EX-10.(F) Executive Deferrred Compensation Plan

EX-10.(F) 3 c72779exv10wxfy.htm EX-10.(F) EXECUTIVE DEFERRRED COMPENSATION PLAN Lincoln National Corporation

Exhibit 10 (f)

LINCOLN NATIONAL CORPORATION
EXECUTIVE DEFERRED COMPENSATION PLAN FOR EMPLOYEES
Amended and Restated Effective August 1, 2002

This Lincoln National Corporation Executive Deferred Compensation Plan for Employees has been established and is maintained by Lincoln National Corporation (“LNC”).

Section 1
Definitions

The following definitions are provided for key terms contained within this document:

	1.01.		Account. The term “Account” refers to a separate deferred compensation account established by the Employer in the name of each Participant.

	1.02.		Beneficiary. The word “Beneficiary” refers to an individual designated by the Participant to receive certain benefits enumerated in this Plan.

	1.03.		Benefits Administrator. The “Benefits Administrator” shall be the LNC Senior Vice President of Human Resources or any successor appointed by the Chief Executive Officer of LNC. The Benefits Administrator shall head the Plan’s Administrative Committee and determine its membership.

	1.04.		Bonus. The term “Bonus” refers to an amount calculated by reference to the LNC Incentive Compensation Plan or, as determined by the Benefits Administrator, any bonus paid by an Employer.

	1.05.		Cause. “Cause” means (as determined by LNC in its sole discretion): (1) a conviction of a felony, or other fraudulent or willful misconduct by a Participant that is materially and demonstrably injurious to the business or reputation of LNC, or (2) the willful and continued failure of a Participant to substantially perform Participant’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 the Participant by the Participant’s manager which specifically identifies the manner in which the manager believes that the Participant has not substantially performed the Participant’s duties.

	1.06.		Change in Control. A “Change in Control” means that LNC has had a change of control as that term is defined in the LNC Executives’ Severance Benefit Plan, as in effect immediately prior to the Change in Control. This definition shall always be identical to the definition of “Change in Control” contained in the LNC Executives’ Severance Benefit Plan (or any successor plan). Any amendment of the definition contained in the LNC Executives’ Severance

			Benefit Plan (or any successor plan) shall be deemed an amendment of the definition of Change in Control contained in this Plan.

	1.07.		Compensation. For purposes of the Plan, “Compensation” means the basic cash compensation paid or payable to a Participant by the Employer at regular intervals, plus the amounts by which such compensation is reduced pursuant to the Participant’s voluntary election, but excluding bonuses, overtime earnings, service awards, and other special compensation. As determined by the Benefits Administrator, Compensation shall also include certain first-year and other commissions reported on IRS Form W-2.

	1.08.		Deferrals. The word “Deferrals” refers to the amount that a Participant specifies in his or her Election to defer pursuant to the terms and conditions of this Plan.

	1.09.		Election. The term “Election” refers to the act of the Participant of stating in writing that he or she intends to participate in the Plan.

	1.10.		Employer(s). The term “Employer” when used in the singular refers to LNC or any individual Subsidiary and when used in the plural (“Employers”) refers to LNC and all subsidiaries collectively.

	1.11.		401(k) Plan. The phrase “401(k) Plan” refers to the Lincoln National Corporation Employees’ Savings and Profit-Sharing Plan.

	1.12.		Hardship. “Hardship” shall mean an unforeseeable emergency to the Participant resulting from a sudden and unexpected illness or accident of the Participant or of a dependent (as defined in Section 152(a) of the Internal Revenue Code of 1986, as amended) of the Participant, loss of the Participant’s property due to casualty, or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant.

	1.13.		Insider. “Insider” means an individual subject to the short-swing profit recovery provisions of Section 16 of the Securities Exchange Act of 1934.

	1.14.		LNCC. “LNCC” means the Lincoln National Corporation Compensation Committee constituted as described in the LNC Bylaws.

	1.15.		Match. The term “Match” refers to a credit to the Participant’s Account made by the Employer equal to (i) six percent (6%) of the Participant’s Compensation and Bonus (up to $100,000 and fifty percent (50%) thereafter) for such year multiplied by the percentage determined under the 401(k) Plan for such calendar year representing the Employer contribution, less (ii) the actual Employer contribution to the 401(k) Plan pursuant thereto for such calendar year, less (iii) any amount the Employer decides in its sole discretion

			to pay directly to the Participant. If the Participant becomes eligible for the 401(k) Plan after the first payroll period of the year, the Match will be based only on the Compensation and Bonus (up to $100,000 and 50% thereafter) paid during or after the payroll period in which he or she becomes eligible.

	1.16.		Match Units. “Match Units” means phantom stock Units allocated pursuant to the Match.

	1.17.		Paid Units. “Paid Units” means phantom stock Units that the Participant has acquired pursuant to deferrals made by the Participant under this Plan.

	1.18.		Participant. The word “Participant” refers to an employee who is a member of a select group of management or highly compensated employees of the Employers who has been designated by an Employer as eligible to participate in the Plan.

