Document:

sfm-ex101_336.htm

Exhibit 10.1

 

SPROUTS FARMERS MARKET, INC.

Performance Share award Agreement

 

Cover Sheet

 

Sprouts Farmers Market, Inc., a company incorporated under the laws of the State of Delaware (“Company”), hereby grants an award of performance shares (“Performance Shares”) to the individual named below.  The terms and conditions of the Performance Shares are set forth in this cover sheet (“Cover Sheet”), in the attached Performance Share Award Agreement (the “Agreement”) and in the Sprouts Farmers Market, Inc. 2013 Incentive Plan (the “Plan”).  All capitalized terms used but not defined in this Cover Sheet and the Agreement will have the meanings ascribed to such terms in the Plan.  

 

			
	
Granted to:
	
 
	
 

	
Grant Date:
	
 
	
 

	
Number of Performance Shares:
	
 
	
 

	
Issuance of Shares:
	
 
	
 

	
Vesting Schedule:
	
 
	
 

 

By signing this Cover Sheet, you agree to all of the terms and conditions described in this Cover Sheet, in the Agreement and in the Plan.  If you do not sign and return this Cover Sheet and the attached Irrevocable Standing Order to Sell Shares within 60 days of the Grant Date, the Company will have the right to rescind this award.

 

 

Signature: _____________________Date: _____________________

       

SPROUTS FARMERS MARKET, INC.

 

 

By: 

Name:Steve Townsend

Title:Chairman, Compensation Committee

Board of Directors, Sprouts Farmers Market

 

DB1/ 96408391.2

 
 

SPROUTS FARMERS MARKET, INC.

2013 INCENTIVE PLAN

Performance Share AWARD AGREEMENT

 

				
	
Right to Shares
	
 
	
The award of Performance Shares represents your right to receive, and the Company’s obligation to issue, one Share for each Performance Share earned, based on the Company’s 2021 EBIT as set forth in the Cover Sheet.  The Shares issued will be subject to the vesting conditions described below.  Issuance of Shares equal to the Performance Shares earned will occur as soon as practicable following the date the Compensation Committee certifies 2021 EBIT, based on the Company’s 2021 fiscal year audited financial statements (the “Certification Date”).   

	
 
	
 
	
 

	
Vesting
	
 
	
The Performance Shares issued to you will vest in accordance with the schedule set forth in the Cover Sheet.

 

All Performance Shares will cease vesting as of the date your employment with the Company and its Affiliates has terminated for any reason.

	
 
	
 
	
 

	
Termination; Specified Conduct
	
 
	
Should your employment with the Company and its Affiliates terminate for any reason or if you engage in Specified Conduct (as defined in Exhibit A) prior to the Certification Date, you shall forfeit all rights to receive any Performance Shares. Should your employment with the Company and its Affiliates terminate for any reason after the Certification Date or if you engage in Specified Conduct after the Certification Date, you shall forfeit all Performance Shares that are not then vested, and such Performance Shares shall be returned to the Company automatically and for no consideration.

	
 
	
 
	
 

-2-

 

				
	
Change in Control
	
 
	
Notwithstanding the foregoing:

 

(A) if there occurs a Change in Control  (as defined in Exhibit A), and this award does not continue or is not assumed by an acquiror, then (i) if the Change in Control occurs prior to the Certification Date, you will be entitled to receive, immediately prior to the Change in Control, the greater of (x) the target number of Performance Shares, or (y) the number of Performance Shares which would have been earned pursuant to the Cover Sheet based on actual 2021 EBIT through the date the Change in Control occurs, and (ii) if the Change in Control occurs after the Certification Date, all Performance Shares that have not yet vested shall vest immediately prior to the Change in Control; and 

 

(B) if there occurs a Change in Control, and this award continues or is assumed by an acquiror, and your employment is terminated by the Company or an acquiror without Cause (as defined in Exhibit A) or by you for Good Reason (as defined in Exhibit A), in each case within 24 months following the Change in Control, then (i) if such termination occurs prior to the Certification Date, you will be entitled to receive, as soon as practicable following such termination, the greater of (x) the target number of Performance Shares, or (y) the number of Performance Shares which would have been earned pursuant to the Cover Sheet based on actual 2021 EBIT through the date of such termination, which Shares shall be immediately vested, and (ii) if such termination occurs after the Certification Date, all Performance 

Shares that have not yet vested shall vest immediately upon such termination.

 

For purposes of the foregoing, this award shall not be treated as continued or assumed unless it is continued or assumed on a substantially equivalent basis, including, without limitation, continuation or assumption of the same Company EBIT performance metrics, subject to adjustment in accordance with the Plan.

	
 
	
 
	
 

	
Taxes
	
 
	
Unless you make an election under Section 83(b) of the Code within 30 days of the Certification Date, the value of the Performance Shares as and when they vest will be treated as wages subject to payroll withholding.  The Company will satisfy the withholding obligation through a “sell to cover” whereby you irrevocably direct a securities broker approved by the Company to sell a portion of your Performance Shares that are then scheduled to vest and to deliver the sale proceeds to the Company in payment of the applicable withholding taxes.  You agree to provide these directions by signing and returning the Irrevocable Standing Order to Sell Shares attached hereto, along with a signed copy of the Cover Sheet, within 60 days of the Grant Date. 

