LINCOLN NATIONAL CORP (Form: 8-K, Received: 02/13/2008 17:19:23)

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

February 7, 2008

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	(Commission	(IRS Employer
of incorporation)	File Number)	Identification No.)

150 N. Radnor Chester Road, Radnor, PA 19087

(Address of principal executive offices) (Zip Code)

(484) 583-1400

(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 5.02. Departure ofDirectors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On February 7, 2008, the Compensation Committee of our Board of Directors took the following actions:

(1) Approved the performance-based compensation measures pursuant to which annual incentive program (“AIP”) awards may be earned by executive officers under the Lincoln National Corporation Amended and Restated Incentive Compensation Plan (the “ICP”) during fiscal 2008, for payment in 2009. The 2008 performance measures are:

· income from operations per share,

· sales growth, and

· merger-related expense savings.

For the executive officers in our business lines, these measures are weighted between enterprise results and the applicable line of business results, with income from operations replacing income from operations per share. In addition, Patrick P. Coyne, who is President of Lincoln National Investment Company, Inc. and Delaware Management Holdings, Inc., has retail investment performance and institutional investment performance as additional performance measures. The retail investment performance measure is based on the percentage of Delaware retail funds that beat their Lipper peer group’s average performance over one, three, five and 10-year periods. The institutional investment performance measure is based on the performance of eight Delaware institutional performance composites created in accordance with CFA institute standards (GIPS), which are compared to the appropriate industry benchmarks over one, three and five-year periods.

Unless and until we disclose new performance measures, these measures will apply to future AIP awards.

The ICP was filed as Exhibit 4 to our proxy statement for the 2007 Annual Meeting of Shareholders. Annual incentive awards, if and to the extent earned, will be paid in cash, unless an executive officer does not meet the share ownership requirements applicable to him at the time of payment, in which case the award will be paid in shares of common stock, as provided in the ICP.

(2) Approved the performance goals for the three-year (2008-2010) ICP long-term performance cycle. The performance measures are:

· growth in income from operations per share,

· sales growth, and

· return on equity.

Unless and until we disclose new performance measures, these measures will apply to future long-term incentive awards.

In a Form 8-K filed on November 9, 2007, we reported the 2008-2010 long-term incentive (“LTI”) compensation target, as a percentage of base salary, for each of the named executive officers identified in our 2007 proxy statement filed with the SEC on April 4, 2007 who was then employed by us (“NEOs”). One-half of the LTI compensation target was paid in the form of a stock option that vests over a three-year period if the NEO remains employed by us on each vesting date. The options granted to the NEOs all had a strike price of $52.76 and were as follows: Mr. Glass—319,364; Mr. Crawford—91,631; Mr. Coyne—101,273; and Mr. Thompson—112,070.

Except for Mr. Coyne, the remainder of the LTI target compensation is in the form of a 2008-2010 performance cycle award, that will be paid out or vest after the end of the applicable performance period only upon the Compensation Committee’s determination that threshold performance has been achieved for at least one of the three performance measures described above. Participants will have the opportunity to elect to receive their performance cycle award as either: 100% performance shares or 75% performance shares and 25% cash (permitted only if current share ownership requirements are satisfied). Such elections were made in advance of the date on which the cycle was established. Participants entering the cycle after that date will receive their awards entirely in performance shares. For Mr. Coyne, 16.5% of his LTI target compensation is in the form of a 2008-2010 performance cycle award as described above and 33.5% is in the form of restricted stock units of Delaware Investments U.S., Inc. (“DIUS”), as described below. Performance awards are converted to shares based on the value of the award divided by the average of the high and low prices of our common stock on the NYSE's consolidated transactions tape on February 6, 2008 of $55.

The 2008 long term incentive program is substantially similar to the 2006 program, which is described in Exhibit 10.1 to our Form 8-K filed with the SEC on April 12, 2006. The 2008-2010 Long-Term Incentive Plan Award Agreement is attached hereto as Exhibit 10.1, and incorporated herein by reference. The 2008 non-qualified stock option award agreement is attached hereto as Exhibit 10.2, and incorporated herein by reference.

