return on average assets, and three-year total shareholder return, and found that the Company ranked sixth in composite performance for 2003, placing the Company between the top quartile and the median.  The comparator insurance companies were identified to the Compensation Committee by the Consultant as appropriate comparators to the Company based on company size and the competitive structure within the insurance industry.  The peer group includes certain members of the S&P Life and Health Insurance Index, which is one of the indices used in the Company’s “Stock Performance Graph” (see page 17), but also includes a broader group of companies, including those historically viewed by the Company as its most direct competitors.

          2003 was the first time the Company was not ranked in the top quartile.  The Consultant Report presented several reasons for this.  One reason was that the Company had an outstanding 2002 when many of its peers had weak performance, thus the Company was challenged to better its 2002 results by as much as those peers rebounding from a poor 2002.  In addition, each year the yen to dollar translation impact is removed from the analysis.  Usually the performance rank impact is nominal.  However, for 2003, it lowered the Company’s rank.

          With respect to Mr. Amos, he had essentially had no salary increase since 1994, the year following the passage of Section 162(m) limiting deductibility of annual salaries exceeding $1 million.  Based on the recommendation of the Consultant Report, the Compensation Committee determined to increase his annual salary for 2004 over the $1 million level.  Mr. Amos’ annual salary was increased from $1 million to $1.2 million with $200,000 of said salary being deferred until Mr. Amos’ retirement in order for the Company to continue to qualify for the Section 162(m) deductibility.  Mr. Cloninger’s salary was increased by 3.5%, Mr. Matsui’s salary was increased by 3.5%, Mr. Kan’s salary was increased by 8.1%, and Mr. Smith’s salary was increased by 3.6%.

Bonuses

          Under the Company’s Management Incentive Plan for 2004, target cash bonuses in an amount equal to 15% to 175% of salary, with respect to the Company and its subsidiaries’ executive officers generally, and with respect to the Named Executive Officers, pursuant to their employment agreements, are paid on the basis of the attainment of target annual performance goals for the Company and goals based on individual performance.  However, none of the Named Executive Officers participating in the Plan, have goals based on individual performance.  In the event that specified performance goals are achieved, participants may receive awards above the target amounts.  Mr. Amos may earn up to 275% (215%, 171%, 150%, and 126% respectively, for Messrs. Cloninger, Matsui, Kan, and Smith) of salary as a cash bonus.  The establishment of the percentage of salary that such bonus may constitute upon the attainment of target goals was based on the recognition by the Compensation Committee that the bonus goals are set very aggressively, that such performance-based compensation should account for a substantial proportion of the total compensation for participating executives of the Company.

          The performance goals are established on the basis of recommendations by management, and the awards, if attained, are paid in the following year.  With respect to 2004, the Compensation Committee established Company performance goals for executive officers, including the Chief Executive Officer, based on, among other things, operating earnings per share (excluding effects of currency fluctuations), premium income, increases in new sales, operating expense controls, pretax operating earnings, and, in the case of most officers other than Executive Officers, goals based on individual performance.  In connection with compliance with Section 162(m), the Compensation Committee deemed it appropriate that the bonus components of the Named Executive Officers were based on objective Company performance goals rather than more subjective goals based on individual performance.  With respect to each of the Named Executive Officers, the percentage of his target award attributed to the earnings-per-share goal was 43% for Mr. Amos, 46% for Mr. Cloninger, 50% for Mr. Kan, 20% for Mr. Smith, and 10% for Mr. Matsui, while the other Company performance goals accounted for the remainder of each of their total possible award in varying increments.  With respect to each Company performance goal, a minimum, target, and maximum performance level is specified, the attainment of which determines the amount paid with respect to each performance goal, except for the earnings-per-share goal, under which benefits are paid at one specified level, but only if target performance is attained or exceeded.  The bonus percentage is increased, subject to a specified maximum percentage, or decreased to the extent the Company performance levels vary from target levels.  Payment on attainment of any particular performance goal may occur independently of (i.e., is not contingent upon) attainment of any other performance goal.  The Consultant noted that with respect to bonuses earned in 2004 and 2003, the Plan accomplished its intended result, since the Company’s U.S. officers received a significant decrease in their bonuses due to the failure to meet U.S. sales goals established for 2004 and 2003.  Similarly, bonuses earned by the Company’s Japan officers were lower in 2004 due to the failure to meet sales goals in 2004, but higher in 2003 due to the strong sales performance of Aflac Japan in 2003.  Messrs. Amos, Cloninger, Matsui, Kan, and Smith achieved bonus levels over the target bonus levels but below maximum bonus levels, reflecting the fact that Company performance levels generally exceeded target levels.

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Other Benefits and Actions

          The Compensation Committee recommended to the Board of Directors that the 2004 Aflac Incorporated Long-Term Incentive Plan be approved, and submitted to the shareholders for their approval at the Annual Shareholders’ Meeting in May 2004.  The Plan was so approved at such Annual Meeting.  The Company maintains (i) its 1985 Stock Option Plan and 1997 Stock Option Plan pursuant to which officers and other employees have been and may be granted options to purchase Common Stock; (ii) its 2004 Long-Term Incentive Plan pursuant to which officers and other employees have been and may be granted restricted stock, restricted stock units, stock appreciation rights or options to purchase Common Stock; (iii) its Retirement Plan for senior officers (the “Retirement Plan”), which provides lifetime retirement and medical benefits to plan participants; (iv) its Executive Deferred Compensation Plan, a non-qualified contributory benefit plan for officers; and (v) its Supplemental Executive Retirement Plan (the “SERP”) for certain key executives of the Company and certain subsidiaries who do not participate in the Retirement Plan.  Certain Named Executive Officers are participants in the Retirement Plan or in the SERP, but not both.  The executive officers of the Company may also participate in the Company’s qualified nondiscriminatory 401(k) plan and a qualified noncontributory defined benefit pension plan covering substantially all employees.

