Document:

EX-10.7(5)

 Exhibit 10.7(5) 

UPS LONG-TERM INCENTIVE PERFORMANCE PROGRAM 
 Terms and Conditions 
  

	1.	Establishment, Objectives and Duration. 

  

	 	1.1	Establishment of the Program and Effective Date. The Compensation Committee of the Board of Directors of United Parcel Service, Inc. (“Committee”)
hereby establishes this Long-Term Incentive Performance Program (“LTIP”) to provide for LTIP Awards in the form of RPUs pursuant to Article 9 of the United Parcel Service, Inc. 2009 Omnibus Incentive Compensation Plan, as amended from time
to time, and any successor plan (“ICP”). This document sets forth the rules under which LTIP Awards shall be made and administered. Capitalized terms shall have the meanings set forth in the ICP or in Section 9 herein.

 The LTIP shall be effective as of January 1, 2012 (“LTIP Effective Date”). 

 

	 	1.2	Objectives of the LTIP. The objectives of LTIP are to promote continuity in management and provide incentives to key managers. 

 

	 	1.3	Duration of the Program. The LTIP shall commence on the LTIP Effective Date and shall remain in effect, subject to the right of the Committee to amend or
terminate the LTIP at any time pursuant to Section 8.3 hereof. 

  

	2.	Administration. 

  

	 	2.1	Authority of the Committee. The LTIP will be administered by the Committee, which shall have the same power and authority to administer the LTIP as it does to
administer the ICP. 

  

	 	2.2	Decisions Binding. All decisions of the Committee shall be final, conclusive and binding on all persons, including the Company, its stockholders, any Eligible
Employee, and their estates and beneficiaries. 

  

	3.	Eligibility for Awards. Only an Eligible Employee shall be eligible to be considered for an LTIP Award. The UPS Salary Committee shall have broad discretion to
determine the eligibility criteria for Eligible Employees. The receipt of an LTIP Award in any year does not entitle an individual to an award in any subsequent year. 

 

	4.	LTIP Awards. The UPS Salary Committee makes a recommendation as to the LTIP awards to be granted to Eligible Employees, based primarily on the recommendation of
their district, region and corporate group managers. The Committee will make the grant of LTIP Awards based on the recommendations of the UPS Salary Committee. 

 

	 	4.1	Target LTIP Award Percentage. An Eligible Employee’s Target LTIP Award Percentage is determined by the Committee based on his or her level of management as
of the Grant Date. 

	 	4.2	Form of Award. A LTIP Award shall be made in the form of RPUs pursuant to Article 9 of the ICP. The target number of RPUs is based on the product of the Target
LTIP Award Percentage and the Eligible Employee’s Annualized Base Salary divided by the Fair Market Value of a Share on the Grant Date. The total target number of RPUs may be divided into one or more Performance Measurement Tranches.

  

	 	4.3	Performance Measurement Tranches.  

  

	 	4.3.1	General. When an Eligible Employee receives an LTIP Award, he or she shall receive an LTIP Award Document that sets forth the target number of RPUs for the
entire LTIP Cycle, the target number of RPUs for each Performance Measurement Tranche and such other terms and conditions as the Committee shall determine. The number of RPUs actually earned for each Performance Measurement Tranche shall be
determined after the end of the relevant performance period based on the achievement of specific performance targets, including, if applicable, a Performance Target Matrix, established for that period by the Committee in accordance with
Section 5.1. The Committee may use the same or different performance targets and matrixes for each Performance Measurement Tranche in an LTIP Cycle. For example, the performance goal for one or more Performance Measurement Tranches could be
growth in consolidated revenues and consolidated operating return on invested capital while the performance goal for another Performance Measurement Tranche in the same LTIP Cycle could be based on earnings per share. Performance targets or matrixes
shall be attached to the LTIP Award Documents or otherwise provided to Eligible Employees. 