	1.19.		Plan. The word “Plan” refers to this Lincoln National Corporation Executive Deferred Compensation Plan for Employees, including Appendixes.

	1.20.		Subsidiary. The term “Subsidiary” means any corporation of which fifty percent (50%) or more of the voting stock is owned, directly or indirectly, by LNC. As determined by the Benefits Administrator, a corporation may be deemed to be a Subsidiary even if such percentage is less than fifty percent (50%).

	1.21.		Units. “Units” means phantom stock Units, including Match Units, Paid Units, Unpaid Units, and Vested Units.

	1.22.		Unpaid Units. “Unpaid Units” means phantom stock Units awarded to the Participant pursuant to the LNC Incentive Compensation Plan (rather than acquired pursuant to deferrals) that are subject to forfeiture.

	1.23.		Vested Units. “Vested Units” are phantom stock Units awarded to the Participant pursuant to the LNC Incentive Compensation Plan (rather than acquired pursuant to deferrals) that are no longer subject to forfeiture.

Section 2
Eligibility, Participation and Disbursements

This Plan is maintained by Employers for the benefit of a select group of management and highly compensated employees. Pursuant to the Plan, eligible employees may elect to participate and receive disbursements.

2.01.

The Benefits Administrator shall have discretion to determine the eligibility of employees to participate in this Plan; provided, however, that in order to be

			eligible, the employee must be a member of a select group of management or highly compensated employees of an Employer.

	2.02.		Under terms and conditions provided herein (including Appendixes hereto), each eligible employee may become a Participant by (a) electing to defer payment of Compensation, Bonus or both, (b) receiving a grant of Unpaid Units, or (c) receiving a special employer credit under subsection 2.05.

	2.03.		Subject to the terms of this Plan, each Participant and the Employers may make the following types of annual Deferrals and Matches:

	a.		Each Participant may elect to defer a portion of his or her Compensation for a calendar year, not to exceed seventy percent (70%).

	b.		The Employer shall provide a Match if (i) the Participant has made “pre-tax contributions” to the 401(k) Plan in the maximum amount permitted under its terms for a calendar year, (ii) such contributions (for years after 1999) equal at least six percent (6%) of such Participant’s eligible compensation under the 401(k) Plan, and (iii) under this Plan, the Participant defers (for years after 1999) at least six percent (6%) of his or her Compensation and Bonus (up to $100,000 and 50% thereafter), either from the beginning of the calendar year or after such maximum amount under the 401(k) Plan shall have been contributed. The Match shall be deemed to be invested in LNC Phantom Stock; except that for years after 2000, only the matching amount, if any, in excess of $0.50 on the dollar will be deemed to be so invested.

	c.		The Participant may elect to defer a specified amount of Bonus that may be earned by the Participant during the subsequent calendar year and which is paid after the close of the calendar year to which the election relates; except that for any Bonus payable for years after 2000, the Participant may elect before September 1 of a year to defer a specified amount of his or her Bonus that may be earned that year and may be paid during the subsequent calendar year.

	d.		To the extent that a Participant who participates in the 401(k) Plan reaches the contribution limit thereunder, he or she may elect to defer the additional amounts that otherwise would have been contributed to the 401(k) Plan into this Plan.

2.04.

The Participant shall file an Election with the Employer in the form specified by the Benefits Administrator, which form shall specify the timing and amount of any Deferrals (of Compensation, Bonus or both) under the Plan. For Deferrals of Compensation, the Participant shall file the Election prior to earning the Compensation, effective for payroll periods in the next calendar year; except that a newly eligible Participant may file an Election within thirty

			(30) days of becoming eligible, effective for prospective payroll periods. An Election shall be irrevocable for any calendar year; provided, however, that in the case of a Hardship withdrawal from the 401(k) Plan (or any defined contribution plan of Delaware Management Holdings, Inc. or its subsidiaries), the Participant’s Election shall be automatically revoked under this Plan beginning with the first day of the next regularly scheduled payroll period and for the remainder of the calendar year and the entire calendar year immediately thereafter.

	2.05.		If a Deferral, Match or special employer credit is made for any calendar year, the Employer shall establish an Account in the name of the Participant, to which shall be credited all such Deferrals, Matches and credits made on behalf of such Participant. Special employer credits may have a vesting schedule and such other terms as are determined by the Benefits Administrator. The Employer shall also credit such Account with earnings that would otherwise accrue if the Account were actually invested in the investment options selected by the Participant from among the options offered from time to time by the Employer (“phantom investments”); provided, however, that any expenses incurred by an Employer (including expenses for Federal and State income taxes) in connection with such Participant’s Account may be charged against the Participant’s Account. Additionally, the Employer makes the following representations concerning the phantom investments available under the Plan:

	a.		Due care will be taken to credit Deferrals and Matches in proper proportions to sub-accounts for the phantom investments selected by the Participant.

	b.		The phantom investments available under this Plan are those set forth in Appendix A, including, but not limited to, phantom stock Units of LNC common stock (“phantom stock Units”).

	c.		With respect to phantom stock Units (and effective September 30, 1999), actual shares of LNC common stock will be issued in settlement when the Participant’s Account is actually paid to him or her. Before such settlement, no voting or other rights of any kind associated with the ownership of LNC common stock shall inure to any Participant whose Account is credited with phantom stock Units.

	d.		With respect to the other phantom investments available under the Plan, Participants have no rights to any assets of any funds used to determine the value of Accounts.

	e.		Subject to Section 3.01(b), Participants may reallocate phantom investments under conditions prescribed by the Benefits Administrator. LNC reserves the right to eliminate, change and add phantom investments

at any time. LNC is under no obligation to offer any particular phantom investment option.

