Document:

Filed by Bowne Pure Compliance

Exhibit 10.23

LINCOLN NATIONAL CORPORATION

DEFERRED COMPENSATION PLAN

for NON-EMPLOYEE DIRECTORS

Amended and Restated Effective November 5, 2008

The Lincoln National Corporation Deferred Compensation for Non-Employee Directors (the “Plan”)
was established by Lincoln National Corporation (the “Company” or “LNC”) on July 1, 2004 and is
maintained by the Company to provide non-employee members of its Boards with the opportunity to
defer annual retainer, meeting, and various other fees that would otherwise be paid to them in cash
during the calendar year. The Plan also serves as a vehicle for the Company to contribute deferred
stock units—units representing interests in a notional investment fund primarily invested in
common stock of the Company—to the Plan accounts of certain Board members. The Plan was amended
and restated on November 5, 2008.

The Plan is intended to comply with Internal Revenue Code section 409A and the official
guidance issued thereunder. The Plan has been operated in good faith compliance with Code section
409A since January 1, 2005, pursuant to Resolution No. 2007 of the Board of Directors of Lincoln
National Corporation, effective December 31, 2004. Notwithstanding any other provision of this
Plan, this Plan shall be interpreted, operated and administered in a manner consistent with this
intention.

Section 1

Definitions

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

“Account” means the separate deferred compensation accounts established by the Company in the
name of each Director. Where the context indicates, the term “Account” shall mean one or more of
the various sub-accounts that may be created within an Account.

“Affiliate” means:

	 	(a)	 	Any corporation which, together with the Company, is part of a “controlled
group” of corporations, in accordance with Code section 414(b);
	 
	 	(b)	 	Any organization which, together with the Company, is under “common control,”
in accordance with Code section 414(c);
	 
	 	(c)	 	Any organization which, together with the Company, is an “affiliated service
group,” in accordance with Code section 414(m); and
	 
	 	(d)	 	Any entity required to be aggregated with the Company pursuant to regulations
promulgated under Code section 414(o).

“Automatic Contributions” means the amount automatically credited by the Company to an account
establish for each LNC Director. LNY Directors are not eligible for Automatic Contributions.
Automatic Contributions are credited in the form of LNC Stock Units pursuant to Section 4.3 of the
Plan. The amount of Automatic Contributions made to LNC Directors is set forth in Appendix B.

“Beneficiary” means the person or persons, including a trust or the Director’s estate,
designated by the Director to receive any death benefits payable under the Plan after the death of
the Director. In the event that a Director dies prior to his/her Benefit Commencement Date and has
not properly designated a beneficiary, or if no designated beneficiary is living on the date of
distribution, such amount shall be distributed to the Director’s estate.

“Benefit Commencement Date” means the date that Plan benefits are scheduled to be paid, or
scheduled to begin to be paid if the Director has elected to receive periodic payments of Plan
benefits pursuant to Section 7.2(d) of the Plan.

 

 

 

“Boards” or “Board” means the Board of Directors of the Company and/or the Board of Directors
of Lincoln Life & Annuity Company of New York.

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

“Company” means Lincoln National Corporation or any successor thereto.

“Default Investment Option” means the Investment Option selected by the Plan Administrator in
its sole discretion for the investment of any Voluntary Deferrals where the participating Director
has failed to provide a valid election with respect to the Plan’s Investment Options.

“Director” or “Directors” means a LNY Director or LNC Director (as defined below).

“Fees” means any annual retainer fee, special meeting fee, non-executive chairperson fee, lead
director fee, committee chairperson fee, audit committee fee, or any other fee normally paid to a
Director in cash during a calendar year. A non-exclusive description of the Fees that may be paid
to, or deferred under the Plan by, Directors is included in Appendix A.

“Investment Option” means one or more of the investment funds in which Directors may direct
the investment of their Accounts, pursuant to Section 4.5 of the Plan. In general, the Investment
Options under the Plan are “notional” or “phantom” versions of the Investment Options offered under
the Company’s qualified savings plans for employees—with the exception of the self-directed
brokerage account option, which is not offered under this Plan.

“IRS” means Internal Revenue Service.

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

“Key Employee” means a Director treated as a “specified employee” as of his or her Separation
from Service under Code Section 409A(a)(2)(B)(i) (e.g. as defined in Code Section 416(i) without
regard for paragraph (5) thereof). A Director will be generally be treated as a “specified
employee” if the Director both owns 1% of the Company (including indirectly pursuant to the IRS
rules as set forth in Section 318 of the Code), and if the Director’s annual compensation from the
Company exceeds $150,000. Key Employees shall be determined in accordance with Code Section 409A
using a December 31st determination date. Key Employee status shall be effective for
the 12-month period beginning on the April 1st following the determination date.

“LNC Director” means a member of the Board of the Company who is not an employee of the
Company or an Affiliate.

“LNY Director” means a member of the Board of Lincoln Life & Annuity Company of New York who
is not an employee of the Company or an Affiliate.

“Plan Administrator” means the Corporate Governance Committee of the Company or its
delegate(s).

“Separate from Service” or “Separation from Service” shall have the meaning prescribed in Code
section 409A and the regulations thereunder. For purposes of this Plan, subject to Code section
409A and applicable regulations, a Director generally Separates from Service when the director
retires, resigns, or otherwise ceases to provide services to LNC and its Affiliates. A Director
has not Separated from Service generally if he or she remains a director of LNC or its Affiliates
or becomes a director of any corporation that, directly or indirectly, merges with, acquires or
otherwise owns and controls more than fifty percent of the assets or common stock of LNC
(“Successor Corporation”).

“Valuation Date” means the date on which the Director’s Account is valued, generally prior to
Benefit Commencement Date.

 

 

 

“Voluntary Deferral” means the election to defer a specified percentage or a dollar amount (as
permitted by the Plan Administrator) of the Director’s Fees that would otherwise be paid to the
Director during a calendar year by executing a valid Voluntary Deferral Agreement pursuant to
Section 3.2 of the Plan.

“Voluntary Deferral Agreement” means an agreement by which a Director directs the Company to
make elective deferrals under the Plan on his or her behalf in lieu of paying the Director cash
compensation.

Section 2

Eligibility to Participate

This Plan is maintained by the Company for the benefit of its non-employee Board members—the
Directors. The Plan Administrator shall have the discretion to determine the eligibility of
Directors to participate in this Plan; provided, however, that in no instance may a current
employee of the Company or any Affiliate participate in the Plan.

Section 3

Participation

3.1 Participation. Each LNC Director is automatically a participant in the
Plan by virtue of receiving Automatic Contributions pursuant to Section 5 of the Plan. LNY
Directors must elect to defer Fees pursuant to a valid Voluntary Deferral Agreement
(“Voluntary Deferrals”) in order to participate in the Plan. LNC Directors may also make
Voluntary Deferrals. The Directors of participating Affiliates of the Company may
participate in the Plan, as set forth in Appendix C.

3.2 Voluntary Deferrals. Each Director may submit a valid Voluntary Deferral
Agreement to make Voluntary Deferrals during the Plan’s annual enrollment period, which
must end no later than December 31st of the calendar year prior to the calendar
year to which the Voluntary Deferral election relates. Newly eligible Directors should
submit a valid Voluntary Deferral Agreement prior to being elected to the Board, but no
later than thirty (30) days from the date they are elected to the Board. New Directors who
fail to submit a valid Voluntary Deferral Agreement during this period must wait until the
Plan’s next annual enrollment period to begin making Voluntary Deferrals to the Plan.
Voluntary Deferral Agreements are only effective with respect to compensation not yet
earned at the time submitted, and to the extent permitted under Code section 409A.

Section 4

Plan Investments & Accounting

4.1 Recordkeeping of Accounts — General. The terms “Account” or “Accounts” refers to
the separate account(s) established by the Company in the name of each Director making Voluntary
Deferrals under the Plan, or receiving Automatic Contributions under the Plan. The Company may
also establish “Sub-Accounts” for each Investment Option under the Plan in which the Director
elects to invest. Each Account or Sub-Account is a bookkeeping device only, established for the
sole purpose of crediting and tracking amounts deferred under the Plan and the notional investments
made by each Director in the Investment Options available under the Plan.

4.2 Notional or “Phantom” Investing. With respect to Voluntary Deferrals, the Company
shall credit Accounts and/or Sub-Accounts with any earnings/losses that would have accrued if the
Accounts or Sub-Accounts were actually invested in the Investment Options selected by the Director
from among the options offered from time to time under the Plan. With respect to Automatic
Contributions, the Company shall credit amounts to a LNC Stock Unit Sub-Account, along with any
dividends and earnings/losses that would have accrued if those amounts had been actually invested
in the LNC Common Stock Fund maintained under the Lincoln National Corporation Employees’ Savings &
Retirement Plan. Neither Voluntary Deferrals nor Automatic Contributions are actually invested in
the Plan’s Investment Options—the performance of the underlying investment options is used solely
as a measure to calculate the value of Plan Accounts.