  

	 	4.3.2	Award Determination. For each Performance Measurement Tranche, the Committee shall review and approve the extent to which the pre-established performance targets
have been achieved as described in Section 5.2. One-hundred percent (100%) of the target number of RPUs for the Performance Measurement Tranche shall be credited to an Eligible Employee’s LTIP Account upon 100% achievement of the
performance targets for the Performance Measurement Tranche. In establishing the performance targets and matrixes in accordance with Section 5.1, the Committee also may authorize payment of a percentage less than or more than 100% of the target
number of RPUs for the Performance Measurement Tranche based on achievement of performance targets at a percentage less than or more than, respectively, 100%. 

 

	 	4.3.3	DEUs. An Eligible Employee’s LTIP Account will be promptly credited with DEUs attributable to the RPUs that have been credited to his or her LTIP Account.

  
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	 	4.4	Maximum Individual Award. The aggregate payout with respect to an LTIP Award shall not exceed the limitations of Section 4.1 of the ICP.

  

	5.	Satisfaction of Internal Revenue Code Section 162(m) for Performance Incentive Award for Management Committee Eligible Employees. LTIP Awards are intended
to satisfy the Performance-Based Exception in order to maximize the deductibility of awards made to “covered employees” within the meaning of Code Section 162(m). 

 

	 	5.1	 Performance Goals and Maximum Award. In accordance with Sections 11.2 and 11.3 of the ICP and no later than the 90th day of each Plan Year, the Committee shall establish the specific
performance goals and matrixes described in Sections 4.3.2 and 4.4.2 that are required to be achieved for payment of LTIP Awards for such Plan Year. 

  

	 	5.2	Committee Certification. In accordance with Section 11.4 of the ICP, after the Form 10-K has been filed for the applicable Plan Year, the Committee shall
determine and certify in writing prior to the payment of any portion of LTIP Award to an Eligible Employee (i) that the specific performance goals and any other material terms applicable to the LTIP Awards have been satisfied for the Plan Year
and (ii) the amount of the LTIP Award for each Eligible Employee. If the performance goals and other material terms applicable to LTIP Awards are not satisfied, no LTIP Awards shall be paid to Eligible Employees. 

 

	6.	Vesting. 

  

	 	6.1	General. The RPUs and DEUs credited to an Eligible Employee’s LTIP Account during the LTIP Cycle shall vest on the Vesting Date for such LTIP Cycle,
provided that the Eligible Employee is continuously employed by UPS or a subsidiary during the LTIP Cycle and through such Vesting Date. The benefit payable to the Eligible Employee shall be based entirely on the number of vested RPUs and DEUs
credited to his or her LTIP Account at the time the LTIP Award becomes payable. 

  

	 	6.2	Demotion. If an Eligible Employee is demoted before the Vesting Date for an LTIP Cycle to a position that would have been ineligible to receive an LTIP Award, he
or she shall forfeit any right to RPUs or DEUs for the Performance Measurement Tranche for the year in which the demotion occurs and for any Performance Measurement Tranche commencing after the demotion. The Eligible Employee shall retain any RPUs
and DEUs credited to his or her LTIP Account prior to the demotion, subject to satisfaction of Section 6.1. 

  

	 	6.3	 Termination of Employment. If an Eligible Employee’s employment terminates by reason of his or her death, Disability or Retirement before
the Vesting Date, he or she immediately shall vest in any RPUs and DEUs for a Performance Measurement Tranche that was completed prior to the termination, and he or she shall forfeit any right to RPUs or DEUs for the Performance Measurement Tranche
for the year in which the termination occurs and for any Performance 

  
 3 

	 	
Measurement Tranche commencing after the termination. Further, if an Eligible Employee terminates employment before the applicable Vesting Date for any reason other than death, Disability or
Retirement, he or she shall forfeit the LTIP Award in its entirety. 