(3) Granted to Mr. Coyne an award of restricted stock units of DIUS under the DIUS Incentive Compensation Plan (the “DIUS ICP”). The dollar value of the restricted stock units is $530,000 and will be converted into a number of restricted stock units when the December 31, 2007 valuation of DIUS shares is completed. Because DIUS stock is not publicly traded, an independent valuation firm performs periodic valuations of DIUS to determine the fair market value (“FMV”) of the DIUS stock underlying all forms of equity granted pursuant to the DIUS ICP. The valuation guidelines take a “market transaction” approach to valuation, considering three commonly applied benchmarks in the asset management industry: (a) assets under management, (b) price to revenues, and (c) earnings before interest, taxes, depreciation and amortization as well as comparable market transactions. The DIUS ICP was filed as Exhibit 10.1 to our Form 8-K filed on November 9, 2007. The form of restricted stock unit agreement is attached hereto as Exhibit 10.3, and incorporated herein by reference.

(4) Pursuant to the ICP, the Committee is authorized to make adjustments in the terms and conditions of awards in recognition of unusual or nonrecurring events (including, without limitation, acquisitions and dispositions of businesses and assets) affecting us; provided that the adjustment would not cause an award intended to qualify as “performance-based compensation” under Section 162(m) of the Internal Revenue Code of 1986, as amended, and regulations thereunder to otherwise fail to qualify as “performance-based compensation” under Section 162(m) . Currently, Section 162(m) applies to all of our NEOs, except the chief financial officer. Accordingly, consistent with the terms of the ICP, the Committee approved an adjustment to the calculation of “return on equity” for the purpose of determining the extent to which participants, excluding all of the NEOs, except our chief financial officer, achieved that performance measure for the 2005-2007 ICP long-term performance cycle. For Frederick J. Crawford, our chief financial officer, the adjustment resulted in the vesting of approximately 3,913 of additional performance shares. The adjustment related to the impact to the equity component of ROE from the goodwill associated with our acquisition of Jefferson-Pilot Corporation (“JP”) and resulted in a payout equal to 86% of target versus an unadjusted payout of 63.5% of target. The Committee did not adjust the calculation to entirely eliminate the goodwill associated with our acquisition of JP, which would have resulted in an above target payout. The Committee took this action because the JP transaction was not anticipated at the beginning of the cycle and was beneficial to us and our shareholders, and the Committee believed that the goodwill from the transaction should not have such a negative effect on the participants’ long-term incentive payment.

Item 9.01. Financial Statements and Exhibits.

The Exhibit Index set forth on page E-1 is incorporated herein by reference.

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/ Douglas N. Miller
	Name: Douglas N. Miller
	Title: Vice President and
	Chief Accounting Officer

Date: February 13, 2008

INDEX TO EXHIBITS

Exhibit Number	Description
10.1	Form of 2008-2010 Long-Term Incentive Plan Award Agreement
10.2	Form of 2008 Non-Qualified Stock Option Agreement
10.3	Form of Restricted Stock Unit Agreement under the Delaware Investments U.S., Inc. Incentive Compensation Plan

Exhibit 10.1

2008 LONG-TERM INCENTIVE AWARD PROGRAM

2008 – 2010 Performance Cycle Agreement

This award agreement (“Agreement”), by and between Lincoln National Corporation (“LNC”) and [Name] (“Grantee”), evidences the grant by LNC on February 7, 2008 , of a long-term incentive performance 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 effective May 10, 2008 (“Plan”) and this Agreement. LNC and Grantee agree as follows:

