Document:

Exhibit 10 (a)

Exhibit
10(a)

LTIP
AWARD AGREEMENT

2003
- 2005 Performance Cycle

This
award agreement (“Agreement”), by and between Lincoln National Corporation
(“LNC”) and ________  
(“Grantee”), evidences the grant by LNC on March 13, 2003 of a long-term
incentive award to Grantee and Grantee’s acceptance of the award in accordance
with and subject to the provisions of the Lincoln National Corporation Incentive
Compensation Plan (“Plan”) and this Agreement. LNC and Grantee agree as
follows:

1.
Form
of Award. Grantee
has elected to receive Grantee’s target award for this performance cycle as
follows: _______ nonqualified
stock options to purchase LNC common stock at $______  for each
share, _______ shares of
LNC common stock and _______in cash.
Grantee’s actual award, if any, will be determined based on performance during
the performance cycle in accordance with the terms of the Plan and the Long-Term
Incentive Plan (“LTIP”) Overview distributed in February 2003. The Compensation
Committee of the LNC Board of Directors (“Committee”) shall determine if and
when any award is payable under the Plan and reserves the right to adjust the
amount of any award under the Plan at any time. The number of options and shares
under this Agreement, if any, shall be adjusted appropriately in the event of a
stock split, reverse stock split, stock dividend, or other similar event.

2.
Transferability. This
award may not be transferred, sold, pledged, or otherwise encumbered, except by
will or the laws of descent and distribution.

3.
Consequences
of Competitive and Other Activity. Any
award under this Agreement is subject to the following
requirements:

(a)
Noncompetition.  Grantee
may not render services for any organization or engage directly or indirectly in
any business that, in the sole judgment of the Chief Executive Officer of LNC or
other senior officer designated by the Committee, is or becomes competitive with
LNC. 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)
Nondisclosure. Grantee
shall not, without prior written authorization from LNC, disclose to anyone
outside of LNC, or use in other than LNC’s business, any confidential
information or material relating to the business of LNC that is acquired by
Grantee either during or after employment with LNC.

(c)
Inventions
or Ideas. Grantee
shall disclose promptly and assign to LNC all right, title, and interest in any
invention or idea, patentable or not, made or conceived by Grantee during
employment by LNC, relating in any manner to the actual or anticipated business,
research or development work of LNC and shall do anything reasonably necessary
to enable LNC to secure a patent where appropriate in the United States and in
foreign countries.

 

 

Grantee
must provide LNC with a certification of compliance with these provisions prior
to the exercise of any option and prior to payment of any cash or share award.
Failure to comply with these provisions at any time prior to, or during the six
months after, any such exercise or payment shall cause such exercise or payment
to be rescinded. LNC must notify Grantee in writing of any such rescission. LNC,
in its discretion, may waive compliance in whole or part in any individual case.
Within ten days after receiving a rescission notice from LNC, Grantee must pay
LNC the amount of any gain realized or payment received (net of any withholding
or other taxes paid by Grantee) as a result of the rescinded exercise or
payment. Such payment by Grantee must be made either in cash or by returning the
shares Grantee received in connection with the rescinded exercise or payment. If
Grantee’s employment is terminated by LNC and its subsidiaries other than for
fraud or other fidelity crimes, however, a failure of Grantee to comply with the
noncompetition provisions after such termination shall not in itself cause
rescission if the exercise or payment occurred before the
termination.

 

4.
Tax
Withholding. In
reference to an option
award, LNC
shall not issue shares until any required tax withholding payments are remitted
to LNC by Grantee; and LNC may permit Grantee to surrender shares or withhold
shares (from those that would otherwise be issued on exercise of the option) to
satisfy tax withholding obligations. In reference to a share
award, Grantee
must remit to LNC an amount equal to the required tax withholding on the value
of the shares payable under this Agreement at such time as they are taxable to
Grantee; and Grantee may elect to surrender shares of LNC stock (including
shares that are a part of this award) to satisfy all or part of the required tax
withholding. In reference to a cash
award, LNC
will withhold any required taxes from the award (federal, state, and local
income, employment, and other taxes).

