RETIREMENT AND RELEASE AGREEMENT
Exhibit
10.1
This
Retirement and Release Agreement (this “Agreement”) is entered into by and
between Lincoln National Corporation (the "Company") and Xxx X. Xxxxxx (the
“Executive”) to set forth the terms and conditions of the Executive's employment
separation from the Company, and his retirement and resignation from his
employment and position as an officer and director of the Company and its
subsidiaries.
RECITALS
A. The
Executive has been employed by the Company as its Chief Executive
Officer.
B. The
Executive is resigning his position as Chairman of the Board and Chief Executive
Officer, and, consistent with the Company’s Corporate Governance Guidelines, as
a director, of the Company, as well as an officer or director of any of the
Company’s subsidiaries, effective July 6, 2007.
C. The
Executive will remain as an employee of the Company and agrees to make himself
reasonably available to the Company through August 31,
2007. Effective August 31, 2007, the Executive hereby retires and
resigns his employment with the Company.
D. The
Executive wishes to accept the payments described herein, to make the covenants
described herein, and to release the Company from any and all claims concerning
his prior employment.
AGREEMENT
In
consideration of the mutual promises and covenants contained in this Agreement,
the receipt and sufficiency of which is hereby acknowledged, the Executive
and
the Company agree as follows:
1. Resignation. The
Executive resigns as Chief Executive Officer and Chairman of the Board, and,
consistent with the Company’s Corporate Governance Guidelines, as a director, of
the Company, and from all positions as a director, officer or employee of each
subsidiary of the Company, effective July 6, 2007. The Executive will
remain as an employee of the Company through August 31, 2007 and will make
himself reasonably available to assist the Company’s new Chief Executive Officer
and its Board of Directors with transition matters. Effective as of
August 31, 2007 (the “Retirement Date”), the Executive hereby retires and
resigns his employment with the Company, and the Executive will be paid
Executive's regular salary amounts, less applicable deductions, and receive
benefits at Executive's current level through the Retirement
Date. The Company accepts the Executive’s resignation and approves
his retirement for all purposes, including with respect to the Company Amended
and Restated Incentive Compensation Plan (“Incentive Compensation Plan”) and all
outstanding awards under the Nonqualified Stock Option Agreements (“Option
Agreements”) and the Long-Term Incentive Plan Award Agreements for the 2005-2007
Performance Cycle (the “2005-2007 LTIP
Award”),
2006-2008 Performance Cycle (the “2006-2008 LTIP Award”), and the 2007-2009
Long-term Incentive Program Performance Award Agreement (the “2007-2009 LTIP
Award” ) (collectively, the “LTIP Award Agreements”). Set forth on Schedule A
are a list of all outstanding option awards with dates of grant, expiration
date, vesting schedules, and exercise prices under the Option Agreements and
the
awards, target values and forms of payments under the LTIP Award
Agreements. The Executive’s resignation shall be treated as an
approved retirement for purposes of any and all of the Company’s bonus,
incentive compensation, stock option and all other benefit plans.
2. Compensation
and Benefits. The Company acknowledges that, as of the
Retirement Date, the Executive will be deemed retired under the Incentive
Compensation Plan, and as such, the Executive is entitled to the following
benefits:
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(a)
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Annual
Incentive Compensation. The Executive will be entitled to receive a
pro-rated amount of his annual bonus under the Annual Incentive Plan
at
his current target level of $2,312,500 per annum based on the ratio
of:
(i) days of employment (243) during the performance cycle to (ii)
number
of total days in the performance cycle (365). Therefore the
Executive will be entitled to $1,541,667 payable in a lump sum on
the
first day that is six months after his Retirement Date, in satisfaction
of
all benefits pursuant to such plan.
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(b)
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Long-term
Incentive Awards.
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1.