  

	7.	Payment of Awards. 

  

	 	7.1.1	Form and Timing. Shares attributable to vested RPUs and DEUs credited to his or her LTIP account shall be transferred to the Eligible Employee (or his or her
estate in the event of death) at the following time: 

  

	 	(A)	If the Eligible Employee is employed on the Vesting Date, during the calendar quarter that includes the applicable Vesting Date; 

 

	 	(B)	If the Eligible Employee terminates employment prior to the applicable Vesting Date as a result of death, no later than 90 days after the date of his or her death; and

  

	 	(C)	If the Eligible Employee terminates employment prior to the applicable Vesting Date as a result of Disability or Retirement, during the calendar quarter that includes
the applicable Vesting Date and at the same time as shares are transferred to an Eligible Employee employed on the Vesting Date under (A) above as if the former Eligible Employee had continued to be employed by the Company or an Affiliate
through such Vesting Date. 

  

	 	7.2	Tax Withholding. LTIP Awards shall be reduced for applicable taxes, or the Eligible Employee shall remit taxes in accordance with Article 15 of the ICP.

  

	8.	Miscellaneous. 

  

	 	8.1	Awards Subject to the Terms of the ICP. LTIP Awards are subject to the terms of the ICP. 

 

	 	8.2	Section 409A Compliance. Each LTIP Award is intended either to be exempt from Section 409A or to comply with Section 409A. To the extent that
benefits provided under an LTIP Award constitute deferred compensation for purposes of Section 409A and to the extent that deferred compensation is payable upon a “separation from service” as defined in Section 409A, then if the
Eligible Employee is a “specified employee” within the meaning of Section 409A(a)(2)(B)(i) of the Code, to the minimum extent required by Section 409A of the Code, no amount of deferred compensation shall be paid or transferred
to the Eligible Employee as a result of the Eligible Employee’s separation from service until the date which is the earlier of (i) the expiration of the six month and one day period measured from the date of the Eligible Employee’s
separation from service or (ii) the date of the Eligible Employee’s death (the “Delay Period”). All amounts subject to the Delay Period shall be transferred to the Eligible Employee promptly after the Delay Period.

  
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	 	8.3	Amendment and Termination. The Committee may amend, alter, suspend or terminate the LTIP and any LTIP Award at any time subject to the terms of the ICP. Any such
amendment shall be in writing signed by a majority of the members of the Committee. The UPS Salary Committee may make administrative amendments to the LTIP from time to time; provided, however, that any such amendment shall be in writing, signed by
all members of the UPS Salary Committee and a copy of any such amendment shall be reviewed with the Committee and kept with the records of the LTIP. 

  

	9.	Definitions. Except as set forth below, capitalized terms shall have the meanings set forth in the ICP. 

 

	 	9.1	Annualized Base Salary. An Eligible Employee’s rate of pay for a single fixed pay installment determined as of the Grant Date multiplied by the number of
mandatory fixed pay installments for the Plan Year. 

  

	 	9.2	Committee. The Committee as defined in Section 1.1. 

  

	 	9.3	Company. United Parcel Service, Inc. 

  

	 	9.4	DEUs. Dividend equivalent units for dividends paid on a share of UPS class A common stock determined as follows: 

 

	 	9.4.1	(a) in the case of Share dividends, by multiplying the per Share dividend by the number of RPUs and DEUs credited to the Eligible Employee’s account prior
to the adjustment for the dividend; and 

  

	 	9.4.2	(b) in the case of a cash dividend or non-Share property dividend, by (i) multiplying the cash dividend paid per Share or the fair market value of the property
transferred per Share by the number of RPUs and DEUs credited to the Eligible Employee’s account prior to adjustment for the dividend and (ii) dividing the product obtained in (i) by the closing price on the NYSE of UPS Class B common
stock on the last full trading day before the dividend is paid. 

 Each DEU shall have a value equal to one share
of UPS class A common stock. 
  

	 	9.5	Disability. Disability as defined in the Company’s long-term disability plan, or if no such plan exists, as determined by the Committee in its discretion.

  

	 	9.6	Eligible Employee. For each Plan Year, an Employee who is classified at the region staff manager level or another level having equivalent or greater
responsibilities and satisfies such other eligibility criteria as may be developed from time to time by the UPS Salary Committee. 