 

 

 

4.3 Stock Unit Investment Option. The Stock Unit Investment Option tracks the value
of the LNC Stock Fund in the Lincoln National Corporation Employees’ Savings and Retirement Plan,
which is an undiversified investment primarily for the purpose of investing in the Company’s common
stock. Actual shares of the Company’s common stock will be issued in settlement of the Director’s investment in this option when the
Account is paid to him or her, with fractional Stock Units paid in cash. Prior to distribution of
a Director’s Account pursuant to Section 7 below, and settlement of Stock Units with shares of the
Company’s common stock, no voting or other rights of any kind associated with the ownership of the
Company’s common stock shall inure to any Director whose Account is credited with Stock Units. The
Company reserves the right to eliminate, change or add any Investment Option from the Plan at any
time, including the Stock Unit Investment Option.

4.4. Non-Stock Unit Investment Option. Directors shall have no rights to any of the
assets, funds or securities in which such Investment Options are actually invested. Upon
distribution of the Director’s Account pursuant to Section 7 below, he or she will receive cash in
settlement of all amounts credited to non-Stock Unit Investment Options. The Company reserves the
right to eliminate, change or add any Investment Option from the Plan at any time.

4.5 Direction of Investments. Subject to the restrictions applicable to investing in
the Plan as described in Section 8 below, Directors participating in the Plan may make or change
their investment directions with respect to the Investment Options available under the Plan at any
time. The Plan’s recordkeeper and third-party administrator will deem any investment directions
provided by the Director to be continuing investment directions until the Director takes
affirmative action to change the investment directions.

4.6 Default Investment Option. In the case where the Director has not provided valid
investment directions to the Plan’s recordkeeper and third-party administrator, any Voluntary
Deferrals shall be invested in the Plan’s Default Investment Option. The Plan’s Default Investment
Option shall be designated by the Plan Administrator from time to time, in the sole discretion of
the Plan Administrator. In general, the Plan’s Default Investment Option shall be the Qualified
Default Investment Alternative (the “QDIA”) designated for the employees’ qualified savings plan
sponsored by the Company.

Section 5

Automatic Contributions

5.1 Eligibility for Automatic Contributions. The Company will automatically credit
each LNC Director with a portion of his or her annual retainer in the form of LNC Stock Units. The
amount of each LNC Director’s annual retainer that will be paid as an Automatic Contribution and
credited in the form of LNC Stock Units is set forth on Appendix B of this Plan. LNY Directors are
not eligible to receive Automatic Contributions.

5.2 Vesting. Automatic Contributions are immediately 100% vested.

5.3 Timing of Automatic Contributions. Automatic Contributions are credited to LNC
Directors in four equal quarterly installments, paid in arrears on the last day of each calendar
quarter to which the payment relates.

Section 6

Voluntary Deferrals

6.1 Eligibility to Make Voluntary Deferrals. Both LNC and LNY Directors are eligible
to defer a percentage (from 1% to 100%), or a specified dollar amount (if permitted by the Plan
Administrator), of the Fees that they would otherwise receive in the form of cash. Elections to
make a Voluntary Deferral must be made pursuant to a Voluntary Deferral Agreement, in the form and
manner prescribed by the Plan Administrator.

6.2. Vesting. Voluntary Deferrals are immediately 100% vested.

6.3 Voluntary Deferral Agreement. Voluntary Deferral Agreements with respect
to Fees must be completed in a form and manner satisfactory to the Plan Administrator, by
the deadlines described in Section 3.2 above.

 

 

 

Section 7

Distributions

7.1 Default Distribution Upon Separation from Service.

(a) Automatic Contributions. Absent an effective Alternative Election pursuant to
Section 7.2 below, the Valuation Date for a Director’s Automatic Contributions will be on the first
of the month that is thirteen (13) full months from the date of the Director’s Separation from
Service. The Director’s Automatic Contributions will be paid to the Director in the Plan’s default
distribution form—a lump sum—on his or her default Benefit Commencement Date, which is as soon as
administratively practicable after the Valuation Date, but in no event later than 90 days.

(b) Voluntary Deferrals. Absent an effective Alternative Election pursuant to Section
7.2 below, the Valuation Date for a Director’s Voluntary Deferrals will be on the first of the
month that is thirteen (13) full months from the date of the Director’s Separation from Service.
The Director’s Voluntary Deferrals will be paid to the Director in the Plan’s default distribution
form—a lump sum—on his or her default Benefit Commencement Date, which is as soon as
administratively practicable after the Valuation Date, but in no event later than 90 days.

7.2 Alternative Elections. No alternative election made pursuant to this Section 7.2
may result in an impermissible acceleration of payment, including accelerations of payment as
defined under Code section 409A. Such an election would be determined to be invalid, and the
default distribution rules above will apply.

(a) Initial Elections. Directors may make an alternative election regarding the
distribution form, but not the Benefit Commencement Date, for their Account(s) by making a valid
Initial Election under the Plan. Generally, Initial Elections must be made by the deadlines
described in Section 3.2. However, for Current Directors only, Initial Elections may be made on or
before the earlier of Separation from Service and December 31, 2008. Current Directors are
Directors serving on a Board as of October 1, 2008. Initial Elections made in 2008 must be made at
least 366 days prior to the Director’s default Benefit Commencement Date (Initial Elections may not
take effect for twelve (12) months after the date on which the election is made). If a Director
fails to make a valid Initial Election under this paragraph, then the default form of distribution
set forth in Section 7.1 above shall be deemed the Director’s Initial Election.

(b) Secondary Elections. Directors may make an alternative election regarding both
the distribution form and Benefit Commencement Date for their Account(s) pursuant to a Secondary
Election, as described in Sections 7.2(c) and (d) below. A Secondary Election is not valid unless
it meets the following two conditions: (i) it must be made at least 366 days prior to the Benefit
Commencement Date indicated by the Director’s Initial Election (elections may not take effect for
twelve (12) months after the date on which the election is made), and (ii) the election to change
the Benefit Commencement Date and/or form of distribution must defer or delay payment of the
Director’s benefit for at least five (5) years from the Benefit Commencement Date indicated by the
Director’s Initial Election.

(c) Alternative Benefit Commencement Dates. With respect to both Voluntary Deferrals
and Automatic Contributions, a Director may make a Secondary Election to delay or further defer
payment of their Account(s).

(d) Alternative Distribution Forms. With respect to both Voluntary Deferrals and
Automatic Contributions, a Director may make a Secondary Election to change the form of
distribution for his or her Account(s) to a lump sum or one of the various installment options
described below:

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

In the case where the Director’s account is paid out in installments pursuant to an Initial
Election, the first installment will be valued on the first day of the month that is thirteen (13)
full months from the date of the Director’s retirement or resignation, and paid to the Director
within six (6) weeks of the valuation date, but in no event later than 90 days after the valuation
date. Subsequent installments shall be valued on February 5th of each succeeding
calendar year and paid to the Director within six (6) weeks of the valuation date, but in no event
later than 90 days after the valuation date, until the entire account value is paid (with the
exception of “Cash Outs” described in Section 7.4 below).

 

 

 

In the case where the Director’s account is paid out in installments pursuant to a Secondary
Election, the first installment will be valued on the first day of the month that is at least five
(5) years after the first day of the month that is thirteen (13) full months from the date of the
Director’s retirement or resignation, and paid to the Director within six (6) weeks of the
valuation date, but in no event later than 90 days after the valuation date. Subsequent
installments shall be valued on February 5th of each succeeding calendar year and paid
to the Director within six (6) weeks of the valuation date, but in no event later than 90 days
after the valuation date, until the entire account value is paid (with the exception of “Cash Outs”
described in Section 7.4 below).

7.3 Distributions Upon Death. The Valuation Date for the Director’s Account will be
the date of the Director’s death. The Director’s Account will be paid to the Director’s
Beneficiary in a lump sum as soon as administratively practicable after the Valuation Date, but in
no event later than 90 days after the Director’s death. In the event of the death of the Director
after his or her Separation from Service, however, the Plan Account will continue to be paid to the
Director’s Beneficiary after the Director’s death in the distribution form in effect at the time of
death. A Director shall designate his or her Beneficiary(ies) in a writing delivered to the Plan
Administrator prior to death in accordance with procedures established by the Plan Administrator.
In the event that a Director dies prior to his/her Benefit Commencement Date and has not properly
designated a Beneficiary, or if no designated Beneficiary is living on the date of distribution,
such amount shall be distributed to the Director’s estate.