 

The number of Shares that the broker will sell will be based on an estimate made by the broker of the Shares required to be sold to satisfy the withholding taxes. You agree that the proceeds received from the sale of Shares will be used to satisfy the withholding taxes and, accordingly, you authorize the broker to pay such proceeds to the Company for such purpose. To the extent that the proceeds obtained by such sale exceed the amount necessary to satisfy the withholding taxes, such excess proceeds shall be deposited into your brokerage account and in the event of a shortfall, additional Shares may be sold and/or cash withholding may be required from you. Any remaining Shares shall be deposited into your brokerage account.

 

If there is not a market in the Shares or the Company determines in its sole discretion that the sell to cover procedure is not advisable or sufficient, the Company will have the right to make other arrangements to satisfy the withholding taxes due upon the vesting of the Shares with respect to the Performance Shares, including, but not limited to, the right to deduct amounts from salary or payments of any kind otherwise due to the Participant or withhold in Shares (by transferring Shares back to the Company), provided that the Company only withholds the amount of Shares necessary to satisfy the statutory minimum withholding amount.  If such other arrangements are made, your Irrevocable Standing Order to Sell Shares will be voided.

 

You represent to the Company that, as of the date you sign the Irrevocable Standing Order to Sell Shares, you are not aware of any material nonpublic information about the Company or the Shares. You and the Company have structured this Agreement to constitute a “binding contract” relating to the sale of Shares, consistent with the affirmative defense to liability under Section 10(b) of the Exchange Act under Rule 10b5-1(c) issued under such Act.

	
 
	
 
	
 

-3-

 

				
	
Restrictions on Resale 
	
 
	
By signing this Agreement, you agree not to sell any Performance Shares at a time when applicable laws, regulations or Company policies prohibit a sale.  

 

In addition, until the Performance Shares have vested pursuant to the schedule set forth in the Cover Sheet, they may not be sold, transferred, assigned, pledged, margined, or otherwise encumbered or disposed of (except for transfers and forfeitures to the Company).

 

The Company’s obligation to issue Performance Shares upon the Certification Date shall be subject to applicable laws, rules and regulations and also to such approvals by governmental agencies as may be deemed appropriate to comply with relevant securities laws and regulations. 

 

You shall deliver to the Chief Legal Officer of the Company, at the time of execution of this Agreement and/or at such other time or times as the Chief Legal Officer may request, one or more executed stock powers, authorizing the transfer of the Performance Shares to the Company upon forfeiture, and you shall take such other steps or perform such other actions as may be requested by the Chief Legal Officer to effect the transfer of any forfeited Performance Shares.

 

	
 
	
 
	
 

	
Transfer of right to receive Performance Shares
	
 
	
Prior to the Certification Date, you cannot transfer or assign your right to receive Performance Shares.  For instance, you may not sell your right to Performance Shares or use such right as security for a loan.  If you attempt to do any of these things, your award will immediately become invalid.  

 

Regardless of any marital property settlement agreement, the Company or a securities broker, as applicable, is not obligated to recognize your former spouse’s interest in your right to Performance Shares in any way.

	
 
	
 
	
 

	
Stockholder Rights; Dividend Equivalent Rights
	
 
	
You, or your estate or heirs, have no rights as a stockholder of the Company in respect of Performance Shares until the Certification Date.  No adjustments are made for dividends or other rights if the applicable record date occurs before Shares are issued, except as described in the Plan.

 

On and following the Certification Date, you shall have the rights as a stockholder, subject to the restrictions set forth in this Agreement (including, without limitation, transfer restrictions and forfeiture during the vesting period).

	
 
	
 
	
 

	
Applicable Law
	
 
	
This Agreement will be interpreted and enforced under the laws of the State of Delaware.

	
 
	
 
	
 

	

The Plan and Other Agreements
	
 
	
The text of the Plan and any amendments thereto are incorporated in this Agreement by reference.

 

This Agreement, the Cover Sheet and the Plan constitute the entire understanding between you and the Company regarding the Performance Shares.  Any prior agreements, commitments or negotiations concerning the Performance Shares are superseded.

 

-4-

 

By signing the Cover Sheet of this Agreement, you agree to all of the terms and conditions described above and in the Plan and evidence your acceptance of the powers of the Committee of the Board of Directors of the Company that administers the Plan.

-5-

 

Exhibit A

Certain Definitions

 

“Affiliate” means, when used with reference to any Person, any other Person that directly or indirectly, through one or more intermediaries, controls, is controlled by or is under common control with, or owns greater than fifty percent (50%) of the voting power in, the specified Person (the term “control” for this purpose shall mean the ability, whether by the ownership of shares or other equity interest, by contract or otherwise, to elect a majority of the directors of a corporation, independently to select the managing partner of a partnership or the managing member or the majority of the managers, as applicable, of a limited liability company, or otherwise to have the power independently to remove and then select a majority of those Persons exercising governing authority over an entity, and control shall be conclusively presumed in the case of the direct or indirect ownership of fifty percent (50%) or more of the voting equity interests in the specified Person).