  

	 	9.7	Grant Date. The date as of which an LTIP Award is granted, as shown on the Award Document for such LTIP Award. 

  
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	 	9.8	ICP. The United Parcel Service, Inc. 2009 Omnibus Incentive Compensation Plan, as amended from time to time or any successor plan and any reference to a
particular section of the ICP shall include a reference to the comparable section (as determined by the Committee) of the successor plan. 

  

	 	9.9	LTIP. The Long-Term Incentive Performance Program, as amended from time to time. 

 

	 	9.10	LTIP Account. A bookkeeping account maintained to keep track of the LTIP Award and any adjustments made to such award. 

 

	 	9.11	LTIP Award. The award described in Section 4.1. 

  

	 	9.12	LTIP Cycle. A cycle of at least three Plan Years as determined by the Committee. For example, the 2012 LTIP Cycle begins on January 1, 2012 and ends no
earlier than December 31, 2014 and the 2013 LTIP Cycle begins on January 1, 2013, and ends no earlier than December 31, 2015. 

  

	 	9.13	LTIP Effective Date. The date described in Section 1.1. 

  

	 	9.14	NYSE. The New York Stock Exchange. 

  

	 	9.15	Performance Measurement Tranche. A Performance Measurement Tranche described in Section 4.3.1. 

 

	 	9.16	Performance Target Matrix. A Performance Target Matrix described in Section 4.3.1. 

 

	 	9.17	Plan Year. The calendar year, January 1 - December 31. 

  

	 	9.18	RPU. A Restricted Performance Unit, which is a bookkeeping unit, the value of which corresponds to one share of UPS Class A common stock.

  

	 	9.19	Target LTIP Award Percentage. The percentage described in Section 4.1. 

 

	 	9.20	UPS Salary Committee. The Salary Committee of United Parcel Service, Inc. 

 

	 	9.21	Vesting Date. January 31 immediately following the end of the LTIP Cycle. For example, January 31, 2015 is the Vesting Date for the 2012 LTIP Cycle if
that cycle is three Plan Years. 

  
 6EX-10.1

 EXHIBIT 10.1 

TORCHMARK CORPORATION 
 PERFORMANCE SHARE AWARD CERTIFICATE 
 Non-transferable 

G R A N T     T O 
  

 

(“Grantee”) 
 by Torchmark Corporation (the “Company”) of Performance Shares (the “Performance Shares”) representing the right to earn, on a one-for-one basis, shares of the Company’s Common
Stock, $1.00 par value (“Stock”), pursuant to and subject to the provisions of the Torchmark Corporation 2011 Incentive Plan (the “Plan”) and to the terms and conditions set forth on the following pages of this award certificate
(this “Certificate”). 
 The target number of Performance Shares subject to this award is
             (the “Target Award”). Depending on the Company’s level of attainment of specified targets for earnings per share, underwriting income, and return on
equity for fiscal years 2012, 2013, and 2014, Grantee may earn 0% to 200% of the Target Award, in accordance with the matrices attached hereto as Exhibit A and the terms of this Certificate. 

By accepting this Award, Grantee shall be deemed to have agreed to the terms and conditions of this Certificate and the Plan. 

IN WITNESS WHEREOF, Torchmark Corporation, acting by and through its duly authorized officers, has caused this Certificate to be
executed. 
  

											
	 TORCHMARK CORPORATION
	 		 	 Grant Date:
	 	
						
	  By:
	 	  
	 		 	 Accepted by Grantee:
	 	  
	 	
	  Its:
	 	 Authorized Officer
	 		 		 		 	

 TERMS AND CONDITIONS 
 1.     Defined Terms. Capitalized terms used herein and not otherwise defined shall have the meanings assigned to such terms in the Plan. In addition, for purposes of this
Certificate: 
 (i) “Confirmation Date” the date of the Committee’s certification
of achievement of the Performance Objectives and determination of the Performance Multiplier following the end of the Performance Period. 
 (ii) “Early Retirement” means resignation or termination of employment without Cause from the Company at or after age 60 and before age 65. 