	2.06.		The Participant’s Account shall be disbursed in accordance with Appendix A, as determined in the sole discretion of the Benefits Administrator. Effective September 30, 1999, a Participant’s Account will be paid in the form of (a) shares of LNC common stock, to the extent the Account consists of LNC phantom stock Units (with fractional Units paid in cash); and (b) cash, to the extent the Account is allocated to other phantom investments. In the case of a Participant providing services to an Employer in a country other than the United States, the Account shall be disbursed as determined in the sole discretion of the Benefits Administrator.

	2.07.		A Participant may request an immediate, accelerated distribution from his or her Account in the event such Participant has incurred a severe financial Hardship. Payments under this Plan for a severe financial Hardship will not be made to the extent that such Hardship is relieved through insurance proceeds, liquidation of the Participant’s assets (only to the extent that such liquidation would not itself cause a severe financial Hardship) or by cessation of Deferrals under this Plan. Payments for severe financial Hardship under this Plan are limited to the extent necessary to comply with the standards set forth in Treas. Reg. Section 1.457-2. The Benefits Administrator, in his sole discretion, shall determine whether the Participant has incurred a severe financial Hardship and may grant the immediate, accelerated distribution of all, or a portion of, the amounts then credited to the Participant’s Account; provided, however, that such distribution shall not exceed the amount necessary for such Participant to alleviate the severe financial Hardship. If a Participant is an Insider, then such Participant is not eligible for Hardship withdrawals from this Plan.

	2.08.		The Participant may designate a Beneficiary to receive amounts payable to him or her under this Plan in the event of death. The Participant may revoke or change a Beneficiary designation and name a new Beneficiary by filing a written notice of revocation or other notice of change of Beneficiary, in accordance with rules or information provided by the Benefits Administrator.

	2.09.		Interests in this Plan cannot and shall not be transferred, assigned, pledged or encumbered. Prior to the time payment is actually made to the Participant or his or her Beneficiary, such Participant or Beneficiary shall have no rights by way of anticipation or otherwise to assign or dispose of any interest under this Plan.

	2.10.		Eligible employees of Delaware Management Holdings, Inc. (“DMH”) or its subsidiaries who become Participants are referred to in this subsection as “DMH Participants.” In the event that a DMH Participant’s Deferral of Compensation under the Plan causes a reduction in the amount that would

have otherwise been contributed to the Delaware Management Company Employee Profit Sharing Plan or any successor thereto (“Delaware Plan”), an amount equal to such reduction shall be credited to this Plan as soon as practicable after the contribution is made to the Delaware Plan. The Accounts of eligible DMH Participants shall be credited with an amount equal to (i) seven and one-half percent (71/2%) of the Participant’s Compensation and Bonus (up to $100,000 and 50% thereafter) for the calendar year, less (ii) the actual Employer contribution to the Delaware Plan pursuant thereto for such calendar year, less (iii) any amount the Employer decides in its sole discretion to pay directly to the Participant.

Section 3
Administration of Phantom Stock Units

3.01.

Administration of Match Units, Paid Units and Vested Units.

	a.		General. The administration of the Match Units, Paid Units and Vested Units shall be done in accordance with rules and definitions that the Benefits Administrator shall in his or her absolute discretion develop from time to time. The Benefits Administrator may delegate his or her responsibilities to other persons, or retain the services of lawyers, accountants, or other outside third parties to assist with the administration of the Plan.

	b.		Restrictions on Transfers. A Participant may transfer amounts out of other phantom investments and into Units pursuant to an election made during a thirty (30) day window period following the release of either a quarterly report of earnings of LNC or the annual report to shareholders; provided, however, that an Insider may transfer amounts from other deemed phantom investments into Units only if it is determined that such transfer will not result in a violation of Section 16 of the Securities Exchange Act of 1934. After November 5, 1999, Participants may not transfer amounts out of Units (Participants formerly could transfer amounts out of Units and into other deemed phantom investments pursuant to an election made prior to November 6, 1999).

	3.02.		Administration of Unit Grants. The LNCC has full and complete authority in its discretion to grant awards of Unpaid Units pursuant to the LNC Incentive Compensation Plan, to be credited to Participant Accounts under this Plan. The LNCC shall determine the terms and conditions pertaining to such awards.