 

“Cause” shall have the meaning ascribed thereto in any effective employment agreement between you and the Company or its Affiliates, or if no employment agreement is in effect that contains a definition of cause, then Cause shall mean that you have (i) committed a felony or a crime involving moral turpitude, (ii) committed any act of gross negligence or fraud, (iii) failed, refused or neglected to substantially perform your duties (other than by reason of a physical or mental impairment) or to implement the reasonable directives of the Company (which, if deemed curable in the discretion of the Committee, is not cured within 30 days after notice thereof to you by the Committee), (iv) materially violated any policy of the Company (which, if deemed curable in the discretion of the Committee, is not cured within 30 days after notice thereof to you by the Committee), or (v) engaged in conduct that is materially injurious to the Company, monetarily or otherwise.

 

“Change in Control” shall mean: 

 

	
 
	
(i)
	
any event occurs the result of which is that any “person,” as such term is used in Sections 13(d) and 14(d) of the Exchange Act, becomes the “beneficial owner”, as defined in Rules l3d-3 and l3d-5 under the Exchange Act directly or indirectly, of more than  50% of the voting stock of the Company or any successor company thereto, including, without limitation, through a merger or consolidation or purchase of voting stock of the Company; provided that the transfer of 100% of the voting stock of the Company to a Person that has an ownership structure identical to that of the Company prior to such transfer, such that the Company becomes a wholly owned subsidiary of such Person, shall not be treated as a Change in Control;

	
 
	
(ii)
	
during any period of two (2) consecutive years, individuals who at the beginning of such period constituted the Board, together with any new directors whose election by such Board or whose nomination for election by the stockholders of the Company was approved by a vote of a majority of the directors of the Company then still in office who were either directors at the beginning of such period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority of the Board then in office;

	
 
	
(iii)
	
the sale, lease, transfer, conveyance or other disposition, in one or a series of related transactions other than a merger or consolidation, of all or substantially all of the assets of the Company and its consolidated subsidiaries taken as a whole to any Person or group of related Persons; or

	
 
	
(iv)
	
the adoption of a plan relating to the liquidation or dissolution of the Company.

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

 

“Good Reason” shall have the meaning ascribed thereto in any effective employment agreement between you and the Company or its Affiliates, or if no employment agreement is in effect that contains a definition of good reason, then Good Reason shall mean that the Company or its 

-6-

 

Affiliates (i) has required that you relocate to a principal place of employment that is more than 50 miles from your then-current principal place of employment; (ii) has reduced, or has notified you of its intent to reduce, your base salary by more than 10%, unless such reduction is agreed to by you or is involuntarily imposed upon all other employees of the Company who are similarly situated to you; or (iii) without your consent, materially diminishes your authority or responsibilities; provided, however, that in the event you believe any of the forgoing conditions exist that constitute Good Reason, prior to Good Reason being established, you will first provide notice to the Company and give the Company a reasonable opportunity (not to exceed thirty (30) calendar days) to cure the condition you contend establishes Good Reason.

 

“Person” means and includes any individual, partnership, joint venture, corporation, limited liability company, estate, trust, or other entity.

 

“Specified Conduct” means, if you are party to an employment agreement that contains post-termination restrictive covenants, a breach of any such covenant, or if you are not party to an employment agreement that contains post-termination restrictive covenants, your (i) unauthorized disclosure of confidential information relating to the Company or its Affiliates, (ii) engaging, directly or indirectly, as an employee, partner, consultant, director, stockholder (other than as a passive investor in not more than 5% of the shares of any publicly traded class of securities of any business), owner, or agent in any business that is competitive with the businesses conducted by the Company and its Affiliates at the time of termination of your employment, (iii) soliciting or inducing, directly or indirectly, any former, present or prospective customer or client of the Company or its Affiliates to purchase any services or products offered by the Company or its Affiliates from any Person other than the Company or its Affiliates, or (iv) hiring, directly or indirectly, any individual who was an employee of the Company or its Affiliates within the six month period prior to termination of your employment, or soliciting or inducing, directly or indirectly, any such individual to terminate his or her employment with the Company or its Affiliates. 

-7-Exhibit 101

		

			Exhibit 10.1

		

		
			THE SEVERANCE PLAN FOR OFFICERS OF
		

		
			LINCOLN NATIONAL CORPORATION
		

		
			(Amended and Restated effective as  of  February 27, 2019)
		

		
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			Purpose and Interpretation  
		

		
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			This amendment and restatement of The Severance Plan for Officers of Lincoln National Corporation (the “Plan”) is effective as of February 27, 2019.  This document amends and restates the November 8, 2017 version of the Plan.  
		

		
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			This Plan is intended to be (a) a “separation pay plan” that complies with an exception to section 409A of the Internal Revenue Code of 1986, as amended, and the official guidance issued thereunder, and (b) an unfunded “top hat” employee welfare benefit plan under the Employee Retirement Income Security Act of 1974, as amended, that covers a select group of management and highly-compensated employees.  It is further intended that benefits under this Plan shall be paid only in cases of “Involuntary Termination” other than for “Cause,” as such terms are defined under Article I below.  Notwithstanding any other provision herein to the contrary, this Plan shall be interpreted, operated and administered in a manner consistent with these intentions.  
		