(iii) “Normal Retirement” means resignation or termination of employment without Cause from the
Company at or after age 65. 
 (ii) “Performance Multiplier” means the percentage, from
0% to 200%, that will be applied to the Target Award to determine the number of Performance Shares that will convert to shares of Stock on the Conversion Date, as more fully described in Exhibit A hereto. 

(iii) “Performance Objectives” are the performance objectives relating to Earnings per Share,
Underwriting Income, and Return on Equity set forth on Exhibit A that must be achieved in order for any Performance Shares to be earned by Grantee pursuant to this Award. 

(iv) “Performance Period” means the three-year period commencing on January 1, 2012 and
ending on December 31, 2014. 
 (v)  “Prorated Target Award” means, in
the case of Grantee’s Early Retirement prior to the Vesting Date, a specified percentage of the Target Award, as follows: 
  

			
	Age at Early Retirement	 	Prorated Target 
Award
	60	 	10% of Target Award
	61	 	20% of Target Award
	62	 	40% of Target Award
	63	 	60% of Target Award
	64	 	80% of Target Award

 (vi) “Vesting Date” is defined in Section 3 of this Agreement.

 2.     Earning and Vesting of Performance Shares.    The Performance
Shares have been credited to a bookkeeping account on behalf of Grantee and do not represent actual Shares of Common Stock. The Performance Shares represent the right to earn up to 200% of the Target Award (or the Prorated Target Award, in the event
of Grantee’s Early Retirement prior to the Vesting Date), based on (i) the Company’s attainment of the Performance Objectives and the application of the Performance Multiplier to the Target Award in accordance with Exhibit A.
Notwithstanding the foregoing, in the event of Grantee’s death or Disability during the Performance Period, Grantee shall be deemed to have earned 100% of the Target Award upon such

 
event (without application of any Performance Multiplier). In addition, notwithstanding the foregoing or anything in the Plan to the contrary, upon a Change in Control of the Company in which the
Performance Shares are not assumed by the Surviving Entity or otherwise equitably converted or substituted in connection with the Change in Control in a manner approved by the Committee or the Board, Grantee shall be deemed to have earned 100% of
the Target Award upon such event (without application of any Performance Multiplier), and there shall be a prorata payout to Grantee within thirty (30) days following the Change in Control, based upon the length of time within the Performance
Period that has elapsed prior to the Change in Control. Further, upon a Change in Control of the Company in which the Performance Shares are assumed by the Surviving Entity or otherwise equitably converted or substituted in connection with the
Change in Control, if within two years after the effective date of the Change in Control, Grantee’s employment is terminated without Cause or Grantee resigns for Good Reason, Grantee shall be deemed to have earned 100% of the Target Award as of
the date of termination (without application of any Performance Multiplier), and there shall be a prorata payout to Grantee within thirty (30) days following the date of termination, based upon the length of time within the Performance Period that
has elapsed prior to the date of termination. 
 Any earned Performance Shares will vest and become non-forfeitable on the
earliest to occur of the following (the “Vesting Date”): 
  

	 	(a)	 the Confirmation Date, provided either (i) Grantee has continued in the employment of the Company or its Affiliates through such date or
(ii) Grantee’s employment with the Company has terminated due to Grantee’s Normal Retirement or Early Retirement, or 

  

	 	(b)	 the termination of Grantee’s employment due to death or Disability, or 

 

	 	(c)	 a Change in Control of the Company. 

 In the event Grantee’s employment terminates for any reason other than as described above at any time prior to the applicable Vesting Date, all of Grantee’s Performance Units will immediately be
forfeited to the Company without further consideration or any act or action by Grantee. 