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2005–2007
LTIP Award. Executive will receive a pro-rated award of options
to purchase shares of Company common stock and any cash pursuant
to the
terms of the 2005-2007 LTIP Award, based on the ratio of: (i) days
of
employment (973) during the performance cycle (1/1/05 – 12/31/07) to (ii)
number of total days in the performance cycle (1,095). His
pro-rated award will be paid at the same time long-term incentive
awards
are normally paid to employees at the end of the performance cycle,
in
accordance with the 2005–2007 LTIP Award, or, if later, the first day that
is six months after the Retirement Date. These options will
remain exercisable until the first to occur of: (i) the tenth (10th)
anniversary
of grant or (ii) the fifth (5th)
anniversary
of the Retirement Date.
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2.
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2006–2008
LTIP Award. Executive will receive a pro-rated award of Company
common stock and any cash pursuant to the terms of the 2006-2008
LTIP
Award based on the ratio of: (i) days of employment (597) during
the
performance cycle (1/12/06 – 12/31/08) to (ii) number of total days in the
performance cycle (1,083). His pro-rated award will be paid at
the same time long-term incentive awards are normally paid to employees
at
the end of the performance cycle, in accordance with the 2006–2008 LTIP
Award.
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3.
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2007–2009
LTIP Award. Executive will receive a pro-rated award of Company
common stock and any cash pursuant to the terms of the 2007-2009
LTIP
Award based on the ratio of: (i) days of employment (243) during
the
performance cycle (1/1/07 – 12/31/09)
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2
| to (ii) number of total days in the performance cycle (1,096). His pro-rated award will be paid at the same time long-term incentive awards are normally paid to employees at the end of the performance cycle, in accordance with the 2007–2009 LTIP Award. |
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(c)
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Stock
Options.
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1.
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Vesting
of Stock Options. All of the Executive’s outstanding unvested
options will vest at the Retirement
Date.
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2.
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Exercise
Period for all Outstanding Vested Stock Options. The Executive
may exercise all or part of any outstanding options, including options
vested prior to the Retirement Date and those vested upon retirement,
until the first to occur of: (i) the tenth (10th)
anniversary
of the grant or (ii) the fifth (5th)
anniversary
of the Retirement Date.
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(d)
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Retirement
Benefits. Executive will receive payments pursuant to the
Company Employees’ Retirement Plan, Employees’ Supplemental Pension
Benefit Plan, Company Executives’ Excess Compensation Pension Benefit
Plan, Salary Continuation Plan and Company 401(k) Plan as determined
as of
the Retirement Date.
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(e)
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Deferred
Compensation Plan. The Executive will receive his account
balance paid in lump-sum or installment payments, at the time and
in the
form provided pursuant to the plan and any elections
thereunder.
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(f)
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Health
and Welfare Benefits. From the Retirement Date until such
time that the Executive is Medicare eligible, the Company shall continue
Executive’s participation in the Company medical and dental plan in which
Executive and his dependents participated as of the Retirement Date
at the
same coverage level as in effect as of the Retirement Date, subject
to
Executive's payment of all applicable contributions or premiums (employer
and employee) at the rate applicable to employees of the Company
in effect
from time to time. The Company shall invoice Executive for all such
contributions and premiums. The Company shall provide the Executive
with
taxable cash payments equal to the pre-determined monthly premiums
due for
participation in the Company medical and dental plan on the first
day of
each month, provided that the first six months of payments will be
made
six months after the Retirement Date. If Executive should at
any time prior to becoming Medicare eligible gain new employment
and
become eligible for coverage under the new employer’s health insurance
plan, it is Executive's personal obligation to immediately notify
the
Company and in such case Executive shall not thereafter be eligible
to
participate in the Company’s group health insurance
plan.