		
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			Article I: Definitions
		

		
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			“Applicable Cap” means the lesser of:  (a) two times (2x) the sum of the Officer’s annual rate of pay determined as of December 31st of the calendar year prior to the year in which the Officer’s actual separation from service occurs,  or (b) two times (2x) the maximum amount that may be taken into account under a tax-qualified retirement plan pursuant to Code section 401(a)(17) in effect for the calendar year in which the Officer’s actual separation from service occurs ($280,000 for calendar year 2019; as indexed thereafter).   In calculating the Applicable Cap, all amounts that are defined as payments under a “separation pay plan” sponsored by the Corporation for an individual Officer are aggregated.
		

		
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			“Cause” shall have the same meaning as used and/or defined under the Lincoln National Corporation Severance Pay Plan.
		

		
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			“Change of Control” shall have the same meaning as used and/or defined under the Change of Control Plan.
		

		
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			“Change of Control Plan” means the Lincoln National Corporation Executives’ Severance Benefit Plan.
		

		
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			“Code” means the Internal Revenue Code of 1986, as amended.
		

		
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			“Corporation”  means Lincoln National Corporation and its affiliates and subsidiaries.
		

		
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			“Effective Date” means February 27, 2019.
		

		

		

		 

 

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			“Involuntary Termination” or “Involuntarily Terminated” means an Officer’s actual “involuntary separation from service,” as defined under Code section 409A and the official guidance issued thereunder, from a Participating Employer.  The terms “Involuntary Termination” and “Involuntarily Terminated” do not include any situation where the Officer tenders a resignation to a manager or other Officer of the Corporation.
		

		
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			“Key Employee” means  any Officer who, as of the date of his or her Involuntary Termination other than for Cause, is treated as a “specified employee” under Code section 409A(a)(2)(B)(i)  (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 any determination date shall be effective for the 12-month period beginning on the April 1st following the determination date.
		

		
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			“Officers” means those officers, other than the Corporation’s President and Chief Executive Officer, listed in the Corporate Directory for each Participating Employer.  The list of officers is maintained by the Corporation and is posted on its intranet site at:  
		

		
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			http://one.lfg.com/ourpeople/orgcharts/Pages/default.aspx
		

		
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			“Participating Employer” means Lincoln National Corporation and any of its affiliates or subsidiaries listed in Appendix A to this Plan.  
		

		
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			“Plan Administrator”  means the Lincoln National Corporation Benefits Committee.  The Plan Administrator shall have complete discretion to interpret the Plan, to resolve issues relating to eligibility to receive benefits under the Plan, to determine the amount of benefits payable under the Plan, and to take whatever action it believes is necessary or desirable for such administration. For purposes of Article IX of the Plan, the Plan Administrator has delegated to the Lincoln National Corporation Benefits Appeals Committee the responsibility and authority to act as “Claims Administrator” and “Appeals Administrator,” respectively.  
		

		
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			Article II: Eligibility for Benefits
		

		
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			The benefits provided under this Plan are the Severance Pay benefit described in Article III below and, if applicable, the Severance Stipend benefit described in Article IV below.  
		

		
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			In order to qualify for benefits under this Plan, the Officer must satisfy each of the three (3) requirements set forth below:   
		

		
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			(a) The Officer must be Involuntarily Terminated other than for Cause on or after the Effective Date;    
		

		
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			-2-     

		

 

		(b) The Officer must remain actively at work and satisfactorily perform his or her job duties until the last day that the Officer’s services are required by the Corporation; and 
		

		
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			(c) The Officer must sign (and not revoke) an Agreement, Waiver and General Release (or similar release document) satisfactory to the Corporation (“Agreement”) that becomes effective, which shall include provisions calling for forfeiture and/or claw back of all but three (3) weeks of benefits payable or paid under this Plan in the event the Officer engages in competition with, or solicits or attempts to solicit employees or customers of the Corporation, reveals confidential information belonging to the Corporation, fails to report such competitive activity, solicitation, or breach of confidentiality, or otherwise violates the terms of the Agreement, unless otherwise prohibited by law.
		

		
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			Benefits are not payable under this Plan unless each of the above requirements of this Article II is satisfied and the Officer continues to satisfy such requirements throughout the duration of the Officer’s Severance Period set forth in Article III below.
		

		
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			As of the Effective Date, (i)  Officers are no longer eligible to participate in or receive benefits from the Lincoln National Corporation Severance Pay Plan; and (ii) this Plan shall pay benefits following an Officer’s Involuntary Termination other than for Cause, which includes a “Job Elimination” as that term is defined under the Lincoln National Corporation Severance Pay Plan, provided such Officer satisfies the requirements for benefits under this Plan.
		

		
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			Any Officer who is Involuntarily Terminated for Cause shall not be eligible for benefits under this Plan or any other plan, program or arrangement sponsored by the Corporation calling for severance or severance-like payments or stipend or stipend-like payments.
		

