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LINCOLN NATIONAL CORPORATION AND SUBSIDIARIES
EXHIBIT 10(q) 1993 STOCK PLAN FOR NON-EMPLOYEE DIRECTORS
ARTICLE I - PURPOSE OF PLAN
1.1 Purpose of Plan. Lincoln National Corporation (the "Corporation") has
adopted the 1993 Stock Plan for Non-Employee Directors (the "Plan") to
provide for payment in shares of the Corporation's Common Stock ("Stock") of
a portion of the retainer fee payable to members of the Board of Directors of
the Corporation who are not employees of the Corporation or any of its
affiliates or subsidiaries ("Non-Employee Directors") and to allow Non-
Employee Directors to elect to defer receipt of all or a portion of their
retainer and/or meeting fees. The Plan also provides a restricted stock
bonus in the form of Restricted Stock for Non-Employee Directors. The Plan
is intended to provide Non-Employee Directors with a larger equity interest
in the Corporation in order to attract and retain well-qualified individuals
to serve as Non-Employee Directors and to enhance the identity of interests
between Non-Employee Directors and the shareholders of the Corporation.
ARTICLE II - ELIGIBILITY AND PARTICIPATION
2.1 Eligibility and Participation. Only Non-Employee Directors of the
Corporation and its subsidiaries shall be eligible to participate in the
Plan, and participation in the Plan is mandatory for all Non-Employee
Directors. Except as specifically provided herein, a Non-Employee Director
may not elect to increase or decrease the portion of the retainer fee payable
in Stock.
ARTICLE III - RETAINER STOCK AWARDS AND DEFERRAL ELECTIONS
3.1 Retainer Stock Awards.
(a) Amount of Award. On each July 1 after the Effective Date through
and including July 1, 2004 (each such date hereinafter a "Grant Date"), in
lieu of the portion of the retainer fee payable to a Non-Employee Director
on such Grant Date determined without regard to this Plan ("Retainer"),
and in consideration for services rendered as a Non-Employee Director of
the Corporation, the Corporation shall issue to each Non-Employee
Director a whole number of shares of Stock (a "Stock Award") equal to
the number of shares determined by dividing (a) twenty-five percent
(25%) of the Retainer, by (b) the Fair Market Value of the Stock on such
Grant Date. For purposes of this Plan, the "Fair Market Value" of Stock
on any business day shall be the average of the high and low sales prices
quoted on the New York Exchange Composite Listing on the next
preceding business day on which there were such quotations for the day
in question. To the extent that the formula described in this Section
3.1(a) does not result in a whole number of shares of Stock,
the result shall be rounded upwards to the next whole number such that
no fractional shares of Stock shall be issued under the Plan. Such shares
shall be restricted from sale or transfer as provided in Section 3.1(b).
(b) Restrictions on Stock Awards. A stock certificate representing
the Stock Award shall be registered in each Non-Employee Director's
name but shall be held in custody by the Company for the Non-Employee
Director's account pursuant to a stock power. The Non-Employee
Director shall have all rights and privileges of a shareholder as to such
Stock Award, including the right to vote such Restricted Shares, except
that the following restrictions shall apply: (i) the Non-Employee Director
shall not be entitled to delivery of the certificate until the
expiration of the Restricted Period, (ii) none of the Restricted Shares
may be sold, transferred, assigned, pledged, or otherwise encumbered or
disposed of during the Restricted Period, and (iii) except as provided
in Section 3.1(c), all of the Restricted Shares shall be forfeited and
all rights of the Non-Employee Director to such Restricted Shares shall
terminate without further obligation on the part of the Corporation and
its subsidiaries upon the Non-Employee Director's ceasing to be a
director of the Corporation and its subsidiaries.
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(c) Termination of Directorship.
(i) Vesting of Shares. If a Non-Employee Director ceases to be a
director of the Corporation and its subsidiaries by reason of
Disability, Death, Retirement or Change of Control, the Restricted
Shares granted to such Non-Employee Director shall immediately vest.