3.     Conversion to Stock.    Any earned and vested Performance Shares will be
converted to actual unrestricted shares of Stock (one share per vested Performance Share) within thirty (30) days following the Vesting Date (and in no event later than March 15, 2015). These shares will be registered on the books of the
Company in Grantee’s name as of the Conversion Date and stock certificates for the Stock shall be delivered to Grantee or Grantee’s designee upon request of the Grantee. Any Performance Shares that fail to vest in accordance with the terms
of this Certificate will be forfeited and reconveyed to the Company without further consideration or any act or action by Grantee. 
 5.     Restrictions on Transfer and Pledge.    No right or interest of Grantee in the Performance Shares may be pledged, encumbered, or hypothecated or
be made subject 

 

 
to any lien, obligation, or liability of Grantee to any other party other than the Company or an Affiliate. The Performance Shares may not be sold, assigned, transferred or otherwise disposed of
by Grantee other than by will or the laws of descent and distribution. 
 6.     Restrictions on
Issuance of Stock.  If at any time the Committee shall determine, in its discretion, that registration, listing or qualification of the Stock underlying the Performance Shares upon any securities exchange or similar self-regulatory
organization or under any foreign, federal, or local law or practice, or the consent or approval of any governmental regulatory body, is necessary or desirable as a condition to the settlement of the Performance Shares, stock units will not be
converted to Stock in whole or in part unless and until such registration, listing, qualification, consent or approval shall have been effected or obtained free of any conditions not acceptable to the Committee. 

7.     Limitation of Rights.    The Performance Shares do not confer to Grantee or
Grantee’s beneficiary, executors or administrators any rights of a shareholder of the Company unless and until shares are in fact issued to such person in connection with the units. Nothing in this Certificate shall interfere with or limit in
any way the right of the Company or any Affiliate to terminate Grantee’s employment at any time, nor confer upon Grantee any right to continue in employment of the Company or any Affiliate. 

8.     No Entitlement to Future Awards.    The grant of the Performance Shares does
not entitle Grantee to the grant of any additional units or other awards under the Plan in the future. Future grants, if any, will be at the sole discretion of the Company, including, but not limited to, the timing of any grant, the number of units,
and vesting provisions. 
 9.     Payment of Taxes.    The Company or any
Affiliate employing Grantee has the authority and the right to deduct or withhold, or require Grantee to remit to the employer, an amount sufficient to satisfy federal, state, and local taxes (including Grantee’s FICA obligation) required by
law to be withheld with respect to any taxable event arising as a result of the vesting or settlement of the Performance Shares. With respect to withholding required upon any taxable event arising as a result of the Performance Awards, the employer
may satisfy the tax withholding requirement by withholding shares of Stock having a Fair Market Value as of the date that the amount of tax to be withheld is to be determined as nearly equal as possible to (but no more than) the total minimum
statutory tax required to be withheld The obligations of the Company under this Agreement will be conditional on such payment or arrangements, and the Company, and, where applicable, its Affiliates will, to the extent permitted by law, have the
right to deduct any such taxes from any payment of any kind otherwise due to Grantee.

 10.    Recoupment. Any shares of Stock issued upon conversion of
the Performance Shares shall be subject to forfeiture and recoupment by the Company based on a later determination that the vesting of such Performance Shares was based on materially inaccurate financial statements or any other materially inaccurate
performance metric criteria, whether or not the Participant caused or contributed to such material inaccurancy. 

11.    Amendment.  Subject to the terms of the Plan, the Committee may amend, modify or terminate
this Certificate without approval of Grantee; provided, however, that such amendment, modification or termination shall not, without Grantee’s consent, reduce or diminish the value of this award determined as if it had been fully vested (i.e.,
as if all restrictions on the Performance Shares hereunder had expired) on the date of such amendment or termination. Notwithstanding the foregoing, Grantee hereby expressly agrees to any amendment to the Plan and this Agreement to the extent
necessary to comply with applicable law or changes to applicable law (including, but not limited to, Code Section 409A) and related regulations or other guidance and federal securities laws. 