		
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			Article III: Amount of Severance Pay
		

		
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			Severance Pay is the greater of the Officer’s:  
		

		
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			(a) Annual base salary in effect at the time of Involuntary Termination other than for Cause plus the Officer’s Annual Incentive Program target bonus dollar amount for the calendar year in which the Officer’s Involuntary Termination other than for Cause occurs, divided by 52; or 
		

		
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			(b) Established compensation, if applicable, in effect at the time of Involuntary Termination other than for Cause plus the Officer’s Annual Incentive Program target bonus dollar amount (if any) for the calendar year in which the Officer’s Involuntary Termination other than for Cause occurs, divided by 52.  
		

		
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			-3-     

		

 

		The Severance Period is the length of time during which an Officer receives Severance Pay. The applicable Severance Period is generally based on an Officer’s title as set forth below:
		

		
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			Officer TitleSeverance Period
		

		
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			Assistant Vice President39 weeks*
		

		
			Vice President39 weeks*
		

		
			Senior Vice President52 weeks
		

		
			Executive Vice President78 weeks
		

		
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			*  The Severance Period for Officers who are Assistant Vice Presidents or Vice Presidents of Participating Employers shall be the greater of: (i) 39 weeks or (ii) the Severance Period set forth in Appendix B to this Plan based on such Officer’s length of service with the Corporation.
		

		
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			In the event an Officer dies during his or her Severance Period, any remaining Severance Pay shall be paid in a cash lump sum to the deceased Officer’s estate as soon as practicable but in no event later than 90 days after the date of death.
		

		
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			For Officers who are employed as of the date of a Change of Control and who are Involuntarily Terminated other than for Cause within two years after such Change of Control, Severance Pay will be calculated pursuant to its definition above, but the Severance Period shall be increased to 150% of the scheduled length determined pursuant to this Article III and Appendix B, as applicable.
		

		
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			See Article VIII below for more information regarding the coordination of the Severance Pay benefit payable under this Plan, and similar benefits under the Change of Control Plan, or any other plans, programs and arrangements sponsored by the Corporation that pay severance benefits.
		

		
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			Article IV:    Amount of Severance Stipend
		

		
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			Any Officer who satisfies the eligibility requirements for Plan benefits set forth in Article II and who is enrolled in a medical plan sponsored by the Corporation at the time of his or her Involuntary Termination other than for Cause shall be entitled to the Severance Stipend.  The Severance Stipend is a flat rate for each week of an Officer’s Severance Period, as determined pursuant to Article III above, and is based upon the Officer’s level of coverage under a medical plan sponsored by the Corporation as set forth below:
		

		
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						Level of Coverage in Medical Plan at Time of Involuntary Termination 

					
					
						Severance Stipend Amount per Week of Severance Period

				
	
					
						Employee only

					
					
						$100

				
	
					
						Employee + spouse/domestic partner

					
					
						$200

				

		 

		

			-4-     

		

 

			
					
						Employee + child(ren)

					
					
						$180

				
	
					
						Employee + family

					
					
						$270

				
	
					
						Not enrolled in Medical Plan

					
					
						$0

				

		
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			See Article VIII below for more information regarding the coordination of the Severance Stipend benefit payable under this Plan, and similar benefits under the Change of Control Plan,  or any other plans, programs and arrangements sponsored by the Corporation that pay severance benefits.
		

		
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			Article V:  Timing of Payments
		

		
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			In general, payments under this Plan will be paid, or begin to be paid, as soon as practical, but in no event later than 90 days, after the date the Officer satisfies the requirements of Article II above.  
		

		
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			Notwithstanding the foregoing, for amounts in excess of  the Applicable Cap that are payable to a Key Employee or any amount of Plan benefits payable to a Key Employee covered under the Change of Control Plan, benefits under this Plan will begin to be paid no earlier than the first day of the month that is a full six (6) months after the date of the Key Employee’s Involuntary Termination other than for Cause.  No interest or other compensation will be paid to the Key Employee in consideration of such delay.
		

		
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			In no event shall Severance Pay be paid later than December 31st of the second calendar year following the calendar year in which the Officer’s Involuntary Termination other than for Cause occurs.  
		

		
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			Article VI:    Form of Payment
		

		
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			Severance Pay.  Except as provided below, Severance Pay is paid bi-weekly during the applicable Severance Period.    
		

		
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			For Officers who are employed as of the date of a Change of Control and who are Involuntarily Terminated other than for Cause within two years after such Change of Control, benefits under this Plan will be paid in a cash lump sum as soon as practical, but not later than 90 days, after the date the Officer satisfies the requirements of Article II above.  Such benefits shall be calculated as described in Articles III and IV above.
		

		
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			Severance Stipend.  The Severance Stipend is paid in a cash lump sum at the beginning of the applicable Severance Period.
		

		
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			Article VII: Additional Restrictions on Eligibility for Severance Benefits
		

		
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				 (a)
			

			
	
			
			Suitable Job.  Severance benefits are not payable to any Officer who refuses an offer of or a transfer to a “suitable job” with the Corporation, provided the transfer does not require the Officer to relocate to a new jobsite that is more than 50 miles 
		

		 

		

			-5-     

		

 

			from the previous jobsite.  In no event is a job “suitable” if the annual base salary is less than 70% of the Officer’s annual base salary immediately prior to the transfer. The determination of whether a position is a “suitable job” will be made by the Corporation’s Chief Human Resources Officer or his or her delegate.  

