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Exhibit
10.26
LINCOLN NATIONAL
CORPORATION
EXCESS RETIREMENT
PLAN
Amendment &
Restatement Effective November 5, 2007
(except as otherwise
indicated)
The Lincoln National
Corporation Excess Retirement Plan (the “Plan”) is
hereby adopted effective November 5, 2007 by Lincoln National
Corporation and Participating Employers. The Plan is the successor
to and replaces the following plans: the Lincoln National
Corporation Executives’ Excess Compensation Pension Benefit
Plan, the Lincoln National Corporation Employees’
Supplemental Pension Benefit Plan, the Lincoln National Life
Insurance Company Agents’ Supplemental Pension Benefit Plan,
the Lincoln National Life Insurance Company Agents’ Excess
Compensation Pension Benefit, and the Jefferson-Pilot Corporation
Supplemental Benefit Plan (the “Predecessor Plans”).
All benefits earned under the Predecessor Plans as of
November 5, 2007, and through December 31, 2007 shall be
payable under this Plan. In addition, certain benefits under this
Plan will cease to accrue or “freeze” as of
December 31, 2007. Finally, this Plan incorporates changes
made to the Predecessor Plans in order to comply with Code section
409A, added by the American Jobs Creation Act of 2004 (the
“JOBS Act”).
The purpose of the Plan is to
provide or “restore” certain benefits that cannot be
paid under the Corporation’s qualified retirement plans due
to Internal Revenue Service limitations on the amount of annual
benefits payable under tax-qualified plans, and the amount of
compensation that can be considered under a tax-qualified plan
formula. The qualified retirement plan benefits that are
“restored” by this Plan are the benefits provided
by:
The Lincoln National
Corporation Employees’ Retirement Plan;
The Jefferson-Pilot
Corporation Employees’ Retirement Plan;
The Lincoln National Life
Insurance Company Agents’ Retirement Plan; and
The Jefferson-Pilot Life
Insurance Company Agents’ Retirement Plan (including the
“Current Service Accounts”)
The Plan is intended
(1) to comply with Code section 409A and the official guidance
issued thereunder, except for amounts covered by Appendix A, and
(2) to be “a plan which is unfunded and is maintained by
an employer primarily for the purpose of providing deferred
compensation for a select group of management or highly compensated
employees” within the meaning of sections 201(2), 301(a)(3)
and 401(a)(1) of ERISA. Notwithstanding any other provision of this
Plan, this Plan shall be interpreted, operated and administered in
a manner consistent with these intentions.
ARTICLE I
DEFINITIONS
Wherever used herein the
terms below shall have the following meaning:
“ ABGA Agent
” means an agency building general agent for the legacy
Jefferson Pilot Life Insurance Company (merged with and into the
Lincoln National Life Insurance Company on April 2,
2007).
“ Affiliate
” means any corporation or other entity that is treated as a
single employer with the Corporation under section 414 of the
Code.
“ Benefit
Commencement Date ” means the date that Plan benefits are
scheduled to be paid in a cash lump sum, or scheduled to begin to
be paid if the Participant has elected to receive periodic payments
of Plan benefits, pursuant to the applicable paragraph of
Section 4.1 below.
“ Benefit
Determination Date ” means the date that Plan benefits
are calculated.
“ Change of
Control ” means an event that qualifies as a change of
control of the Corporation under the Lincoln National Corporation
Executives’ Severance Benefit Plan (as in effect immediately
prior to such change of control).
“ Code ”
means the Internal Revenue Code of 1986, as amended from time to
time.
“ Committee
” means the Compensation Committee of the Corporation’s
Board of Directors or such other committee as may be appointed by
the Board of Directors from time to time.
“ Corporation
” means Lincoln National Corporation or any successor
corporation or other entity.
“ Current Service
Accounts ” means the accounts under the JP Agents’
Plan to which the active, post-1975 money purchase pension plan
contributions under the JP Agents’ Plan are
credited.
“ Disabled
” means, with respect to a Participant, that the Participant
has been determined to be disabled as defined in the applicable
Qualified Plan.
“ DAN Agent
” means a district agency network agent aligned with the
legacy Jefferson Pilot Life Insurance Company’s retail sales
organization (merged with and into the Lincoln National Life
Insurance Company on April 2, 2007).
“ Employee
” means an individual who is a regular employee on the U.S.
payroll of the Corporation or an Employer. The term
“Employee” shall not include a person hired as an
independent contractor, leased employee, consultant, or a person
otherwise designated by the Corporation or an Employer as not
eligible to participate in the Plan, even if such person is
determined to be an “employee” of the Corporation or a
Participating Employer by any governmental or judicial
authority.
“ Employer
” means Lincoln National Corporation and any Affiliate who
has adopted this Plan as a participating Employer.
