect to a
Participant’s Pre-409A Account under the Plan:

          (i) The installment payments shall be made in substantially equal annual installments
(adjusted for investment income between payments in the manner described in Section 3.6);
provided, in no event shall such payments be made over a period in excess of 10 years. The
initial value of the obligation for the installment payments shall be equal to the amount of
the Participant’s Pre-409A Account balance calculated in accordance with the terms of
Section 6.1(a).

          (ii) If a Participant dies after payment of his benefit from the Plan has begun, but
before his entire benefit has been distributed, the remaining amount of his Pre-409A Account
balance shall be distributed to the Participant’s designated Beneficiary in the form of a
single-sum payment.

          (iii) Notwithstanding any election under this Section 6.2(b) to the contrary, with
respect to any Participant whose Pre-409A Account distribution as of the date it is
scheduled to commence in accordance with Section 6.1(b) is less than $10,000 per year, or
such other minimum amount as may be determined by the Administrative Committee in its sole
discretion, such benefit shall be paid in a lump sum payment.

          (c) Multiple Forms of Distribution. To the extent a Participant elects multiple
benefit commencement dates in accordance with Section 6.1(b)(ii), such Participant may elect, with
respect to the total benefit corresponding to each benefit commencement date, to receive such total
benefit in the form of either a single-sum payment or annual installments as set forth above.

          (d) Change in Control. Notwithstanding anything in Section 6.1 or this Section 6.2 or
any election made by the Participant to the contrary, any Participant (i) who terminates employment
with all Affiliates for a reason other than his death within the 12 month period beginning on the
date a Change in Control occurs, or (ii) whose installment payments as elected under Section
6.2(b) have commenced or are scheduled to commence as of the date of the Change in Control, will
receive a full distribution of the Pre-409A Account payable under

28

 

Section 6.1(a) in the form of a lump sum payment. Such payment shall be made as soon as
administratively feasible after the date the Participant terminates employment with all Affiliates
for any reason other than death or the date of the Change in Control, as applicable.

          (e) Form of Assets. All distributions shall be made in the form of cash, except for
amounts deemed invested in the Company Stock Fund (which shall be distributed in whole shares of
Company Stock with fractional shares paid in cash).

          (f) Order of Distribution. If any portion of a Participant’s Pre-409A Account is
deemed invested in the Company Stock Fund, any partial distributions from such Participant’s
Pre-409A Account shall be made first from such amounts. After all amounts deemed invested in the
Company Stock Fund have been distributed, any remaining amounts shall be distributed in cash, as
provided for in subsection (e) hereof.

     6.3 Death Benefits.

          If a Participant dies before payment of his Pre-409A Account from the Plan is made or
commenced, the Beneficiary or Beneficiaries designated by such Participant in his latest
beneficiary designation form filed with the Administrative Committee shall be entitled to receive a
distribution of the total of the entire vested amount credited to such Participant’s Pre-409A
Account, determined as of the Valuation Date on which such distribution is processed. For purposes
of this Section, the “Valuation Date on which such distribution is processed” refers to the
Valuation Date established for such purpose by administrative practice, even if actual payment is
made or commenced at a later date due to delays in valuation, administration or any other
procedure. The Pre-409A Account shall be distributed to such Beneficiary or Beneficiaries, as soon
as administratively feasible after the date of the Participant’s death, in the form of a single-sum
payment in cash or Company Stock as prescribed in Section 6.2(e).

     6.4 In-Service Distributions.

          (a) Hardship Distributions. Upon receipt of an application for an in-service hardship
distribution and the Administrative Committee’s decision, made in its sole discretion, that a
Participant has suffered a Financial Hardship, the Administrative Committee shall cause the
Controlling Company to pay an in service distribution to such Participant from such Participant’s
Pre-409A Account. Such distribution shall be paid in a lump sum payment, in cash or Company Stock
as prescribed in Section 6.2(e), as soon as administratively feasible after the Administrative
Committee determines that the Participant has incurred a Financial Hardship. The amount of such
lump sum payment shall be limited to the amount reasonably necessary to meet the Participant’s
requirements resulting from the Financial Hardship. The amount of such distribution shall reduce
the Participant’s Pre-409A Account balance as provided in Section 3.5.

