Form of Lincoln National Corporation Restricted Stock Unit Award Agreement
Exhibit
99.1
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Form
of
Lincoln
National Corporation
This
Restricted Stock Unit Award Agreement (the "Agreement") is by and between
Lincoln National Corporation ("LNC") on behalf of itself and its affiliates, and
[Name] (the "Grantee"),
and evidences the grant on November 2, 2009 of Restricted
Stock Units to Grantee, and Grantee's acceptance of the Restricted Stock Units
in accordance with the terms and provisions of the Lincoln National Corporation
2009 Amended and Restated Incentive Compensation Plan, effective May 14, 2009
(the "Plan") and this Agreement. LNC and Grantee agree as
follows:
1. Number of
Shares Granted. Grantee is
awarded [Number]
Restricted Stock Units ("RSUs") subject to the terms and restrictions as
set forth in the Plan and in this Agreement. In the event an
adjustment pursuant to Section 10(c) of the Plan is required, the number of RSUs
awarded under this Agreement and/or the number of shares of common stock issued
pursuant to RSUs granted under this Agreement shall be adjusted in accordance
with Section 10(c) of the Plan. All RSUs after such adjustment
(and/or shares of LNC common stock issuable pursuant to an RSU granted under
this Agreement) shall be subject to the same restrictions applicable to such
RSUs (and/or shares of LNC common stock issuable pursuant to an RSU granted
under this Agreement) before the adjustment.
2. Restrictions. Neither the RSUs
granted under this Agreement, nor any interest or right therein or part thereof,
shall be sold, transferred, pledged, hypothecated, margined or otherwise
encumbered by the Grantee. The RSUs shall be subject to the
restrictions in this Paragraph 2 until such time as the RSUs vest and shares are
distributed in settlement of the RSUs, as described in Paragraph 7
below.
3. Voting
Rights. Grantee shall
have no voting rights with respect to RSUs.
4. Cancellation
of Restricted Stock Units/Rescission of Award After Vesting or
Distribution. Any RSUs may be
cancelled by action of the Committee or its delegate if Grantee is terminated
for Cause (as defined below). Any RSUs may be cancelled by action of
the Committee or its delegate if Grantee fails to comply with the
non-competition, non-solicitation, non-disparagement and/or non-disclosure
provisions described below in subparagraphs 4(a) through 4(d) before shares are
distributed in settlement of the RSUs, as described in Paragraph
7. Furthermore, any portion of, or the entire RSU Award may be
cancelled or amended without notice to or approval by the Grantee by sole action
of the Committee or its delegate, if the Committee, in its sole discretion,
believes that such action is necessary or advisable in order to comply with the
Emergency Economic Stabilization Act of 2008, as amended by the American
Recovery and Reinvestment Act of 2009, and as may be further amended from time
to time (the "Act"), and any rules, regulations, programs and interpretations
promulgated thereunder (the "Rules").
Should
Grantee fail to comply with the provisions in 4(a) through 4(d) during the six
month period after shares are distributed in settlement of the RSUs, or if
Grantee is terminated for Cause at any time after distribution, LNC will rescind
the award.
LNC
must notify Grantee in writing of any such rescission. LNC, in its
discretion, may waive compliance with this provision in whole or part in any
individual case. Within ten days of receiving a rescission notice
from LNC, Grantee must repay the award to LNC. Such payment by
Grantee must be made in shares of LNC common stock equal to the gross number of
shares paid to the Grantee pursuant to the award subject to the rescission (not
net of shares withheld for taxes). If Grantee's employment is
terminated by LNC and its subsidiaries other than for Cause, a failure of
Grantee to comply with the non-competition provisions after
such
termination shall not in itself cause rescission of the award, if the
distribution of shares occurred prior to termination. At the time
shares are to be distributed pursuant to this Agreement, Grantee shall certify
on a form acceptable to the Committee that Grantee is in compliance with the
terms and conditions of the Plan, and with the provisions in subparagraphs 4(a)
through 4(d) below.