7.4 Small Balance Cash-Out Rule. Notwithstanding any elections pursuant to this
Section 7 to the contrary, if, beginning on January 1, 2009, with respect to any Director who has
Separated from Service, the balance of the Director’s Plan Account(s), together with any other
account balance(s) in any other account plans covered by Code section 409A sponsored by the
Company, is below the annual limit provided under Section 402(g) of the Internal Revenue Code
($15,500 for 2008, as adjusted) as of any Valuation Date, then the balance will be distributed to
the Director in a lump sum as soon as administratively possible from such Valuation Date, but in no
event later than 90 days from this date.

7.5. Distributions to Key Employees. Notwithstanding any other provision of this Plan
to the contrary, in the event a Director is a Key Employee as of the date of his or her Separation
from Service, distributions to such Director shall not be paid earlier than six months after the
date upon which the Key Employee Separates from Service. In the case of all benefits which are
delayed due to the imposition of this Section 7.6, payments shall be paid on the first day of the
seventh month following the month in which the Director’s Separation from Service occurs (or, if
earlier, the first day of the month following the Director’s death). Interest shall not accrue on
such amounts during the period of delay.

7.6 Effect of Early Taxation. If a Director’s Plan Account(s) is includable in income
pursuant to Code section 409A, such benefits shall be distributed immediately to the Director.

7.7 Permitted Delays. Notwithstanding the foregoing, any payment to a Director under
the Plan shall be delayed upon the Plan Administrator’s reasonable anticipation of one or more of
the following events:

(a) The Company’s deduction with respect to such payment would be eliminated by application of
Code section 162(m); or

(b) The making of the payment would violate Federal securities laws or other applicable law;

provided, that any payment delayed pursuant to this Section 7.7 shall be paid in accordance with
Code section 409A.

Section 8

 Restrictions on Investment Activity

8.1 Restrictions on Transfers or Redemptions Involving the Stock Unit Investment
Option. Unless a Director is in possession of material non-public information, a Director may
redeem or transfer amounts out of a non-Stock Unit Investment Option and into the Stock Unit
Investment Option pursuant to an election made during an open “window period” as defined in the
Company’s Insider Trading and Confidentiality Policy or a successor policy.
Notwithstanding the foregoing, due to the fact that each Director is an Insider, Directors may
redeem or transfer amounts from a non-Stock Unit Investment Option into the Stock Unit Investment
Option during such window period only if it is determined that such redemption or transfer will not
result in a violation of Section 16 of the Securities Exchange Act of 1934.

 

 

 

8.2 General Restrictions on Transfers or Redemptions. In order to prevent market
timing, excessive trading, and other abuses, the managers of the various investment options offered
under the Lincoln National Corporation Employees’ Savings and Retirement Plan may impose additional
trading restrictions or redemption fees triggered by certain kinds of trades or trading activities.
The same or similar trading restrictions may be applied to related Investment Options offered
under this Plan, if, in the sole discretion of the Plan Administrator, the pattern of investment is
considered abusive. For mutual fund options, trading restrictions or applicable redemption fees
are found in the fund prospectus. For collective investment trust options, trading restrictions or
applicable redemption fees are found in the trust’s disclosure statement.

Section 9

Claims

9.1 General Administration. The Plan Administrator shall be responsible for the
operation and administration of the Plan and for carrying out the provisions hereof. The Plan
Administrator shall have the full authority and discretion to make, amend, interpret, and enforce
all appropriate rules and regulations for the administration of this Plan and decide or resolve any
and all questions, including interpretations of this Plan, as may arise in connection with this
Plan. Any such action taken by the Plan Administrator shall be final and conclusive and binding on
any party. To the extent the Plan Administrator has been granted discretionary authority under the
Plan, the Plan Administrator’s prior exercise of such authority shall not obligate it to exercise
its authority in a like fashion thereafter. The Plan Administrator shall be entitled to rely
conclusively upon all tables, valuations, certificates, opinions and reports furnished by any
actuary, accountant, controller, counsel or other person employed or engaged by the Company with
respect to the Plan. The Plan Administrator may, from time to time, employ agents and delegate to
such agents, including employees of the Company, such administrative duties as it sees fit. The
Plan Administrator has delegated the review of claims and appeals for benefits under this Plan to
the Benefit Appeals Committee of the Company’s Benefits Committee.

9.2 Claims for Benefits.

(a) Filing a Claim. A Director or his authorized representative may file a claim for
benefits under the Plan. Any claim must be in writing and submitted to the Appeals Committee or
its delegate at such address as may be specified from time to time. Claimants will be notified in
writing of approved claims, which will be processed as claimed. A claim is considered approved only
if its approval is communicated in writing to a claimant.

(b) Denial of Claim. In the case of the denial of a claim respecting benefits paid or
payable with respect to a Director, a written notice will be furnished to the claimant within 90
days of the date on which the claim is received by the Appeals Committee. If special circumstances
(such as for a hearing) require a longer period, the claimant will be notified in writing, prior to
the expiration of the 90-day period, of the reasons for an extension of time; provided, however,
that no extensions will be permitted beyond 90 days after the expiration of the initial 90-day
period.

(c) Reasons for Denial. A denial or partial denial of a claim will be dated and
signed by the Appeals Committee and will clearly set forth:

(i) the specific reason or reasons for the denial;

(ii) specific reference to pertinent Plan provisions on which the denial is based;

(iii) a description of any additional material or information necessary for the claimant to
perfect the claim and an explanation of why such material or information is necessary; and

(iv) an explanation of the procedure for review of the denied or partially denied claim set
forth below.

 

 

 

(d) Review of Denial. Upon denial of a claim, in whole or in part, a claimant or his
duly authorized representative will have the right to submit a written request to the Appeals
Committee for a full and fair review of the denied claim by filing a written notice of appeal with
the Appeals Committee within 60 days of the receipt by the claimant of written notice of the denial
of the claim. A claimant or the claimant’s authorized representative will have, 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 may submit issues and comments in writing. The
review will take 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.

If the claimant fails to file a request for review within 60 days of the denial notification, the
claim will be deemed abandoned and the claimant precluded from reasserting it. If the claimant
does file a request for review, his request must include a description of the issues and evidence
he deems relevant. Failure to raise issues or present evidence on review will preclude those
issues or evidence from being presented in any subsequent proceeding or judicial review of the
claim.

(e) Decision Upon Review. The Appeals Committee will provide a prompt written
decision on review. If the claim is denied on review, the decision shall set forth:

(i) the specific reason or reasons for the adverse determination;

(ii) specific reference to pertinent Plan provisions on which the adverse determination is
based;

(iii) 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

(iv) a statement describing any voluntary appeal procedures offered by the Plan and the
claimant’s right to obtain the information about such procedures.

A decision will be rendered no more than 60 days after the Appeals Committee’s receipt of the
request for review, except that such period may be extended for an additional 60 days if the
Appeals Committee determines that special circumstances (such as for a hearing) require such
extension. If an extension of time is required, written notice of the extension will be furnished
to the claimant before the end of the initial 60-day period.

(f) Finality of Determinations; Exhaustion of Remedies; Limitations Period. To the
extent permitted by law, decisions reached under the claims procedures set forth in this Section
shall be final and binding on all parties. No legal action for benefits under the Plan shall be
brought unless and until the claimant has exhausted his remedies under this Section. In any such
legal action, the claimant may only present evidence and theories which the claimant presented
during the claims procedure. Any claims which the claimant does not in good faith pursue through
the review stage of the procedure shall be treated as having been irrevocably waived. Judicial
review of a claimant’s denied claim shall be limited to a determination of whether the denial was
an abuse of discretion based on the evidence and theories the claimant presented during the claims
procedure. Any suit or legal action initiated by a claimant under the Plan must be brought by the
claimant no later than one year following a final decision on the claim for benefits by the Appeals
Committee. The one-year limitation on suits for benefits will apply in any forum where a claimant
initiates such suit or legal action.

9.3 Indemnification. To the extent not covered by insurance, the Company shall
indemnify the Appeals Committee, each employee, officer, director, and agent of the Company, and
all persons formerly serving in such capacities, against any and all liabilities or expenses,
including all legal fees relating thereto, arising in connection with the exercise of their duties
and responsibilities with respect to the Plan, provided however that the Company shall not
indemnify any person for liabilities or expenses due to that person’s own gross negligence or
willful misconduct.

 

 

 

Section 10

Miscellaneous

10.1. No Contract Created. This Plan does not and is not intended to create a
contract of employment or guarantee that a Director will continue to provide services of any kind
to the Company, including as a Director. The provisions of this Plan shall not be interpreted to
limit any independent right of the Company to require the resignation of a Director, nor limit the
right of a Director to voluntarily terminate from the service of the Company or its Affiliates.