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(g)
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Beneficiaries. Any
payment provided to be made to the Executive shall, in the event
of
Executive’s death, instead be made (i) in the case of any payment pursuant
to a plan or other arrangement under which the Executive has designated
a
beneficiary, to the Executive's beneficiary and (ii) in any other
case, to
the legal
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| representative of the Executive's estate or such other beneficiary as he may hereafter designate in writing by notice to the Company, or (iii) as otherwise required by law. |
3. Additional
Pay and Annuity. In consideration of the releases and
covenants contained herein, and for other good and valuable
consideration,
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(a)
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the
Company will pay the Executive additional payments equal to one times
his
target annual cash compensation (including salary and target annual
bonus)
in the amount of $3,237,500, payable over one year in three installments
on the first day of March, June, and September 2008, the first installment
being $1,618,750 and the remaining installments being $809,375 each,
and
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(b)
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the
Executive will be entitled to receive a special supplemental monthly
retirement benefit in the form of a 100% joint & survivorship annuity
with a 10 year term certain in the amount of $28,583.33 ($343,000
annually) and upon his death, Executive’s surviving spouse shall receive a
monthly retirement benefit for her life of $28,583.33 ($343,000 annually).
This benefit is a monthly benefit commencing on the Retirement Date
to be
paid in the form of a ten year certain and 100% joint and survivorship
annuity (in no event would the Company make less than one hundred
and
twenty (120) such payments, whether to the Executive, the Executive’s
spouse or their respective beneficiaries). Notwithstanding the foregoing,
the first payment shall not be made to the Executive before the date
that
is six months from the date after the Retirement Date. The
first payment shall include a payment in arrears for payments accrued
during the six month period beginning on the Retirement Date in the
amount
of $171,500, as well as the normal monthly benefit amount of
$28,583.33. This special supplemental monthly retirement
benefit shall not be reduced for early commencement of
benefits.
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The
Executive agrees and stipulates that the payments described herein are being
paid to him as a special allowance, and that he is not entitled to receive
said
payments under any contract between the Company and himself, or pursuant to
any
Company policy or practice.
4. No
Additional Compensation. The Executive and the Company agree
that, except as expressly set forth in this Agreement, the Executive shall not
be entitled to receive any additional compensation, bonuses, incentive
compensation, Executive benefits or other consideration from the Company in
connection with or in any way related to his retirement from, or prior
employment by, the Company. The Executive acknowledges that he does
not have and will not be deemed to have a deemed participation under the Company
Executives’ Severance Benefit Plan.
5. Return
of Company Property. The Executive represents and warrants
that he will return to the Company by no later than the Retirement Date all
Company property including, without limitation, any keys, access cards, credit
cards, books, manuals, files, computer software, disks and the like, as well
as
all paper and electronic copies of materials and documents in his possession
or
under his direct or indirect control relating to the Company, its business,
executives, clients and customers, and that he will not retain copies, in
whatever form, of any
4
such
materials or documents. Notwithstanding anything to the contrary set
forth herein, the Company hereby acknowledges and agrees that the Executive
may
retain, as his own property, his copies of his individual personnel documents,
such as his payroll and tax records, and similar personal records.
6. Complete
Release of Claims by The Executive Against the Company. In
consideration of the payments described in Sections 2 and 3 of this Agreement,
and other good and valuable consideration, which are given to the Executive
specifically in exchange for this release as a result of negotiations between
the Company and the Executive, the Executive, on behalf of himself, his heirs,
successors and assigns, hereby releases and discharges the Company, its
subsidiaries, its and their employee benefit plans, its and their current or
former directors, officers, executives, agents, insurers, attorneys,
consultants, and auditors, and any and each of their successors and assigns
and
predecessors (“Released Parties”), from any and all claims, charges, causes of
action and damages (including attorneys’ fees and costs actually incurred),
known and unknown (“Claims”), including those Claims related in any way to the
Executive’s employment with the Company, or the termination of his employment
relationship or positions as an officer of the Company, arising on or prior
to
the Retirement Date. The waivers in this Agreement shall not waive
the Executive’s rights respecting the Company’s obligations under this
Agreement, Executive’s rights as a shareholder of the Company, or Executive’s
rights as a policyholder of any policies issued by the Company or any of its
subsidiaries.
For
the
purposes of implementing a full and complete release and discharge of the
Company and the other Released Parties, the Executive expressly acknowledges
that this Agreement is intended to include in its affect, without limitation,
all Claims which he does not know or suspect to exist in his favor at the time
he signs this Agreement, and that this Agreement is intended to fully and
finally resolve any such Claim or Claims.