          In its evaluation of executive compensation, the Consultant Report recommended that Mr. Daniel Amos should receive stock options at a level which will deliver total direct compensation approximately at the sixth highest among the 14 companies.  Based on the recommendation of the Consultant Report, the Compensation Committee in 2004 made two stock option grants to Mr. Amos exercisable for a total of 477,231 shares under the 1997 Stock Option Plan, which is substantially below the 988,692 stock options he received in 2003 when the Company’s performance rank was second.  The award to Mr. Amos reflects the finding in the Consultant Report that the total direct compensation levels for Mr. Amos should be approximately at the 64th percentile for compensation for peer companies, in keeping with the Company’s performance success.  Grants of stock options exercisable for 100,000, 50,000, and 10,000 shares were also made to Messrs. Cloninger, Kan, and Smith, respectively.  All option grants were made with an exercise price equal to fair market value on the dates of grant.

          The Compensation Committee believes that the executive compensation policies serve the best interests of the shareholders and the Company.  The bonus and stock option components of compensation for Company executives are intended to be directly related to and commensurate with the Company’s performance.

          In connection with making decisions on executive compensation, the Compensation Committee will take into account, as one of the factors which it considers, the provisions of Section 162(m), which limits the deductibility by the Company for federal income tax purposes of certain categories of compensation in excess of $1 million paid to certain executive officers.  The Compensation Committee may determine to authorize compensation arrangements that exceed the $1 million deductibility cap imposed by Section 162(m) as it did with respect to Mr. Amos, although it deferred the amount in excess of $1 million until his retirement.  The 1985 and 1997 Stock Option Plans, the 2004 Long-Term Incentive Plan and the Management Incentive Plan presently conform to the requirements of Section 162(m) so that stock option grants, Long-Term Incentive Plan awards and Management Incentive Plan awards are generally performance-based and not subject to the deduction limitation contained in Section 162(m).

Compensation Committee

Robert B. Johnson, Chairman
Glenn Vaughn Jr.
Robert L. Wright

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SUMMARY COMPENSATION TABLE

		Annual Compensation												Long-Term Compensation Awards
		Year			Salary ($)			Bonus ($)(1)			Other Annual Compensation ($)(2)			Awards						Payouts			All Other Compensation ($)(3)
Name and Principal Position														Restricted Stock Award(s) ($)			Securities Underlying Options (#)			LTIP Pay- outs ($)
Daniel P. Amos			2004			1,200,000			2,196,000			138,122			-0-			477,231			-0-			7,392
Chairman and CEO			2003			995,000			2,170,593			141,755			-0-			988,692			-0-			7,242
			2002			995,000			2,759,633			144,822			-0-			918,745			-0-			6,742
Kriss Cloninger III			2004			740,890			1,118,744			62,550			-0-			100,000			-0-			8,472
President, CFO, and			2003			715,825			1,222,630			77,262			-0-			100,000			-0-			8,322
Treasurer			2002			685,000			1,476,860			—			-0-			150,000			-0-			8,322
Hidefumi Matsui			2004			556,808			549,236			-0-			-0-			-0-			-0-			9,284
Chairman, Aflac Japan			2003			502,285			899,042			-0-			-0-			-0-			-0-			8,633
			2002			453,331			854,782			-0-			-0-			50,000			-0-			8,095
Akitoshi Kan			2004			432,500			448,200			13,015			-0-			50,000			-0-			8,472
Chairman,			2003			400,000			397,600			6,350			-0-			50,000			-0-			8,322
Aflac International, Executive Vice President and Chief Operating Officer, Aflac Japan			2002			375,000			551,250			6,350			-0-			50,000			-0-			6,742
Joseph W. Smith, Jr.			2004			425,000			432,034			7,470			-0-			10,000			-0-			6,192
Sr. Vice President,			2003			410,000			287,000			9,785			-0-			10,000			-0-			7,098
Chief Investment Officer			2002			390,000			462,150			12,835			-0-			-0-			-0-			5,782

(1)	Includes for all Named Executive Officers, cash bonuses paid in 2003, 2004, and 2005 under the Management Incentive Plan.
(2)	Includes financial consulting services of $95,355, $91,444, and $80,878 in 2004, 2003, and 2002 for Mr. Daniel P. Amos. Effective with the 2001 Annual Meeting, Directors who are also officers of the Company are not compensated for Board service.  Includes aircraft expenses of $50,848 and  $68,817 in 2004 and 2003 for Mr. Kriss Cloninger III.
(3)	Includes premiums paid in 2004 for term life insurance in the amount of $1,242, $2,322, $9,284, $2,322, and $42 for Mr. Daniel P. Amos, Mr. Kriss Cloninger III, Mr. Hidefumi Matsui, Mr. Akitoshi Kan, and Mr. Joseph W. Smith, Jr., respectively, and Company-matching contributions to the 401(k) retirement plan in the amount of $6,150 for each of Mr. Daniel P. Amos, Mr. Kriss Cloninger III, Mr. Akitoshi Kan, and Mr. Joseph W. Smith, Jr.  Includes premiums paid in 2003 for term life insurance in the amount of  $1,242, $2,322, $8,632, $2,322, and $1,098 for Mr. Daniel P. Amos, Mr. Kriss Cloninger III, Mr. Hidefumi Matsui, Mr. Akitoshi Kan, and Mr. Joseph W. Smith, Jr., respectively, and Company-matching contributions to the 401(k) retirement plan in the amount of $6,000 each for Mr. Daniel P. Amos, Mr. Kriss Cloninger III, Mr. Akitoshi Kan, and Mr. Joseph W. Smith, Jr.  Includes premiums paid in 2002 for term life insurance in the amount of $1,242, $2,322, $8,095, $1,242, and $282 for Mr. Daniel P. Amos, Mr. Kriss Cloninger III, Mr. Hidefumi Matsui, Mr. Akitoshi Kan, and Mr. Joseph W. Smith, Jr., respectively, and Company-matching contributions to the 401(k) retirement plan in the amount of $5,500 each for Mr. Daniel P. Amos, Mr. Akitoshi Kan, Mr. Joseph W. Smith, Jr., and $6,000 for Mr. Kriss Cloninger III.