“ ERISA ”
means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
“ Grandfathered
Benefits ” means, with respect to terminated vested
Participants as of December 31, 2004, or active Participants
who have not accrued a benefit in this Plan since December 31
,2004, the benefit amounts earned and vested under this Plan
pursuant to Article III as of December 31, 2004 within the
meaning of Code section 409A and the official guidance thereunder.
Except as specified herein, Grandfathered Benefits are subject to
the distribution rules that were in effect under the Predecessor
Plans as of December 31, 2004.
“ JP Agents’
Plan ” means the Jefferson-Pilot Life Insurance Company
Agents’ Retirement Plan (the traditional final average pay
type component was frozen effective December 31, 1975; as of
the effective date of this Plan it continues as a money purchase
pension plan with Current Service Accounts).
“ JP Plan
” means the Jefferson-Pilot Corporation Employees’
Retirement Plan.
“ Key Employee
” means an Employee treated as a “specified
employee” as of his Separation from Service under Code
section 409A(a)(2)(B)(i) of the Corporation or its Affiliates,
i.e. , a key employee (as defined in Code section 416(i)
without regard to paragraph (5) thereof) . Key Employees shall
be determined in accordance with Code section 409A using
December 31 st as
the determination date. A listing of Key Employees as of an
identification date shall be effective for the 12-month period
beginning on the April 1 st following the identification date.
“ LNC Plan
” means the Lincoln National Corporation Employees’
Retirement Plan.
“ LNL Agent
” means a full-time life insurance salesman for Lincoln
National Life Insurance Company.
“ LNL Plan
” means the Lincoln National Life Insurance Company
Agents’ Retirement Plan.
“ Participant
” means any Employee, LNL Agent, ABGA Agent, or DAN Agent who
has accrued a Plan benefit as described in Article III of the Plan
below. All Participants shall belong to a “select group of
management or highly compensated employees,” as such phrase
is defined under ERISA. Effective December 31, 2007, there
shall be no new Participants in this Plan.
“ Participating
Employer ” means the Corporation and the Lincoln National
Life Insurance Company and any other Affiliate which adopts the
Plan with the written consent of the Corporation.
“ Plan ”
means the Lincoln National Corporation Excess Retirement Plan, as
set forth herein and as amended from time to time.
“ Plan
Administrator ” means the Senior Vice President of Human
Resources.
“ Present Value
” means, for a Participant whose Plan benefits are expressed
as an annuity, the lump sum present value of the accrued benefit
calculated using the actuarial assumptions for calculating lump sum
amounts under the applicable Qualified Plan. For Plan benefits
expressed as a cash balance account, or a money purchase pension
plan account, Present Value is simply the amount credited to the
Participant’s account as of the applicable determination
date.
“ Qualified
Plans ” means, collectively, the Lincoln National
Corporation Employees’ Retirement Plan (referred to
individually as the “LNC Plan”), the Lincoln National
Life Insurance Corporation Agents’ Retirement Plan (referred
to individually as the “LNL Plan”), the Jefferson-Pilot
Corporation Employees’ Retirement Plan (referred to
individually as the “JP Plan”), and the Jefferson-Pilot
Life Insurance Corporation Agents’ Retirement Plan (referred
to individually as the “JP Agents’
Plan”).
“ Separation from
Service ” or “ Separate from Service ”
means a “separation from service” within the meaning of
Code section 409A.
ARTICLE II
PARTICIPATION
Participation in the Plan by
an Employee, LNL Agent, ABGA Agent, or DAN Agent begins when the
individual begins to accrue a Plan benefit as described in Article
III below. Effective December 31, 2007, there shall be no new
Participants in the Plan.
ARTICLE III
PLAN
BENEFITS
3.1 General
.
(a) LNC Plan
Participants . Participants in the LNC Plan shall accrue
benefits as described in Section 3.2 below, except that
benefit accruals under this Plan shall cease or
“freeze” effective December 31, 2007 for
Participants in the LNC Plan. Notwithstanding the foregoing, any
LNC Plan Participant who is determined to be Disabled as of
December 31, 2007 shall continue to accrue certain benefits
until the earlier of (i) the date that they are determined to
be no longer Disabled, or (ii) attainment of age
65.
(b) LNL Plan
Participants . LNL Agents participating in the LNL Plan accrued
benefits as described in Section 3.2 below under this Plan
until December 31, 1994. Benefit accruals under this Plan
ceased or “froze” effective December 31, 1994 for
Participants in the LNL Plan.
