Contract
Exhibit
10.1
2008
LONG-TERM INCENTIVE AWARD PROGRAM
This
award agreement (“Agreement”), by and between Lincoln National Corporation
(“LNC”) and [Name] (“Grantee”), evidences the grant by LNC on February 7, 2008, of a
long-term incentive performance 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 effective May 10, 2008 (“Plan”)
and this Agreement. LNC and Grantee agree as follows:
1. Form of
Award. The performance award grant shall equal one-half of
Grantee’s 2008 long-term incentive award target value, which, upon vesting after
certification of achievement of the established performance criteria, shall
ultimately be paid in shares of LNC common stock, or, if Grantee has so elected,
and has satisfied the terms of LNC’s share ownership requirements, Grantee may
receive 75% of his/her award 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). Grantee has elected to receive his or her award, if any, in
the following form:
100%
in shares of LNC common stock = _____ shares
75%
in shares of LNC common stock and 25% in cash = ____ shares &
$______
During
the performance cycle, the share component of such award shall consist of LNC
stock units but any actual award shall be ultimately vest 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 2008-2010 Performance Cycle approved by the Compensation
Committee of the LNC Board of Directors (“Committee”). The Committee
shall determine if and when any award shall vest under the Plan and reserves the
right to adjust the target award or payout amount of any award under the Plan at
any time to the extent permissible under Section 162(m) of the Internal Revenue
Code of 1986, as amended. The number of shares that may ultimately
vest 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. Transferability. This
award may not be transferred, sold, pledged, or otherwise encumbered, except by
will or the laws of descent and distribution.
3. Non-Competition,
Non-Solicitation, Non-Disparagement and Non-Disclosure Provisions or Termination
for Cause.
(a) Non-Competition. Grantee
may not become employed by, work on behalf of, or otherwise render services that
are the same or similar to the services rendered by Grantee to the business unit
employing Grantee for any other organization or business which competes with or
provides, or is planning to provide, the same or similar products and/or
services as the business unit in which Grantee was employed or otherwise had
responsibilities for at the time of his/her termination. Grantee
understands and agrees that this restriction is nationwide in
scope. 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) Non-Solicitation. Grantee
shall not directly or indirectly hire, manage, solicit or recruit any employees,
agents, financial planners, salespeople, financial advisors, vendors or service
providers of LNC whom Grantee had hired, managed, supervised, or otherwise
became familiar with as a result of his/her employment with LNC.
(c) Non-Disparagement. Grantee
shall not (i) make any public statements regarding his/her employment with LNC
(other than factual statements concerning the dates of employment and positions
held) or his/her termination or Retirement (as defined in Paragraph 7 below)
from LNC that are not agreed to by LNC, such approval not to be unreasonably
withheld or delayed; and (ii) Grantee shall not disparage LNC or any of its
subsidiaries or affiliates, its and their respective employees, executives,
officers, or Boards of Directors.
(d) Non-Disclosure & Ideas
Provision. Grantee shall not, without prior written
authorization from LNC, disclose to anyone outside LNC, or use in other than
LNC’s business, any information or material relating to the business of LNC that
LNC considers confidential and/or proprietary pursuant to its Code of
Conduct. Furthermore, Grantee agrees to disclose and assign to LNC
all rights and interest in any invention or idea that Grantee developed or
helped develop for actual or related business, research, or development work
during the period of their Service with LNC.
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
provisions (a) through (d) above at any time prior to, or during the six months
after, any such payment shall cause such payment to be
rescinded. Termination for Cause at any time, before or after payment
of any cash or share award, shall result in the cancellation or rescission of
the award. 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 gain realized
or 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 exercise or payment. 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 non-competition provisions after such
termination shall not in itself cause rescission if the exercise or payment
occurred before the termination.
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 other taxes).
5. Change in
Control. Upon a Change in Control
of LNC (as defined in the LNC Executives’ Severance Benefit 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. Definitions. As
used in this Agreement:
“Cause”
means, as determined by LNC in its sole discretion, a conviction of a felony or
any fraudulent of willful misconduct by Grantee that is materially and
demonstrably injurious to the business or reputation of LNC.
“Retirement”
means, for purposes of this Agreement, Grantee’s retirement from LNC or a
subsidiary at age 55 or older with at least five (5) years of service with
LNC.
“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 have lasted
six months and be expected to continue for at least six more months or be
expected to continue unto death.
7. Full or
Pro-Rata Awards Upon Certain Events. Except as provided in
this Section 8 and in the preceding 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 Grantee's 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 Grantee’s period of service during the
cycle. 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.
8. Terms
Applicable Only to Stock Units/Shares. During the performance
cycle, any share award shall consist of LNC stock units but any actual award
shall be payable in shares of LNC common stock. If an award becomes
payable in shares of LNC stock under this Agreement, Grantee shall also receive
an amount equal to the dividends that would have been paid on such shares of LNC
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 stock based on the Fair Market Value (as defined in the
Plan) of LNC stock on the date the award becomes payable (with fractional shares
paid in cash).
IN
WITNESS WHEREOF, LNC, by its duly authorized officer has signed this Agreement
as of the first date set forth above.
LINCOLN NATIONAL
CORPORATION
By:
Xxxxxx X. Xxxxx
President and Chief Executive
Officer