AFLAC INC — Proxy Solicitation & Information Statement 1999

Mar 16, 1999

NOTICE AND PROXY STATEMENT AFLAC INCORPORATED WORLDWIDE HEADQUARTERS 1932 WYNNTON ROAD COLUMBUS, GEORGIA 31999 NOTICE OF ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON MONDAY, MAY 3, 1999 The Annual Meeting of Shareholders of AFLAC Incorporated (the "Company") will be held on Monday, May 3, 1999, at 10:00 a.m. at the Columbus Museum (in the Patrick Theatre), 1251 Wynnton Road, Columbus, Georgia, for the following purposes, all of which are described in the accompanying Proxy Statement: 1. To elect seventeen Directors of the Company to serve until the next Annual Meeting and until their successors are duly elected and qualified; 2. To consider and adopt an Amended and Restated Management Incentive Plan; 3. To consider and act upon the ratification of the appointment of KPMG LLP as independent auditors of the Company for the year ending December 31, 1999; and 4. To transact such other business as may properly come before the meeting or any adjournment thereof. The accompanying proxy is solicited by the Board of Directors of the Company. The Proxy Statement and the Company's Annual Report for the year ended December 31, 1998, are enclosed. The record date for the determination of shareholders entitled to vote at the meeting is February 23, 1999, and only shareholders of record at the close of business on that date will be entitled to vote at this meeting, and any adjournment thereof. YOUR VOTE IS IMPORTANT! WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING, PLEASE MARK, SIGN, DATE AND RETURN THE ENCLOSED PROXY PROMPTLY IN THE ENCLOSED PREPAID ENVELOPE SO THAT WE MAY BE ASSURED OF A QUORUM TO TRANSACT BUSINESS. IF YOU ATTEND THE MEETING, YOU MAY REVOKE YOUR PROXY AND VOTE IN PERSON. By order of the Board of Directors, /s/Joey M. Loudermilk ---------------------------------- Columbus, Georgia Joey M. Loudermilk March 11, 1999 Secretary 1 AFLAC INCORPORATED PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS TO BE HELD MONDAY, MAY 3, 1999 SOLICITATION AND REVOCATION OF PROXY This Proxy Statement is furnished to shareholders in connection with the solicitation of proxies by the Board of Directors of AFLAC Incorporated (the "Company") for use at the Annual Meeting of Shareholders to be held on Monday, May 3, 1999, and any adjournment thereof, for the purposes set forth in the accompanying Notice of Annual Meeting of Shareholders and described in detail herein. The meeting will be held at 10:00 a.m. at the Columbus Museum (in the Patrick Theatre), 1251 Wynnton Road, Columbus, Georgia. All properly executed proxies will be voted in accordance with the instructions contained thereon, and if no choice is specified, the proxies will be voted FOR the election of all nominees named elsewhere in this Proxy Statement and FOR approval of each other proposal set forth in the Notice of Meeting. Any proxy may be revoked by the shareholder at any time before it is exercised by giving written notice to that effect to the Secretary of the Company or by signing a later-dated proxy. Shareholders who attend the meeting may revoke any proxy previously granted and vote in person. This Proxy Statement and the accompanying proxy are being mailed to the shareholders on or about March 17, 1999. SOLICITATION OF PROXIES The cost of soliciting proxies will be paid by the Company. The Company will make arrangements with brokerage firms, custodians and other fiduciaries to send proxy materials to their principals, and the Company will reimburse them for their mailing and related expenses. In addition to solicitation by mail, certain officers and other employees of the Company, who will receive no compensation for their services other than their regular compensation, may solicit proxies by telephone and by personal contacts. In addition, the Company has retained Corporate Investor Communications, Inc. to assist in the solicitation of proxies for a fee of $8,500, plus reimbursement of reasonable out-of-pocket expenses. DESCRIPTION OF VOTING RIGHTS In accordance with the Company's Articles of Incorporation, shares of the Company's Common Stock, par value $.10 per share (the "Common Stock"), are entitled to one vote per share until they have been held by the same beneficial owner for a continuous period of greater than 48 months prior to the record date of the meeting, at which time they become entitled to 10 votes per share. Any transferee of a share of Common Stock where such share was transferred to the transferee by gift, devise or bequest, or otherwise through the laws of inheritance, descent or distribution from the estate of the transferor, or by distribution to a beneficiary of shares held in trust for such beneficiary, is deemed to be the same beneficial owner as the transferor. Shares acquired as a direct result of a stock split, stock dividend or other distribution with respect to existing shares ("dividend 2 shares") are deemed to have been acquired and held continuously from the date on which the shares with regard to which the issued dividend shares were acquired. Shares of Common Stock acquired pursuant to the exercise of a stock option are deemed to have been acquired on the date the option was granted. Shares of Common Stock held in "street" or "nominee" name are presumed to have been held for less than 48 months and are entitled to one vote per share unless this presumption is rebutted by providing evidence to the contrary to the Board of Directors of the Company. Shareholders desiring to rebut this presumption should complete and execute the affidavit appearing on the reverse side of their proxy. The Board of Directors reserves the right to require evidence to support the affidavit. VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF Holders of record of Common Stock at the close of business on February 23, 1999, will be entitled to vote at the meeting. At that date, the number of outstanding shares of Common Stock entitled to vote was 266,111,059. According to the Company's records, this represents the following voting rights: 219,695,360 Shares @ 1 Vote Per Share = 219,695,360 Votes 46,415,699 Shares @ 10 Votes Per Share = 464,156,990 Votes ----------- ----------- 