The
release contained in this Section 6 specifically includes, but is not limited
to, rights and claims under the local, state or federal laws prohibiting
discrimination in employment, including the Americans with Disabilities Act,
the
Age Discrimination in Employment Act, the Family and Medical Leave Act, the
Pennsylvania Human Relations Act, the Employee Retirement Income Security Act
(except as otherwise stated herein), the Executive protection provisions of
the
Federal Deposit Insurance Act (12 U.S.C. § 1831j), Title VII of the Civil Rights
Act of 1964, the Xxxxxxxx-Xxxxx Act of 2002, as well as any other state or
federal laws or common law theories relating to discrimination in employment,
the termination of employment, or personal injury, including without limitation
all claims for wrongful discharge, breach of contract, fraud, breach of an
implied covenant of good faith and fair dealing, intentional infliction of
emotional distress, tortious interference with contract or prospective economic
advantage, defamation, loss of consortium, infliction of emotional distress;
or
any claim for any compensation, including, but not limited to additional
compensation, back pay, front pay, or benefits (other than as provided for
in
this Agreement), severance, reinstatement, or any other form of economic loss;
and all claims for personal injury, including, but not limited to: mental
anguish, emotional distress, pain and suffering, humiliation, and damage to
name
or reputation; and all claims for liquidated damages and punitive damages and
all claims for counsel fees and costs.
7. Covenant
Not to Xxx. The Executive represents that he has not filed
any Claim that was released in this Agreement against the Company or its
Released Parties with any court
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or
government agency, and that he will not, to the extent allowed by applicable
law, do so at any time in the future; provided, however, that the covenants
contained in this Section 7 will not prevent the Executive from filing a claim
to enforce the terms of this Agreement. If any government agency
brings any claim or conducts any investigation against the Company, nothing
in
this Agreement forbids the Executive from cooperating in such proceedings,
but
by this Agreement, the Executive waives and agrees to relinquish any damages
or
other individual relief that may be awarded as a result of any such
proceedings.
8. Future
Cooperation. The Executive agrees to make himself reasonably
available to the Company in connection with any claims, disputes,
investigations, regulatory examinations or actions, lawsuits or administrative
proceedings relating to matters in which he was involved during the period
in
which he was Chief Executive Officer of the Company, and to provide information
to the Company, and otherwise cooperate with the Company in the investigation,
defense or prosecution of such actions. The Company will reimburse
the Executive for any reasonable, documented out-of-pocket expenses incurred
by
the Executive in connection with his compliance with this Section
8.
9. Voluntary
Agreement; Full Understanding; Advice of Counsel. The
Executive understands and acknowledges the significance of this Agreement and
acknowledges that this Agreement is voluntary and has not been given as a result
of any coercion. The Executive also acknowledges that he has been
given full opportunity to review and negotiate this Agreement, that he has
been
specifically advised to consult with legal counsel prior to signing it, that
he
has in fact carefully reviewed it with his attorney before signing it, and
that
he executes this Agreement only after full reflection and analysis.
10. Company
Representations. The Company represents and warrants to the
Executive that (i) the execution, delivery and performance of this Agreement
have been duly and validly authorized on behalf of the Company, (ii) the
execution, delivery and performance of this Agreement by the Company does not
and will not violate any law, regulation, order, judgment or decree or any
agreement, plan or corporate governance document of the Company and (iii) upon
the execution and delivery of this Agreement by the Executive, this Agreement
shall be the valid and binding obligation of the Company, enforceable in
accordance with its terms, except to the extent enforceability may be limited
by
applicable bankruptcy, insolvency or similar laws affecting the enforcement
of
creditors' rights generally and by the effect of general principles of equity
(regardless of whether enforceability is considered in a proceeding in equity
or
at law). The Executive acknowledges that, except as
expressly set forth herein, no representations of any kind or character have
been made to him by the Company or by any of the Company’s directors, employees,
agents, representatives or attorneys to induce the execution of this
Agreement.