	3.03.		Phantom Dividends on Units. To the extent dividends are paid by LNC on common stock of the same class as the Units, Participants will be credited with phantom dividends. Phantom dividends shall be calculated, on each dividend payment date, as an amount equal to the product of the dividend paid

			on a share of common stock multiplied by the number of Units as of the record date. Any dividends on Unpaid Units are subject to the terms and conditions pertaining to such awards.

	3.04.		Determination of Price for Units. The value of a Unit shall be equal to the final sales price quoted by the New York Stock Exchange Composite Listing of a share of LNC common stock of the same class as the Units on the business day on which the calculation is made.

	3.05.		Changes in Capital and Corporate Structure. In the event of any change in the outstanding shares of LNC common stock by reason of an issuance of additional shares, recapitalization, reclassification, reorganization, stock split, reverse stock split, combination of shares, stock dividend or similar transaction, the number of phantom stock Units held by Participants under the Plan shall be proportionately adjusted, in an equitable manner. The foregoing adjustment shall be made in a manner that will cause the relationship between the aggregate appreciation in outstanding common stock and earnings per share of LNC and the increase in value of each phantom stock Unit granted hereunder to remain unchanged as a result of the applicable transaction.

	3.06.		Voting. Participants shall not be entitled to any voting rights with respect to LNC common stock because their Accounts contain Match Units, Paid Units, Unpaid Units or Vested Units.

	3.07.		No Assignment. Units cannot be assigned, transferred, pledged or otherwise encumbered.

Section 4
Miscellaneous

	4.01.		This Plan does not and is not intended to create a contract of employment. The provisions of this Plan shall not limit the right of the Employer to discharge the Participant nor limit the right of the Participant to voluntarily terminate from the service of the Employer.

	4.02.		The rights of the Participant under this Plan (as well as any right of his or her Beneficiary or estate) shall be solely those of an unsecured general creditor of the Employer and such rights shall not constitute an interest in any specific asset of the Employer. LNC may establish one or more “rabbi trusts” in connection with the Plan, provided that such trusts shall not be deemed to cause the Plan to be anything other than unfunded for purposes of the Internal Revenue Code of 1986, as amended, and the Employee Retirement Income Security Act of 1974, as amended.

	4.03.		The Plan shall be administered by the Benefits Administrator, who shall have complete discretion to interpret the Plan, resolve issues pertaining to Plan

			eligibility, determine benefits payable under the Plan and take whatever action that he believes is necessary or desirable for such administration, including but not limited to (a) establishing administrative rules consistent with the provisions of this Plan, (b) delegating his responsibilities to other persons, (c) retaining the services of lawyers, accountants or other third parties to assist with the administration of the Plan, (d) making equitable adjustments under the Plan (including retroactive adjustments) to correct mathematical, accounting or factual errors made in good faith by the Employer or a Participant (and any such adjustments will be final and binding on all persons), and (e) directing Employers to deduct from all Accounts, payments and distributions under the Plan any federal, state or local taxes or such other amounts as may be required by law to be withheld (alternatively, the Benefits Administrator may charge each Participant a flat fee based upon the amount of money deferred pursuant to the Plan, for purposes of covering any such taxes or other amounts).

	4.04.		LNC retains the right to amend this Plan prospectively at any time. This Plan may be amended by action of the Board at a meeting held either in person or by telephone or other electronic means, or by unanimous consent in lieu of a meeting. The Board may delegate this amendment power to an officer of LNC or committee of the Board, in whole or in part, by resolution adopted by the Board. Pursuant to Resolution Number 1467 of the Board, adopted January 11, 1995, the Chief Executive Officer of LNC has been authorized to make any modification to this Plan if such modification is (1) in the opinion of counsel, required by local, state or federal law or regulation or (2) estimated to cost LNC no more than $5,000,000 (actuarial present value of all Plan changes made in the same year) for the next five (5) calendar years after the effective date of such modification.

	4.05.		LNC, by action of the Board, may terminate this Plan for any reason at any time. The Plan will terminate as to all of the Employers on any date specified by LNC if thirty (30) days’ advance written notice of the termination is given to the Employers. The Plan will terminate as to any individual Employer on the first to occur of the following:

	a.		the date it is terminated by that Employer if thirty (30) days’ advance written notice is given to LNC;

	b.		the date that the Employer is judicially declared bankrupt or insolvent;

	c.		the dissolution, merger, consolidation or reorganization of the Employer, or the sale by that Employer of all or substantially all of its assets, except as otherwise determined by the Benefits Administrator; or

the date specified by the Board in an action terminating this Plan for one or more specific Employers provided that thirty (30) days’ advance written notice is given to the Employer prior to termination of the Plan.

	4.06.		If a Subsidiary (“Affected Corporation”) shall have ceased to meet the definition of “Subsidiary” as a result of sale, merger or other disposition by LNC, then LNC may negotiate with the Affected Corporation or the entity purchasing the Affected Corporation (or both) to have the Affected Corporation assume responsibility for the Plan and all liabilities for Accounts of Participants employed by the Affected Corporation (or of Participants to be employed by the purchaser, or both). A Participant who remains employed by an Employer may continue to participate in the Plan.