10.2. Amendment, Suspension or Termination of Plan. This Plan may be amended or
terminated at any time and from time to time by the Company without an Director’s consent, but no
amendment shall operate to give the Director, or his Beneficiary, either directly or indirectly,
any interest whatsoever in any funds or assets of the Company, except the right upon fulfillment of
all terms and conditions hereof to receive the payments herein provided. Likewise, no amendment,
suspension or termination of this Plan shall, in and of itself, result in the forfeiture of any
benefit credited to a Director. No amendment, suspension or termination of this Plan shall operate
to reduce or diminish any benefit after payment of such benefit has begun. The Company retains
the right to amend this Plan prospectively at any time. This Plan may be amended by action of the
Corporate Governance Committee 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 Committee may delegate
this amendment power to an officer of the Company.

Effective August 15, 2004, the Committee delegated to the Senior Vice President of Human
Resources the authority to amend the Plan to change the Investment Options offered under the Plan
to maintain such “mirroring” of the investment options offered under the Lincoln National
Corporation Employees’ Savings and Retirement Plan as appropriate, as well as the power to amend
the Plan to reflect any changes in the Plan’s contractual relationships with its service providers
or other vendors.

10.3 Effect of Amendment or Termination. Except as provided in the next sentence, no
amendment or termination of the Plan shall adversely affect the rights of any Director or
Beneficiary receiving benefits under the Plan as of the effective date of such amendment or
termination. Upon termination of the Plan, distribution of Plan benefits shall be made to
Directors or Beneficiaries in the manner and at the time described in Section 7, unless the Company
determines in its sole discretion that all such amounts shall be distributed upon termination in
accordance with the requirements under Code section 409A. Upon termination of the Plan, no further
benefit accruals shall occur.

10.4 Change of Control. In the event of a Change of Control as defined in the
Lincoln National Corporation Executives’ Severance Benefit Plan, no amendment or termination of
this Plan shall adversely affect the right of any Director to the benefits credited to the
Director, or to payment of such benefits under the terms of this Plan as in effect immediately
prior to such Change of Control.

10. Incapacity. Any amount payable under this Plan to an incompetent or otherwise
incapacitated person may, at the sole discretion of the Plan 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 Company
to the Director or the Director’s Beneficiary(ies).

10.7 Governing Law. 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.

10.8 Source of Payments; Rights Unsecured. The amount of any benefit payable under
the Plan with respect to any Director shall be paid from the general assets of the Company. The
right of a Director or his or her Beneficiary to receive a distribution hereunder shall be an
unsecured (but legally enforceable) claim against the general assets of the Company, and neither
the Director nor his or her Beneficiary shall have any rights in or against any assets of the
Company. The Plan at all times shall be considered entirely unfunded for tax purposes. Any funds
set aside by the Company for the purpose of meeting its obligations under the Plan, including any
amounts held by a trustee, shall continue for all purposes to be part of the general assets of the
Company and shall be available to its general creditors in the event of the Company’s bankruptcy or
insolvency. The Company’s obligation under this Plan shall be that of an unfunded and unsecured
promise to pay money in the future.

 

 

 

10.9 No Guarantee of Benefits. Nothing contained in the Plan shall constitute a
guarantee by the Company or any other person or entity that the assets of the Company will be
sufficient to pay any benefits hereunder.

10.10 No Enlargement of Rights. No Director or Beneficiary shall have any right to
receive a distribution under the Plan except in accordance with the terms of the Plan.

10.11 Anti-Alienation Provision. No interest of any person in, or right to receive a
distribution under, the Plan shall be subject in any manner to sale, transfer, assignment, pledge,
attachment, garnishment, or other alienation or encumbrance of any kind; nor may such interest or
right to receive a distribution be taken, either voluntarily or involuntarily for the satisfaction
of the debts of, or other obligations or claims against, such person.

10.12 Corporate Successors. The Plan and the obligations of the Company under the
Plan shall become the responsibility of any successor to the Company by reason of a transfer or
sale of substantially all of the assets of the Company or by the merger or consolidation of the
Company into or with any other corporation or other entity.

10.14 Unclaimed Benefits. Each Director shall keep the Corporation’s Secretary
informed of his or her current address and the current address of his or her Beneficiary. The
Secretary shall not be obligated to search for the whereabouts of any person if the location of a
person is not made known to the Secretary.

10.15 Severability. In the event any provision of the Plan shall be held invalid or
illegal for any reason, any illegality or invalidity shall not affect the remaining parts of the
Plan, but the Plan shall be construed and enforced as if the illegal or invalid provision had never
been inserted.

10.16 Words and Headings. Words in the masculine gender shall include the feminine
and the singular shall include the plural, and vice versa, unless qualified by the context. Any
headings used herein are included for ease of reference only, and are not to be construed so as to
alter the terms hereof.

IN WITNESS WHEREOF, the President and Chief Executive Officer of the Company executed this Plan as
of this 5th day of November, 2008.

	 	 	 	 	 
	 	 	LINCOLN NATIONAL CORPORATION
	 
	 	 	 	 
	 

	 	By:
	 	Dennis R. Glass
	 

	 	Its:
	 	President and Chief Executive OfficerFiled by Bowne Pure Compliance

Exhibit 10.36

AMENDED AND RESTATED

DELAWARE INVESTMENTS U.S., INC.

INCENTIVE COMPENSATION PLAN

Amended and Restated Effective December 26, 2008

1. Purpose. The purpose of this Amended and Restated Delaware Investments U.S., Inc.
Incentive Compensation Plan (the “Plan”), which was formerly known as the “Delaware Investments
U.S., Inc. Stock Option Plan,” is to assist Delaware Management Holdings, Inc., a Delaware
corporation (the “Corporation”), and its subsidiaries in attracting, retaining, and rewarding key
executives, investment professionals, employees, and other persons who provide services to the
Corporation and/or its subsidiaries, enabling such persons to acquire or increase a proprietary
interest in the Corporation in order to strengthen the mutuality of interests between such persons
and the Corporation’s stockholders, and providing such persons with annual and long-term
performance incentives to expend their maximum efforts in the creation of shareholder value. The
Plan was originally called the Delaware Investments U.S., Inc.Stock Option Plan, effective January
1, 2001. The Plan was amended and restated as the Delaware Investments U.S.,. Inc. Incentive
Compensation Plan, effective November 5, 2007, and subsequently amended and restated to preclude
future awards and new Participants under the Plan effective December 26, 2008.

2. Definitions. For purposes of the Plan, the following terms shall be defined as set forth
below, in addition to such terms defined in Section 1 hereof:

(a) “Award” means any Option, SAR (including Limited SAR), Restricted Stock or Restricted
Stock Unit, including Stock issuable pursuant to the foregoing, together with any other right
or interest granted to a Participant under the Plan.

(b) “Beneficiary” means the person, persons, trust or trusts who or which have been
designated by a Participant in his or her most recent written beneficiary designation filed
with the Corporation to receive the benefits specified under the Plan upon such Participant’s
death or to which Awards are transferred if and to the extent permitted under Section 8(b)
hereof. If, upon a Participant’s death, there is no designated Beneficiary or surviving
designated Beneficiary, then the term Beneficiary means the person, persons, trust or trusts
entitled by will or the laws of descent and distribution to receive such benefits.

(c) “Change of Control” means (i) with respect to Lincoln, a change of control of Lincoln
within the meaning of the Lincoln National Corporation Executive Severance Benefit Plan, and
(ii) with respect to DIUS or the Corporation (as the case may be), the consummation of (a) a
transaction after which neither Lincoln (or any successor corporation to Lincoln following a
merger of Lincoln with another corporation, which merger is not a Change of Control of
Lincoln) nor any of its subsidiaries continues to be the beneficial owner of more than 50% of
the combined voting power of the then outstanding securities of DIUS, or the Corporation (as
the case may be) or (b) the sale or transfer of all or substantially all of DIUS’s, or the
Corporation’s (as the case may be), business or assets to an entity other than Lincoln (or any
successor corporation to Lincoln following a merger of Lincoln with another corporation, which
merger is not a Change of Control of Lincoln) or one of its subsidiaries.

(d) “Change of Control Price” means an amount in cash equal to the higher of (i) the
amount of cash and fair market value of property that is the highest price per share paid
(including extraordinary dividends) in any transaction triggering the Change of Control or any
liquidation of shares following a sale of substantially all assets of the Corporation, or (ii)
the Fair Market Value per share (as determined pursuant to Section 2(k)(1) or 2(k)(2), as
applicable) as of the Valuation Date occurring at any time during the 60-day period preceding
and 60-day period following the Change of Control.

(e) “Code” means the Internal Revenue Code of 1986, as amended from time to time,
including regulations thereunder and successor provisions and regulations thereto.

(f) “Committee” means the Compensation Committee of the Board of Directors of Lincoln.

 

 

 

(g) “DIUS” means Delaware Investments U.S., Inc.