          (b) Distributions with Forfeiture. Notwithstanding any other provision of this
Article VI to the contrary, a Participant may elect, at any time prior to termination of his
employment with the Controlling Company and all of its Affiliates, to receive a distribution of a
portion of the total of the entire vested amount credited to his Pre-409A Account, determined as of
the Valuation Date on which such distribution is processed. Such distribution shall be made in the
form of a single-sum payment, in cash or Company Stock as prescribed in Section 6.2(e),

29

 

as soon as administratively feasible after the date of the Participant’s election under this
subsection (b). At the time such distribution is made, an amount equal to 10% of the amount
distributed shall be permanently and irrevocably forfeited (and, if the distribution request is for
90% or more of such Participant’s Pre-409A Account, the forfeiture amount shall be deducted from
his distribution amount to the extent there otherwise will be an insufficient remaining Pre-409A
Account balance from which to deduct this forfeiture). In addition, the Participant receiving such
distribution shall not be eligible to actively participate in the Plan during the Plan Year next
following the Plan Year in which the distribution is made.

     6.5 Taxes.

          If the whole or any part of any Participant’s or Beneficiary’s Pre-409A Account hereunder
shall become subject to any estate, inheritance, income or other tax which the Participating
Company shall be required to pay or withhold, the Participating Company shall have the full power
and authority to withhold and pay such tax out of any monies or other property in its hand for the
account of the Participant or Beneficiary whose interests hereunder are so affected, except any
portion of the Post-409A Account that is not then payable. Prior to making any payment, the
Participating Company may require such releases or other documents from any lawful taxing authority
as it shall deem necessary.

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ARTICLE VII

CLAIMS

     7.1 Rights.

          If a Participant or Beneficiary has any grievance, complaint or claim concerning any aspect of
the operation or administration of the Plan, including but not limited to claims for benefits
(collectively referred to herein as “claim” or “claims”), such claimant shall submit the claim in
accordance with the procedures set forth in this Article. All such claims must be submitted within
the “applicable limitations period.” The “applicable limitations period” shall be 2 years,
beginning on (i) in the case of any lump-sum payment, the date on which the payment was made, (ii)
in the case of a periodic payment, the date of the first in the series of payments, or (iii) for
all other claims, the date on which the action complained of occurred. Additionally, upon denial
of an appeal pursuant to Section 7.2(b), a Participant or Beneficiary shall have 90 days within
which to bring suit for any claim related to such denied appeal; any such suit initiated after such
90-day period shall be precluded.

     7.2 Claim Procedure.

          (a) Initial Claim. Claims for benefits under the Plan may be filed in writing with
the Administrative Committee on forms or in such other written documents as the Administrative
Committee may prescribe. The Administrative Committee shall furnish to the claimant written notice
of the disposition of a claim within 90 days after the application therefor is filed; provided, if
special circumstances require an extension, the Administrative Committee may extend such 90-day
period by up to an additional 90 days, by providing a notice of such extension to the claimant
before the end of the initial 90-day period. In the event the claim is denied, the notice of the
disposition of the claim shall provide the specific reasons for the denial, citations of the
pertinent provisions of the Plan, and, where appropriate, an explanation as to how the claimant can
perfect the claim and/or submit the claim for review (where appropriate), and a statement of the
claimant’s right to bring a civil action under ERISA Section 502(a) following an adverse
determination on review.

          (b) Appeal. Any Participant or Beneficiary who has been denied a benefit, or his duly
authorized representative, shall be entitled, upon request to the Administrative Committee, to
appeal the denial of his claim. The claimant (or his duly authorized representative) may review
pertinent documents related to the Plan and in the Administrative Committee’s possession in order
to prepare the appeal. The request for review, together with a written statement of the claimant’s
position, must be filed with the Administrative Committee no later than 60 days after receipt of
the written notification of denial of a claim provided for in subsection (a). The Administrative
Committee’s decision shall be made within 60 days following the filing of the request for review;
provided, if special circumstances require an extension, the Administrative Committee may extend
such 60-day period by up to an additional 60 days, by providing a notice of such extension to the
claimant before the end of the initial 60-day period. If unfavorable, the notice of decision shall
explain the reasons for denial, indicate

31

 

the provisions of the Plan or other documents used to arrive at the decision, and state the
claimant’s right to bring a civil action under ERISA Section 502(a).

