8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

March 14, 2002

Date of Report (Date of earliest event reported)

Lincoln National Corporation

(Exact name of registrant as specified in its charter)

Indiana	1-6028	35-1140070
(State or other jurisdiction	(IRS Employer	(Commission
of incorporation)	Identification No.)	File Number)

1500 Market Street, West Tower, Suite 3900, Philadelphia, Pennsylvania 19102-2112

(Address of principal executive offices) (Zip Code)

(215) 448-1400

(Registrant’s telephone number)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry into a Material Definitive Agreement

a)On March 14, 2002, January 9, 2003 and March 11, 2004, the Compensation Committee of our Board of Directors approved the performance measures for the three-year, long-term performance award cycles of 2002-2004, 2003-2005 and 2004-2006, respectively, under the Lincoln National Corporation Incentive Compensation Plan, as amended and restated on March 8, 2001 (the “ICP”). The ICP is filed as Exhibit 3 to our proxy statement for the 2001 Annual Meeting of Shareholders. The performance measures for the 2002-2004 and 2003-2005 performance cycles are based on our:

 ·   shareholder return as compared to a peer group of companies;

 ·   growth in income from operations per share; and

 ·   return on equity.

For the 2002-2004 and 2003-2005 performance cycles, each of the performance measures are based on our performance relative to the performance of a peer group of companies.

For the 2004-2006 performance cycle, however, the shareholder return comparison measure is compared to a modified S&P 500 Index (modified to include only companies in the S&P 500 for the entire performance period), not to shareholder return achieved during the same period by a peer group of companies. The other measures are based on absolute numbers and are not compared to a peer group of companies.

The awards for the 2002-2004 performance cycle are payable in cash unless the Compensation Committee approves a payment of the award in stock. The awards for the 2003-2005 and 2004-2006 performance cycles are payable in cash, stock and options, or a combination of these, at the election of the participant made no later than March of the first year of the cycle. The minimum-maximum amount of awards for all performance cycles as well as the other terms of the awards for the 2003-2005 and 2004-2006 performance cycles are similar to those described in the Long-Term Incentive Awards Framework filed as Exhibit 10(a) to our Form 8-K dated January 20, 2004. A copy of the 2003-2005 form of long-term incentive award agreement is attached as Exhibit 10(a) hereto.

b)On January 8, 2004, the Compensation Committee approved the performance-based compensation measures pursuant to which annual incentive awards may be paid to executive officers under the ICP. The annual incentive awards may be paid in cash or shares of common stock pursuant to the terms of the ICP. The Compensation Committee set corporate performance measures as well as additional measures for particular business units. The 2004 corporate performance measures are:

l   growth in our income from operations per share,

 l   return on equity,

l   sales growth relative to industry-based indices and

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

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

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

Item 9.01. Financial Statements and Exhibits.

(c)   Exhibits.

The following exhibits are included with this Form 8-K.

Exhibit Number	Description
10(a)	Form of Long-Term Incentive Award Agreement (2003-2005 Performance Cycle)
10(b)	2004 Annual Incentive Award Measures
10(c)	2002-2004 Long-Term Incentive Award Measures
10(d)	2003-2005 Long-Term Incentive Award Measures
10(e)	2004-2006 Long-Term Incentive Award Measures

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

LINCOLN NATIONAL CORPORATION

By/s/ Richard C. Vaughan

Name:Richard C. Vaughan

Title:Executive Vice President and

           Chief Financial Officer

Date:February 16, 2005

Exhibit Index

Exhibit Number	Description
10(a)	Form of Long-Term Incentive Award Agreement (2003-2005 Performance Cycle)
10(b)	2004 Annual Incentive Award Measures
10(c)	2002-2004 Long-Term Incentive Award Measures
10(d)	2003-2005 Long-Term Incentive Award Measures
10(e)	2004-2006 Long-Term Incentive Award Measures

EX-10.A

Exhibit 10(a)

LTIP AWARD AGREEMENT

2003 - - 2005 Performance Cycle

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

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

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

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

(a) Noncompetition. Grantee may not render services for any organization or engage directly or indirectly in any business that, in the sole judgment of the Chief Executive Officer of LNC or other senior officer designated by the Committee, is or becomes competitive with LNC. If Grantee has terminated employment, Grantee shall be free, however, to purchase, as an investment or otherwise, stock or other securities of such organization or business so long as they are listed upon a recognized securities exchange or traded over-the-counter and such investment does not represent a greater than five percent equity interest in the organization or business.

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

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

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

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

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

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

7. Definitions. As used in this Agreement:

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

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

“Cause” means (as determined by the Committee): (1) a conviction of a felony, or other fraudulent or willful misconduct by Grantee that is materially and demonstrably injurious to the business or reputation of LNC, or (2) the willful and continued failure of Grantee to substantially perform Grantee’s duties with LNC or a subsidiary (other than such failure resulting from incapacity due to physical or mental illness), after a written demand for substantial performance is delivered to Grantee by Grantee’s manager which specifically identifies the manner in which the manager believes that Grantee has not substantially performed Grantee’s duties.

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

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

10. Terms Applicable Only to Stock Options.

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

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

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

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

LINCOLN NATIONAL CORPORATION

By:  ___________________________

Jon A. Boscia

Chairman and Chief Executive Officer

EX-10.B

Exhibit 10(b)

2004 Annual Incentive Award Measures

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

·growth in our income from operations per share,

·return on equity,

·sales growth relative to industry-based indices and

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

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

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

EX-10.C

Exhibit 10(c)

2002-2004 Long-Term Incentive Award Measures

On March 14, 2002, the Compensation Committee of our Board of Directors approved the performance measures for the three-year, long-term performance award cycle of 2002-2004 under the Lincoln National Corporation Incentive Compensation Plan, as amended and restated on March 8, 2001. The performance measures are based on Lincoln National Corporation’s:

·   shareholder return,

·   growth in income from operations per share and

·   return on equity.

Each of the performance measures are based on Lincoln National’s performance relative to the performance of a peer group of companies.

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

EX-10.D

Exhibit 10(d)

2003-2005 Long-Term Incentive Award Measures

On January 9, 2003, the Compensation Committee of our Board of Directors approved the performance measures for the three-year, long-term performance award cycle of 2003-2005 under the Lincoln National Corporation Incentive Compensation Plan, as amended and restated on March 8, 2001. The performance measures are based on Lincoln National Corporation’s:

·   shareholder return,

·   growth in income from operations per share and

·   return on equity.

Each of the performance measures are based on Lincoln National’s performance relative to the performance of a peer group of companies.

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

EX-10.E

Exhibit 10(e)

2004-2006 Long-Term Incentive Award Measures

On March 11, 2004, the Compensation Committee of our Board of Directors approved the performance measures for the three-year, long-term performance award cycle of 2004-2006 under the Lincoln National Corporation Incentive Compensation Plan, as amended and restated on March 8, 2001. The performance measures are based on Lincoln National Corporation’s:

·   total shareholder return compared to a modified S&P 500 Index,

·   growth in income from operations per share and

·   return on equity.

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