LTIP AWARD AGREEMENT (Senior Management Committee)
Exhibit
10.2
2006
- 2008 Performance Cycle
(Senior
Management Committee)
This
award agreement (“Agreement”), by and between Lincoln National Corporation
(“LNC”) and
(“Grantee”), evidences the grant by LNC on April 12, 2006, of a long-term
incentive award to Grantee and Grantee’s acceptance of the award in accordance
with and subject to the provisions of the Lincoln National Corporation Incentive
Compensation Plan (“Plan”) and this Agreement. LNC and Grantee agree as
follows:
1.
Form
of Award.
The
award shall equal one-half of Grantee’s long-term incentive target value, and
shall be paid in shares of LNC common stock; provided, however, that if Grantee
has satisfied the terms of LNC’s share ownership requirements, Grantee may
elect, by no later than May
12, 2006,
to
receive the award as follows: 100% in the form of shares of LNC common stock
or
75% in the form of shares of LNC common stock and 25% in cash (if the election
is not timely made, the form shall be 100% shares). If Grantee has not made
a
valid election by May 12, 2006, the Grantee will receive his or her LTIP award,
if any, in 100% performance shares. During the performance cycle, the share
component of such award shall consist of LNC stock units but any actual award
shall be payable in shares of LNC common stock. Grantee’s actual award, if any,
will be determined based on performance during the performance cycle in
accordance with the terms of the Plan and the 2006-2008 Long-Term Incentive
Plan
(“2006-2008 LTIP”) approved by the Compensation Committee of the LNC Board of
Directors (“Committee”). The Committee shall determine if and when any award is
payable under the Plan and reserves the right to adjust the target award or
payout amount of any award under the Plan at any time. The number of shares
under this Agreement, if any, shall be adjusted appropriately in the event
of a
stock split, reverse stock split, stock dividend, or other similar event.
2.
Dividend
Equivalents.
If an
award becomes payable in shares of LNC common stock under this Agreement,
Grantee shall also receive an amount equal to the dividends that would have
been
paid on such shares of LNC common stock had Grantee held such shares from the
above date of grant through the date the award becomes payable. Such dividend
equivalent amount shall be paid in shares of LNC common stock based on the
Fair
Market Value (as defined in the Plan) of LNC common stock on the date the award
becomes payable (with fractional shares paid in cash).
3.
Full
or Pro-Rata Awards Upon Certain Events. Except
as
provided in this section and section 5, if during the performance cycle
Grantee’s employment (with LNC and all subsidiaries of LNC) terminates for any
reason, Grantee shall not be entitled to any award under this Agreement. In
the
case of a Grantee's removal from the 2006-2008 LTIP because of a change in
responsibilities (including, but not limited to, transfer from employee status
to agent or planner status), death, Total Disability, Retirement, or involuntary
termination of employment with LNC and all affiliates without Cause, Grantee
(or
Grantee's beneficiary, if applicable) shall receive a pro-rated award based
on
the ratio of: (a) days of employment during the performance cycle (January
12,
2006 though December 31, 2008) to (b) the number of total days in the
performance cycle (1,083). Any such award shall be paid at the same time
long-term incentive awards are normally paid to employees who are employed
at
the end of the performance cycle. Notwithstanding the foregoing, in the case
of
such involuntary termination, any award shall be contingent on Grantee's release
of claims against LNC and its affiliates (in form and substance satisfactory
to
LNC) and shall not be paid unless such release shall have become effective;
except that such a release shall not be required when such termination is by
reason of the sale or disposition of the business in which Grantee is
employed.
4.
Tax
Withholding.
In
reference to a share award, Grantee must remit to LNC an amount equal to the
required tax withholding on the value of the shares payable under this Agreement
at such time as they are taxable to Grantee; and Grantee may elect to surrender
shares of LNC stock (including shares that are a part of this award) to satisfy
all or part of the required tax withholding. In reference to a cash award,
LNC
will withhold any required taxes from the award (federal, state, and local
income, employment, and any other taxes).
5.
Change
in Control. Upon
a
Change in Control of LNC (as defined in the Plan), the Committee (as it shall
have existed on the day immediately preceding such Change in Control) shall
determine what, if any, award under this Agreement shall be provided to Grantee.
