The Company has outstanding share-based awards under the Aflac Incorporated Long-Term Incentive Plan (as Amended and Restated February 14, 2017), as further amended on August 9, 2022 (the Plan). Share-based awards are designed to reward employees for their long-term contributions to the Company and provide incentives for them to remain with the Company. The number and frequency of share-based awards are based on competitive practices, operating results of the Company, government regulations, and other factors.

The Plan allows for a maximum number of shares issuable over its term of 75 million shares including 38 million shares that may be awarded in respect of awards other than options or stock appreciation rights. If any awards granted under the Plan are forfeited or are terminated before being exercised or settled for any reason other than tax forfeiture, then the shares underlying the awards will again be available under the Plan. As of December 31, 2025, approximately 32.6 million shares were available for future grants under this plan.

Share-based awards granted to U.S.-based grantees are settled with authorized but unissued Company stock, while those issued to Japan-based grantees are settled with treasury shares.

Stock options and stock appreciation rights have an expiration date of no later than 10 years from the grant date. Generally, the vesting period for share-based awards is the requisite service period, which is typically three years for employees and one year for non-employee directors. Vesting for employees is generally on a ratable basis over the three years, typically subject to continued employment.

Share-based compensation expense consists primarily of expenses for stock options, restricted stock, and performance-based restricted stock. The expense is included in insurance and other expenses in the consolidated statements of earnings.


(In millions, except for per-share amounts)	2025			2024			2023
Impact on earnings from continuing operations		$	82		$	72		$	79
Impact on earnings before income taxes		82			72			79
Impact on net earnings		65			57			62
Impact on net earnings per share:
Basic		$	.12		$	.10		$	.10
Diluted		.12			.10			.10


(In thousands of shares)	Stock Option Shares		Weighted-Average Exercise Price Per Share
Outstanding at December 31, 2022		1,577		$	32.05
Granted in 2023		0		0.00
Canceled in 2023		0		24.75
Exercised in 2023		(526)		30.35
Outstanding at December 31, 2023		1,051		32.90
Granted in 2024		0		0.00
Canceled in 2024		(3)		31.21
Exercised in 2024		(425)		31.40
Outstanding at December 31, 2024		623		33.92
Granted in 2025		0		0.00
Canceled in 2025		(2)		30.53
Exercised in 2025		(301)		31.04
Outstanding at December 31, 2025		320		$	36.65


(In millions)	2025			2024			2023
Total intrinsic value of options exercised		$	23		$	25		$	22
Cash received from options exercised		9			13			16
Tax benefit realized as a result of options exercised and restricted stock releases		31			28			20

Stock options and stock appreciation rights granted under the Plan have an exercise price of at least the fair market value of the underlying stock on the grant date. For awards with an exercise price currently below the quoted closing price of the Company's common stock, the total pretax intrinsic value of stock options exercised during the period is based on the difference between the exercise price of the stock options and the closing price of the Company's common stock of $110.27 as of December 31, 2025.

The Company estimates the fair value of each stock option granted using the Black-Scholes-Merton multiple option approach. Expected volatility is based on historical periods generally commensurate with the estimated terms of the options. The Company uses historical data to estimate option exercise and termination patterns within the model. Separate groups of employees that have similar historical exercise patterns are stratified and considered separately for valuation purposes. The expected term of options granted is derived from the output of the Company's option model and represents the weighted-average period of time that options granted are expected to be outstanding. The Company bases the risk-free interest rate on the Treasury note rate with a term comparable to that of the estimated term of the options.


	2025			2024			2023
Expected term (years)		8.0			8.0			8.0
Expected volatility		27.2	%		26.8	%		26.7	%
Annual forfeiture rate		4.4			4.4			4.2
Risk-free interest rate		4.2			4.0			3.0
Dividend yield		2.2			2.4			2.3


(In thousands of shares)						Options Outstanding							Options Exercisable
	Range of Exercise Prices Per Share					Stock Option Shares Outstanding		Wgtd.-Avg. Remaining Contractual Life (Yrs.)		Wgtd.-Avg. Exercise Price Per Share			Stock Option Shares Exercisable		Wgtd.-Avg. Exercise Price Per Share
	$	0.00	-	$	28.97		39		0.1		$	28.97		39		$	28.97
	28.97		-	36.21			166		1.2		35.17			166		35.17
	36.21		-	44.59			115		1.9		41.37			115		41.37


	$	0.00	-	$	44.59		320		1.3		$	36.65		320		$	36.65

Under the Plan, the Company grants selected executive officers performance-based restricted stock with vesting contingent upon meeting various financial performance goals or other Company identified metrics. Performance-based restricted stock is generally granted at-the-money and contingently cliff vest over a period of three years, generally subject to continued employment. Additionally, grants of performance-based restricted stock may also be contingent upon certain market conditions. Compensation expense for performance-based restricted stock subject to accelerated vesting at the date of retirement eligibility is expensed over the implicit service period.

In 2025, the Company granted 284 thousand performance-based restricted stock, which are contingent on the achievement of the Company's financial performance goals and certain market conditions. On the date of grant, the Company estimated the fair value of performance-based restricted stock with market conditions using a Monte Carlo simulation model. The model discounts the value of the stock at the assumed vesting date based on a risk-free interest rate. Based on estimates of actual performance versus the vesting thresholds, the calculated fair value percentage pay-out estimate will be updated each quarter. Actual performance, including modification for relative total shareholder return, may result in the ultimate award of 0% to 200% percent of the initial number of performance-based restricted stock issued, with the potential for no award if the Company's performance goals are not achieved.

In 2025, the Company also granted 10 thousand performance-based stock units, which are contingent on the achievement of certain Company determined metrics. Based on estimates of actual performance versus the vesting thresholds, the calculated fair value percentage pay-out estimate will be updated each quarter. Actual performance may result in the ultimate award of 0% to 100% percent of the initial number of performance-based restricted stock issued, with the potential for no award if the Company's determined metrics are not achieved.

The Company uses third-party analyses to assist in developing the assumptions used in, as well as calibrating, a Monte Carlo simulation model. The Company is responsible for determining the assumptions used in estimating the fair value of its share-based compensation awards.


(In millions)	2025
Expected volatility (based on Aflac Inc. and peer group historical daily stock price)		21.3	%
Expected life from grant date (years)		2.9
Risk-free interest rate (based on U.S. Treasury yields at the date of grant)		4.2	%

The value of restricted stock is based on the fair market value of the Company's common stock at the date of grant. The following table summarizes restricted stock activity during the years ended December 31.


(In thousands of shares)	Shares		Weighted-Average Grant-Date Fair Value Per Share
Restricted stock at December 31, 2022		2,414		$	56.21
Granted in 2023		1,171		70.74
Canceled in 2023		(112)		60.62
Vested in 2023		(1,165)		52.77
Restricted stock at December 31, 2023		2,308		62.96
Granted in 2024		1,300		80.90
Canceled in 2024		(48)		74.68
Vested in 2024		(1,461)		47.22
Restricted stock at December 31, 2024		2,099		73.65
Granted in 2025		1,139		104.53
Canceled in 2025		(77)		78.60
Vested in 2025		(1,294)		68.83
Restricted stock at December 31, 2025		1,867		$	86.15

As of December 31, 2025, total compensation cost not yet recognized in the Company's financial statements related to restricted stock was $38 million, of which $13 million (1.6 million shares) was related to performance-based restricted stock. The Company expects to recognize these amounts over a weighted-average period of approximately 1.7 years. There are no other contractual terms covering restricted stock once vested.