(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 (including, but not limited to, doing a "lift-out" of same)
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 5 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 his/her Service with LNC.
For
purposes of this Agreement, "Cause" means, as determined by LNC in its sole
discretion, a conviction of a felony or any fraudulent or willful misconduct by
Grantee that is materially and demonstrably injurious to the business or
reputation of LNC.
5. Vesting
of Restricted Stock Units. Subject to
Paragraph 4 above, and the first full paragraph following subparagraph (f)
below, the RSUs shall vest upon the earliest to occur of
the following dates, provided Grantee remains in Service (as defined below)
through such date:
(a) 100% as of November 2, 2012;
or
(b) 100% as of the date on which
the Grantee is certified as disabled and becomes eligible for long-term
disability ("LTD") benefits under a LTD program sponsored by LNC;
or
(c) 100% as of the date of the
Grantee's death; or
(d) 100% as of the date on which a
Change of Control occurs, as that term is defined by Section 2(e) of the
Plan pursuant to the definition in effect on the day immediately preceding such
Change of Control; or
(e) Pro-rata as of the date
Grantee's position is Job Eliminated, as that term is defined under the LNC
Severance Pay Plan, and Grantee no longer provides Services to LNC or its
subsidiaries, provided, however, that Grantee executes an Agreement, Waiver and
General Release in form and substance satisfactory to LNC; or
(f) Pro-rata as of the date on
which Grantee Retires from LNC.
Notwithstanding
the foregoing: (1) no portion of the RSUs shall vest prior to
November 2, 2011 based on an event described above unless such vesting is
permissible under the Act and the Rules (generally, limited to vesting on death,
disability and certain changes in control); and (2) no portion of the RSUs shall
vest under subparagraphs 5(d) or 5(e) while the Grantee is subject to the
prohibition under the Act and the Rules on "golden parachute
payments."
For
purposes of this Agreement, the term "Service" includes service as a common law
employee or planner of LNC or any subsidiary. In the event that
Grantee's Service terminates prior to the vesting of RSUs as set forth above,
other than under the circumstances described in subparagraphs 5(b) through (f),
the RSUs shall be forfeited and automatically transferred back to
LNC. Upon forfeiture, Grantee shall have no further rights in such
RSUs or shares of common stock issuable pursuant to an RSU granted
hereunder.
For
purposes of this Agreement, "Retire" or "Retirement" refers to a separation from
service after having attained age 55 with credit for five (5) or more years of
Service with LNC.
The
number of RSUs vesting pro-rata upon an event described in 5(e) or (f) shall be
calculated by calculating a fraction where the denominator is equal to number of
days during the three-year period beginning on the date of grant, November 2,
2009, and ending on the third anniversary of grant date, November 2, 2012
("Vesting Period"), and the numerator is equal to the number of days that the
Grantee provided Service to LNC or a subsidiary during the Vesting Period, with
the total number of RSUs awarded multiplied by such fraction (rounding up the
nearest whole RSU).
6. Dividend
Equivalent Rights.
No cash dividends shall be payable with respect to the
RSUs. Instead, a Dividend Equivalent Rights Payment Account ("DER
Account") shall be established and maintained for Grantee. For each
RSU, Grantee shall have a dividend equivalent right ("DER"). The DER
shall entitle the Grantee to have additional RSUs credited to his DER Account on
each date that dividends are paid on LNC common stock while the RSU is
outstanding. The number of RSUs to be credited on a dividend payment
date based on each DER shall equal the number of shares of LNC common stock (or
fraction thereof) that could be purchased on that date with the per share
dividend amount paid on that date. DERs have the same restrictions as
the underlying RSUs.