     7.3 Satisfaction of Claims.

          Any payment to a Participant or Beneficiary shall to the extent thereof be in full
satisfaction of all claims hereunder against the Administrative Committee and the Participating
Companies, any of whom may require such Participant or Beneficiary, as a condition to such payment,
to execute a receipt and release therefor in such form as shall be determined by the Administrative
Committee or the Participating Companies. If receipt and release is required but the Participant
or Beneficiary (as applicable) does not provide such receipt and release in a timely enough manner
to permit a timely distribution in accordance with the general timing of distribution provisions in
the Plan, such payment shall be forfeited.

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ARTICLE VIII

SOURCE OF FUNDS; TRUST

     8.1 Source of Funds.

          Except as provided in this Section and Section 8.2 (relating to the Trust), each Participating
Company shall provide the benefits described in the Plan from its general assets. However, to the
extent that funds in such Trust allocable to the benefits payable under the Plan are sufficient,
the Trust assets may be used to pay benefits under the Plan. If such Trust assets are not
sufficient to pay all benefits due under the Plan, then the appropriate Participating Company shall
have the obligation, and the Participant or Beneficiary who is due such benefits shall look to such
Participating Company to provide such benefits.

     8.2 Trust.

          (a) Establishment. To the extent determined by the Controlling Company, the
Participating Companies shall transfer the funds necessary to fund benefits accrued hereunder to
the Trustee to be held and administered by the Trustee pursuant to the terms of the Trust
Agreement. Except as otherwise provided in the Trust Agreement, each transfer into the Trust Fund
shall be irrevocable as long as a Participating Company has any liability or obligations under the
Plan to pay benefits, such that the Trust property is in no way subject to use by the Participating
Company; provided, it is the intent of the Controlling Company that the assets held by the Trust
are and shall remain at all times subject to the claims of the general creditors of the
Participating Companies.

          (b) Distributions. Pursuant to the Trust Agreement, the Trustee shall make payments
to Plan Participants and Beneficiaries in accordance with a payment schedule provided by the
Participating Company. The Participating Company shall make provisions for the reporting and
withholding of any federal, state or local taxes that may be required to be withheld with respect
to the payment of benefits pursuant to the terms of the Plan and shall pay amounts withheld to the
appropriate taxing authorities or determine that such amounts have been reported, withheld and paid
by the Participating Company.

          (c) Status of the Trust. No Participant or Beneficiary shall have any interest in the
assets held by the Trust or in the general assets of the Participating Companies other than as a
general, unsecured creditor. Accordingly, a Participating Company shall not grant a security
interest in the assets held by the Trust in favor of the Participants, Beneficiaries or any
creditor.

          (d) Change in Control. Notwithstanding anything in this Article VIII to the contrary,
in the event of a Change in Control, each of the Participating Companies shall immediately transfer
to the Trustee an amount equal to the aggregate of all benefit amounts (determined as of the
Valuation Date as of which the Change in Control occurs) of all Participants for which such
Participating Company is liable for payment in accordance with the terms of Section 3.1(c). The
funds so transferred shall be held and administered by the Trustee pursuant to the terms of the
Trust Agreement and the foregoing provisions of this Section 8.2.

33

 

     8.3 Funding Prohibition under Certain Circumstances.

          Notwithstanding anything in this Article VIII to the contrary, no assets will be set aside to
fund benefits under the Plan if such setting aside would be treated as a transfer of property under
Code Section 83 pursuant to Code Section 409A(b).

34

 

ARTICLE IX

ADMINISTRATIVE COMMITTEE

     9.1 Action.

          Action of the Administrative Committee may be taken with or without a meeting of committee
members; provided, action shall be taken only upon the vote or other affirmative expression of a
majority of the committee members qualified to vote with respect to such action. If a member of
the committee is a Participant or Beneficiary, he shall not participate in any decision which
solely affects his own benefit under the Plan. For purposes of administering the Plan, the
Administrative Committee shall choose a secretary who shall keep minutes of the committee’s
proceedings and all records and documents pertaining to the administration of the Plan. The
secretary may execute any certificate or any other written direction on behalf of the
Administrative Committee.