	4.07.		This paragraph shall apply if LNC determines that any Subsidiary does not have sufficient capital to pay its liabilities under the Plan when due (but shall not apply if and when such organization no longer meets the definition of “Subsidiary” under the Plan). To the extent of LNC’s determination, the trustees of the LNC rabbi trust(s) (“Trusts”) shall pay each Participant from that Subsidiary his Account balance (in accordance with the terms of the Plan). If the assets within the Trusts are insufficient to make any such payment, LNC shall ensure that such payment is made in full. LNC may require each such Subsidiary to reimburse either the trustees or LNC for amounts paid on its behalf.

	4.08.		By participating in the Plan, a Participant waives the right to litigate any dispute pertaining to the Plan in any court of otherwise competent jurisdiction. If a Participant disagrees with any decision, action or interpretation pertaining to the Plan, he or she may submit in writing a full description of the disagreement. The determination of the Benefits Administrator in reference to any such disagreement shall be final, binding and conclusive upon all persons.

	4.09.		Any amount payable under this Plan to an incompetent or otherwise incapacitated person may, at the sole discretion of the Benefits Administrator, be made directly to such person or for the benefit of such person through payment to an institution or other entity caring for or rendering service to or for such person or to a guardian of such person or to another person with whom such person resides. The receipt of such payment by the institution, entity, guardian or other person shall be a full discharge of that amount of the obligation of the Employer to the Employee or Beneficiary.

	4.10.		This Plan shall be governed and construed in accordance with the laws of the State of Indiana. When appropriate, the singular nouns in this Plan include the plural, and vice versa. If any provision of this Plan is deemed invalid or unenforceable, the remaining provisions shall continue in effect.

This amendment and restatement of the Lincoln National Corporation Executive Deferred Compensation Plan for Employees is hereby approved.



Jon A. Boscia		Date
Chairman and Chief Executive Officer
Lincoln National Corporation

APPENDIX A

LINCOLN NATIONAL CORPORATION

EXECUTIVE DEFERRED COMPENSATION
PLAN
FOR EMPLOYEES

- PLAN OVERVIEW -

August 1, 2002

CONTENTS


I	PLAN OVERVIEW

II	PLAN DESCRIPTION

	A	Eligibility

	B	Deferral Provisions

	C	Vesting

	D	Account Characteristics

	E	Investment Options

	F	Choosing a Beneficiary

	G	Distributions and Taxes

	H	Other Important Facts about the Plan

	I	Participant Communications

This Brochure highlights only the key features of the Lincoln National Corporation Executive Deferred Compensation Plan for Employees. It does not describe all details of the Plan. The Plan is explained in more detail in the legally binding Plan Document, which is available in the Human Resources Benefits office. This booklet is not a substitute for the official Plan Document. If this brochure omits details of the Plan or disagrees with the official Plan Document in any way, the Plan Document will govern.

I. PLAN OVERVIEW

As you know, the compensation and benefits package provided to all Lincoln Financial Group (“LFG”) employees has been designed to deliver a competitive total compensation package. However, in recognition of the services provided by certain designated individuals, LFG has developed the Lincoln National Corporation Executive Deferred Compensation Plan for Employees (“Plan”).


		Each August, you may elect to defer receipt of up to 70 percent of your annual salary¹ and up to 100 percent of your annual bonus². You must make these elections before September 1st of the year in which the deferrals occur (new employees may elect to defer salary if the election is made within 30 days of the hire date)

		The investment performance of your deferral will depend upon the performance of the investment options that you select from the investment options.

		Your account balance is 100 percent vested at all times (unless you have a special arrangement with other terms). Your account balance is comprised of your pre-tax deferral, company match, Delaware retirement contribution³ and investment performance.

		The deferrals that you make during the year will be eligible to receive a company match equal to the match that would have been made to the LNC Savings and Profit Sharing Plan [401(k) plan] had you made a deferral and had there not been any IRS limits on contributions. To be eligible for the company match you must elect to defer at least six percent of your eligible compensation (salary and bonus). You may elect to start such deferral effective January 1st of a plan year (immediate deferral) and/or delay the start of the deferral (delayed deferral) until you have contributed the maximum allowed to the 401(k) plan ($12,000 effective January 1,

¹		Annual salary includes salary and W-2 commissions. For LFA Second Line Managers and LFD associates, commissions only include first year enterprise benefitable commissions.
²		Refers to Annual Bonus only. Other types of bonuses (i.e. LTIP, retention, and sign on bonuses) are not eligible for deferral. Commission payments for Delaware Investment employees are considered as bonus income, not base salary.
³		If applicable.