(h) “Eligible Person” means each Executive Officer and other officers and employees of
the Corporation or of any subsidiary, including employees, agents and brokers who may also be
directors of the Corporation. An employee on leave of absence may be considered as still in
the employ of the Corporation or a subsidiary for purposes of eligibility for participation in
the Plan.

(i) “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to
time, including rules thereunder and successor provisions and rules thereto.

(j) “Executive Officer” means an executive officer of the Corporation as defined under
the Exchange Act.

(k) “Fair Market Value” means (1) with respect to any transactions related to RSUs
outstanding prior to December 26, 2008, the fair market value of Stock as determined by the
outside appraiser(s), who is (are) selected by the President of the Corporation with the
approval of the Chief Financial Officer of Lincoln and who is (are) not the outside auditor
for the Corporation or for Lincoln, applying the principles set forth in Appendix A, and (2)
for all Awards made and with respect to any transactions related to those Awards on or after
December 26, 2008, the fair market value of Stock subject to the Award shall be determined by
an independent appraisal (without direction from management of DIUS or its affiliates and
without regard to the principles set forth in Appendix A) using a valuation methodology that
meets the requirements of Code section 401(a)(28)(C) and the regulations issued thereunder as
of a date that is no more than 12 months before the relevant transaction to which the
valuation is applied (e.g., the date of grant of an Option).

(l) “Incentive Stock Option” or “ISO” means any Option intended to be and designated as
an incentive stock option within the meaning of Code Section 422 or any successor provision
thereto.

(m) “Lincoln” means Lincoln National Corporation.

(n) “Option” means a right, granted to a Participant under Section 6(b) hereof, to
purchase Stock at a specified price during specified time periods.

(o) “Participant” means an Eligible Person who has been granted an Award under the Plan
that remains outstanding, including a person who is no longer an Eligible Person.

(p) “Restricted Stock” means Stock granted to a Participant under Section 6(d) hereof.

(q) “Restricted Stock Unit” or “RSU” means a right to receive Stock, cash or a
combination thereof, granted to a Participant under Section 6(e) hereof.

(r) “Stock” means the common stock of DIUS, and such other securities as may be
substituted (or resubstituted) for Stock pursuant to Section 8(c) hereof.

(s) “Stock Appreciation Right” or “SAR” means a right granted to a Participant pursuant
to Section 6(c) hereof.

(t) “Valuation Date” means any date as of which the Fair Market Value of Stock is
determined. Unless the Committee reasonably concludes that no purpose under the Plan would be
served by determining Fair Market Value as of such a date, (1) each March 31, June 30,
September 30 and each December 31, (2) any date on which a Change of Control occurs, and (3)
any other date as the Committee in its sole discretion may determine is appropriate for the
proper administration of the Plan will be a Valuation Date; however, in no event shall the
Fair Market Value of Stock be determined less often than once each calendar year.

 

 

 

3. Administration.

(a) Authority of the Committee. The Plan shall be administered by the Committee. The
Committee shall have full and final authority, in each case subject to and consistent with the
provisions of the Plan, to interpret the provisions of the Plan, select Eligible Persons to
become Participants, grant Awards, determine the type, number and other terms and conditions
(including, but not limited to, any Stock ownership requirements that may be a condition of an
Award), and all other matters relating to, Awards, prescribe Award agreements (which need not
be identical for each Participant), adopt, amend and rescind rules and regulations for the
administration of the Plan, construe and interpret the Plan and Award agreements and correct
defects and ambiguities, supply omissions or reconcile inconsistencies therein, and make all
other decisions and determinations as the Committee may deem necessary or advisable for the
administration of the Plan.

(b) Manner of Exercise of Committee Authority. Any action of the Committee shall be
final, conclusive and binding on all persons, including the Corporation, its subsidiaries,
Participants, Beneficiaries, transferees under Section 8(b) hereof or other persons claiming
rights from or through a Participant, and stockholders. The Committee shall exercise its
authority only by a majority vote of its members at a meeting or without a meeting by a
writing signed by a majority of its members. The express grant of any specific power to the
Committee, and the taking of any action by the Committee, shall not be construed as limiting
any power or authority of the Committee. The Committee may delegate to officers or managers
of the Corporation or any subsidiary, or committees thereof, the authority, subject to such
terms as the Committee shall determine, to grant Awards under the Plan or perform
administrative functions to the extent permitted under applicable law. The Committee may
appoint agents to assist it in administering the Plan.

(c) Limitation of Liability. The Committee and each member thereof shall be entitled, in
good faith, to rely or act upon any report or other information furnished to it, him or her by
any Executive Officer, other officer or employee of the Corporation or a subsidiary, the
Corporation’s independent auditors and appraisers, consultants or any other agents assisting
in the administration of the Plan. Members of the Committee and any officer or employee of
the Corporation or a subsidiary acting at the direction or on behalf of the Committee shall
not be personally liable for any action or determination taken or made in good faith with
respect to the Plan, and shall, to the extent permitted by law, be fully indemnified and
protected by the Corporation with respect to any such action or determination.

4. Stock Subject to Plan.

(a) Overall Number of Shares Available for Delivery. Subject to adjustment as provided
in Section 8(c) hereof, the total number of shares of Stock reserved and available for
delivery in connection with Awards under the Plan shall be 2,500,000; provided, however, that
the total number of shares of Stock with respect to which ISOs may be granted shall not exceed
1,000,000. Any shares of Stock delivered under the Plan shall consist of authorized shares.

(b) Application of Limitation to Grants of Awards. No Award may be granted if the number
of shares of Stock to be delivered in connection with such Award or, in the case of an Award
measured solely by the increase in value of shares of stock settleable only in cash (such as
cash-only SARs), the number of shares to which the Award relates, exceeds the number of shares
of Stock remaining available under the Plan minus the number of shares of Stock issuable in
settlement of or relating to then-outstanding Awards. The Committee may adopt reasonable
counting procedures to ensure appropriate counting, avoid double counting and make adjustments
if the number of shares of Stock actually delivered differs from the number of shares
previously counted in connection with an Award.

(c) Availability of Shares Not Delivered under Awards. Shares of Stock subject to an
Award under the Plan (i) which Award is canceled, expired, forfeited, settled in cash or
otherwise terminated without a delivery of shares to the Participant, including the number of
 shares surrendered in payment of any taxes relating to any Award, or (ii) which shares are
repurchased by the Corporation pursuant to Section 4(d), 4(e) or 7(b) hereof will again be
available for Awards under the Plan, except that if any such shares could not again be
available for Awards to a particular Participant under any applicable law or regulation, such
 shares shall be available exclusively for Awards to Participants who are not subject to such
limitation.

 

 

 

(d) Call Feature. Upon or after a Participant’s (or Stock holder’s) termination of
employment with the Corporation and all its affiliates, the Corporation or DIUS may call all
 shares of Stock held by the Participant (or Stock holder). In addition, the Committee may,
in its sole discretion, require the Corporation or DIUS to call shares of Stock. Subject to
the following sentence, called shares of Stock will be reacquired by the Corporation or DIUS
as soon as practicable after the call for an amount per share equal to (1) the Fair Market
Value of a share (determined pursuant to Section 2(k)(1) or 2(k)(2), as applicable) as of the
Valuation Date immediately preceding the date of the call if the call occurs before the
expiration of the period after the Valuation Date during which the shares may be put to the
Corporation or DIUS (in accordance with Section 4(e) below), or (2) the Fair Market Value of
a share (determined pursuant to Section 2(k)(1) or 2(k)(2), as applicable) as of the
Valuation Date following the date of the call if the call occurs after the expiration of the
period after the preceding Valuation Date during which the shares may be put to the
Corporation or DIUS (in accordance with Section 4(e) below).

Notwithstanding the foregoing, (1) shares that have been held for six months or less as
of the date of a call will not be called as of that date, but will be called on the date as
of which the Stock holder has held the shares for six months and one day for an amount equal
to the amount determined in accordance with the preceding paragraph, and (2) the Corporation
or DIUS may, in the sole discretion of the Committee, delay calling shares held by a Stock
holder for less than one year until the day after the first anniversary of the date on which
the Stock holder acquired such shares, in which case the shares will be reacquired by the
Corporation or DIUS for an amount determined in accordance with the preceding paragraph;
 shares called other than in connection with termination of employment will be called from
each holder of Stock in proportion to the holder’s total Stock holdings.

Notwithstanding the foregoing, the six month and one day holding period described in
this Section 4(d) shall not apply to outstanding RSUs that were unvested as of December 26,
2008.