     9.2 Rights and Duties.

          The Administrative Committee shall administer the Plan and shall have all the powers necessary
to accomplish that purpose, including (but not limited to) the following:

          (a) To construe, interpret and administer the Plan;

          (b) To make determinations required by the Plan, and to maintain records regarding
Participants’ and Beneficiaries’ benefits hereunder;

          (c) To compute and certify to the Participating Company the amount and kinds of benefits
payable to Participants and Beneficiaries, and to determine the time and manner in which such
benefits are to be paid;

          (d) To authorize all disbursements by the Participating Company pursuant to the Plan;

          (e) To maintain all the necessary records of the administration of the Plan;

          (f) To make and publish such rules for the regulation of the Plan as are not inconsistent with
the terms hereof;

          (g) To delegate to other individuals or entities from time to time the performance of any of
its duties or responsibilities hereunder;

          (h) To have all powers elsewhere conferred upon it; and

          (i) To hire agents, accountants, actuaries, consultants and legal counsel to assist in
operating and administering the Plan.

35

 

The Administrative Committee shall have the exclusive right in its discretion to construe and
interpret the Plan, to decide all questions of eligibility for benefits and to determine the amount
of such benefits, and its decisions on such matters shall be final and conclusive on all parties.

     9.3 Compensation, Indemnity and Liability.

          The Administrative Committee and its members shall serve as such without bond and without
compensation for services hereunder. All expenses of the Administrative Committee shall be paid by
the Participating Companies. No member of the committee shall be liable for any act or omission of
any other member of the committee, nor for any act or omission on his own part, except with regard
to his own willful misconduct. The Participating Companies shall indemnify and hold harmless the
Administrative Committee and each member thereof against any and all expenses and liabilities,
including reasonable legal fees and expenses, arising out of his membership on the Administrative
Committee, excepting only expenses and liabilities arising out of his own willful misconduct.

36

 

ARTICLE X

AMENDMENT AND TERMINATION

     10.1 Amendments.

          The Administrative Committee shall have the right, in its sole discretion, to amend the Plan
in whole or in part at any time and from time to time; provided, any amendment that may result in
significantly increased expenses under the Plan must be approved by the Compensation Committee.
Any amendment shall be in writing and executed by a duly authorized officer of the Controlling
Company. An amendment to the Plan may modify its terms in any respect whatsoever; provided, no
such action may reduce the amount already credited to a Participant’s Account without the affected
Participant’s written consent. All Participants and Beneficiaries shall be bound by such
amendment.

     10.2 Termination of Plan.

          (a) Freezing. The Controlling Company, through action of the Board or the
Compensation Committee, reserves the right to discontinue and freeze the Plan at any time, for any
reason. Any action to freeze the Plan shall be taken by the Board in the form of a written Plan
amendment executed by a duly authorized officer of the Controlling Company. Upon the freezing of
the Plan, Salary Deferral Elections and Annual Bonus Elections shall not apply to Base Salary or
Annual Bonuses earned after the Plan Year in which the Plan is frozen.

          (b) Termination. The Controlling Company expects to continue the Plan but reserves
the right to terminate the Plan and fully distribute all Accounts under the Plan at any time, for
any reason; provided, the distribution of Post-409A Accounts shall be subject to the restrictions
provided under Code Section 409A (including, to the extent required by Code Section 409A, the
6-month delay that applies to distributions to Key Employees following Separation from Service).
Any action to terminate the Plan shall be taken by the Board or the Compensation Committee in the
form of a written Plan amendment executed by a duly authorized officer of the Controlling Company.
If the Plan is terminated, each Participant shall become 100 percent vested in his Account. Such
termination shall be binding on all Participants and Beneficiaries.

37

 

ARTICLE XI

MISCELLANEOUS

     11.1 Beneficiary Designation.

          (a) General. Participants shall designate and from time to time may redesignate their
Beneficiaries in such form and manner as the Administrative Committee may determine.

          (b) No Designation or Designee Dead or Missing. In the event that:

          (i) a Participant dies without designating a Beneficiary;

          (ii) the Beneficiary designated by a Participant is not surviving when a payment is to
be made to such person under the Plan, and no contingent Beneficiary has been designated; or

          (iii) the Beneficiary designated by a Participant cannot be located by the
Administrative Committee within the maximum time limit for payment of benefits to such
person (or within 1 year from the date benefits are to be paid to such person in the case of
the Participant’s Pre-409A Account);

then, in any of such events, the Beneficiary of such Participant with respect to any benefits that
remain payable under the Plan shall be the Participant’s Surviving Spouse, if any, and if not, the
estate of the Participant.