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STOCK PERFORMANCE GRAPH

          The following graph compares the five-year performance of the Company’s Common Stock to the Standard & Poor’s 500 Index (S&P 500) and the Standard & Poor’s Life and Health Insurance Index (S&P Life and Health).  The Standard & Poor’s Life and Health Insurance Index includes: Aflac Incorporated, Jefferson-Pilot Corporation, Lincoln National Corporation, Metlife Inc., Prudential Financial, Inc., Torchmark Corporation, and UnumProvident Corporation.  The graph assumes that the value of the investment in the Company’s Common Stock and each index was $100 at December 31, 1999, and that all dividends were reinvested.

COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN
AMONG AFLAC INCORPORATED, THE S & P 500 INDEX
AND THE S & P LIFE & HEALTH INSURANCE INDEX

Performance Graph Index
DECEMBER 31

		1999			2000			2001			2002			2003			2004
Aflac Incorporated			100			154			105			130			158			176
S&P 500			100			91			80			62			80			86
S&P Life and Health			100			114			105			88			112			128

   (All performance data provided by Research Data Group, Inc., San Francisco, CA 94107)

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RETIREMENT PLANS FOR KEY EXECUTIVES

          Participants in the Retirement Plan receive full compensation for the first 12 months after retirement. Thereafter, the participants may elect to receive annual lifetime retirement benefits equal to 60% of their final compensation, or 54% of such compensation with 50% of such amount to be paid to their spouses for a specified period after death of the participant.  Final compensation is deemed to be the higher of (i) the compensation paid during the last 12 months of active employment with the Company or (ii) the highest compensation received in any calendar year of the last three years preceding the date of retirement.  Compensation under this plan is defined to be base salary plus bonus.  All benefits are subject to annual cost-of-living increases as the Compensation Committee may approve.  Retired participants and their spouses are also entitled to receive full medical expense benefits for their lifetimes.  The benefits payable under the plan are not subject to Social Security or defined benefit pension plan offsets.

          Generally, no benefits are payable until the participant accumulates 10 years credited service at age 60 or 20 years credited service.  Reduced benefits may be paid to a participant who retires (other than for disability) before age 65 with less than 20 years credited service.

          Mr. Daniel P. Amos is covered by this plan and has 31 years credited service.

			Retirement Plan for Senior Officers Table (all $ in thousands) Years of Service
Compensation			20			25			30			35
$	500		$	300		$	300		$	300		$	300
	1,000			600			600			600			600
	1,500			900			900			900			900
	2,000			1,200			1,200			1,200			1,200
	2,500			1,500			1,500			1,500			1,500
	3,000			1,800			1,800			1,800			1,800
	3,500			2,100			2,100			2,100			2,100
	4,000			2,400			2,400			2,400			2,400

          The Company maintains the SERP for certain key executives of the Company and its subsidiaries who do not participate in the Retirement Plan.  Participation in the SERP is limited to key employees of the Company (and its subsidiaries) designated by the Board of Directors of the Company from time to time.  Participants generally must be employed with the Company or a subsidiary at age 55, and with respect to participants who began participating in the SERP after August 11, 1992, must also complete at least 15 years of employment with the Company or a subsidiary and participate in the SERP for at least 5 years to be eligible to receive benefits under the SERP.  In the case of certain participants who terminate employment before age 55 but who continue to provide services to the Company pursuant to a consulting agreement, the Chief Executive Officer may, in his or her discretion, cause service during such consulting period to be credited for benefits eligibility (but not benefit accrual) purposes.  The SERP includes a three-tiered benefit formula that provides for a 40% benefit upon retirement between the ages of 55 and 59, a 50% benefit upon retirement between the ages of 60 and 64, and a 60% benefit upon retirement for ages 65 and over.  A reduced 30% benefit is available to participants with at least 15 years of service who terminate employment prior to age 55.  The benefit formula computes benefits using the average of annual compensation for the three consecutive calendar years out of the final 10 consecutive calendar years of employment that yields the highest average.  Average compensation is calculated using “Annual Compensation,” which is defined to include both base salary and bonuses for a calendar year.  Under the terms of the plan, all benefit calculations are subject to offset for amounts paid under the Company’s qualified defined benefit pension plan.

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          Benefits are generally payable in the form of an annuity for the life of the participant.  However, a participant may elect a joint and survivor annuity pursuant to which he or she will receive reduced benefits during his or her lifetime and, after his or her death, his or her surviving spouse will receive a monthly benefit equal to 50% of the amount that had been paid to the participant.  No benefits are payable to a participant whose employment is terminated before age 55, except as previously described and for certain terminations following a “change in control.”  If a participant dies after age 55 but before benefits are paid under the plan, his or her spouse will receive a death benefit equal to 50% of the benefits that the participant would have been entitled to receive had he or she retired on the day preceding the date of his or her death.  If a participant’s employment is terminated for “cause,” he or she immediately forfeits all rights and entitlements under the plan.  The benefits payable under the plan are not subject to Social Security offset.  See “Employment Agreements and Termination of Employment Arrangements” for additional information regarding the SERP.

          Messrs. Kriss Cloninger III, Akitoshi Kan, and Joseph W. Smith, Jr. participate in the SERP. The estimated annual benefit payable upon a retirement age of 58 for Mr. Cloninger is $672,562; at a retirement age of 57 for Mr. Kan is $277,418; and at a retirement age of 55 for Mr. Smith is $299,570.