7. Distribution
of Shares. A share of LNC
common stock shall be distributed to Grantee (or to Grantee's estate) for every
vested RSU (including RSUs credited based on DERs), on the earliest to occur
of:
(a) November 2, 2012;
or
(b) The date
of the Grantee's death; or
(c) The date
of a "change of control event," within the meaning of Section 409A of the
Internal Revenue Code of 1986, as amended (the "Code"); or
(d) The date
of the Grantee's "disability" within the meaning of Section 409A of Code;
or
(e) The date
of the Grantee's "separation from service," within the meaning of Section 409A
of the Code ("Separation from Service").
Distributions
shall be made as soon as practicable after the earliest date set forth above,
but in no event later than 90 days thereafter. Notwithstanding the
foregoing, in the case of a Key Employee of LNC, a distribution upon the Key
Employee's Separation from Service shall be made on the date that is six (6)
months after the date on which the Key Employee Separates from Service. A "Key
Employee" means an Employee treated as a "specified employee" as of his
Separation from Service under Code Section 409A(a)(2)(B)(i) of LNC or its
affiliates, i.e., a Key Employee (as defined in Code Section 416(i) without
regard to paragraph (5) thereof). Key Employees shall be determined
in accordance with Code Section 409A using December 31st as
the determination date. A listing of Key Employees as of a
determination date shall be effective for the 12-month period beginning on the
April 1st
following the determination date.
Notwithstanding
the foregoing, no distributions shall be made earlier than permitted pursuant to
the following schedule under the Act and the Rules:
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Percentage
of Aggregate
Assistance
Received by LNC
Under Act Repaid
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Percentage
of RSUs
That
May be
Distributed
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25%
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up
to 25%
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50%
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up
to 50%
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75%
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up
to 75%
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100%
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up
to 100%
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Distribution
of any shares delayed based on the above schedule shall be made promptly
following the date the shares may be distributed in accordance with the Act and
the Rules.
The
appropriate officer or agent of LNC shall create a book entry account in the
name of the Grantee, to which shares of LNC common stock issued in settlement of
the RSUs shall be credited. Once a share has been issued with respect
to an RSU pursuant to the Agreement and the Plan, the Grantee shall have no
further rights with respect to the RSU.
8. Tax
Withholding. LNC
will require Grantee to remit an amount equal to any tax withholding required by
federal, state, or local law on the value of the RSUs at such time as LNC is
required to withhold such amounts. In accordance with procedures
established by the Committee, LNC may withhold shares of LNC common stock with a
fair market value on the date of withholding that satisfies all or part of the
withholding requirements.
9. Compliance
with Securities Laws. LNC common stock
shall not be issued with respect to RSUs unless the issuance and delivery of
such common stock shall comply with all relevant provisions of state and federal
laws, rules and regulations, and, in the discretion of the LNC, shall be further
subject to the approval of counsel for LNC with respect to that
compliance.
10. Incorporation
of Plan Terms. This Award is
subject to the terms and conditions of the Plan. Such terms and
conditions of the Plan are incorporated into and made a part of this Agreement
by reference. In the event of any conflicts between the provisions of
this Agreement and the terms of the Plan, the terms of
the Plan
will control. Capitalized terms used but not defined in the Agreement
shall have the meanings set forth in the Plan unless the context clearly
requires an alternative meaning.
11. Recovery
of Shares. Any shares
distributed under the Award are subject to recovery by LNC in accordance with
the Act and the Rules. Generally, the Act and the Rules provide for
recovery by LNC if (1) the shares were accrued or distributed during the TARP
period (as defined under the Rules) and while the Grantee is subject to this
recovery provision, and (2) distribution or accrual was based on materially
inaccurate financial statements or any other materially inaccurate performance
metric criteria.
IN
WITNESS WHEREOF, LNC, by its duly authorized officer has signed this Agreement
as of the effective date set out above. The terms and provisions of
this Agreement are acknowledged and agreed to by Grantee, as evidenced by his or
her signature below.
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LINCOLN
NATIONAL CORPORATION
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| By: | ||
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇ | |
| President and Chief Executive Officer | ||
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November
2, 2009