(e) Put Option. An individual who has acquired shares upon the exercise of an Option or
otherwise pursuant to the grant or settlement of an Award and has held those shares for more
than six months may put the shares back to the Corporation (or, if directed by the
Corporation, to DIUS), Shares may be put to the Corporation (or, if directed by the
Corporation, to DIUS) only during the 15-day period beginning on the date on which valuation
results are communicated to Stock holders, and the Corporation (or, if directed by the
Corporation, DIUS) will pay to the Stock holder the Fair Market Value (determined pursuant to
Section 2(k)(1) or 2(k)(2), as applicable) determined as of the immediately preceding
Valuation Date. Notwithstanding the foregoing, the length of the put period beginning on the
date on which valuation results are communicated to Stock holders may be modified by the
Committee or the Corporation provided that the change in put period does not represent a
material and adverse change affecting the Stock holders. Further, the President of the
Corporation may, in his or her complete discretion, announce additional terms and conditions
(including, but not limited to Stock ownership requirements, which additional terms and
conditions may be outside of a Participant’s original Award documentation) that must be met
before a Participant can exercise the put option.

Notwithstanding the foregoing, the six month and one day holding period described in
this Section 4(e) shall not apply to outstanding RSUs that were unvested as of December 26,
2008.

At the Corporation’s sole discretion, the amount the Corporation is required to pay
pursuant to the preceding sentence may be paid in (i) cash, (ii) a promissory note (in
substantially the form of the note attached hereto as Appendix B) that requires payment over
a period not to exceed five years with interest each year at a rate equal to the rate paid on
Treasury notes of similar term and similar subordination plus the increment over that rate
paid on borrowings of similar term and similar subordination by Lincoln with such note to be
guaranteed by Lincoln (with a guaranty in substantially the form of the agreement attached
hereto as Appendix C), (iii) freely tradable shares of common stock of Lincoln having a
market value on the date of transfer to the employee equal to the amount payable to the
employee, or (iv) any combination of (i) and (ii) or (i) and (iii).

 

 

 

5. Eligibility. Awards may be granted under the Plan only to Eligible Persons.

6. Terms of Awards.

(a) General. Awards may be granted on the terms and conditions set forth in this Section
6. In addition, the Committee may impose on any Award or the exercise thereof, at the date of
grant or thereafter (subject to Section 8(e) and the provisos therein), such additional terms
and conditions, not inconsistent with the provisions of the Plan, as the Committee shall
determine, including terms requiring forfeiture of Awards in the event of termination of
employment by the Participant, terms permitting a Participant to make elections relating to
his or her Award and such other terms (including, but not limited to, Stock ownership
requirements) that are a condition of an Award. The Committee shall (subject to Section 8(e)
and the provisos therein) retain full power and discretion to accelerate, waive or modify, at
any time, any term or condition of an Award that is not mandatory under the Plan. Except in
cases in which the Committee is authorized to require other forms of consideration under the
Plan, or to the extent other forms of consideration must be paid to satisfy the requirements
of Delaware law, no consideration other than services may be required for the grant (but not
the exercise) of any Award.

(b) Options. The Committee is authorized to grant Options to Participants on the
following terms and conditions:

(i) Exercise Price. The exercise price per share of Stock purchasable under an
Option shall be determined by the Committee, provided that such exercise price shall be
not less than the Fair Market Value of a share of Stock (as determined under Section
2(k)(2)) on the date of grant of such Option.

(ii) Time and Method of Exercise. The Committee shall determine, at the date of
grant or thereafter, the time or times at which or the circumstances under which an
Option may be exercised in whole or in part (including based on completion of future
service requirements), the methods by which such exercise price may be paid or deemed to
be paid, the form of such payment, including, without limitation, cash, Stock (including
Stock acquired in connection with the exercise of an Option) or through a cashless
exercise procedure, and the methods by or forms in which Stock will be delivered or
deemed to be delivered to Participants.

(iii) ISOs. The terms of any ISO granted under the Plan shall comply in all
respects with the provisions of Code Section 422. Anything in the Plan to the contrary
notwithstanding, no term of the Plan relating to ISOs shall be interpreted, amended or
altered, nor shall any discretion or authority granted under the Plan be exercised, so
as to disqualify either the Plan or any ISO under Code Section 422, unless the
Participant has first requested the change that will result in such disqualification.

(iv) Term of Options. The term of each Option shall be for such period as may be
determined by the Committee; provided that in no event shall the term of any Option
exceed a period of ten years (or such shorter term as may be required in respect of an
ISO under Code Section 422).

(c) Stock Appreciation Rights. The Committee is authorized to grant SARs to Participants
on the following terms and conditions:

(i) Right to Payment. A SAR shall confer on the Participant to whom it is granted
a right to receive, upon exercise thereof, the excess of (A) the Fair Market Value
of one share of Stock on the date of exercise over (B) the grant price of the SAR
as determined by the Committee. The grant price of a SAR shall not be less than
the Fair Market Value of a share of Stock on the date of grant of such SAR. The
Fair Market Value of a share shall determined under Section 2(k)(1) or 2(k)(2), as
applicable.

(ii) Other Terms. The Committee shall determine, at the date of grant or
thereafter, the time or times at which and the circumstances under which a SAR may be
exercised in whole or in part (including, without limitation, based on achievement of performance goals and/or
future service requirements), the method of exercise, method of settlement, form of
consideration payable in settlement, method by or forms in which any Stock payable will
be delivered or deemed to be delivered to Participants, whether or not a SAR shall be in
tandem or in combination with any other Award, and any other terms and conditions of any
SAR. Limited SARs that may only be exercised in connection with a Change of Control or
other events as specified by the Committee may be granted on such terms, not
inconsistent with this Section 6(c), as the Committee may determine. SARs and Limited
SARs may be either freestanding or in tandem with other Awards.

 

 

 

(d) Restricted Stock. The Committee is authorized to grant Restricted Stock to Participants
on the following terms and conditions:

(i) Grant and Restrictions. Restricted Stock shall be subject to such restrictions on
transferability, risk of forfeiture and other restrictions, if any, as the Committee may
impose, which restrictions may lapse separately or in combination at such times, under such
circumstances (including, without limitation, based on achievement of performance goals and/or
future service requirements), in such installments or otherwise, as the Committee may
determine at the date of grant or thereafter. Except to the extent restricted under any Award
agreement relating to the Restricted Stock, a Participant granted Restricted Stock shall have
the rights of a shareholder, including the right to vote the Restricted Stock and the right to
receive dividends thereon (subject to any mandatory reinvestment or other requirement imposed
by the Committee or President as provided herein). During the restricted period applicable to
the Restricted Stock, subject to Section 8(b) below, the Restricted Stock may not be sold,
transferred, pledged, hypothecated, margined or otherwise encumbered by the Participant.

(ii) Forfeiture. Except as otherwise determined by the Committee, upon termination of
employment during the applicable restriction period, Restricted Stock that is at that time
subject to restrictions shall be forfeited; provided that the Committee may, in its
discretion, in any individual case provide for waiver in whole or in part of restrictions or
forfeiture conditions relating to Restricted Stock.

(iii) Certificates for Stock. Restricted Stock granted under the Plan may be
uncertificated and shall be evidenced in such manner as the Committee or the Corporation shall
determine. If certificates representing Restricted Stock are registered in the name of the
Participant, the Committee may require that such certificates bear an appropriate legend
referring to the terms, conditions and restrictions applicable to such Restricted Stock, that
DIUS retain physical possession of the certificates, and that the Participant deliver a stock
power to DIUS, endorsed in blank, relating to the Restricted Stock.

(iv) Dividends and Splits. As a condition to the grant of an Award of Restricted Stock,
the Committee may require that any cash dividends paid on a share of Restricted Stock be
automatically reinvested in additional shares of Restricted Stock or applied to the purchase
of additional Awards under the Plan. Unless otherwise determined by the Committee, Stock
distributed in connection with a Stock split or Stock dividend, and other property distributed
as a dividend, shall be subject to restrictions and a risk of forfeiture to the same extent as
the Restricted Stock with respect to which such Stock or other property has been distributed.

(e) Restricted Stock Units (“RSUs”). The Committee is authorized to grant RSUs to
Participants on the following terms and conditions:

(i) Grant and Restrictions. The Committee shall determine the number of RSUs to be
awarded to a Participant pursuant to an Award. RSUs shall be settled in Stock only.
RSUs shall be subject to such restrictions on transferability, risk of forfeiture and
other restrictions, if any, as the Committee may impose, which restrictions may lapse
separately or in combination at such times and under such circumstances (including based
on achievement of performance goals and/or future service requirements), in installments
or otherwise, as the Committee may determine at the date of grant or thereafter. A
Participant who is granted RSUs shall not have any of the rights of a shareholder,
including the right to vote Stock or the right to receive dividends thereon prior to any
actual issuance of Stock in settlement of the RSUs. During the restricted period applicable to the
RSUs, subject to Section 8(b) below, RSUs may not be sold, transferred, pledged,
hypothecated, margined or otherwise encumbered by the Participant.