DEFINED BENEFIT PENSION PLAN

          The Company has a tax-qualified noncontributory defined benefit pension plan covering substantially all U.S. employees who satisfy the eligibility requirements.  Benefits are calculated in accordance with the following formula: l% of average monthly compensation times years of credited service not in excess of 25 years, plus .5% of average monthly compensation times years of credited service in excess of 25 years.  Participants are eligible to receive normal retirement benefits upon attaining their normal retirement age of 65.  Participants with 15 years of credited service are eligible to receive reduced normal retirement benefits upon reaching their early retirement age of 55.  A participant can be eligible for full normal retirement benefits when the participant’s years of credited service plus attained age equals or exceeds 80.  For purposes of the plan, average monthly compensation is deemed to be the participant’s highest average compensation during any 5 consecutive years of service within the 10 consecutive plan years of service immediately preceding retirement.  Compensation generally means salaries and annual incentive bonuses.  The benefits payable under the plan as amended and restated are not subject to adjustment for Social Security benefits or other offsets.  The benefits payable under the plan may be paid monthly over the life of the participant (with joint and survivor options available at reduced rates).  The maximum retirement benefit is limited in accordance with Section 415 of the Code to $165,000 for 2004 ($170,000 for 2005).  The maximum compensation that may be taken into account in the calculation of retirement benefits is limited in accordance with Section 401(a)(17) of the Code to $205,000 for 2004 ($210,000 for 2005).  These limitation amounts for future years will be indexed for cost-of-living adjustments, but only increase when a new $5,000 increment is reached.  The following table reflects annual benefits as determined by the above formula.

Defined Benefit Pension Plan Table

			Years of Service
Compensation			15			20			25			30			35
$	25,000		$	3,750		$	5,000		$	6,250		$	6,875		$	7,500
	50,000			7,500			10,000			12,500			13,750			15,000
	75,000			11,250			15,000			18,750			20,625			22,500
	100,000			15,000			20,000			25,000			27,500			30,000
	125,000			18,750			25,000			31,250			34,375			37,500
	150,000			22,500			30,000			37,500			41,250			45,000
	175,000			26,250			35,000			43,750			48,125			52,500
	200,000			30,000			40,000			50,000			55,000			60,000
	210,000			31,500			42,000			52,500			67,750			63,000

          Mr. Daniel P. Amos, Mr. Kriss Cloninger III, Mr. Akitoshi Kan, and Mr. Joseph W. Smith, Jr. have 31 years, 13 years, 24 years, and 19 years, respectively, of credited service in the plan.

          Mr. Matsui has waived his rights to participate in the Company’s pension plans and instead, will receive retirement benefits pursuant to the terms of his employment agreement. 

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EMPLOYMENT AGREEMENTS AND TERMINATION OF EMPLOYMENT ARRANGEMENTS

          On August 1, 1993, the Company entered into an employment agreement with Mr. Daniel P. Amos which provided for a three-year term commencing August 1, 1993, with automatic extensions of one-year periods to the term of the agreement occurring on an annual basis beginning August 1, 1994, unless written notice of termination is given prior to such annual extensions.  Mr. Amos’ annual base salary in 2004 was $1,200,000.  Pursuant to the employment agreement, his base salary shall be increased annually as determined by the Compensation Committee.

          The agreement provides that Mr. Amos (referred to hereafter as the “Executive”) will continue to participate in the Management Incentive Plan and the Retirement Plan, and will participate in all other fringe benefit plans applicable to employees generally or provided to senior executives of the Company, but not the SERP.  The Executive may receive other benefits as determined from time to time by the Compensation Committee. 

          Pursuant to the agreement, the Company remains obligated to continue compensation and benefits to the Executive for the scheduled term of the agreement if the employment of the Executive is terminated by the Company without “good cause.”  If the Executive’s employment is terminated by the Company for “good cause,” or by the Executive without “good reason,” the Company is generally obligated to pay compensation and benefits only to the date of termination (except that the Executive is entitled to benefits under the Retirement Plan if the termination is not for “good cause”).  “Good cause” generally means (i) the willful failure by the Executive to substantially perform his management duties for more than 60 days, (ii) intentional conduct by the Executive causing substantial injury to the Company, or (iii) the conviction or plea of guilty by the Executive of a felony crime involving moral turpitude.  “Good reason” is defined to include a breach of the agreement, a diminution or change in the Executive’s title, duties or authority, or a relocation of the Company’s principal offices.  Upon voluntary termination without “good reason” or termination by the Company for “good cause,” the Executive is prohibited for a two-year period from directly or indirectly competing with the Company.

          The agreement provides that compensation and benefits continue for certain specified periods in the event that the Executive becomes totally disabled.  Upon the death of the Executive, his estate is to be paid an amount, payable over a three-year period, equal to the Executive’s base salary and any bonus actually paid during the last three years of his life.

          Upon a “change in control” of the Company, the agreement is extended for an additional three-year period.  If, following a change in control, the Executive’s employment with the Company is terminated by the Company without “good cause,” or by the Executive for “good reason,” the Company must pay to the Executive, among other payments but in lieu of any further salary payments subsequent to the date of termination, a lump-sum severance payment equal to three times the sum of the Executive’s base salary and bonus under the Management Incentive Plan (as paid during periods specified in the agreement).

          A “change in control” is generally deemed to occur when (i) a person or group acquires beneficial ownership of 30% or more of the Common Stock; (ii) during any period of two consecutive years, individuals who at the beginning of such period constitute the Board cease for any reason to constitute a majority of the Board; or (iii) the shareholders approve a liquidation or sale of substantially all of the assets of the Company or certain merger and consolidation transactions.

          Pursuant to an employment agreement between the Company and Mr. Kriss Cloninger III, as amended, Mr. Cloninger is employed as President and Chief Financial Officer of the Company.  The term of the agreement is subject to automatic two-year extensions on an annual basis beginning March 16, 1994, unless written notice that such extension will not occur is given prior to such annual date by either party.  Mr. Cloninger’s annual base salary in 2004 was $740,890.  His employment agreement provides that his base salary shall be increased annually during the term of the agreement and any extensions thereof, as determined by the Compensation Committee.  The Company shall also pay Mr. Cloninger, as performance bonus compensation, an amount each year under the Company’s Management Incentive Plan.