5.
Change
in Control. Upon a
Change in Control of LNC (as defined in the Plan), the Committee (as it shall
have existed on the day immediately preceding such Change in Control) shall
determine what, if any, award under this Agreement shall be provided to Grantee.
In making such determination, the Committee shall consider the nature of such
Change in Control, whether continuation of the Plan and payment of awards for
this performance cycle are feasible, and whether the resulting corporate entity
offers or commits to offer awards of comparable economic value; provided,
however, that the Committee’s determination shall be consistent with existing
LNC plans such as the LNC Incentive Compensation Plan and the LNC Executives’
Severance Benefit Plan.

 

6.
Deferral. Pursuant
to the LNC Executive Deferred Compensation Plan for Employees and if eligible
for such Plan, Grantee may elect to defer receipt of any share or cash award
under this Agreement, in the time and manner specified by the Benefits
Administrator for such Plan. 

 

7.
Definitions. As used
in this Agreement: 

 

“Total
Disability” means (as determined by the Committee) a disability that results in
Grantee being unable to engage in any occupation or employment for wage or
profit for which Grantee is, or becomes, reasonably qualified by training,
education or experience. In addition, the disability must have lasted six months
and be expected to continue for at least six more months or be expected to
continue unto death. 

 

 

“Retirement”
means,
for purposes of this Agreement, Grantee’s retirement from LNC or a subsidiary at
age 65 or older with at least five years of service (with LNC or a subsidiary)
or, with the approval of Grantee’s employer, at age 55 or older with at least
five years of such service.

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

8.
Pro-Rata
Awards Upon Certain Events. Except as
provided in this section and section 5, if during the performance cycle
Grantee’s employment (with LNC and all subsidiaries of LNC) terminates for any
reason, Grantee shall not be entitled to any award under this Agreement. If any
of the following events occurs, Grantee (or Grantee’s beneficiary, if
applicable) shall receive, at the same time long-term incentive awards are
normally paid to employees (employed at the end of the performance cycle), any
award to which Grantee would otherwise be entitled based on performance during
the performance cycle, but such award shall be pro-rated based on Grantee’s
service during the performance cycle: Grantee’s death, Total Disability,
Retirement, or involuntary termination of employment with LNC and all affiliates
without Cause; provided, however, that any award in the case of such involuntary
termination shall be contingent on Grantee’s release of claims against LNC and
its affiliates (in form and substance satisfactory to LNC) and shall not be paid
unless such release shall have become effective; and provided further that such
a release shall not be required when such termination is by reason of the sale
or disposition of the business in which Grantee is employed.

9.
Terms
Applicable Only to Stock Units/Shares. During
the performance cycle, any share award shall consist of LNC stock units but any
actual award shall be payable in shares of LNC common stock. If an award becomes
payable in shares of LNC stock under this Agreement, Grantee shall also receive
an amount equal to the dividends that would have been paid on such shares of LNC
stock had Grantee held such shares from the above date of grant through the date
the award becomes payable. Such dividend equivalent amount shall be paid in
shares of LNC stock based on the Fair Market Value (as defined in the Plan) of
LNC stock on the date the award becomes payable (with fractional shares paid in
cash).