11. Review
and Revocation Periods. The Executive has twenty-one (21)
days to consider this Agreement before signing it. The Executive may
use as much or as little of this 21-day period as he wishes before
signing. To accept this Agreement, the Executive must return the
signed Agreement to Xxxxxxx X. Xxxxxxxxxx, on or before that day and
time. The Executive understands and acknowledges that he has seven
(7) days after signing this Agreement to revoke it. To revoke this
Agreement, the Executive must deliver a written notice of revocation to Xxxxxxx
X. Xxxxxxxxxx no later than 5:00 pm, Eastern Standard Time, on the seventh
day
after this Agreement is executed. If the Executive does not sign this
Agreement or signs and revokes this Agreement, he will not receive any of the
payments described in Sections 2 and 3 of this
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Agreement. Although
the Executive's resignations as Chief Executive Officer, Chairman of the Board
and a director of the Company, and from all positions as a director, officer
or
employee of each subsidiary of the Company, are effective on July 6, 2007 as
set
forth in Section 1 of this Agreement, the remainder of this Agreement shall
not
become effective until the eighth (8th) day following the Executive's signing
of
this Agreement.
12. Nonadmission. This
Agreement shall not be construed as an admission of wrongdoing or evidence
of
any noncompliance with, or violation of, any statute or law by the Company
or by
the Executive.
13. Non-Competition.
In consideration of the payments described in Sections 2 and 3 of this
Agreement, Executive agrees that from the date hereof and for one (1) year
following the Retirement Date, he will not act as a director, officer, employee,
partner, principal, agent, consultant or advisor to, nor directly or indirectly
become associated with, any business or entity which engages in any activity
that is competitive with any of the businesses of the Company or any of its
subsidiaries, existing at the time of this Agreement, in the United States
of
America ("Competitive Business"); provided that Executive shall not
be prohibited from engaging in activities that are not
a Competitive Business for any business or entity that engages in
both a Competitive Business and activities that are not a Competitive Business
so long as Executive does not also engage in any activities that
are a Competitive Business for such business or
entity. The Company acknowledges that this Section 13 does not
preclude the Executive from purchasing or owning publicly-traded securities
of
any such business if the Executive's holdings do not exceed five percent of
the
issued and outstanding securities of any class of securities of such
business.
14. Non-solicitation. In
consideration of the payments described in Section 2 and 3 of this Agreement,
from the date hereof and for one (1) year following the Retirement Date,
Executive agrees that he will not directly or indirectly hire, manage, solicit
or recruit senior management, financial planners, agents, salespeople, financial
advisors, or other employees of the Company or any of its subsidiaries (or
an
employee of the Company or any of its subsidiaries within the two-month period
prior to the Retirement Date), or encourage or induce such person to resign
from
the Company. The Executive acknowledges that his association with any business,
in a senior management or similar position, which hires a member of senior
management of the Company or any of its subsidiaries in the
Executive’s direct or indirect reporting chain at such business would be
considered an indirect hire or solicitation in violation of this Section
14. From the date hereof and for a period of one (1) year
following the Retirement Date, the Executive will not attempt to (i) solicit
any
client or customer to transact business with another business that is
competitive with any business of the Company or any of its subsidiaries or
to
reduce or refrain from doing any business with the Company or any of its
subsidiaries, or (ii) disrupt or otherwise interfere with any relationship
between the Company or any of its subsidiaries and a client or
customer.
15. Waiver
of Obligation Not to Compete under the LTIP Award Agreements and the Option
Agreements. The Company hereby waives compliance beginning
on and after September 1, 2008 with the non-competition provision contained
in
Section 7 of the Option Agreements, Section 3 of the 2005-2007 LTIP Award,
Section 7 of the 2006-2008 LTIP Award, and Section 3 of the 2007-2009 LTIP
Award, and the Company agrees that compliance with the non-competition standard
set forth in Section 13 of this Agreement will be deemed compliance
7
with
any
non-competition standard contained in such agreements or awards; provided that
the remedial provisions of such Option Agreements and LTIP Awards shall only
apply with respect to actions taken by Executive before September 1,
2008.