          Mr. Cloninger is eligible to participate in all fringe benefit programs applicable to employees generally, and shall receive such other “fringe” or employee benefits as are provided to key executive employees of the Company and that are appropriate to his responsibilities as President and Chief Financial Officer.

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          Other material terms of Mr. Cloninger’s employment agreement relating to termination, disability, death, and changes in control of the Company are substantially similar to such provisions in Mr. Daniel P. Amos’ employment agreement, as described above.

          Under Mr. Kriss Cloninger III’s employment agreement, he is a participant in the SERP but not the Retirement Plan.  Under the SERP, as amended, in the event that a participant’s employment with the Company is terminated within two years of a “change in control” of the Company other than for death, disability or cause, or a participant terminates his employment during such period for “good reason,” the participant becomes 100% vested in his retirement benefits and is entitled to receive a lump-sum amount equal to the actuarial equivalent of the annual retirement benefit to which he would have been entitled had he remained in the employ of the Company until (i) age 55 (in the case of a participant who is not yet 55); (ii) age 60 (in the case of a participant who is at least 55, but not yet 60); or (iii) age 65 (in the case of a participant who is at least 60, but not yet 65), as the case may be.  A “change in control” shall generally occur under the same circumstances described as a “change in control” in Mr. Daniel P. Amos’ employment agreement.  “Cause” shall mean generally (i) the participant’s willful failure to substantially perform his duties with the Company (other than that resulting from illness or after a participant gives notice of termination of employment for “good reason”) after a written demand for substantial performance is delivered to the participant by the Board or (ii) the willful engaging by the participant in materially injurious conduct to the Company.  “Good reason” is defined to include various adverse changes in employment status, duties and/or compensation and benefits following a “change in control.”  Benefits may be reduced to the extent that they are not deductible by the Company for income tax purposes.

          Mr. Hidefumi Matsui, Chairman of Aflac Japan, also has an employment agreement.  Mr. Matsui’s annual base salary in 2004 was $556,808.  Pursuant to the agreement, Mr. Matsui will be considered for salary increases in the same manner and time as the senior executive officers of Aflac.  Mr. Matsui participates in the Management Incentive Plan and, in addition, is eligible to receive stock options in the same manner as selected key employees and Directors.

          Mr. Matsui’s employment agreement provides for the retirement benefits described below and he waived his right to participate in the SERP and the Retirement Plan.  Mr. Matsui is eligible for retirement benefits as follows: at age 65, mandatory retirement at 65% of base salary on the day before retirement; from age 55 to age 65, voluntary retirement at 50% of base salary on the day before retirement.  All retirement benefits paid above shall be subject to annual cost-of-living type increases proportionate to any such compensation increases granted each year to the most senior officers of Aflac Japan, or, at the option of Aflac, by any alternate reasonable index of cost-of-living increases.  Mr. Matsui has agreed not to engage in any activity competitive with Aflac while any benefits (including retirement benefits) are being paid to him by Aflac.

          Mr. Akitoshi Kan, Chairman of Aflac International, has an employment agreement with the Company, as amended, pursuant to which Mr. Kan is also Executive Vice President and Chief Operating Officer of Aflac Japan.  The agreement provides for a three-year term commencing April 1, 2001, with automatic extensions of one-year periods to the term of the agreement occurring on an annual basis beginning April 1, 2002 unless written notice of termination is given prior to such annual extension date by either party.  Mr. Kan’s annual base salary in 2004 was $432,500.  His employment agreement provides that his base salary may be increased annually during the term of the agreement and any extensions thereof.  Mr. Kan is also eligible to participate in the Company’s Management Incentive Plan.

          Mr. Kan is eligible to participate in all fringe benefit programs applicable to employees generally, and shall receive such other “fringe” or employee benefits as are provided to key executive employees of the Company and that are appropriate to his responsibilities as Executive Vice President, Chief Operating Officer, Aflac Japan.

          Other material terms of Mr. Kan’s employment agreement relating to termination, disability, death, and changes in control of the Company are substantially similar to such provisions in Mr. Daniel P. Amos’ employment agreement, as described above, except that Mr. Kan is a participant in the SERP and not the Retirement Plan. 

          Pursuant to an employment agreement between the Company and Mr. Joseph W. Smith, Jr., Mr. Smith is employed as Senior Vice President, Chief Investment Officer of the Company.  The term of the agreement which provided for a three-year term commencing January 1, 1998, with automatic extensions of one-year periods to the term of the agreement occurring on an annual basis beginning January 1, 1999 unless written notice of termination

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is given prior to such annual extension date by either party.  Mr. Smith’s annual base salary in 2004 was $425,000.  His employment agreement provides that his base salary may be increased annually during the term of the agreement and any extensions thereof.  Mr. Smith is also eligible to participate in the Company’s Management Incentive Plan.

          Mr. Smith is eligible to participate in all fringe benefit programs applicable to employees generally, and shall receive such other “fringe” or employee benefits as are provided to key executive employees of the Company and that are appropriate to his responsibilities as Senior Vice President and Chief Investment Officer of the Company.

          Other material terms of Mr. Smith’s employment agreement relating to termination, disability, death, and changes in control of the Company are substantially similar to such provisions in Mr. Daniel P. Amos’ employment agreement, as described above, except that Mr. Smith is a participant in the SERP and not the Retirement Plan.