		2003). Once you reach the 401(k) IRS limit and have elected delayed deferral, the basic match (50 percent match) will be made to your deferred compensation account on a per pay period basis and will be invested in accordance with the investment direction you have indicated for new money going into the Plan. The discretionary match (up to 100 percent) will be invested in the LNC Common Stock Account annually. This discretionary match will be credited to your account in April for the previous year’s deferrals, and will be an amount, if any, equal to the discretionary match made to the Company’s 401 (k) plan for that year. Failure to elect a deferral under this plan will result in you not receiving the total company match to which you would have been entitled under the 401(k) plan had there been no IRS contribution limitations

		If you are an employee of Delaware Management Holdings, Inc. or one of its subsidiaries (Delaware), an employer contribution will be made to this plan equal to the profit sharing contribution rate multiplied by the sum of the compensation deferred by you under this plan plus the compensation paid to you that is in excess of the compensation limit used for determining your company’s contribution under the Delaware Retirement Plan had such compensation but for this limit plus the compensation deferred been eligible for a retirement plan contribution. This contribution will be invested in accordance with the investment direction you have indicated for new money going into the Plan. As a Plan participant, an elective deferral is not required to be eligible for this additional contribution.

The Plan is referred to as a “non-qualified” plan because it is not provided for under section 401 of the Internal Revenue Code. The non-qualified nature of the Plan allows the Company to offer this plan to only select executives.

Unlike benefits under the “qualified” 401(k) plan, benefits under this non-qualified plan are not protected against Company insolvency (you would have rights no greater than other general unsecured creditors). As a result, your account balance would not be guaranteed if the Company became insolvent.

This Plan Overview is intended to serve as a summary of Plan features and does not detail every possible combination of circumstances that could affect your participation or your account balance. The Plan Document is the primary

resource for all Plan questions. In the event of any discrepancies between this overview and the Plan’s legal documents, the Plan Documents will govern.

II. PLAN DESCRIPTION

A. Eligibility

This Plan is being offered to select employees of Lincoln Financial Group. You will be eligible for the Plan if you are at an officer level and have an annual base salary of at least $100,000 or Lincoln Financial Advisors’ Second Line Managers with established compensation of at least $100,000 per year. Once you are a Plan participant, you continue to be a participant. However, you will not be eligible to make a deferral for a plan year if your prior year’s salary is less than $100,000 and if you are not at the officer level.

New employees are eligible to participate if they are hired at an officer level with a salary of at least $100,000 and enroll in the Plan within 30 days of their hire date.

B. Deferral Provisions

Under this Plan, you may elect to defer up to 70 percent of annual salary and up to 100 percent of annual bonus compensation. You must make this election before September 1st of each year for the following year. In addition to, or in lieu of a deferral beginning January 1st, you may also elect to have deferrals of at least six percent of your salary and/or bonus commence after you have contributed the maximum deferral permitted under the 401(k) Plan ($12,000 for 2003).

You may elect to defer payment of your account until termination or retirement (at least age 55 with five years or more of service) or to any one of the following pre-established in-service distribution year accounts — the year 2010 Account, 2015 Account or 2020 Account – or any fifth year afterwards. In the next year, you may defer into a different account than your previous year deferral (for example, 2010 for the first year deferral, 2015 for the second year deferral). In the third year, you may defer into an account different from those selected for the first two years’ deferrals (maximum of three accounts at any time- two in-service accounts and a retirement account).

You are not required to defer part of your compensation each year; however, if you do not elect immediate or delayed deferral, you will not receive any restoration of lost company match due to IRS limitations on the 401(k) plan.

If you elect to defer contributions to a distribution year account that is payable after your retirement or separation from service, the distribution of these funds will not start until that future date and not at your retirement or separation from service, subject to the Plan terms and conditions detailed in Section G, Distributions and Taxes.

You may re-defer any in-service account until retirement if you make that election at least one full calendar year prior to the distribution date for that account. For example, if you elect to defer into the 2010 account, you may re-defer that account balance into the retirement account provided that the request is made by December 31, 2008. Amounts re-deferred can only be re-deferred one time and only until retirement.

In the absence of a properly and timely completed re-deferral, all scheduled distributions will be made to participants even if they occur before termination or retirement. For example, if you have money deferred to the year 2010 Account, you will receive it in the year 2010 even if you retire in the year 2012.

Generally, you may not receive your distribution before the distribution year that you selected except in the case of death, permanent disability as defined in the company’s Long Term Disability Plan or financial hardship. However, subject to a 10 percent penalty, you can elect a special in-service distribution at your discretion; see terms and conditions detailed in Section G, Distributions and Taxes.

C. Vesting

You are immediately vested in the amounts in your plan account attributable to your deferral elections, the company match and any Delaware Retirement Plan contributions (unless you have a special arrangement with other terms).

D. Account Characteristics

For purposes of recordkeeping, a separate account(s) will be established in your name.

The investment performance of your account balance will be tied to the performance of the investment option(s) you choose.

You may change your investment allocation⁴ daily, with the exception of money allocated to LNC stock, which must remain in LNC stock, and pre-1996 credits from the former CIGNA deferred compensation plan which must remain in the guaranteed account. In addition, transfers into LNC stock are limited to open window periods and subject to insider trading rules. LNC reserves the right to eliminate or change investment options at any time. LNC is under no obligation to offer any particular investment option or to effectuate a selection by you. Any selection shall be treated by Lincoln as a mere expression of investment preference on your part.