If a Non-Employee Director ceases to be a director of the Corporation
and its subsidiaries for any other reason, the Non-Employee Director
shall immediately forfeit all Stock Awards, except to the extent that
a majority of the Board other than the Non-Employee Director
approves the vesting of such Stock Award. Uponvesting, except as
provided in Article X, all restrictions applicable to such Stock
Award shall lapse and a certificate for such shares shall be
delivered to the Non-Employee Director, or the Non-Employee
Director's beneficiary or estate, in accordance with Article VI.
(ii) Disability. For purposes of this Section
3.1(c), "Disability" shall mean a permanent and
total disability as defined in Section 22(e)(3)
of the Internal Revenue Code of 1986, as
amended.
(iii) Retirement. For purposes of this Section 3.1(c),
"Retirement" shall mean ceasing to be a director
of the Company (i) on or after age 70, or (ii)
on or after age 65 with the consent of a
majority of the members of the Board other than
the Non-Employee Director.
(iv) Change of Control. For purposes of this Section
3.1(c), "Change of Control" shall have the same
meaning as in the LNC Executives' Severance
Benefit Plan on the date immediately preceding
the "Change of Control."
3.2 Deferral of Retainer and/or Fees.
(a) Deferral Elections. Commencing on the effective date of the Plan,
payment of all or part of the Retainer (excluding Stock Awards pursuant
to Section 3.1(a)) and/or fees payable to a Non-Employee Director for
meetings of the Board or Board Committees or for extraordinary services
may be deferred by election of the Non-Employee Director. Each such
election must be made prior to the start of the calendar year for which
the Retainer and/or fees will be paid and must be irrevocable for the
affected calendar year, provided, however, that for 1994, each
Non-Employee Director shall be permitted to elect deferred payment of
all or a portion of the Retainer and/or the fees earned after the
effective date of the Plan and before December 31, 1994, provided such
Non-Employee Director has made an irrevocable election to this effect
prior to stockholder approval of the Plan. In addition, each election
to defer payment of any amount of the Retainer and/or fees payable in
cash shall be made at least six (6) months in advance of the date such
election is to be effective and shall be irrevocable except upon a
subsequent irrevocable election that takes effect at least six (6)
months after the date of such subsequent election, to the extent
necessary to satisfy the requirements of Rule 16b-3(d) promulgated
under the Securities Exchange Act of 1934 ("1934 Act"), as the same
may be hereafter amended.
(b) Crediting Stock Units to Accounts. Amounts deferred pursuant to
Section 3.2(a) shall be credited as of the date of the deferral to a
bookkeeping reserve account maintained by the Corporation ("Account")
in units which are equivalent in value to shares of Stock ("Stock Units").
The number of Stock Units credited to an Account with respect to any
Non-Employee Director shall equal a number of Stock Units equal to any
deferred cash amount divided by the Fair Market Value of the Stock on
the date on which such cash amount would have been paid but for the
deferral election pursuant to Section 3.2(a).
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(c) Fully Vested Stock Units. All Stock Units credited to a Non-
Employee Director's Account pursuant to this Article III shall be at
all times fully vested and nonforfeitable.
(d) Payment of Stock Units. Stock Units credited to a Non-Employee
Director's Account pursuant to this Article III shall be payable in an
equal number of shares of Stock or cash in a single distribution made at
such time specified by the Non-Employee Director in the applicable
deferral election, provided that the designated payment date with respect
to any election must be the first day of a subsequent calendar year which
is no earlier than twelve (12) months following the establishment of the
affected Stock Unit.
ARTICLE IV - RESTRICTED STOCK BONUS
4.1 Restricted Stock Bonus for Non-Employee Directors on the Effective Date.
Each Non-Employee Director serving as such on the effective date of the Plan
shall be awarded 200 shares of Stock (a "Stock Bonus") in consideration for
services rendered as a Non-Employee Director of the Corporation and its
subsidiaries. The restrictions on the Stock Bonus shall be the same as those
restrictions described in Section 3.1(b).