OPTION GRANTS IN 2004

		Individual Grants												Potential Realizable Value at Assumed Annual Rates of Stock Price Appreciation for Option Term (1)
Name		Number of Securities Underlying Options Granted (#)			Percent of Options Granted to Employees in 2004			Exercise of Base Price ($/Sh)			Expiration Date			5%($)			10%($)
Stock Appreciation for All Shareholders (1)			N/A			N/A			N/A			N/A			11,890,823,721			30,133,308,163
Daniel P. Amos, CEO (2)			221,349			8.1			40.4250			02/10/14			5,627,798			14,260,409
			255,882			9.3			38.3200			08/10/14			6,166,756			15,626,714
Kriss Cloninger III (2)			100,000			3.6			38.3200			08/10/14			2,410,000			6,107,000
Hidefumi Matsui (2)			-0-
Akitoshi Kan (2)			50,000			1.8			38.3200			08/10/14			1,205,000			3,053,500
Joseph W. Smith, Jr. (2)			10,000			0.4			38.3200			08/10/14			241,000			610,700

(1)	The assumed annual rates of stock price appreciation (shown at the assumed rates of 5% and 10% for the option term of 10 years, as required by the SEC) are compounded annually and therefore are shown at the compound appreciation rates of 63% and 159%, respectively.
(2)	The option grant of 221,349 shares for Mr. Daniel P. Amos vests in thirds with one-third vesting immediately on February 10, 2004, the date of the option, and an additional one-third on each of the following two anniversary dates of the option grant.  The option grant of 255,882 shares for Mr. Daniel P. Amos and the grants of the other Named Executive Officers vest in thirds with one-third vesting on each of the three following anniversary dates of the option grant date of August 10, 2004.

22

AGGREGATED OPTION EXERCISES IN 2004
AND OPTION VALUES AS OF DECEMBER 31, 2004

		Shares Acquired on Exercise (#)			Value Realized ($)			Number of Securities Underlying Unexercised Options at 12-31-04 (#)						Value of Unexercised In the Money Options at 12-31-04 ($)
Name								Exercisable			Unexercisable			Exercisable			Unexercisable
Daniel P. Amos, CEO			163,000			5,016,423			3,838,531			2,310,885			73,065,697			20,545,492
Kriss Cloninger III			110,000			3,632,563			754,112			350,000			16,312,128			2,379,250
Hidefumi Matsui			-0-			-0-			450,000			50,000			11,258,975			463,250
Akitoshi Kan			-0-			-0-			150,000			150,000			2,477,000			958,000
Joseph W. Smith, Jr.			19,508			613,022			226,134			20,000			5,284,965			98,950

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

          During the fiscal year ended December 31, 2004, the members of the Company’s Compensation Committee were Robert B. Johnson (Chairman), Glenn Vaughn Jr., and Robert L. Wright.  None of the members of the Compensation Committee is an employee or former employee of the Company or any of its subsidiaries.

CERTAIN TRANSACTIONS AND RELATIONSHIPS

          Information is provided with respect to executive officers, Directors, Director nominees and/or members of their immediate families who were indebted to the Company or its subsidiaries, at any time since January 1, 2004, in excess of $60,000, as follows:

Name

Largest Aggregate Amount Outstanding Since January 1, 2004 ($)

Nature of Indebtedness (2)

Rate of Interest

Amount Outstanding as of January 31, 2005 ($)

Kermitt Cox (1)

94,725

Stock Option Note

4.50%

59,550

(1)	Kermitt Cox was an executive officer of one of the Company’s subsidiaries during 2004.
(2)	Collateralized note accepted by the Company in payment of stock option exercised.

          John Shelby Amos II, a Director of the Company, has been associated with Aflac since 1973 and presently serves as Alabama/West Florida State Sales Coordinator.  In 2004, he earned renewal and first-year commissions before expenses of $2,355,797.  For services rendered in 2004, $262,519 was paid by Aflac to Paul S. Amos II, the son of Daniel P. Amos who served as North Georgia Co-State Sales Coordinator.  This amount was earned as renewal, and first-year commissions before expenses.  In 2004, $155,367 was paid by Aflac to a corporation of which Maria Theresa Land, the sister of John Shelby Amos II, is the sole shareholder.  This amount was earned as renewal commissions before expenses by W. Donald Land, the deceased husband of Maria Theresa Land, who served as Florida State Sales Coordinator with Aflac from 1975 until May 1990.  State Sales Coordinators are not salaried employees but are compensated on a commission basis and are required to pay their own expenses, including travel, office expenses, incentives for District and Regional Sales Coordinators and Associates in their states, and recruiting and training costs.  The compensation arrangements with John Shelby Amos II, Paul S. Amos II, and W. Donald Land were no more favorable, when contracted, than those of other State Sales Coordinators.  With respect to Paul S. Amos II, his first-year and renewal commission rates (1% and .2%, respectively), were significantly below other State Sales Coordinators’ commission rates (approximately 5.0% and 1.0%, respectively).  Effective January 1, 2005, Mr. Paul S. Amos II was appointed Executive Vice President, Aflac U.S. Operations.

23

          In 2004, $151,108 was paid by Aflac to John William Amos, the son of John Shelby Amos II.  This amount was earned as renewal and first-year commissions before expenses.  John William Amos serves as an Alabama District Sales Coordinator.  In 2004, $214,215 was paid by Aflac to Joe Frank Harris Jr., the son of Joe Frank Harris.  This amount was earned as renewal and first-year commissions before expenses.  Joe Frank Harris Jr. serves as a Georgia District Sales Coordinator.  District Sales Coordinators are not salaried employees but are compensated on a commission basis and are required to pay their own expenses.  The compensation arrangement with John William Amos and Joe Frank Harris Jr. is the same as with other District Sales Coordinators.

          In 2004, $97,490 was paid by Aflac to Michael S. Kirkland, the son of Ronald E. Kirkland, an executive officer of Aflac.  Michael Kirkland serves as a Missouri Regional Sales Coordinator.  This amount was earned as renewal and first-year commissions before expenses.  Regional Sales Coordinators are not salaried employees but are compensated on a commission basis and are required to pay their own expenses, including travel, office expenses, incentives for District Coordinators and Associates in their states, and recruiting and training costs.  The compensation arrangement with Michael S. Kirkland is similar, when contracted, to those of other Regional Sales Coordinators.