E. Investment Options

The Plan’s investment options include LNC common stock, professionally managed funds and a guaranteed account. The investments are “phantom” investments but your account value will be based on the performance of the investment options that you select. Your account will not actually be invested in the investment funds, but rather the Plan record keeper will keep records of your “phantom” investment performance. Your account will remain assets of LNC until time of distribution to you. In the future the Company may change investment options offered.

Except for the discretionary company match, which is invested in LNC Common Stock, new contributions under the plan (your deferrals, the basic company match and the Delaware Retirement Plan contribution) will be invested in the manner you select for your deferrals. New contributions under the Plan will be invested in the Short Term account if you have not made an investment election for new contributions.

⁴

Transfers are limited to one per day.

The following investment options are available. LNC reserves the right to select alternative investments at its sole discretion. These are the same investments currently offered under the 401(k) plan.


1.		Lincoln National Corporation Common Stock
2.		Guaranteed
3.		Short Term (SA14)
4.		Government/Corporate Bond (SA12)
5.		High Yield Bond (SA20)
6.		Conservative Balanced (SA30)
7.		Balanced (SA21)
8.		Aggressive Balanced (SA32)
9.		Delaware Growth and Income (SA61)
10.		Neuberger Berman Mid-Cap Growth (SA37)
11.		Medium Capitalization Equity (SA17)
12.		Scudder VIT Small Cap Index (SA36)
13.		Small Capitalization Equity (SA24)
14.		Value Equity (SA28)
15.		Core Equity (SA11)
16.		Scudder VIT Equity 500 Index (SA27)
17.		FidelityVIP Contrafund (SA35)
18.		Neuberger Berman AMT Regency (SA38)
19.		Social Awareness (SA33)
20.		Large Capitalization Equity (SA23)
21.		International Equity (SA22)
22.		Janus Aspen Series Worldwide Growth (SA34)
23.		Janus Aspen Series Growth (SA70)
24.		Fidelity VIP Overseas (SA59)

F. Choosing a Beneficiary

When you enroll you will be asked to designate a beneficiary (a person or an entity such as a trust who will be entitled to receive the value of your account if you die before distribution). You may name anyone you wish as your beneficiary.

You may, if you wish, name more than one person as beneficiary. If you name more than one person, however, you should specify the percentage you wish paid to those persons. Otherwise, the beneficiaries will share the account value equally.

If you do not have a beneficiary designation on file, or if your beneficiary dies before you and you have not named a contingent beneficiary, the value of your account will be payable to your spouse, if living, and otherwise to your estate.

At any time you may change your beneficiary by filing a new designation of beneficiary form with the Plan Administrator. The change will be effective on the date that you submit the form.

G. Distributions and Taxes

For distributions at selected distribution years other than death or disability, you will receive your distribution in a lump-sum payment unless you have filed for a five-year payment option at least one full calendar year prior to distribution date.

At termination or retirement, you will receive distribution of your retirement account in a lump-sum payment unless you have filed for any of the following payment options at least one full calendar year prior to the distribution date:

	•		Five-year installment payments
	•		Ten-year installment payments
	•		Fifteen-year installment payments
	•		Twenty-year installment payments

For example, if you choose five-year installment payments, you will receive 1/5 of your total account balance the first year, 1/4 of the remaining account balance the second year, 1/3 of the remaining account balance the third year, 1/2 of the remaining account balance the fourth year and all of the remaining balance the final year. You may elect a different payment option for your LNC stock than you elect for distribution of the balance of your account.

In the event of death or total disability prior to the commencement of distributions, you or your beneficiary will receive a lump sum payment that will be paid as soon as possible after the death or total disability unless you have filed an election for one of the alternate annual distribution options available for termination or retirement. Annual distributions will commence as of February 5th in the calendar year following your death or total disability. Such election for an alternate distribution must be on file at least one full calendar year prior to your death or total disability.

You will need to make a separate distribution election for each separate distribution year account. However, you will have a one-time option per distribution year elected to amend your distribution election. Such election must be made at least one full calendar year prior to the scheduled distribution date while still employed by the Company. For example, if you elect to defer to 2005 and do not elect an installment option, you will receive your distribution in a lump sum in 2005. However, you may change to a five-year distribution option if you make the election before January 1, 2004 (one full calendar year prior to the scheduled distribution year).

At termination or retirement, your account balance will be paid in a lump sum or in installment payments as specified in your Distribution Form. Retirement is defined as separation of service with Lincoln at age 55 or later with five or more years of service. Termination is defined as voluntary or involuntary separation from employment other than for cause or fraud. If you have elected to defer to a distribution year account beyond your date of termination or retirement, distribution of those funds will start in that future year as specified on your Distribution Option form.

For distributions at termination or retirement, you are permitted to make an election for distribution of your account in LNC Stock that is different than your account value that is not based on LNC stock. For example, you could receive LNC stock in a lump sum and the rest of you account value in annual installments. Any separate distribution elections must be made at least one full calendar year prior to the scheduled distribution date. Shares of LNC stock will be distributed for that portion of your account that is based on LNC stock; distribution of all other account values will be in cash.