10.
Terms
Applicable Only to Stock Options.

(a)
Exercise
Period. If and
when an actual award of options under this Agreement is made, Grantee may
exercise all or part of such options until the first to occur of: (1) the tenth
anniversary of the grant date specified in the first paragraph of this
Agreement; (2) in the case of Grantee’s death or Total Disability, the first
anniversary of the later of the date on which the Committee approves the award
for this cycle or the date of Grantee’s termination of employment with LNC and
all subsidiaries on account of death or Total Disability; (3) in the case of
Grantee’s Retirement, the fifth anniversary of the later of the date on which
the Committee approves the award for this cycle or the date of Grantee’s
Retirement; (4) in the case of Grantee’s involuntary termination of employment
with LNC and all subsidiaries (other than a termination on account of fraud or
other fidelity crimes), including the sale or disposition of the business in
which Grantee is employed, the date three months after the later of the date on
which the Committee approves the award for this cycle or such termination date;
and (5) the date that Grantee’s employment with LNC and all subsidiaries
terminates for any reason other than those described in item 2, 3, or 4 of this
paragraph. LNC shall determine what constitutes termination of employment but
for purposes of this Agreement (i) such termination shall not occur if Grantee
has a full-time agent’s contract with LNC or a subsidiary and (ii) “subsidiary”
shall include any corporation in which LNC has ownership of at least twenty-five
percent.

 

 

(b)
Manner
of Exercise. To
exercise an option, Grantee must, on an LNC business day, (1) deliver, mail or
fax written notice of the exercise (in the form specified by LNC) to the LNC
stock option administrative group and (2) submit full payment of the exercise
price and the certification of compliance described above. Payment may be made
in any combination of cash, personal check, or shares of LNC common stock. Such
shares must be owned for at least six months and will constitute payment to the
extent of their Fair Market Value (as defined in the Plan). As soon as
practicable after an option is exercised, LNC shall cause the appropriate number
of shares of LNC stock to be issued to Grantee.

(c)
Award
Above 100% of Target. If
performance during the performance cycle exceeds 100 percent of target
performance, Grantee shall receive shares of LNC common stock equal to the
excess option value (prorated, if applicable, in the case of death, Total
Disability, Retirement, or involuntary termination of employment as stated
above). “Excess option value” means the dollar value of options in excess of 100
percent of target, determined as described in the Long-Term Incentive Plan
(“LTIP”) Overview distributed in February 2003. Grantee shall also receive an
amount equal to the dividends that would have been paid on such shares had
Grantee held such shares from the above date of grant through the date the award
becomes payable. Such dividend equivalent amount shall be paid in shares of LNC
common stock based on the Fair Market Value (as defined in the Plan) of such
stock on the date the award becomes payable (with fractional shares paid in
cash).

IN
WITNESS WHEREOF, LNC, by its duly authorized officer has signed this Agreement
as of the first date set forth above.

LINCOLN
NATIONAL CORPORATION

By: 
___________________________       

Jon A.
Boscia

Chairman
and Chief Executive OfficerExhibit 10 (b)

Exhibit
10(b)

2004
Annual Incentive Award Measures

The
Compensation Committee set corporate performance measures as well as additional
measures for particular business units under the Lincoln National Corporation
Incentive Compensation Plan, as amended and restated on March 8, 2001. The 2004
corporate performance measures are:

·  growth in
our income from operations per share, 

·  return on
equity, 

·  sales
growth relative to industry-based indices and

·  success
in attracting and retaining a diverse and talented employee group and in
management development and succession planning. 

In
addition to the corporate measures, the 2004 performance measures for the CEO of
the Investment Management segment include the investment performance of assets
managed by the segment, and the 2004 performance measures for the CEO of Lincoln
Financial Advisors (“LFA”) business unit include LFA income from operations and
LFA sales growth relative to industry-based indices.

As used
above, income from operations is defined as net income determined in accordance
with generally accepted accounting principles (“GAAP”) excluding, as applicable,
the after-tax effects of realized gain or losses on investments and derivatives,
restructuring charges, gains (losses) related to reinsurance embedded
derivatives/trading account assets, cumulative effect of accounting changes,
reserve changes on business sold through reinsurance net of related deferred
gain amortization, gains (losses) on the sale of subsidiaries and blocks of
business and loss on early retirement of debt, including subordinated debt. This
is the measure that the Compensation Committee uses to evaluate the performance
of our businesses. Return on equity as used above is calculated based on income
from operations.

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