           For services rendered in 2004, $632,318 in salary and bonus was paid by the Company to Ms. Kathelen V. Spencer, then Executive Vice President, Deputy Legal Counsel and Director of Corporate Communications.In addition, Ms. Spencer received such employee benefits and other compensation (including awards of stock options) as were made available to key executive employees of the Company generally.  Ms. Spencer retired from the Company on January 1, 2005 and is now the spouse of Daniel Amos.  In connection with her retirement, Ms. Spencer will receive a severance payment of $632,318.  The basis for calculating this severance payment was less favorable than severance arrangements that had been granted to other executive officers of the Company in the past.  In addition, upon her retirement, Ms. Spencer forfeited two stock options that were not vested as of her date of retirement.  The embedded gain in these forfeited stock options at the closing price of the Company’s Common Stock on December 31, 2004 was $524,750.  Ms. Spencer’s severance package was approved by the Compensation Committee of the Board of Directors in recognition of her 20 years of service to the Company.  For services rendered in 2004, $284,800 in salary and bonus was paid by the Company to Kenneth S. Janke Jr., the son of Kenneth S. Janke Sr.  Mr. Janke Jr. serves as Senior Vice President, Investor Relations.  In addition, he received such employee benefits and other compensation (including awards of stock options) as were made available to senior management of the Company generally.  Joey M. Loudermilk is the Executive Vice President, General Counsel and Corporate Secretary of the Company.  In 2004, Joey Loudermilk’s sister, Melissa L. Tucker, brother-in-law, James M. Tucker, Jr., and son, Matthew Loudermilk were each employees of Aflac and each received less than $60,000 in salary and bonus.  All of these employees also participated in all fringe benefit programs available to employees generally.

          The following table provides information with respect to compensation plans under which our equity securities are authorized for issuance to employees or Non-employee Directors, as of December 31, 2004.

Equity Compensation Plan Information

Plan Category		Number of Securities to Be Issued Upon Exercise of Outstanding Options, Warrants and Rights (a)			Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights (b)			Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans Excluding Securities Reflected in Column (a) (c)
Equity Compensation Plans Approved by Shareholders			22,087,458			$23.86			29,077,118
Equity Compensation Plans Not Approved by Shareholders			-0-			-0-			-0-
Total			22,087,458			$23.86			29,077,118

24

2.   RATIFICATION OF APPOINTMENT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

          In February 2005, the Audit Committee voted to appoint KPMG LLP, an independent registered public accounting firm, to perform the annual audit of the Company’s financials for the fiscal year 2005, subject to ratification by the shareholders.

          Representatives of KPMG LLP are expected to be present at the 2005 Annual Meeting of Shareholders with the opportunity to make a statement if they so desire. Such representatives are expected to be available to respond to appropriate questions.

          The aggregate fees for professional services rendered to the Company by KPMG LLP for the years ended December 31, were as follows:

		2004			2003
Audit fees - Audit of the Company’s consolidated financial
statements for the years ended December 31		$	5,154,531	(1)	$	1,872,421
Audit related fees (audits of subsidiaries and
employee benefit plans)			164,706			158,520
Tax fees (2)			924			119,582
All other fees			-0-			-0-
Total fees:		$	5,320,161		$	2,150,523

(1)	The audit fees for 2004 include $3,339,250 for the services rendered for the attestation with respect to, and related reviews of, the Company’s internal control over financial reporting as required under Section 404 of the Sarbanes-Oxley Act of 2002 which first applied to the year ended December 31, 2004.
(2)	In 2003, comprised of fees for tax services provided for expatriates, for executives and for retired executives and surviving spouses.  Amounts are included in their compensation and reported for federal tax purposes.  In 2004, tax compliance work related to the Hong Kong branch.

          The Audit Committee of the Board of Directors has considered whether the provision of the non-audit professional services is compatible with maintaining KPMG LLP’s independence and has concluded that it is.  The Audit Committee pre-approves all audit and non-audit services provided by KPMG LLP.

THE BOARD OF DIRECTORS RECOMMENDS UNANIMOUSLY A VOTE “FOR”
RATIFICATION OF THE SELECTION OF KPMG LLP
AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM.

25

3. OTHER MATTERS

          Management does not intend to bring any other matter before the meeting, and does not know of any other matter that is proposed to be brought before the meeting. However, should any other matter properly come before the meeting, the persons named in the enclosed proxy will have discretionary authority to vote all proxies in accordance with their judgment on such matter.

Shareholder Proposals

          For a shareholder’s proposal to be included in the Company’s Proxy Statement for the 2006 Annual Meeting of Shareholders, the shareholder must follow the procedures of Rule 14a-8 under the Exchange Act, and the proposal must be received by the Secretary of the Company by November 17, 2005.  To be timely, shareholder proposals submitted outside the processes of Rule 14a-8 must be received by the Secretary of the Company after December 31, 2005, and before February 1, 2006.

Annual Report

          The Company has delivered a copy of its Annual Report to each shareholder entitled to vote at the 2005 Annual Meeting of Shareholders.  A copy of the Company’s Form 10-K is available at no charge to all shareholders.  For a copy, write to:

Kenneth S. Janke Jr.
Senior Vice President, Investor Relations
Aflac Incorporated
Worldwide Headquarters
Columbus, Georgia 31999

		By Order of the Board of Directors,
		/s/ JOEY M. LOUDERMILK
		Joey M. Loudermilk
		Secretary
March 17, 2005

26

APPENDIX A

PROXY

AFLAC INCORPORATED
Worldwide Headquarters
1932 Wynnton Road, Columbus, Georgia 31999

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned hereby appoints Daniel P. Amos, Kriss Cloninger III and E. Stephen Purdom, M.D., as Proxies or any one of them, each with the power to appoint his substitute, and hereby authorizes them to represent and to vote, as designated below, all the shares of Common Stock of Aflac Incorporated held of record by the undersigned on February 23, 2005, at the Annual Meeting of the Shareholders to be held on Monday, May 2, 2005, at 10:00 a.m., or any adjournment thereof.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” ALL PROPOSALS

The following proposals are being submitted to the Shareholders:

1.	Election of seventeen Directors of the Company. To vote your Shares for all Director nominees, mark the “For” box.  To withhold voting for all nominees, mark the “Withheld” box.  If you do not wish your Shares voted “For” a particular nominee, mark the “exceptions” box.
	*EXCEPTIONS:  To withhold authority to vote for any individual nominee, strike a line through that nominee’s name in the list below.