     11.2 Distribution Pursuant to Domestic Relations Order.

          Upon receipt of a valid domestic relations order (determined in accordance with the rules
applicable to a tax-qualified retirement plan under Code Section 401(a)) requiring the distribution
of all or a portion of a Participant’s vested Account to an alternate payee, the Administrative
Committee shall cause the Controlling Company to pay a distribution to such alternate payee.

     11.3 Taxation.

          It is the intention of the Controlling Company that the benefits payable hereunder shall not
be deductible by the Participating Companies nor taxable for federal income tax purposes to
Participants or Beneficiaries until such benefits are paid by the Participating Company, or the
Trust, as the case may be, to such Participants or Beneficiaries. When such benefits are so paid,
it is the intention of the Controlling Company that they shall be deductible by the Participating
Companies under Code Section 162. The Plan is intended to satisfy the requirements of Code Section
409A with respect to Post-409A Accounts, and the Administrative Committee shall use its reasonable
best efforts to interpret and administer the Plan in accordance with such requirements.

38

 

     11.4 Elections Prior to 2009.

          To the extent not consistent with the terms of this Plan, Salary Deferral Election forms and
Annual Bonus Election forms submitted under the Plan prior to the Effective Date for Plan Years
beginning after December 31, 2004, shall be deemed modified to conform to the provisions of this
document. Without limiting the generality of the foregoing, (i) any reference to payment as soon
as administratively feasible following separation from service shall be deemed to mean within 90
days following separation from service; (ii) any statement that the election will remain in effect
for all future years until changed will be deemed modified to conform to subsection 3.2(b); (iii)
any statement that if payments are less than $10,000 annually they will be paid in a single lump
sum will be modified to provide for the cash-out distributions described in subsection 5.2(f)
instead; and (iv) any statement that benefits will be paid beginning on the first day of the
calendar quarter following Separation from Service will be deemed to provide for payment within 90
days after Separation from Service instead.

     11.5 No Employment Contract.

          Nothing herein contained is intended to be nor shall be construed as constituting a contract
or other arrangement between a Participating Company and any Participant to the effect that the
Participant will be employed by the Participating Company for any specific period of time.

     11.6 Headings.

          The headings of the various articles and sections in the Plan are solely for convenience and
shall not be relied upon in construing any provisions hereof. Any reference to a section shall
refer to a section of the Plan unless specified otherwise.

     11.7 Gender and Number.

          Use of any gender in the Plan will be deemed to include all genders when appropriate, and use
of the singular number will be deemed to include the plural when appropriate, and vice versa in
each instance.

     11.8 Assignment of Benefits.

          The right of a Participant or his Beneficiary to receive payments under the Plan may not be
anticipated, alienated, sold, transferred, pledged, encumbered, attached or garnished by creditors
of such Participant or Beneficiary, except: (i) by will or by the laws of descent and distribution
and then only to the extent permitted under the terms of the Plan; or (ii) pursuant to a valid
domestic relations order, in accordance with Section 11.2.

     11.9 Legally Incompetent.

          The Administrative Committee, in its sole discretion, may direct that payment be made to an
incompetent or disabled person, whether because of minority or mental or physical disability, to
the guardian of such person or to the person having custody of such person, without

39

 

further liability on the part of the Participating Company for the amount of such payment to
the person on whose account such payment is made.

     11.10 Governing Law.

          The Plan shall be construed, administered and governed in all respects in accordance with
applicable federal law (including ERISA) and, to the extent not preempted by federal law, in
accordance with the laws of the State of Georgia. If any provisions of this instrument are held by
a court of competent jurisdiction to be invalid or unenforceable, the remaining provisions hereof
shall continue to be fully effective.

     IN WITNESS WHEREOF, the Controlling Company has caused the Plan to be executed by its duly
authorized officer on the 23rd day of December, 2008.

	 	 	 	 	 	 	 
	 

	 	 	 	Aflac Incorporated	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Daniel P. Amos	 	 
	 

	 	 	 	 

Daniel P. Amos
	 	 
	 

	 	 	 	Chairman and Chief Executive Officer	 	 
	 
	 	 	 	 	 	 
	 

	 	Attest:
	 	/s/ Joey M. Loudermilk	 	 
	 

	 	 	 	 

Joey M. Loudermilk
	 	 
	 

	 	 	 	Corporate Secretary	 	 

40

 

EXHIBIT A

Participating Companies

(See §1.31)

	 	 	 
	Company Names	 	Effective Date
	Communicorp, Inc.