(c) JP Plan
Participants . Participants in the JP Plan shall accrue
benefits as described in Section 3.2 below, except that
benefit accruals under this Plan ceased or “froze”
effective January 31, 2007 for DAN Agents, and benefit
accruals under this Plan will cease or “freeze”
effective December 31, 2007 for all other Participants in the
JP Plan. Notwithstanding the foregoing, any DAN Agent determined to
be Disabled with at least five (5) years of participation
service as of January 31, 2007, or any other JP Plan
Participant who is determined to be Disabled with at least five
(5) years of participation service as of December 31,
2007, shall continue to accrue certain benefits under this Plan
until the earlier of (i) the date that they are determined to
be no longer Disabled, or (ii) attainment of age 65. In
addition, any DAN Agent who is determined to be Disabled with at
least five (5) years of participation service upon becoming
Disabled, or any other JP Plan Participant who is determined to be
disabled with at least five (5) years of participation service
upon becoming Disabled, shall receive Disability Retirement Income
as defined in Section 3.4 of the JP Plan, however, the amount
of annual compensation and participation service used to determine
the amount of Disability Retirement Income for a DAN Agent whose
Disability Retirement Income commences after January 31, 2007
will be frozen as of January 31, 2007, and the amount of
annual compensation and participation service used to determine the
amount of Disability Retirement Income for any other JP Plan
Participant whose Disability Retirement Income commences after
December 31, 2007 will be frozen as of December 31,
2007.
(d) JP Agents’ Plan
Participants . ABGA Agents participating in the JP
Agents’ Plan accrued benefits as described in
Section 3.2 under the final average pay formula of the JP
Agents’ Plan, which ceased or “froze” effective
December 31, 1975. ABGA Agents participating in this Plan on
or after January 1, 1976 received contributions to Current
Service Accounts, as described in Section 3.2 below, until
December 31, 2006. Contributions under this Plan ceased or
“froze” effective December 31, 2006 for ABGA
Agents participating in this Plan. DAN Agents participating in the
JP Agents’ Plan effective January 1, 2007 have Current
Service Accounts that are not eligible for benefits that restore JP
Agents’ Plan benefits under this Plan.
3.2 Amount of Benefits
.
(a) The amount of benefit
under a final average pay formula that is payable to a Participant
on his or her Benefit Commencement Date will be equal to
(i) minus (ii), where:
(i) is the benefit amount the
Participant would be entitled to receive under the applicable
Qualified Plan formula, determined without regard to the
limitations imposed on such amount by Code sections 401(a)(17) and
415 (and the provisions of the Qualified Plan applying those
limitations); and
(ii) is the benefit amount
actually payable to the Participant under the applicable Qualified
Plan formula, as reduced by such limitations, as of his or her
Benefit Commencement Date.
(b) The amount of benefit
under a cash balance formula credited to a Cash Balance Account, or
under a money purchase pension plan formula credited to a Current
Service Account (together, “Account Balance”) that is
payable to a Participant on his or her Benefit Commencement Date
will be equal to (i) minus (ii), where:
(i) is the
Participant’s Account Balance determined using the employer
contributions that would have been credited to the Account under
the applicable Qualified Plan if not for the limitations imposed on
such contributions by Code sections 401(a)(17) and 415 (and the
provisions of the Qualified Plan applying those limitations);
and
(ii) is the
Participant’s actual Account Balance under the applicable
Qualified Plan determined using actual employer contributions, as
reduced by such limitations.
Notwithstanding the foregoing, the
maximum amount of annual compensation earned after 1999 used to
determine benefits under this Plan for any LNL Agent participating
in the LNC Plan who is an LFA or Sagemark RCEO or Sales Manager
shall be $500,000 (with consistent “grandfathering” for
Participants whose annual compensation for any year prior to 2000
exceeded $500,000, all as determined by the Corporation’s
Director of Human Resources). In addition, for purposes of
calculating the amount of benefit under 3.2(a)(i) only, amounts
deferred under the Lincoln National Corporation Executive Deferred
Compensation Plan for Employees are included in the definition of
eligible compensation under the applicable Qualified Plan
formula.
3.3 Vesting . A
Participant shall be vested in his or her Plan benefit if he or she
has met the requirements for early retirement or is otherwise fully
vested under the applicable Qualified Plan.
ARTICLE IV
DISTRIBUTION OF
BENEFITS
The provisions of this
Article IV shall apply only to amounts that are not Grandfathered
Benefits. The distribution rules applicable to the Grandfathered
Benefits are set forth in Appendix A.
4.1. Default Distributions
Upon Separation from Service .
(a) LNC Plan
Participants . Absent an effective election pursuant to
Section 4.5 below, a LNC Plan Participant’s default
Benefit Determination Date is the first day of the month that is a
full thirteen (13) months from the date that the Participant
Separates from Service. Payment of the Present Value of the
Participant’s benefit will be made to the Participant in the
form of a cash lump sum on his or her Benefit Commencement Date.
The Benefit Commencement Date is as soon as administratively
practicable after the default Benefit Determination Date, but in no
event later than 90 days after the default Benefit Determination
Date.
Notwithstanding the foregoing, in the
case of an LNC Plan Participant who is at least 53 years of age and
has not yet attained age 55 at the time they are job eliminated, as
that term is defined under the Lincoln National Corporation
Severance Pay Plan, such Participant will be
“stretched” or treated as having attained age 55. A
“Stretched” Participant’s default Benefit
Determination date will be the first of the month that is thirteen
(13
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