4.2 Restricted Stock Bonus for Non-Employee Directors After the Effective
Date. Each Non-Employee Director who commences serving a new three year term
after the effective date of the Plan shall be issued a whole number of Shares
of Stock ("Stock Bonus") equal to $10,000 divided by the Fair Market Value of
Stock on the July 1 on which he or she begins serving a new term as a
Non-Employee Director. To the extent that the formula described in this
Section 4.2 does not result in a whole number of Shares of Stock, the result
shall be rounded upwards to the next whole number such that no fractional
shares shall be issued under the Plan. This Stock Bonus shall contain the
same restrictions as specified in Section 3.1(b).
ARTICLE V - DIVIDEND EQUIVALENT PAYMENTS
5.1 Dividend Equivalent Payments. As of each dividend payment date with
respect to Stock, each Non-Employee Director shall receive additional Stock
Units ("Dividend Equivalent Payment") equal to the product of (i) the per-
share cash dividend payable with respect to each share of Stock on such date,
and (ii) the total number of Restricted Shares issued in his or her name and
held by the Corporation and Stock Units credited to his Account as of the
record date corresponding to such dividend payment date, divided by the Fair
Market Value of Stock on the date. Fractional Stock Units may be awarded.
ARTICLE VI - DELIVERY OF STOCK CERTIFICATES
6.1 Stock Awards. The Stock certificate for shares of Stock issued to any
Non-Employee Director pursuant to a Retainer Stock Award or Stock Bonus with
respect to a Grant Date shall be held by the Corporation until the
restrictions lapse. As soon as practicable following the expiration of the
restrictions, but in no event sooner than six (6) months from such Grant
Date, the Corporation shall deliver to the Non-Employee Director the Stock
certificate with respect to the shares of Stock issued pursuant to such Stock
Award and Stock Bonus. During any six (6) month period after the Grant Date
and before delivery of the Stock certificate after the restrictions have
lapsed, the Non-Employee Director shall have all the rights of a shareholder
with respect to such Stock, except that such Stock shall not be transferable
by the Non-Employee Director other than by will or the laws of descent and
distribution or pursuant to a qualified domestic relations order.
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6.2 Stock Unit Payments. The Corporation shall issue and deliver to the
Non-Employee Director cash or a Stock certificate, as elected by the Non-
Employee Director for payment of Stock Units as soon as practicable following
the date on which Stock Units are payable in accordance with Section 3.2(d).
No fractional shares will be distributed.
ARTICLE VII - STOCK
7.1 Stock. The Aggregate number of shares of Stock that may be issued under
the Plan shall not exceed one hundred fifty thousand (150,000) shares, unless
such number of shares is adjusted as provided in Article VIII of this Plan.
In addition to the foregoing limit, the aggregate number of restricted shares
that may be granted during the term of the Plan shall not exceed thirty
thousand (30,000) shares, unless such number of shares is adjusted as provided
in Article VIII of this Plan. To the extent that an award lapses or the
rights of the Non-Employee Director terminate or the award is settled in cash
(e.g. cash settlement of Stock Units) any shares of Common Stock subject to
such award shall again be available for the grant of an award.
ARTICLE VIII - ADJUSTMENT UPON CHANGES IN CAPITALIZATION
8.1 Adjustment Upon Changes in Capitalization. In the event of a stock
dividend, stock split or combination, reclassification, recapitalization or
other capital adjustment of shares of Stock, the number of shares of Stock
that may be issued pursuant to Stock Awards, Stock Bonuses, and Stock Units
and the number of Stock Units credited to Accounts shall be appropriately
adjusted by the Board of Directors of the Corporation, whose determination
shall be final, binding and conclusive. No fractional shares of Stock shall
be issued under the Plan on account of any adjustment specified herein. The
grant of Stock Awards, Stock Bonuses, or Stock Units pursuant to this Plan
shall not affect in any way the right or power of the Corporation to issue
additional Stock or other securities, make adjustments, reclassifications,
reorganizations or other changes in its corporate, capital or business
structure, to participate in a merger, consolidation or share exchange or to
transfer its assets or dissolve or liquidate.