In making such determination, the Committee shall consider the nature of such
Change in Control, whether continuation of the Plan and payment of awards for
this performance cycle are feasible, and whether the resulting corporate entity
offers or commits to offer awards of comparable economic value; provided,
however, that the Committee’s determination shall be consistent with existing
LNC plans such as the LNC Incentive Compensation Plan and the LNC Executives’
Severance Benefit Plan.
6.
Transferability.
This
award may not be transferred, sold, pledged, or otherwise encumbered, except
by
will or the laws of descent and distribution.
7.
Consequences
of Competitive and Other Activity.
Any
award under this Agreement is subject to the following
requirements:
(a)
Noncompetition.
Grantee
may not render services for any organization or engage directly or indirectly
in
any business that, in the sole judgment of the Chief Executive Officer of LNC
or
other senior officer designated by the Committee, is or becomes competitive
with
LNC. If Grantee has terminated employment, Grantee shall be free, however,
to
purchase, as an investment or otherwise, stock or other securities of such
organization or business so long as they are listed upon a recognized securities
exchange or traded over-the-counter and such investment does not represent
a
greater than five percent equity interest in the organization or business.
(b)
Nondisclosure.
Grantee
shall not, without prior written authorization from LNC, disclose to anyone
outside of LNC, or use in other than LNC’s business, any confidential
information or material relating to the business of LNC that is acquired by
Grantee either during or after employment with LNC.
(c)
Inventions
or Ideas.
Grantee
shall disclose promptly and assign to LNC all right, title, and interest in
any
invention or idea, patentable or not, made or conceived by Grantee during
employment by LNC, relating in any manner to the actual or anticipated business,
research or development work of LNC and shall do anything reasonably necessary
to enable LNC to secure a patent where appropriate in the United States and
in
foreign countries.
Grantee
must provide LNC with a certification of compliance with these provisions prior
to the payment of any cash or share award. Failure to comply with these
provisions at any time prior to, or during the six months after, any such
payment shall cause such payment to be rescinded. LNC must notify Grantee in
writing of any such rescission. LNC, in its discretion, may waive compliance
in
whole or part in any individual case. Within ten days after receiving a
rescission notice from LNC, Grantee must pay LNC the amount of any payment
received (net of any withholding or other taxes paid by Grantee) as a result
of
the rescinded payment. Such payment by Grantee must be made either in cash
or by
returning the shares Grantee received in connection with the rescinded payment.
However, if Grantee’s employment is terminated by LNC and its subsidiaries other
than for fraud or other fidelity crimes, a failure of Grantee to comply with
the
noncompetition provisions after such termination shall not in itself cause
rescission if the payment was made before the termination.
8.
Definitions.
As used
in this Agreement:
“Total
Disability” means (as determined by the Committee) a disability that results in
Grantee being unable to engage in any occupation or employment for wage or
profit for which Grantee is, or becomes, reasonably qualified by training,
education or experience. In addition, the disability must be a disability that
has lasted six months, is expected to continue for an additional six months
or
longer or to result in death, and must meet the definition of “disabled” under
Internal Revenue Code Section 409A (as amended from time to time), and any
applicable federal taxation rules.
“Retirement”
means,
for purposes of this Agreement, Grantee’s retirement from LNC or a subsidiary at
age 65 or older with at least five years of service (with LNC or a subsidiary)
or, with the approval of Grantee’s employer, at age 55 or older with at least
five years of such service.
“Cause”
means (as determined by the Committee): (1) a conviction of a felony, or other
fraudulent or willful misconduct by Grantee that is materially and demonstrably
injurious to the business or reputation of LNC, or (2) the willful and continued
failure of Grantee to substantially perform Grantee’s duties with LNC or a
subsidiary (other than such failure resulting from incapacity due to physical
or
mental illness), after a written demand for substantial performance is delivered
to Grantee by Grantee’s manager which specifically identifies the manner in
which the manager believes that Grantee has not substantially performed
Grantee’s duties.
IN
WITNESS WHEREOF, LNC, by its duly authorized officer has signed this Agreement
as of the first date set forth above.
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LINCOLN
NATIONAL CORPORATION
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By:
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Xxx
X. Xxxxxx
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Chairman
and Chief Executive Officer
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