		
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			Notwithstanding the foregoing, severance benefits are not payable under this Plan if:
		

		
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				 (i)
			

			
	
			
			The Officer is a member of the Corporate Leadership Group or has an annual base salary in excess of U.S. $200,000, and is offered the same, a “substantially similar job,” or a higher level job (as determined by the Corporation’s Chief Human Resources Officer or his or her delegate)  in another location (even if it does entail more duties and responsibilities), if the Corporation offers the standard relocation benefit for the business entity or Participating Employer applicable to such individual, and such individual refuses to relocate, regardless of the location of the new jobsite; or

		
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				 (ii)
			

			
	
			
			At the time the Officer was hired, promoted, or transferred to his or her current position, the Officer was expressly informed that relocation to another location was a job requirement; or

		
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				 (iii)
			

			
	
			
			At the time the Officer was hired, promoted, or transferred to his or her current position, the Officer was expressly informed that rotation to another job, whether in the same or different location, as part of a planned development program was a job requirement.

		
			 
		

			
	
			
				 (b)
			

			
	
			
			Substantially Similar Job.  Severance benefits are not payable under this Plan to any Officer who is Involuntarily Terminated other than for Cause and who is offered a “substantially similar job” in the following and similar instances:

		
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				 (i)
			

			
	
			
			The Involuntary Termination other than for Cause is the result of the sale of a subsidiary or affiliate of the Corporation and the substantially similar job offered is a result of the sale; or

		
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				 (ii)
			

			
	
			
			The Involuntary Termination other than for Cause is the result of the transfer or sale of all or a portion of a business unit or of a line of business of the Corporation and the substantially similar job offered is a result of the transfer or sale; or

		
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				 (iii)
			

			
	
			
			The Involuntary Termination other than for Cause is the result of the transfer of duties or functions through “outsourcing,” and the substantially similar job offered is with the outsource vendor. For purposes of this Plan, the term “outsourcing” means the transfer of duties or functions historically performed by employees of the Corporation to another organization pursuant to an agreement 
		

		 

		

			-6-     

		

 

			between the Corporation and such organization to provide those services.

		
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			Severance benefits are payable in the instances described in Subsections VII(b)(i) through (iii) if, in addition to the requirements of Article II being satisfied, the acceptance of the substantially similar job requires the Officer to relocate to a new jobsite that is more than 50 miles from the Officer’s jobsite immediately preceding the Involuntary Termination other than for Cause and the Officer chooses not to relocate.  The determination of what constitutes a “substantially similar job” will be made by the Corporation’s Chief Human Resources Officer or his or her delegate.
		

		
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				 (c)
			

			
	
			
			Sale of Affiliate or Subsidiary.  In the event of a sale of an affiliate or subsidiary of the Corporation, severance benefits are not payable under this Plan to any Officer whose employment continues with that affiliate or subsidiary.

		
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			Article VIII: Coordination with Other Plans, Programs & Arrangements
		

		
			 
		

		
			Retirement Plans.  With respect to an Officer who is a participant in the Lincoln National Corporation Retirement Plan for Employees Hired Prior to January 1, 2008, the length of such Officer’s Severance Period will not count in the determination of whether that Officer is age 53 or older at the time of his or her termination of employment (actual separation from service).
		

		
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			Any Severance Pay or Severance Stipend payable pursuant to this Plan is not eligible to be contributed to any of the Corporation’s qualified savings or 401(k) plans, nor eligible to be deferred under any of the Corporation’s non-qualified savings or deferred compensation arrangements.  No Severance Pay or Severance Stipend is considered in the calculation of benefits under any of the Corporation’s qualified or non-qualified defined benefit plans.
		

		
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			Paid Time Off. In addition to the benefits described in this Plan, an Officer may receive a cash lump sum payment for all accrued but unused paid time off (“PTO”) hours in the calendar year in which his or her Involuntary Termination other than for Cause occurs, as well as any unused PTO hours that, consistent with Corporation policy, were permitted to be carried over from the preceding calendar year.
		

		
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			If an Officer is paid Severance Pay under this Plan and is paid for accrued but unused PTO hours as provided above, and is then subsequently rehired (other than as a temporary employee) by the Corporation or one of its subsidiaries or affiliates within one year after such Involuntary Termination other than for Cause, Severance Pay will cease and the Officer shall not be eligible to be re-credited with any PTO hours that have already been used or paid out.
		

		
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			Previous Payment of Severance Benefits.  Any Officer who has previously been paid severance benefits by the Corporation or any subsidiary or affiliate, and is subsequently rehired, and is determined to be eligible for benefits under this Plan, will have any 
		

		 

		

			-7-     

		

 

		benefits under this Plan calculated without including any past periods of service to the extent that previous severance benefits were paid with respect to such past periods of service.
		

		
			 
		

		
			Other Severance or Severance-Type Benefits.  Any amounts of Severance Pay and Severance Stipend payable under this Plan shall be reduced, or offset, on a dollar-for-dollar basis, by the amount of any severance pay and severance stipend that may also be payable to the Officer under any other plan, program, contract or arrangement sponsored by the Corporation calling for the payment of severance or severance-like payments or stipend or stipend-like payments.  
		