ARTICLE IX - TERMINATION OR AMENDMENT OF PLAN
9.1 In General. The Board of Directors of the Corporation may at any time
terminate, suspend or amend this Plan. However, except as otherwise
determined by the Board, no such amendment shall become effective without the
approval of the stockholders of the Corporation to the extent stockholder
approval is required in order to comply with Rule 16b-3 under the 1934 Act.
9.2 Amendment No More than Once in 6 Months. Those provisions of this Plan
that set forth the amounts and the formula for determining the amounts, prices
and timing of Stock Awards, Stock Bonuses, and Stock Units, respectively, may
not be amended more than once every six (6) months.
9.3 Written Consents. No amendment may adversely affect the right of any
Non-Employee Director to receive any Stock previously issued as a Stock
Award, Stock Bonus, or to receive any Stock of Dividend Equivalent Payments
pursuant to an outstanding Stock Unit without the written consent of such
Non-Employee Director.
9.4 Termination of Stock Awards. Unless the Plan is sooner terminated, no
Stock Award shall be granted after July 1, 2004.
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ARTICLE X - GOVERNMENT REGULATIONS
10.1 Government Regulations.
(a) The obligations of the Corporation to issue any Stock granted under
this Plan shall be subject to all applicable laws, rules and regulations and
the obtaining of all such approvals by governmental agencies as may be deemed
necessary or appropriate by the Board of Directors of the Corporation.
(b) Except as otherwise provided in Article IX of this Plan, the Board of
Directors of the Corporation may make such changes as may be necessary or
appropriate to comply with the rules and regulations of any governmental
authority.
ARTICLE XI - MISCELLANEOUS
11.1 Unfunded Plan. The Plan shall be unfunded with respect to the
Corporation's obligation to pay any amounts due pursuant to Stock Units and
Dividend Equivalent Payments, and a Non-Employee Director's rights to receive
any payment of any Stock Unit or Dividend Equivalent Payment shall be not
greater than the rights of an unsecured general creditor of the Corporation.
11.2 Assignment; Encumbrances. The right to receive a Stock Award, Stock
Bonus or Stock Unit and the right to receive payment with respect to a Stock
Unit under this Plan are not assignable or transferable and shall not be
subject to any encumbrances, liens, pledges or charges of the Non-Employee
Director or his or her creditors. Any attempt to assign, transfer or
hypothecate any Restricted Stock Award, Stock Bonus, or Stock any
right to receive a Stock Award, Stock Bonus or Stock Unit shall be void and
and of no force and effect whatsoever.
11.3 Designation of Beneficiaries. A Non-Employee Director may designate a
beneficiary or beneficiaries to receive any distributions under the Plan upon
his or her death.
11.4 Applicable Law. The validity, interpretation and administration of
this plan and any rules, regulations, determinations or decisions made
hereunder, and the rights of any and all persons having or claiming to have
any interest herein or hereunder, shall be determined exclusively in
accordance with the laws of the State of Indiana, without regard to the
choice of laws provisions hereof.
11.5 Headings. The headings in this Plan are for reference purposes only
and shall not affect the meaning or interpretation of this Plan.
11.6 Notices. All notices or other communications made or given pursuant to
this Plan shall be in writing and shall be sufficiently made or given if
hand-delivered or mailed by certified mail, addressed to any Non-Employee
Director at the address contained in the records of the Corporation or to the
Corporation at its principal office.
ARTICLE XII - EFFECTIVE DATE OF PLAN
12.1 Effective Date of Plan. This Plan shall become effective on the date
on which it is adopted by the Board of Directors of the Corporation, subject,
however, to the approval by the affirmative vote of the holders of a majority
of the votes cast by shareholders of the Corporation present, or represented
and entitled to vote, at the next annual meeting of the shareholders of the
Corporation duly held in accordance with the laws of the State of Indiana.