1. Form of Award. The performance award grant shall equal one-half of Grantee’s 2008 long-term incentive award target value, which, upon vesting after certification of achievement of the established performance criteria, shall ultimately be paid in shares of LNC common stock, or, if Grantee has so elected, and has satisfied the terms of LNC’s share ownership requirements, Grantee may receive 75% of his/her award in the form of shares of LNC common stock and 25% in cash (if the election is not timely made, the form shall be 100% shares). Grantee has elected to receive his or her award, if any, in the following form:

100% in shares of LNC common stock = _____ shares

75% in shares of LNC common stock and 25% in cash = ____ shares & $______

During the performance cycle, the share component of such award shall consist of LNC stock units but any actual award shall be ultimately vest in shares of LNC common stock. 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 2008-2010 Performance Cycle approved by the Compensation Committee of the LNC Board of Directors (“Committee”). The Committee shall determine if and when any award shall vest under the Plan and reserves the right to adjust the target award or payout amount of any award under the Plan at any time to the extent permissible under Section 162(m) of the Internal Revenue Code of 1986, as amended. The number of shares that may ultimately vest 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. Non-Competition, Non-Solicitation, Non-Disparagement and Non-Disclosure Provisions or Termination for Cause .

(a) Non-Competition . Grantee may not become employed by, work on behalf of, or otherwise render services that are the same or similar to the services rendered by Grantee to the business unit employing Grantee for any other organization or business which competes with or provides, or is planning to provide, the same or similar products and/or services as the business unit in which Grantee was employed or otherwise had responsibilities for at the time of his/her termination. Grantee understands and agrees that this restriction is nationwide in scope. 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) Non-Solicitation . Grantee shall not directly or indirectly hire, manage, solicit or recruit any employees, agents, financial planners, salespeople, financial advisors, vendors or service providers of LNC whom Grantee had hired, managed, supervised, or otherwise became familiar with as a result of his/her employment with LNC.

(c) Non-Disparagement . Grantee shall not (i) make any public statements regarding his/her employment with LNC (other than factual statements concerning the dates of employment and positions held) or his/her termination or Retirement (as defined in Paragraph 7 below) from LNC that are not agreed to by LNC, such approval not to be unreasonably withheld or delayed; and (ii) Grantee shall not disparage LNC or any of its subsidiaries or affiliates, its and their respective employees, executives, officers, or Boards of Directors.

(d) Non-Disclosure & Ideas Provision . Grantee shall not, without prior written authorization from LNC, disclose to anyone outside LNC, or use in other than LNC’s business, any information or material relating to the business of LNC that LNC considers confidential and/or proprietary pursuant to its Code of Conduct. Furthermore, Grantee agrees to disclose and assign to LNC all rights and interest in any invention or idea that Grantee developed or helped develop for actual or related business, research, or development work during the period of their Service with LNC.

Grantee must provide LNC with a certification of compliance with these provisions prior to the payment of any cash or share award. Failure to comply with provisions (a) through (d) above at any time prior to, or during the six months after, any such payment shall cause such payment to be rescinded. Termination for Cause at any time, before or after payment of any cash or share award, shall result in the cancellation or rescission of the award. 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 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 a failure of Grantee to comply with the non-competition 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 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 LNC Executives’ Severance Benefit 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. Definitions. As used in this Agreement:

“Cause” means, as determined by LNC in its sole discretion, a conviction of a felony or any fraudulent of willful misconduct by Grantee that is materially and demonstrably injurious to the business or reputation of LNC.

“Retirement” means, for purposes of this Agreement, Grantee’s retirement from LNC or a subsidiary at age 55 or older with at least five (5) years of service with LNC.

“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.

7. Full or Pro-Rata Awards Upon Certain Events. Except as provided in this Section 8 and in the preceding 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. In the case of Grantee's death, Total Disability, Retirement, or involuntary termination of employment with LNC and all affiliates without Cause, Grantee (or Grantee's beneficiary, if applicable) shall receive a pro-rated award based on the Grantee’s period of service during the cycle. Any such award shall be paid at the same time long-term incentive awards are normally paid to employees who are employed at the end of the performance cycle. Notwithstanding the foregoing, in the case of such involuntary termination, any award 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; except 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.