		
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			In addition, if the Officer is also eligible for benefits pursuant to the terms of the Change of Control Plan, then any amount of Severance Pay and Severance Stipend payable to the Officer under this Plan shall offset or reduce the amount payable to the Officer under the Change of Control Plan.  
		

		
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			Except as expressly provided herein, particularly as to the amount of Severance Pay,  Severance Stipend, and/or as to the coordination of benefits provisions in this Plan, this Plan does not amend or otherwise modify the provisions of any of the plans, programs, arrangements or agreements established, maintained or entered into by the Corporation for the purpose of providing benefits to employees.  
		

		
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			Article IX:    Claim for Benefits & Appealing a Denied Claim
		

		
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			ERISA Claims Procedures.  Any claim for benefits under this Plan shall be made in accordance with the procedures set forth in this Article IX.  It is intended that the following claims procedures at all times be in compliance with the claim procedure regulations of the U.S. Department of Labor set forth in 29 C.F.R. section 2560.503-1.
		

		
			General Procedures.  The Plan Administrator or its delegate shall establish administrative processes and safeguards designed to ensure and to verify that all benefit claim determinations under this Plan are made in accordance with this document and that, where appropriate, the Plan provisions have been applied consistently with respect to similarly situated Officers.
		

		
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			(a)Initial Claim.  An employee of a Participating Employer who believes he or she is entitled to benefits under this Plan may make a claim for those benefits (such employee being a “Claimant”) by submitting a written notification of his or her claim of right to such benefits to the Claims Administrator (see definition of “Plan Administrator” under Article I), in the manner prescribed by Claims Administrator.
		

		
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			(b)Timing of Benefits Determinations.  If a claim is wholly or partially denied (an “Adverse Benefit Determination”), the Claims Administrator shall notify the Claimant of the Adverse Benefit Determination within a reasonable period of time, but not later than 90 days after receipt of the 
		

		 

		

			-8-     

		

 

		claim by the Claims Administrator, unless the Claims Administrator determines that special circumstances require an extension of time for processing the claim.  If the Claims Administrator determines that an extension of time for processing is necessary, then written notice of the extension shall be furnished to the Claimant prior to the termination of the initial 90-day period.  In no event shall such extension exceed a period of 90 days from the end of such initial period.  The extension notice shall indicate the special circumstances requiring an extension of time and the date by which the Claims Administrator expects to render a decision on the claim.  
		

		
			(c)Manner and Content of Notice of Adverse Benefit Determination.  The Claims Administrator shall provide a Claimant with written or electronic notification of any Adverse Benefit Determination.  Electronic notifications shall comply with standards imposed under 29 C.F.R. sections 2520.104b-1(c)(1)(i), (iii) and (iv).  The notification shall set forth, in a manner calculated to be understood by the Claimant:
		

		
			(1) the specific reason or reasons for the Adverse Benefit Determination;
		

		
			(2) reference to the specific Plan provisions on which the determination is based;
		

		
			(3) a description of any additional material or information necessary for the Claimant to protect the claim and an explanation of why such material or information is necessary; and
		

		
			(4) a description of the Plan’s review procedures and the time limits applicable to such procedures, including a statement of the Claimant’s right to bring a civil action under section 502(a) of ERISA following an Adverse Benefit Determination on review.
		

		
			Appeal of Adverse Benefit Determinations.   The Plan shall provide: 
		

		
			(a) the Claimant 60 days following receipt of notification of an Adverse Benefit Determination within which to appeal the determination;
		

		
			(b) the Claimant the opportunity to submit written comments, documents, records, and other information relating to the claim for benefits;
		

		
			(c)for a review that takes into account all comments, documents, records, and other information submitted by the Claimant relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination; and
		

		
			(d)the Claimant, upon request and free of charge, reasonable access to, and copies 
		

		 

		

			-9-     

		

 

		of, all documents, records, and other information relevant to the Claimant’s claim for benefits.
		

		
			Timing of Notification of Benefit Determination on Review.  The Appeals Administrator (see definition of “Plan Administrator” under Article I) shall notify a Claimant in accordance with this Article IX of the Plan’s benefit determination on review within a reasonable period of time, but not later than 60 days after receipt of the Claimant’s request for review by the Plan, unless the Appeals Administrator determines that special circumstances require an extension of time for processing the review of the claim.  If the Appeals Administrator determines that the extension of time for processing is required, written notice of the extension shall be furnished to the Claimant prior to the termination of the initial 60-day period.  In no event shall such extension exceed a period of 60 days from the end of the initial period.  The extension notice shall indicate the special circumstances requiring an extension of time and the date by which the Appeals Administrator expects to render the determination on review.
		

		
			For purposes of this Article IX, the period of time within which a benefit determination on review is required to be made shall begin at the time an appeal is filed, in accordance with the Plan’s procedures, without regard to whether all the information necessary to make a benefit determination on review accompanies the filing.  In the event that a period of time is extended due to a Claimant’s failure to submit information necessary to decide a claim, the period for making the benefit determination on review shall be suspended from the date on which the notification of the extension is sent to the Claimant until the date on which the Claimant responds to the request for additional information.
		