All distributions payable as a result of your retirement or termination will commence as of February 5th of the calendar year following your retirement or termination. Pre-established distribution year payments will commence as of February 5th of the year you elected for the distribution. Your account will be valued as of the close of business on February 5th or on the last business day preceding February 5th. You should receive your distribution within six weeks of that date. Distributions of LNC stock should also be received within six weeks of February 5th.

If you are terminated involuntarily for cause, you will forfeit employer contributions and appreciation on those contributions. If you are terminated involuntarily for fraud, you will forfeit employer contributions plus

appreciation. In addition, employee deferrals plus appreciation will be forfeited only in an amount sufficient to allow LNC to recover any balances due LNC from you. In any event, LNC will have a right of offset from the distribution of your account balance in an amount equal to any balance owed LNC by you.

In the event of your death or disability prior to the complete distribution of your account balance, your remaining account balance will continue to be paid to you or your beneficiary(ies) in accordance with your elected distribution option.

In the event of a qualifying financial hardship, the Administrative Committee will direct that you be paid from your account balance an amount in cash sufficient to meet the financial hardship. In the event the amount needed to satisfy the hardship is greater than the value of your account invested in other than LNC stock, the balance will be paid to you in shares of LNC Stock. Hardship distributions are permitted only if the participant is faced with an unforeseeable financial emergency. An unforeseeable financial emergency is defined as “severe hardship to the participant resulting from a sudden and unexpected illness or accident of the participant or a dependent of the participant, loss of the participants property due to casualty or other extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the participant.”

You can elect a special discretionary in-service distribution other than a scheduled distribution. However, the amount you have to withdraw must be at least 50 percent of your account value and will be subject to a 10 percent penalty. Also, you will then be ineligible to make future deferrals into the Plan until the beginning of the second year after the year in which you elected to take the in-service distribution. No company match or Delaware Retirement contributions would be made during this period of suspension. For example, if you elect a special discretionary in-service distribution in 2003, you would be ineligible to defer any portion of your compensation until January 2005.

Distributions under this plan are taxable as ordinary income in the year that you receive them. Income taxes will be withheld, if required, in accordance with federal, state and local income tax laws. Because of the nature of this Plan (non-qualified), you cannot “roll over” plan distributions into an IRA or another employer’s savings plan.

If your distribution includes LNC stock or cash plus LNC stock and you do not have a cash distribution large enough for the tax withholding, shares of stock

scheduled for distribution will be sold to satisfy the tax-withholding requirement.

Accounts with balances less than $10,000 will be distributed in a lump sum in all circumstances. For example, if your account balance is $15,000 and you elect five annual installments and your balance at the third installment is $9,000, you will receive a total distribution in that year and no further installments.

H. Other Important Facts about the Plan

Participation in this Plan is not an employment contract between you and the Company either expressed or implied. The existence of the Plan and participation in it does not in any way guarantee you the right to continue your employment relationship with the Company.

The Company reserves the right to amend or terminate the Plan at any time. If the Plan were terminated, the Plan would continue until all distributions were made under the terms of the Plan. You will be informed of any changes to the Plan if they become necessary.

I. Participant Communications

You will receive quarterly statements that will be itemized to show the balances in each of your accounts, including any investment gains or losses.

APPENDIX B

Lincoln Financial Distributors
Level Four Wholesalers

This Appendix describes the special employer credit, pursuant to subsection 2.05 of the Plan, for “level four” wholesalers of Lincoln Financial Distributors, Inc. (LFD), Participants hereunder.

The President and Chief Executive Officer of LFD (or his delegate) shall determine the amount of credit, if any, for each Participant for each calendar year. Such credit shall be made as soon as practicable after it has been determined (generally on February 1 and in reference to the previous year), may vary by Participant and shall be based on performance and other criteria determined by LFD. The first credit (for the year 2000) shall equal $25,000 for each Participant and will be retroactively credited as of February 1, 2001 to the Short Term fund. Each credit (adjusted for gains and losses under the Plan) will vest at the beginning of the fourth calendar year after the calendar year in which it shall have been credited; except that all of a Participant’s credits shall vest at retirement, death or in the case of total disability. “Retirement” means termination of employment at age 55 years or later with at least 5 vesting years of service under the LNC Employees’ Retirement Plan. “Total disability” shall be determined by the Benefits Administrator, who may apply criteria contained in any LTD plan or coverage provided by LNC or its subsidiaries. The amount of unvested credits (adjusted for gains and losses under the Plan) shall be forfeited upon the Participant’s termination of employment with LNC and its subsidiaries.

After a credit has vested, the amount of the credit (adjusted for gains and losses under the Plan) shall be paid in February of the next in-service distribution year under the Plan unless the Participant elects to defer distribution until retirement or other termination of employment. Such election must be filed with the Plan’s recordkeeper more than one full calendar year before such in-service distribution year. The amount of credits (adjusted for gains and losses under the Plan) shall not be considered eligible compensation under any other plan of LNC or its subsidiaries.