266,111,059 Shares Total 683,852,350 Votes Shareholders with one vote per share shown above can rebut the presumption that they are entitled to only one vote as outlined in "Description of Voting Rights" above. If all of the outstanding shares were entitled to 10 votes per share, the total votes available would be 2,661,110,590. However, for the purposes of this Proxy Statement, it is assumed that the total votes available to be cast at the meeting will be 683,852,350. The holders of a majority of the voting rights entitled to vote at the meeting, present in person or represented by proxy, shall constitute a quorum for the transaction of such business as shall come before the meeting. Directors are elected by an affirmative vote of a plurality of voting rights cast. In the case of the election of directors, under applicable Georgia law, in tabulating the vote, votes withheld will be disregarded and will have no effect on the outcome of the vote. Approval of all other matters to be considered at the meeting requires the affirmative vote of holders of a majority of the voting rights present in person or represented by proxy at the meeting. Broker-non-votes and abstentions are counted as "shares present" at the meeting in determining whether a quorum exists. Broker-non-votes, if any, have the effect of a vote to withhold authority in connection with the election of directors while broker-non- votes, if any, and abstentions have the effect of a vote against other proposals at the meeting. No person, as of February 23, 1999, was the owner of record or, to the knowledge of the Company, beneficially owned 5% or more of the outstanding shares of Common Stock or of the available votes of the Company other than as shown below: 3 PERCENT NAME AND PER- OF ADDRESS OF AMOUNT OF CENT AVAIL- BENEFICIAL TITLE OF CLASS BENEFICIAL OWNERSHIP OF ABLE OWNER COMMON STOCK SHARES VOTES CLASS VOTES - ---------- -------------- ---------- --------- ----- ------ Oppenheimer Capital 1 Vote Per Share 26,664,302 26,664,302 10.0 3.9 Oppenheimer Tower World Financial Center New York, NY 10281 FMR Corp. 1 Vote Per Share 16,641,594 16,641,594 6.3 2.4 82 Devonshire Street Boston, MA 02109 Daniel P. Amos 10 Votes Per Share 4,299,059 42,990,590 1932 Wynnton Road 1 Vote Per Share 625,666 625,666 Columbus, GA 31999 --------- ---------- 4,924,725 43,616,256 1.8 6.3 () This information is derived from Schedule 13G, dated February 9, 1999, filed with the Securities and Exchange Commission by Oppenheimer Capital, a Delaware general partnership. Includes shares held by certain investment advisory clients and discretionary accounts of Oppenheimer Capital. (**) This information is derived from Schedule 13G, dated February 1, 1999, filed with the Securities and Exchange Commission by FMR Corp. According to the Schedule 13G, FMR Corp. may be deemed to be controlled by Edward C. Johnson 3d and Abigail P. Johnson and family members. Includes shares beneficially owned by various subsidiaries of FMR Corp. () Includes options to purchase 1,546,362 shares (and 9,832,626 available votes) which are exercisable within 60 days. SECURITY OWNERSHIP OF MANAGEMENT The following table sets forth, as of February 23, 1999, the number of shares and percentage of outstanding Common Stock beneficially owned by certain executive officers named in the "Summary Compensation Table" below (the "Named Executive Officers"), and Directors and executive officers as a group. The beneficial ownership of directors and of the remaining Named Executive Officers is set forth below in the information provided for director nominees in "Election of Directors." The number of shares of Common Stock shown are those deemed "beneficially owned," as determined under Rule 13d-3 promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the information is not necessarily indicative of beneficial ownership for any other purpose. Under such rule, beneficial ownership includes any shares as to which a person, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has sole or shared voting power or investment power, and also any shares that the person has the right to acquire within 60 days through the exercise of any option, warrant or right, through conversion of any security, or pursuant to the automatic termination or power of revocation of a trust, discretionary account or similar arrangement. 4 Common Stock Beneficially Owned and Approximate Percentage of Class as of February 23, 1999 Percent Percent Name Shares (1) of Shares Votes(1) of Votes - ---- --------- --------- ------- --------- Joseph P. Kuechenmeister 65,529 * 265,338 * Kriss Cloninger, III 440,488 .2 2,794,006 .4 All Directors and executive officers as a group (32 persons) 15,744,773 5.8 126,848,680 17.4 * Percentage not listed if less than .1% (1) Includes options to purchase shares (and available votes), which are exercisable within 60 days, for Joseph P. Kuechenmeister, 38,952 (119,502); Kriss Cloninger, III, 369,818 (2,108,168); and for all Directors and executive officers as a group, 5,989,429 (44,714,485). 1. ELECTION OF DIRECTORS The Company proposes that the following seventeen individuals be elected to the Board of Directors of the Company. The persons named in the following table have been nominated by the Nominating Committee of the Board of Directors for election as Directors and, if elected, are willing to serve as such until the next Annual Meeting of Shareholders and until their successors have been elected and qualified. It is intended that the persons named in the accompanying proxy, or their substitutes, will vote for the election of these nominees (unless specifically instructed to the contrary). However, if any nominee at the time of the election is unable or unwilling to serve or is otherwise unavailable for election, and in consequence another nominee is designated, the persons named in the proxy, or their substitutes, will have discretionary authority to vote or refrain from voting in accordance with their judgment on such other nominees. The Board of Directors has no reason to believe that any of the persons nominated will be unable or unwilling to serve. THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF EACH OF THE BELOW-LISTED NOMINEES AS DIRECTORS 5