8. 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).

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:

Dennis R. Glass

President and Chief Executive Officer

Exhibit 10.2

NONQUALIFIED STOCK OPTION AGREEMENT

This Nonqualified Stock Option Agreement (the “Agreement”) evidences the terms of the grant by Lincoln National Corporation (“LNC”) of a Nonqualified Stock Option (the “Option”) to _______________________ (“Grantee”) on February 7, 2008 (the “Date of Grant”), and Grantee’s acceptance of the Option in accordance with and subject to the provisions of the Lincoln National Corporation Incentive Compensation Plan (the “Plan”) and this Agreement. LNC and Grantee agree as follows:

1. Shares Optioned and Option Price

Grantee shall have an Option to purchase _________ shares of LNC common stock (the “Shares”) for $_____________ (United States dollars) for each Share.

2. Vesting Dates

The Option for unvested Shares shall be forfeited upon Grantee’s termination of employment except as provided below. During Grantee’s employment, Option Shares shall vest as follows:

______ Option Shares on February 7, 2009 ;

______ Option Shares on February 7, 2010 ; and

______ Option Shares on February 7, 2011 .

In addition, unvested Options Shares shall be deemed vested as follows:

(a)	100% vested on the date of Grantee’s death;

(b)	100% vested on the date of Grantee’s termination of employment as a result of Total Disability (as defined below);

(c)	Pro-rata as of the date Grantee Retires (as defined in Paragraph 8 below)--except that if a Grantee Retires at age 62 or older, the RSUs shall be 100% vested as of that date;

(d)

Pro-rata as of the date of Grantee’s involuntary termination of employment with LNC and all subsidiaries, other than for Cause (as defined in Paragraph 8 below), including the sale or disposition of the business that includes Grantee’s employment; provided, however, that Grantee executes an Agreement, Waiver and General Release, in form and substance satisfactory to LNC, in connection with such termination of employment (other than a termination due to the sale or disposition of the business that includes Grantee’s employment), in which case the Shares shall vest on the later of the date of such involuntary termination of employment and the date such agreement shall have become effective; or

(e)	100% as of the date of a Change of Control of LNC, as defined in the LNC Executive Severance Benefit Plan (“Change of Control”).

Option Shares that vest pro-rata upon certain events shall vest according to a pro-ration formula equal to the number of days in the calendar year in which the event described in (c) and (d) occurred, divided by the total number of days of Service that Grantee provides during that calendar year, multiplied by the number of Option Shares subject to vesting during that calendar year (rounding up the nearest whole Option Share).

3. Exercise Period

Grantee may exercise all or part of the Option for vested Shares on any LNC business day at LNC’s executive offices until the first to occur of:

(a)	the tenth anniversary of the Date of Grant;

(b)	the first anniversary of the date of Grantee’s termination of employment with LNC and all subsidiaries on account of death or Total Disability;

(c)	the fifth anniversary of Grantee’s Retirement;

(d)	the date three months after 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 that includes Grantee’s employment; or

(e)	the date that Grantee’s employment with LNC and all subsidiaries terminates for any reason other than those described in (b), (c), or (d) of this paragraph.

4. 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 in Paragraph 7 below. Payment may be made in any combination of cash, personal check, or Shares. 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).

5. Transfer of Shares Upon Exercise

As soon as practicable after the exercise date, LNC shall cause the appropriate number of Shares to be issued to Grantee. LNC shall not issue Shares until any required tax withholding payments are remitted to LNC by Grantee; Grantee may surrender Shares or withhold Shares (from those that would otherwise be issued on exercise of the Option) to satisfy tax withholding obligations.

6. Transferability

No rights under this Agreement may be transferred except by will or the laws of descent and distribution. The rights under this Agreement may be exercised during the lifetime of Grantee only by Grantee. After Grantee’s death, the Option may be exercised by the person or persons to whom the Option was transferred by will or the laws of descent or distribution.