12.    Plan Controls.    The terms contained in the Plan shall be and are hereby
incorporated into and made a part of this Certificate and this Certificate shall be governed by and construed in accordance with the Plan. Without limiting the foregoing, the terms and conditions of the Performance Shares, including the number of
shares and the class or series of capital stock which may be delivered upon settlement of the Performance Shares, are subject to adjustment as provided in Article 15 of the Plan. In the event of any actual or alleged conflict between the provisions
of the Plan and the provisions of this Certificate, the provisions of the Plan shall be controlling and determinative. Any conflict between this Certificate and the terms of a written employment with Grantee that has been approved, ratified or
confirmed by the Committee shall be decided in favor of the provisions of such employment agreement. 

13.    Governing Law.    This Certificate shall be construed in accordance with and
governed by the laws of the State of Delaware, United States of America, regardless of the law that might be applied under principles of conflict of laws. 
 14.    Severability.  If any one or more of the provisions contained in this Certificate is deemed to be invalid, illegal or unenforceable, the other provisions of
this Certificate will be construed and enforced as if the invalid, illegal or unenforceable provision had never been included. 

15.    Relationship to Other Benefits.    The Performance Shares shall not affect the
calculation of benefits under any other compensation plan or program of the Company, except to the extent specially provided in such other plan or program. 
 16.    Notice.    Notices and communications hereunder must be in writing and either personally delivered or sent by registered or certified United States
mail, return receipt requested, postage prepaid. Notices to the Company must be addressed to Torchmark Corporation., 3700 South Stonebridge Drive, McKinney, Texas 75070, Attn: Secretary, or any other address designated by the Company in a written
notice to Grantee. Notices to Grantee will be directed to the address of Grantee then currently on file with the Company, or at any other address given by Grantee in a written notice to the Company.

 

  

			
		  	

 Page 4 of 4 

 

 EXHIBIT A 

The Performance Shares will be earned, in whole or in part, based on the Company’s achievement of Performance
Objectives relating to Earnings per Share, Underwriting Income, and Return on Equity (each as defined below). 
  

															
	 	  	 	  	Performance Goals / Percent Earned	 	Actual 	  	Performance	  	 Weighted

 Performance

	
Performance Measure
	  	 Weighting 	  	
    Threshold    

50%
	  	
    Target    
 100%
	  	
    Maximum    

200%
	 	  Performance  	  	Multiplier Earned1	  	Multiplier Earned2
	 	 	 		 	 		 
	 Cumulative EPS 3

  
	  	 40%

 
	  	 $        

 
	  	 $        

 
	  	 $        

 
	 	 	  		  	 
	 	 	 	 	 	 	 	 
	
Underwriting Income 4
  ($million) 

 
	  	 30%

 
	  	
$        
  
	  	 $        

 
	  	 $        

 
	 	 	  	 	  	 
	 	 	 		 	 		 
	 Return on Equity 5

	  	 30%
	  	         %
	  	         %
	  	         %
	 	 	  		  	 
	 	  	 	  	 	  	 	  	 	 	 	  	 	  	 
		  		  		  		  		 	  
 Performance Multiplier6
	  	 
		  		  		  		  		 		  	 

  
  

	1 	 Performance below the Threshold level results in 0% earned. All other percentages earned are determined by pro-ration between the appropriate
Performance Goals. 

  

	2 	 Performance Multiplier for the Performance Measure multiplied by the Weighting assigned to that Performance Measure 

 

	3 	 “Earning per Share” means the cumulative sum of “total diluted net income per share,” as reported in the Company’s
Consolidated Statements of Operations for each fiscal year in the Performance Period. 

  

	4 	 “Underwriting Income” means the cumulative sum of the insurance underwriting margins of the life, health and annuity segments, plus other
income, less insurance administrative expenses (excluding the investment segment, parent company expense and income taxes) for each fiscal year during the Performance Period.  

 

	5 	 “Return on Equity” means average of return on equity on a GAAP basis earned for the three-year Performance Period. Thus if the ROE earned
for 2012, 2013 and 2014 were 14%, 15% and 16% respectively, average ROE would be 15%. 

  

	6 	 Total of the Weighted Performance Multiplier Earned

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