16. Confidentiality
of Terms of this Agreement Prior to Execution. Executive
affirms that he has kept confidential his proposed retirement, including all
surrounding circumstances, and all terms of this Agreement before execution
of
this Agreement, except for his counsel and spouse.
17. Confidential
Information.
Acknowledgement
of Receipt of Confidential Information. The Executive acknowledges that
he has occupied a position of the highest trust and confidence with the Company,
and during the Executive’s employment with the Company, he has become familiar
with the Company’s and its subsidiaries’ business plans and strategies, and with
other proprietary and confidential information concerning the Company and its
subsidiaries, their businesses, executives and customers or
clients. As used in this Agreement, “Confidential Information” shall
mean any information relating to the business or affairs of the Company, its
subsidiaries or its customers, including but not limited to information relating
to financial statements, executives, software tools, business methods,
equipment, programs, methodologies, strategies and information, analyses,
reports, notes, memoranda, data, ideas, processes, devices, programs, writings,
research, personnel information, customer information, financial information,
or
other proprietary information used by the Company or any of its subsidiaries
in
connection with its business, provided, however, that Confidential Information
shall not include any information which is in the public domain or becomes
known
in the industry through no wrongful act on the part of the
Executive. The Executive acknowledges that the Confidential
Information is confidential and proprietary to the Company.
Agreement
to Maintain Confidentiality of Company Information. The Executive shall
keep secret and retain in strictest confidence, and shall not, without the
prior
written consent of the Company, furnish, make available or disclose to any
third
party (except in furtherance of the Company’s business activities and for the
sole benefit of the Company) or use for the benefit of himself or any third
party, any Confidential Information.
18. Non-Disparagement. Except
as required by law or subpoena, (a) the Executive shall not make any public
statements regarding his employment (other than factual statements concerning
the dates of his employment and positions held) or his retirement and
resignation, or the Agreement that are not agreed to by the Company, such
approval not to be unreasonably withheld or delayed, (b) the Executive shall
not
disparage the Company, or any of its subsidiaries, its and their respective
Boards of Directors, members thereof and senior management, and (c) the Company
will ensure that no executive officers or directors of the Company disparage
the
Executive.
19. Indemnification. For
six (6) years following the date hereof, the Company shall not amend, repeal
or
otherwise modify in a manner adverse to the Executive the provisions of the
Company's articles of incorporation and/or bylaws with respect to exculpation,
advancement of expenses and indemnification of the Executive. The
Company represents and warrants that it maintains a directors and officers
liability insurance policy that provides coverage with respect to
8
actions
taken or omissions on or prior to the date hereof and covenants and
agrees, for the six (6) years following the date hereof, to maintain
such a policy in effect that does not treat the Executive
in a disproportionate manner as compared with the other directors and officers
of the Company .
20. Remedies. Executive
expressly recognizes and agrees that the restraints imposed by Section 13 and
14
are reasonable as to time and geographic scope and are not oppressive. The
Executive acknowledges and agrees that the covenants set forth in Sections
13,
14, 16, 17, and 18, are reasonable and necessary for the protection of the
Company’s business interests, that irreparable injury will result to the Company
if the Executive breaches any of his obligations under this Agreement, and
that
in the event of the Executive’s actual or threatened breach of such obligations,
the Company will have no adequate remedy at law. The Executive
accordingly agrees that in the event of any actual or threatened breach by
him
of any of his obligations under Sections 13, 14, 16, 17, and 18 of this
Agreement, the Company shall be entitled to immediate temporary injunctive
and
other equitable relief, without bond and without the necessity of showing actual
monetary damages, subject to hearing as soon thereafter as
possible. In that regard, the Executive agrees to submit voluntarily
to the jurisdiction over his person by a court of competent jurisdiction located
within the Commonwealth of Pennsylvania. Nothing contained herein
shall be construed as prohibiting the Company from pursuing any other remedies
available to it for such breach or threatened breach, including the recovery
of
any damages which it is able to prove. In the event that the Company
seeks an injunction or similar equitable relief for the breach or threatened
breach of the provisions herein, the Executive agrees that he shall not use
the
availability of arbitration in Section 20 hereof as grounds for the dismissal
of
any such injunctive action.