 

 

 

(ii) Forfeiture. Except as otherwise determined by the Committee, upon termination
of employment during the applicable restriction period, RSUs that are at that time
subject to restrictions shall be forfeited; provided that the Committee may, in its
discretion, in any individual case provide for waiver in whole or in part of
restrictions or forfeiture conditions relating to RSU.

(iii) Certificates for Stock. RSUs shall always be settled in Stock. Shares of
such Stock may be uncertificated and shall be evidenced in such manner as the Committee
or the Corporation shall determine.

(f) Cancellation and Rescission of Awards. Unless the Award agreement specifies
otherwise, the Committee may cancel any outstanding Award at any time, and the Corporation
shall have the additional rights set forth in Section 6(f)(iv) below, if the Participant is
not in compliance with all applicable provisions of the Award agreement and the Plan including
the following conditions:

(i) A Participant shall not render services for any organization or engage
directly or indirectly in any business which, in the judgment of the President of the
Corporation or other senior officer designated by the Committee, is or becomes
competitive with the Corporation. For Participants whose employment has terminated, the
judgment of the President or other senior officer designated by the Committee shall be
based on the Participant’s position and responsibilities while employed by the
Corporation, the Participant’s post-employment responsibilities and position with the
other organization or business, the extent of past, current and potential competition or
conflict between the Corporation and the other organization or business, the effect on
the Corporation’s shareholders, customers, suppliers and competitors of the Participant
assuming the post-employment position and such other considerations as are deemed
relevant given the applicable facts and circumstances. A Participant 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.

(ii) A Participant shall not, without prior written authorization from the
Corporation, disclose to anyone outside the Corporation, or use in other than the
Corporation’s business, any confidential information or material relating to the
business of the Corporation that is acquired by the Participant either during or after
employment with the Corporation.

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

(iv) Upon exercise, settlement, payment or delivery pursuant to an Award, the
Participant shall certify on a form acceptable to the Committee that he or she is in
compliance with the terms and conditions of the Plan. Failure to comply with the
provisions of this Section 6(f) prior to, or during the six months after, any exercise,
payment or delivery pursuant to an Award shall cause such exercise, payment or delivery
to be rescinded. The Corporation shall notify the Participant in writing of any such
rescission within two years after such exercise, payment or delivery; provided, however,
that the Corporation may, in its discretion, in any individual case provide for waiver
in whole or in part of compliance with the provisions of this Section 6(f). Within ten
days after receiving such a notice from the Corporation, the Participant shall pay to
the Corporation the amount of any gain realized or payment received as a result of the
rescinded exercise, payment or delivery pursuant to an Award. Such payment shall be
made either in cash or by returning to the Corporation the number of shares of
Stock that the Participant received in connection with the rescinded exercise,
payment or delivery. In the case of any Participant whose employment is terminated by
the Corporation and its subsidiaries without “cause” (as defined in the Award
agreement), however, a failure of the Participant to comply with the provisions of
Section 6(f)(i) after such termination of employment shall not in itself cause
rescission or require repayment with respect to any Award exercised, paid or delivered
before such termination.

 

 

 

7. Change of Control. Unless otherwise provided in the Award agreement:

(a) In the event of a Change of Control of Lincoln, (i) any Award of an Option or SAR
carrying a right to exercise that was not previously exercisable and vested shall become fully
exercisable and vested as of the time of the Change of Control of Lincoln and shall remain
exercisable and vested for the balance of the stated term of such Award without regard to any
termination of employment by the Participant, subject only to applicable restrictions set
forth in Section 8(a) hereof and (ii) any restrictions and forfeiture conditions applicable to
any RSU or Restricted Stock granted under the Plan shall lapse and such Award shall be deemed
fully vested as of the time of the Change in Control, except to the extent of any waiver by
the Participant and subject to applicable restrictions set forth in Section 8(a) hereof,
provided that a Change of Control shall not accelerate payment of any such fully vested Award
that is subject to Code Section 409A unless such Change of Control also qualifies as a “change
in control event” as described under Code Section 409A(a)(2)(A)(v).

(b) In the event of a Change of Control of the Corporation or DIUS that occurs within
one year after shares are called in accordance with the provisions of Section 4(d) from an
individual other than an individual from whom the shares are called as a result of the
individual’s termination of employment, the individual will receive a payment equal to the
excess, if any, of the Change of Control Price over the amount paid for a share of Stock
pursuant to the call, multiplied by the number of shares called from the individual. In the
event that a Change of Control of DIUS occurs in connection with a Change of Control of the
Corporation in which the Change of Control Price is set in a manner that does not indicate a
specific Change of Control Price for DIUS, such an individual will receive a payment equal to
the excess, if any, of the Fair Market Value of a share (pursuant to Section 2(k)(1) or
2(k)(2), as applicable) as determined on the most recent Valuation Date on or before the
Change in Control of DIUS over the amount paid for a share of stock pursuant to the call,
multiplied by the number of shares called from the individual. Any such payment under this
Section shall be paid in a lump sum as soon as practicable after the Change of Control, but in
no event later than thirty (30) days after the Change of Control.

8. General Provisions.

(a) Compliance with Legal and Other Requirements. The Corporation may, to the extent
deemed necessary or advisable by the Committee, postpone the issuance or delivery of Stock or
payment of other benefits under any Award until completion of such registration or
qualification of such Stock or other required action under any federal or state law, rule or
regulation, listing or other required action with respect to any stock exchange or automated
quotation system upon which the Stock or other securities of the Corporation may in the future
be listed or quoted, or compliance with any other obligation of the Corporation, as the
Committee may consider appropriate, and may require any Participant to make such
representations, furnish such information and comply with or be subject to such other
conditions as it may consider appropriate in connection with the issuance or delivery of Stock
or payment of other benefits in compliance with applicable laws, rules, and regulations,
listing requirements, or other obligations. The foregoing notwithstanding, in connection with
a Change of Control, the Corporation shall take or cause to be taken no action, and shall
undertake or permit to arise no legal or contractual obligation, that results or would result
in any postponement of the issuance or delivery of Stock or payment of benefits under any
Award or the imposition of any other conditions on such issuance, delivery or payment, to the
extent that such postponement or other condition would represent a greater burden on a
Participant than existed on the 90th day preceding the Change of Control.

 

 

 

(b) Limits on Transferability; Beneficiaries. No Award or other right or interest of a
Participant under the Plan shall be pledged, hypothecated or otherwise encumbered or subject
to any lien, obligation or liability of such Participant to any party (other than the Corporation or a subsidiary),
or assigned or transferred by such Participant otherwise than by will or the laws of descent
and distribution or to a Beneficiary upon the death of a Participant, and such Awards or
rights that may be exercisable shall be exercised during the lifetime of the Participant only
by the Participant or his or her guardian or legal representative, except that Awards and
other rights (other than ISOs and SARs in tandem therewith) may be transferred to one or more
Beneficiaries or other transferees during the lifetime of the Participant, and may be
exercised by such transferees in accordance with the terms of such Option, but only if and to
the extent such transfers are permitted by the Committee pursuant to the express terms of an
Award agreement (subject to any terms and conditions which the Committee may impose thereon).
A Beneficiary, transferee, or other person claiming any rights under the Plan from or through
any Participant shall be subject to all terms and conditions of the Plan and any Award
agreement applicable to such Participant, except as otherwise determined by the Committee, and
to any additional terms and conditions deemed necessary or appropriate by the Committee.

