Exhibit 10.2
2009 Executive Compensation
Matters
On March 30,
and March 31, 2009 the Compensation Committee of our Board of
Directors took the following actions:
(1) Approved the performance-based compensation
measures pursuant to which our 2009 annual incentive program
(“2009 AIP”) awards may be paid to executive officers
under the Lincoln National Corporation Amended and Restated
Incentive Compensation Plan (the “ICP”) for the fiscal
year ending December 31, 2009. The ICP was filed as Exhibit 4 to
our proxy statement for the 2007 Annual Meeting of
Shareholders. The 2009 performance measures
are:
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income from
operations per share,
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achievement of
budget goals.
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For the executive officers in our business
lines, these measures are weighted between enterprise results and
the applicable line of business results.
Unless and until we disclose new performance
measures, these measures will apply to future AIP
awards.
(2) Approved the performance measure and
goals for the cash portion of the three-year (2009-2011) long-term
incentive program performance cycle (“2009-2011 LTI”)
under the ICP. The performance measure for the cash
portion of our 2009-2011 LTI is growth in income from operations
per share.
One third of the 2009-2011 LTI is payable in
cash, provided that at least threshold performance is
achieved. Two-thirds of the 2009-2011 LTI will be
granted in a combination of options and restricted stock units
contingent upon shareholder approval of the 2009 Lincoln National
Corporation Amended and Restated Incentive Compensation Plan, which
was filed as Exhibit 4 to our proxy statement for the 2009 Annual
Meeting of Shareholders. The portion of our 2009-2011
LTI awards granted as equity will be allocated as
follows: 60% of time-vested stock options and 40% of
time-vested restricted stock units. The equity portion
of the LTI award is targeted to approximately 233% of the CEO base
salary, and approximately 150% of the base salary for the
Company’s other named executive officers (NEOs).
Unless and until we disclose new performance
measures, this measure will apply to future long-term incentive
awards.
Income from operations is defined for the
purposes of paragraphs (2) and (3) above as net income determined
in accordance with generally accepted accounting principles
(“GAAP”) excluding, as applicable, the after-tax
effects of:
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Realized gain
(loss) – defined as gains and losses on investments and
derivat
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