In
the
event that any covenant contained in this Agreement shall be determined by
any
court of competent jurisdiction to be unenforceable by reason of its extending
for too great a period of time or over too great a geographical area or by
reason of its being too extensive in any other respect, it shall be interpreted
to extend only over the maximum period of time for which it may be enforceable
and/or over the maximum geographical area as to which it may be enforceable
and/or to the maximum extent in all other respects as to which it may be
enforceable, all as determined by such court in such action.
If
Executive fails to comply with Sections 5, 6, 7, 8, 13, 14, 16, 17, or 18 of
the
Agreement and does not cure such failure within 15 days after written notice
by
the Company to Executive of such failure, then the Company can
thereafter immediately cease any continuing benefits under Sections 2 and 3
of
this Agreement, in addition to any other remedies the Company may have pursuant
to this Agreement or under law.
21. Arbitration. The
Company and the Executive will first attempt to amicably resolve disagreements
and disputes hereunder by negotiation. If the matter is not amicably
resolved through negotiation, within thirty (30) days after written notice
from
either party, any controversy, dispute or disagreement arising out of or
relating to this Agreement, or the breach thereof, will be subject to exclusive,
final and binding arbitration, which will be conducted in Philadelphia,
Pennsylvania in accordance with the Commercial Arbitration Rules of the American
Arbitration Association. Either party may bring a court action to
compel arbitration under this Agreement or to enforce an arbitration
award. Nothing in this Section 21 shall be deemed to limit,
compromise, or affect the Company’s right to seek and/or obtain injunctive
relief or other equitable relief from a court of competent jurisdiction pursuant
to Section 20
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above.
Each party hereto hereby expressly waives any right to a trial by jury in any
action or proceeding to enforce or defend any rights under this Agreement,
or
under any amendment to this Agreement.
22. Applicable
Law; Venue; Interpretation. This Agreement shall be
interpreted in accordance with the laws of the Commonwealth of Pennsylvania
without regard to its conflict of laws or canons of construction interpreting
written agreements against the drafter. The Company and the Executive
agree that any claims or causes of action that arise out of this Agreement
shall
be instituted and litigated only in, and they voluntarily submit to the
jurisdiction over his person by, a court of competent jurisdiction located
within the Commonwealth of Pennsylvania. The language of this Agreement shall
be
construed as a whole according to its fair meaning.
23. Fees
and Expenses. The Company will pay the legal fees incurred
by the Executive in connection with the negotiation and execution of this
Agreement, up to $100,000, payable upon submission of the billing statement
or
paid receipt for such services rendered by the Executive's counsel or
counsels.
24. Tax
Withholdings and Deductions. All payments described herein
shall be subject to applicable federal, state, and local tax withholdings and
deductions.
25. Complete
Agreement. This Agreement represents and contains the entire
understanding between the parties in connection with the subject matter of
this
Agreement. This Agreement shall not be modified or varied except by a
written instrument signed by the Executive and the Chairman of the Board of
the
Company. It is expressly acknowledged and recognized by all parties
that all prior written or oral agreements, understandings or representations
between the parties are merged into this Agreement.
26. Notices. All
notices, requests, demands, waivers and other communications under this
Agreement must be in writing and will be deemed given (1) on the business day
sent, when delivered by hand or facsimile transmission (with confirmation)
during normal business hours, (2) on the business day after the business day
sent, if delivered by a nationally recognized overnight courier or (3) on the
third business day after the business day sent if delivered by registered or
certified mail, return receipt requested, in each case to the following address
or number (or to such other addresses or numbers as may be specified by notice
that conforms to this Section 26).
If
to the
Executive, to you:
Xxx
X.