(c) Adjustments. In the event that any dividend or other distribution (whether in the
form of cash, Stock, or other property), recapitalization, forward or reverse split,
reorganization, merger, acquisition, consolidation, spin-off, combination, repurchase, share
exchange, liquidation, non-reciprocal inter-company transaction, dissolution or other similar
corporate transaction or event (including a material change in intercompany pricing
methodologies) affects the Stock such that an adjustment to outstanding Awards or the number
of shares of Stock held by a Participant or Stock holder is required to preserve (or prevent
enlargement of) the benefits or potential benefits intended at the time of grant, then in such
manner as the Committee deems equitable, an appropriate adjustment must be made to any or all
of (i) the number and kind of shares of Stock (or other securities substituted for Stock as
the Committee determines) held by a Participant or Stock holder, (ii) the number and kind of
 shares of Stock (or other securities substituted for Stock as the Committee determines) which
may be delivered in connection with Awards granted thereafter, (iii) the number and kind of
 shares of Stock (or other securities substituted for Stock as the Committee determines)
subject to or deliverable in respect of outstanding Awards and (iv) the exercise price, grant
price or purchase price relating to any Award and/or the Committee shall make provision for
payment of cash or other property in respect of any outstanding Award. In determining the
appropriate adjustment to be made, the Committee may take into account such factors as it
deems appropriate, including (x) the restrictions of applicable law, (y) the potential tax
consequences of an adjustment and (z) the possibility that some Participants might receive an
adjustment or a distribution of some other benefit that is unintended, and in light of certain
factors or circumstances may make adjustments that are not uniform or proportionate among
outstanding Awards, modify vesting dates, defer the delivery shares of Stock or make other
equitable adjustments. Any such adjustments shall also apply to Stock held by a Participant
or Stock holder that was acquired pursuant to the exercise, payment, settlement or vesting of
an Award. Any such adjustments to outstanding Awards or the number of shares of Stock held by
a Participant or Stock holder will be effected in a manner that precludes enlargement of
rights and benefits under such Awards and will be made in a manner that will not be treated
under Code Section 409A as the grant of a new Option or SAR. Adjustments, if any, and any
determinations or interpretations, including any determination of whether a distribution is
other than a normal cash dividend, made by the Committee shall be conclusive and binding. In
addition, the Committee is authorized (subject to Section 8(e) and the provisos therein) to
make adjustments in the terms and conditions of, and the criteria included in, Awards in
recognition of unusual or nonrecurring events (including, without limitation, events described
in the preceding sentence, as well as acquisitions and dispositions of businesses and assets)
affecting the Corporation, any subsidiary or any business unit, or the financial statements of
the Corporation or any subsidiary, or in response to changes in applicable laws, regulations,
accounting principles, tax rates and regulations or business conditions or in view of the
Committee’s assessment of the business strategy of the Corporation, any subsidiary or business
unit thereof, performance of comparable organizations, economic and business conditions,
personal performance of a Participant, and any other circumstances deemed relevant.

(d) Taxes. The Corporation and any affiliate is authorized to withhold from any payment
to a Participant amounts of withholding and other taxes due or potentially payable in
connection with any transaction involving an Award, and to take such other action as the
Committee may deem advisable to enable the Corporation and Participants to satisfy obligations
for the payment of withholding taxes and other
tax obligations relating to any Award. This authority shall include authority to
withhold or receive Stock held more or less than six months, or other property and to make
cash payments in respect thereof in satisfaction of a Participant’s tax obligations (not to
exceed the minimum statutorily required tax withholding), either on a mandatory or elective
basis in the discretion of the Committee.

 

 

 

(e) Changes to the Plan and Awards. The Board, or the Committee acting pursuant to such
authority as may be delegated to it by the Board, may amend, alter, suspend, discontinue or
terminate the Plan or the Committee’s authority to grant Awards under the Plan, provided that,
without the consent of an affected Participant, no such Board action may materially and
adversely affect the rights of a Participant under any previously granted and outstanding
Award. Any adjustment pursuant to Section 8(c) hereof shall not be treated as materially and
adversely affecting the rights of a Participant or a Stock holder. The Committee may waive
any conditions or rights under, or amend, alter, suspend, discontinue or terminate any Award
theretofore granted and any Award agreement relating thereto, except as otherwise provided in
the Plan; provided that, without the consent of an affected Participant, no Committee action
may materially and adversely affect the rights of such Participant under such Award.
Notwithstanding anything in the Plan to the contrary, if any right under this Plan would cause
a transaction to be ineligible for pooling of interest accounting that would, but for the
right hereunder, be eligible for such accounting treatment, the Committee may modify or adjust
the right so that pooling of interest accounting shall be available, including the
substitution of Stock having a Fair Market Value (determined pursuant to Section 2(k)(1) or
2(k)(2), as applicable) equal to the cash otherwise payable hereunder for the right which
caused the transaction to be ineligible for pooling of interest accounting.

(f) Limitation on Rights Conferred under Plan. Neither the Plan nor any action taken
hereunder shall be construed as (i) giving any Eligible Person or Participant the right to
continue as an Eligible Person or Participant or in the employ or service of the Corporation
or a subsidiary, (ii) interfering in any way with the right of the Corporation or a subsidiary
to terminate any Eligible Person’s or Participant’s employment or service at any time, (iii)
giving an Eligible Person or Participant any claim to be granted any Award under the Plan or
to be treated uniformly with other Participants and employees, or (iv) conferring on a
Participant any of the rights of a shareholder of the Corporation (including the right to vote
 shares of Stock or receive dividends) unless and until the Participant is duly issued or
transferred shares of Stock in accordance with the terms of an Award.

(g) Nonexclusivity of the Plan. The adoption of the Plan by the Board shall not be
construed as creating any limitations on the power of the Board or a committee thereof to
adopt such other compensation and incentive arrangements for employees, agents and brokers of
the Corporation and its subsidiaries as it may deem desirable.

(h) Payments in the Event of Forfeitures; Fractional Shares. Unless otherwise determined
by the Committee, in the event of a forfeiture of an Award with respect to which a Participant
paid cash or other consideration, the Participant shall be repaid the amount of such cash or
other consideration.

(i) Governing Law. The validity, construction and effect of the Plan, any rules and
regulations under the Plan, and any Award agreement shall be determined in accordance with
Delaware law, without giving effect to principles of conflicts of laws, and applicable federal
law.

(j) Plan Effective Date. The Plan was originally adopted by the Board effective as of
January 1, 2001, and was amended and restated by the Board effective as of November 5, 2007.

(k) Code Section 409A. The Plan shall be operated and administered in such a way that
no Participants are subject to adverse tax consequences under Code Section 409A.
Accordingly, no action shall be taken under the Plan that would result in such adverse tax
consequences.

 

 

 

APPENDIX A

Market Transaction Approach to Valuation

General

The Market Transaction Approach is a “top down” approach to business valuation which involves
valuing a company based on the market valuation of entire companies that have been sold or the
prices at which significant interests in companies have been transacted. Although each business
entity may be regarded as a unique income producing enterprise, the fair market values of DIUS can
be estimated by computing the multiples of various performance measures using actual transaction
prices paid for similar investment management companies.

Application

To estimate the respective fair market values of DIUS, an independent valuation firm will
consider three commonly applied valuation benchmarks in the asset management industry: price to
assets under management (“AUM”); price to revenues; and, price to earnings before taxes,
amortization and depreciation (“EBITDA”). The sub-advised assets will be valued separately from
the advised assets, and the independent valuation firm may, in its judgment, apply different median
multiples to the sub-advised assets than used for the advised assets. In addition, the independent
valuation firm may, in its judgment, apply certain non-operating assets and liabilities to adjust
the valuation.

For the purposes of the Plan, the independent valuation firm will consistently apply the
following weightings to median multiples to arrive at estimates of fair market value for DIUS:

	 	 	 	 	 
	Benchmark	 	Weighting	 
	Price to AUM
	 	 	40.0	%
	Price to Revenue
	 	 	20.0	%
	Price to EBITDA
	 	 	40.0	%

	 
	Advantages

	•	 	Over time, semiannual updates of the Market Transaction Database will reflect changes in the valuation multiples paid
for investment management companies

	 
	•	 	Most weight given to valuation benchmarks displaying least variability, mitigating potential of unreasonable estimates
of value

	 
	•	 	Consideration given to all commonly used valuation benchmarks used to price asset management businesses

	 
	•	 	Use of more than one benchmark multiple reduces volatility from market trends and dilutes impact of pricing anomalies
(e.g. recent premia paid by foreign buyers)

	 
	•	 	No required adjustments for discounts/premia as all information impounded into market data

	 
	•	 	Adds a degree of certainty and stability to valuation updates

 

 

 

Fair Market Value Determinations in the Event of Certain Business Transactions

	A.	 	In the event of a sale transaction in which any material source of revenues within the
business of DIUS is not included in the sale, an appropriate adjustment should be made by the
appraiser using a methodology consistent with those used in prior valuations.

	 
	B.	 	In the event of a “Change of Control” of Lincoln, the Fair Market Value of DIUS shall be
calculated in a manner that will take into account an allocable portion of any control premium
associated with the Change of Control of Lincoln. The control premium percentage to be used
for this purpose will be calculated by comparing the average of the closing price of LNC stock
for the 90 day period preceding the announcement of such Change of Control with the actual
Change of Control purchase price. The announcement date to be used will be the date of the
initial announcement which precipitates the change of control. The Change of Control premium
percentage so computed will be applied to the Fair Market Value of DIUS for the valuation
applicable to the Lincoln Change of Control date.

Committee/Appraiser Coordination

In the event of any corporate transaction or any other event which the appraiser reasonably
believes should, in order to provide consistency and fairness, result in an adjustment to the Fair
Market Value or in an adjustment to the exercise price, grant price, number of options or shares or
other feature of the plan, the appraiser shall consult with and coordinate with the Committee (see
Section 8(c) of the Plan) to determine what adjustments are appropriate and that those adjustments
are correctly and consistently applied. Changes to the valuation methodology shall be approved by
the Committee.

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