		For			Withheld			Exceptions*

1.	Daniel P. Amos	7.	Kenneth S. Janke Sr.	13.	Barbara K. Rimer, Ph.D.
2.	John Shelby Amos II	8.	Douglas W. Johnson	14.	Marvin R. Schuster
3.	Michael H. Armacost	9.	Robert B. Johnson	15.	D. Gary Thompson
4.	Kriss Cloninger III	10.	Charles B. Knapp	16.	Tohru Tonoike
5.	Joe Frank Harris	11.	Hidefumi Matsui	17.	Robert L. Wright
6.	Elizabeth J. Hudson	12.	E. Stephen Purdom, M.D.

		For			Against			Abstain

2.	Ratification of appointment of KPMG LLP as independent registered public accounting firm.
3.	In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the meeting or any adjournment thereof.

THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER.  IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED “FOR” PROPOSALS 1, 2, AND 3.

(PLACE LABEL HERE)

	Sign here as name(s) appears on account:
	X
	X
	Date _________________________________, 2005
	If acting as Attorney, Executor, Trustee or in other representative capacity, please sign name and title.
Complete the proxy, turn the proxy over, read
description of voting rights and complete, sign
and date the affidavit if applicable.

A-1

DESCRIPTION OF VOTING RIGHTS

     In accordance with the Company’s Articles of Incorporation, shares of 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 ten 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 shares”) are deemed to have been acquired and held continuously from the date on which the shares with regard to which the dividend shares were issued 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 below.  The Board of Directors reserves the right to require evidence to support this affidavit.

Affidavit

Under the penalties of perjury, I do solemnly swear that I am entitled to the number of votes set forth below because

 

I agree to provide evidence to support this statement at the request of the Company.	________ Shares @	1 Vote/Share	=	________ Votes
	________ Shares @	10 Votes/Share	=	________ Votes
		Total	=	________ Votes
Sign here X _________________________
X _________________________		Date  ______________, 2005

A-2

APPENDIX B

PROXY

AFLAC INCORPORATED
Worldwide Headquarters
1932 Wynnton Road, Columbus, Georgia 31999

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned hereby appoints Daniel P. Amos, Kriss Cloninger III and E. Stephen Purdom, M.D., as Proxies or any one of them, each with the power to appoint his substitute, and hereby authorizes them to represent and to vote, as designated below, all the shares of Common Stock of Aflac Incorporated held of record by the undersigned on February 23, 2005, at the Annual Meeting of the Shareholders to be held on Monday, May 2, 2005, at 10:00 a.m., or any adjournment thereof.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” ALL PROPOSALS

The following proposals are being submitted to the Shareholders:

1.	Election of seventeen Directors of the Company.  To vote your Shares for all Director nominees, mark the “For” box.  To withhold voting for all nominees, mark the “Withheld” box.  If you do not wish your Shares voted “For” a particular nominee, mark the “exceptions” box.
	*EXCEPTIONS:  to withhold authority to vote for any individual nominee, strike a line through that nominee’s name in the list below.

		For			Withheld			Exceptions*

1.	Daniel P. Amos	7.	Kenneth S. Janke Sr.	13.	Barbara K. Rimer, Ph.D.
2.	John Shelby Amos II	8.	Douglas W. Johnson	14.	Marvin R. Schuster
3.	Michael H. Armacost	9.	Robert B. Johnson	15.	D. Gary Thompson
4.	Kriss Cloninger III	10.	Charles B. Knapp	16.	Tohru Tonoike
5.	Joe Frank Harris	11.	Hidefumi Matsui	17.	Robert L. Wright
6.	Elizabeth J. Hudson	12.	E. Stephen Purdom, M.D.

		For			Against			Abstain

2.	Ratification of appointment of KPMG LLP as independent registered public accounting firm.
3.	In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the meeting or any adjournment thereof.

THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER.  IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED “FOR” PROPOSALS 1, 2, AND 3.

Only if you agree with the voting rights below, you can vote by telephone or internet.  **QUICK **EASY**IMMEDIATE**

Call *** Toll Free*** On a Touch Tone Telephone for Telephone Voting, or, Vote over the internet using the Address Below.

PHONE VOTING		INTERNET VOTING
1-888-297-9553	OR	www.voteyourproxy.com

PROXY #

COMPANY#

ACCT.#

According to the records of the Company you are entitled to the following number of votes:

Sign here as name(s) appears on account:

VOTING RIGHTS	X	___________________________________________________
	X	___________________________________________________
	Date _____________________________________________, 2005
	If acting as Attorney, Executor, Trustee or in other representative capacity, please sign name and title.
	If you do not agree with the voting rights, check here _______and complete, sign and date the reverse side.

B-1

DESCRIPTION OF VOTING RIGHTS

          In accordance with the Company’s Articles of Incorporation, shares of 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 ten 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 shares”) are deemed to have been acquired and held continuously from the date on which the shares with regard to which the dividend shares were issued 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 below.  The Board of Directors reserves the right to require evidence to support this affidavit.

          Only if you do not agree with the voting rights shown on the front of this Proxy should you complete the following:

Affidavit

Under the penalties of perjury, I do solemnly swear that I am entitled to the number of votes set forth below because

 

I agree to provide evidence to support this statement at the request of the Company.	________ Shares @	1 Vote/Share	=	________ Votes
	________ Shares @	10 Votes/Share	=	________ Votes
		Total	=	________ Votes
Sign here X _________________________
X _________________________		Date  ______________, 2005