		
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			Furnishing documents.  In the case of an Adverse Benefit Determination on review, the Appeals Administrator shall provide such access to, the copies of, documents, records, and other information described below, as appropriate.
		

		
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			Manner and Content of Notification of Benefit Determination on Review.    The Appeals Administrator shall provide a Claimant with written or electronic notification of the Appeals Administrator’s benefit determination on review.  Electronic notifications shall comply with standards imposed under 29 C.F.R. sections 2520.104b-1(c)(1)(i), (iii) and (iv).  In the case of an Adverse Benefit Determination, the notification shall set forth, in a manner calculated to be understood by the Claimant:
		

		
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				 (a)
			

			
	
			
			the specific reason or reasons for the adverse determination;

		
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				 (b)
			

			
	
			
			reference to the specific Plan provisions on which the determination is based;

		
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			(c)a statement that the Claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the Claimant’s claim for benefits; and 
		

		

		

		 

		

			-10-     

		

 

		(d)a statement of the Claimant’s right to bring an action under section 502(a) of ERISA.
		

		
			Litigation.    To operate and administer the claims procedure in a timely and efficient manner, any Claimant whose appeal with respect to a claim for benefits under this Plan has been denied, and who desires to commence a legal action with respect to such a claim, must commence such action in a court of competent jurisdiction within one year after receipt of notification of such denial.  Failure to file such action by the prescribed time will forever bar the commencement of such action.
		

		
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			Article X:    Amendment and Termination
		

		
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			This Plan may be amended at any time and from time to time, or terminated at any time, by the Corporation.  This Plan may be amended by action of the Compensation Committee of the Corporation’s Board of Directors at a meeting held either in person or by telephone or other electronic means, or by unanimous consent in lieu of a meeting.  The Compensation Committee may delegate this amendment power to an Officer of the Corporation.  The Chief Executive Officer of the Corporation may amend this Plan if such amendment is (a) in the opinion of counsel, required by local, state or federal law or regulation or (b) estimated to cost the Corporation no more than $15,000,000 (actuarial present value of all Plan amendments made in the same year) for the next five (5) calendar years after the effective date of such amendment.  
		

		

		

		 

		

			-11-     

		

 

		
		

		
			APPENDIX A
		

		
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			Participating Employers
		

		
			As of February 27, 2019
		

		
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			California Fringe Benefit & Insurance and Marketing Corp.
		

		
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			LFA Limited Liability Co.
		

		
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			LFA Management Corporation
		

		
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			Lincoln Financial Advisors Corporation
		

		
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			Lincoln Investment Management Company
		

		
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			Lincoln Life & Annuity Company of New York 
		

		
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			Lincoln National Corporation
		

		
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			Lincoln National Management Corporation 
		

		
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			The Lincoln National Life Insurance Company 
		

		
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			-12-     

		

 

		APPENDIX B
		

		
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						Severance Period Schedule  

					
						 (As of February 27, 2019)

					
						 

				
	
					
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						As set forth in Article III of the Plan, this Appendix B applies only to Assistant Vice Presidents and Vice Presidents of Participating Employers.

					
						 

				
	
					
						LENGTH OF SERVICE*

					
					
						LENGTH OF SEVERANCE PERIOD

				
	
					
						Less than 3 years

					
					
						39 weeks

				
	
					
						3 years  

					
					
						39 weeks

				
	
					
						4 years 

					
					
						39 weeks

				
	
					
						5 years 

					
					
						39 weeks

				
	
					
						6 years 

					
					
						39 weeks

				
	
					
						7 years 

					
					
						39 weeks

				
	
					
						8 years  

					
					
						39 weeks

				
	
					
						9 years  

					
					
						39 weeks

				
	
					
						10 years

					
					
						39 weeks

				
	
					
						11 years 

					
					
						39 weeks

				
	
					
						12 years 

					
					
						39 weeks

				
	
					
						13 years 

					
					
						39 weeks

				
	
					
						14 years 

					
					
						39 weeks

				
	
					
						15 years

					
					
						39 weeks

				
	
					
						16 years 

					
					
						39 weeks

				
	
					
						17 years 

					
					
						39 weeks

				
	
					
						18 years 

					
					
						39 weeks

				
	
					
						19 years 

					
					
						39 weeks

				
	
					
						20 years 

					
					
						40 weeks

				
	
					
						21 years

					
					
						42 weeks

				
	
					
						22 years 

					
					
						44 weeks

				
	
					
						23 years 

					
					
						46 weeks

				
	
					
						24 years 

					
					
						48 weeks

				
	
					
						25 years 

					
					
						50 weeks

				
	
					
						26 years or more

					
					
						52 weeks

				
	
					
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						*An Officer’s length of service will be the whole number of years of the Officer’s continuous employment with the Corporation, measured from the Officer’s seniority date as reflected in the Corporation’s human resource information system, with a year of service being credited on each succeeding anniversary of the Officer’s seniority date. Partial years are not credited.

				

		
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			-13-

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