	 	Original Effective Date of the Plan
	 
	 	 
	American Family Life Assurance Company of New York

	 	Original Effective Date of the Plan
	 
	 	 
	AFLAC International, Inc.

	 	Original Effective Date of the Plan
	 
	 	 
	American Family Life Assurance Company of Columbus

	 	Original Effective Date of the Plan

A-1EX-10.11

Aflac
Incorporated 2008 Form 10-K

EXHIBIT 10.11

FIRST AMENDMENT

TO THE

AFLAC INCORPORATED

AMENDED AND RESTATED 2009 MANAGEMENT INCENTIVE PLAN

     THIS FIRST AMENDMENT to the Aflac Incorporated Amended and Restated 2009 Management Incentive
Plan (the “Plan”) is made on this 19th day of December, 2008, by Aflac Incorporated
(“Aflac”).

W I
T N E S S E T H :

     WHEREAS, Aflac maintains the Plan to provide incentives to its eligible officers and other
employees; and

     WHEREAS, Section 6(e) of the Plan authorizes the Board of Directors of Aflac (the “Board”) or
the Compensation Committee of the Board to amend the Plan; and

     WHEREAS, Aflac desires to amend the Plan to comply with the requirements of Section 409A of
the Internal Revenue Code of 1986, as amended, and all applicable regulations and guidance issued
thereunder (“Section 409A”); and

     WHEREAS, this First Amendment is intended to comply with the requirements of Section 409A and
is to be construed in accordance with the terms of Section 409A;

     NOW, THEREFORE, the Plan is hereby amended as follows, effective as of January 1, 2009:

	1.	 	Section 5 shall be amended by deleting the first sentence thereof and replacing it with the
following:

Awards granted pursuant to the 2009 MIP may, in the discretion of the Committee,
be evidenced by an Award Agreement in such form as the Committee shall from time
to time approve. The following terms shall apply to Awards whether or not
evidenced by an Award Agreement or other document.

	2.	 	The definition of “Change in Control,” commencing in the second paragraph of Section 6(f),
shall be deleted and replaced with the following:

For purposes of this Section 6(f), a “Change in Control” of Aflac shall occur upon
the happening of any of the events specified in (i), (ii), (iii) or (iv) below,
subject to the rules described in subsection (v) below:

     (i) Any one person, or more than one person acting as a group (as described
below), acquires ownership of stock of Aflac that, together with stock held by
such person or group constitutes more than 50 percent of the total fair market
value or total voting power of the stock of Aflac. However, if any one person, or
more than one person acting as a group, is considered to own more than 50 percent
of the total fair market value or total voting power of the stock of Aflac, the
acquisition of additional stock by the same person or persons is not considered to
cause a Change in Control. An increase in the percentage of stock owned by any
one person, or persons acting as a group, as a result of a transaction in which
Aflac

 

 

acquires its stock in exchange for property will be treated as an acquisition
of stock for purposes of this subsection. This subsection applies only when there
is a transfer of stock of Aflac (or issuance of stock of Aflac) and stock in Aflac
remains outstanding after the transaction.

     (ii) Any one person, or more than one person acting as a group, acquires (or
has acquired during the 12-month period ending on the date of the most recent
acquisition by such person or persons) ownership of stock of Aflac possessing 30
percent or more of the total voting power of the stock of Aflac. However, if any
one person, or more than one person acting as a group, is considered to own more
than 50 percent of the total fair market value or total voting power of the stock
of Aflac, the acquisition of additional stock by the same person or persons is not
considered to cause a Change in Control.

     (iii) A majority of members of Aflac’s board of directors is replaced during
any 12-month period by directors whose appointment or election is not endorsed by
a majority of the members of Aflac’s board of directors before the date of the
appointment or election.

     (iv) Any one person, or more than one person acting as a group acquires (or
has acquired during the 12-month period ending on the date of the most recent
acquisition by such person or persons) assets from Aflac that have a total gross
fair market value equal to or more than 40 percent of the total gross fair market
value of all of the assets of Aflac immediately before such acquisition or
acquisitions. For this purpose, gross fair market value means the value of the
assets of Aflac, or the value of the assets being disposed of, determined without
regard to any liabilities associated with such assets.