Xxxxxx
000
Xxxxxxxx Xxxxx
Xxxxxxxx,
XX 00000
with
a
copy to:
Xxxx
Xxxxx, Esquire
Cozen
X’Xxxxxx
The
Atrium
0000
Xxxxxx Xxxxxx
00
Xxxxxxxxxxxx,
XX 00000
If
to the
Company, to:
General
Counsel
Lincoln
National
Corporation
0000
Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx
Xxxxxx Xxxx Xxxxx
Xxxxxxxxxxxx,
Xx 00000-0000
with
a
copy to:
Chairman
of the Compensation Committee
Lincoln
National Corporation
0000
Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx
Xxxxxx Xxxx Xxxxx
Xxxxxxxxxxxx,
Xx 00000-0000
27. Section
409A.All payments and benefits under this Agreement shall be made and
provided in a manner that is intended to comply with Section 409A of the Code,
to the extent applicable. The Executive and the Company agree that if
the Executive concludes in good faith on the advice of counsel that the rights
granted hereby should be altered to comply with Section 409A of the Code, the
Executive and the Company will use reasonable best efforts to agree to
amendments to this Agreement to comply with Section 409A of the Code while
preserving substantially the same economic value and cost to each of the parties
hereto; provided that this sentence shall not be construed as an indemnification
with respect to any liability under Section 409A of the Code.
28. Invalidity. It
is understood and agreed that if any provisions of this Agreement are held
to be
invalid or unenforceable, the remaining provisions of the Agreement shall
nevertheless continue to be fully valid and enforceable.
29. Execution. This
Agreement may be executed with duplicate original counterparts with faxed
signatures, each of which shall constitute an original and which together shall
constitute one and the same document.
11
PLEASE
READ CAREFULLY. THIS AGREEMENT INCLUDES A RELEASE OF ALL KNOWN AND
UNKNOWN CLAIMS.
|
LINCOLN
NATIONAL CORPORATION
By /s/
Xxxxxxx X. Xxxxxxxxxx
_______________________________
Chairman
of the Compensation
Committee
of the Board of Directors
Date
July 6, 2007
_____________________________
|
XXX
XXXXXX
By /s/
Xxx X. Xxxxxx
___________________________
Xxx
X. Xxxxxx
Date
July 6, 2007
______________________________
|
12
SCHEDULE
A
NQSO
– ICP Awards
|
Grant
Date
|
Expiration
Date
|
Strike
Price
|
Vested
& Exercisable
|
Unvested
|
|
05/13/1998
|
05/13/2008
|
$44.925
|
220,000
|
0
|
|
05/12/1999
|
05/12/2009
|
$50.830
|
200,000
|
0
|
|
03/09/2000
|
03/09/2010
|
$24.720
|
100,000
|
0
|
|
03/08/2001
|
03/08/2011
|
$43.480
|
184,000
|
0
|
|
03/14/2002
|
03/14/2012
|
$52.100
|
200,000
|
0
|
|
03/11/2004
|
03/11/2014
|
$47.580
|
272,827
|
0
|
|
03/10/2005*
|
03/10/2015
|
$46.770
|
0
|
301,385
|
|
04/13/2006**
|
04/13/2016
|
$56.020
|
92,792
|
185,583
|
|
02/22/2007**
|
02/22/2017
|
$70.660
|
0
|
226,303
|
|
04/26/2007
|
05/14/2007
|
$69.900
|
21,924
|
0
|
|
Totals
|
1,291,543
|
713,271
|
*
Performance
option granted pursuant to LTIP Award terms, xxxx xxxxx-vest at the end of
three-year performance period (upon payout), on the date of Board
certification.
**Vests
ratably, 1/3 on each anniversary of grant date (not performance
options).
Long-Term
Incentive Plan (LTIP) Performance Awards
|
LTIP
Cycle
|
Grant
Date
|
Elected
Form
|
Target
Amount
|
|
2005-2007
Cycle
|
03/10/2005
|
67%
options
33%
cash
|
$5,200,000
|
|
2006-2008
Cycle
|
04/13/2006
|
100%
shares
|
$4,865,500
|
|
2007-2009
Cycle
|
02/22/2007
|
75%
shares
25%
cash
|
$4,865,500
|
13