          (A) There is no Change in Control under this subsection (iv) when there is a
transfer to an entity that is controlled by the shareholders of Aflac immediately
after the transfer, as provided in this subsection. A transfer of assets by Aflac
is not treated as a change in the ownership of such assets if the assets are
transferred to:

               (1) A shareholder of Aflac (immediately before the asset transfer) in
exchange for or with respect to its stock;

               (2) An entity, 50 percent or more of the total value or voting power of which
is owned, directly or indirectly, by Aflac;

               (3) A person, or more than one person acting as a group, that owns, directly
or indirectly, 50 percent or more of the total value or voting power of all the
outstanding stock of Aflac; or

               (4) An entity, at least 50 percent of the total value or voting power of
which is owned, directly or indirectly, by a person described in subsection (3)
above.

          (B) For purposes of this subsection (iv) and except as otherwise provided in
Treasury Regulations, a person’s status is determined immediately after the
transfer of the assets. For example, a transfer to a company in which Aflac has
no ownership interest before the transaction, but that is a majority-owned
subsidiary of Aflac after the transaction, is not treated as a Change in Control.

2

 

     (v) Additional Rules.

          (A) Persons Acting as a Group. Persons will not be considered to be
acting as a group solely because they purchase assets of the same corporation at
the same time with respect to subsection (iv), or solely because they purchase or
own stock of the same corporation at the same time with respect to subsections
(i), (ii) and (iii). However, persons will be considered to be acting as a group
if they are owners of a corporation that enters into a merger, consolidation,
purchase or acquisition of assets (with respect to subsection (iv)) or stock (with
respect to subsections (i), (ii) and (iii)), or similar business transaction with
Aflac. If a person, including an entity shareholder, owns stock in both
corporations that enter into a merger, consolidation, purchase or acquisition of
assets (with respect to subsection (iv)) or stock (with respect to subsections
(i), (ii) and (iii)), or similar transaction, such shareholder is considered to be
acting as a group with other shareholders in a corporation only to the extent of
the ownership in that corporation before the transaction giving rise to the change
and not with respect to the ownership interest in the other corporation.

          (B) Attribution of Stock Ownership. For purposes of this section,
Code Section 318(a) applies to determine stock ownership. Stock underlying a
vested option is considered owned by the individual who holds the vested option
(and the stock underlying an unvested option is not considered owned by the
individual who holds the unvested option). For purposes of the preceding
sentence, however, if a vested option is exercisable for stock that is not
substantially vested (as defined by Treasury Regulations Section 1.83-3(b) and
(j)), the stock underlying the option is not treated as owned by the individual
who holds the option.

          (C) Acquisition of Additional Control. If any one person, or more than one
person acting as a group, is considered to effectively control Aflac (as
determined under subsections (ii) and (iii)), the acquisition of additional
control of Aflac by the same person or persons is not considered to cause a Change
in Control under subsections (i), (ii) or (iii).

3. Section 6(l) shall be amended by adding the following at the end thereof:

Awards and other grants or payments under the Plan shall be made, paid out and/or
modified in a manner intended to avoid resulting in the acceleration of taxation
(or the imposition of penalty taxation) under Section 409A upon a Participant.
Notwithstanding anything in the Plan to the contrary, with respect to any Awards
or other grants or payments that provide nonqualified deferred compensation
subject to Section 409A, no payment to a “specified employee” (as such term is
defined in Section 409A) upon separation from service (as such term is used in
Section 409A), to the extent required under Section 409A, shall be made before six
(6) months after the date on which the separation from service occurs. All
distributions under the Plan shall be made in the form of a single sum, unless
otherwise specified under the terms of the Plan or by the Committee at the time of
grant.

3

 

     IN WITNESS WHEREOF, Aflac has caused its duly authorized officer to execute this First
Amendment on the date first written above.

	 	 	 	 	 	 	 
	 

	 	 	 	Aflac Incorporated	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Daniel P. Amos
 

Daniel P. Amos
	 	 
	 

	 	 	 	Chairman and Chief Executive Officer	 	 
	 
	 	 	 	 	 	 
	 

	 	Attest:
	 	/s/ Joey M. Loudermilk	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Joey M. Loudermilk	 	 
	 

	 	 	 	Corporate Secretary	 	 

4

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