7.	Consequences of Breach of Non-Competition, Non-Solicitation, Non-Disparagement and Non-Disclosure Provisions or Termination for Cause

Any Option Shares may be cancelled by action of the Committee or its delegate if Grantee is terminated for Cause (as defined below), or fails to comply with the non-competition, non-solicitation, non-disparagement and/or non-disclosure provisions described below before the Option is exercised. Upon exercise of the Option, Grantee shall certify compliance with the terms and conditions in this paragraph. Failure to comply with subsections (a), (b), (c), or (d) of this Paragraph at any time prior to, or during the six months after any exercise of this Option, shall cause such Option and/or any related exercise to be rescinded. Termination for Cause at any time shall cause such Option and/or any related exercise 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 to 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. Such payment must be made either in cash or by returning the Shares Grantee received in connection with the rescinded exercise. If Grantee’s employment is terminated by LNC other than for Cause, however, a failure of Grantee to comply with the provisions of 7(a) below after such termination shall not in itself cause rescission to the extent the Option was exercised before Grantee’s termination.

(b) Non-Solicitation . Grantee shall not directly or indirectly hire, manage, solicit or recruit any employees, agents, financial planners, salespeople, financial advisors, vendors or service providers of LNC (including, but not limited to, doing a “lift-out” of same) whom Grantee had hired, managed, supervised, or otherwise became familiar with as a result of his/her employment with LNC.

(c) Non-Disparagement . Grantee shall not (i) make any public statements regarding his/her employment with LNC (other than factual statements concerning the dates of employment and positions held) or his/her termination or Retirement (as defined in Paragraph 8 below) from LNC that are not agreed to by LNC, such approval not to be unreasonably withheld or delayed; and (ii) Grantee shall not disparage LNC or any of its subsidiaries or affiliates, its and their respective employees, executives, officers, or Boards of Directors.

8. Definitions

“Cause” means, a conviction of a felony or any fraudulent of willful misconduct by Grantee that is materially and demonstrably injurious to the business or reputation of LNC. With respect to an SMC member, Cause shall be determined in the sole discretion of the Compensation Committee of the Board of Directors. For any other Grantee, Cause shall be determined in the sole discretion of the Senior Vice President of Human Resources for the Corporation.

“Retires” or “Retirement” means, for purposes of this Agreement, Grantee’s retirement from LNC or a subsidiary at age 55 or older with at least five years of Service (with LNC or a subsidiary).

“Service” means, for purposes of this Agreement, service as a common law employee or planner with a full-time agent’s contract with LNC or any Subsidiary.

“Subsidiary” means, for purposes of this Agreement, any corporation in which LNC has ownership of at least twenty-five percent.

“Total Disability” means, as determined by the Senior Vice President of Human Resources, 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.

IN WITNESS WHEREOF, the President and Chief Executive Officer of Lincoln National Corporation has signed this Agreement as of the day and year first above written.

LINCOLN NATIONAL CORPORATION

Dennis R. Glass

President and Chief Executive Officer

Exhibit 10.3

Delaware Investments U.S., Inc.

Incentive Compensation Plan

Restricted Stock Unit Award Agreement

This Restricted Stock Unit Award Agreement (the “Agreement”) is by and between Delaware Investments U.S., Inc., (“DIUS”) on behalf of itself and its affiliates (including Delaware Management Holdings, Inc. and its subsidiaries (“DMHI”), and Patrick P. Coyne (the “Grantee”), and evidences the grant on February 7, 2008 of Restricted Stock Units to Grantee, and Grantee’s acceptance of the Restricted Stock Units in accordance with the provisions of the Amended and Restated Delaware Investments U.S., Inc. Incentive Compensation Plan, effective November 5, 2007, and any amendments thereto (the “Plan”) and this Agreement. DIUS and Grantee agree as follows:

1. Number of Shares Granted . Grantee is awarded ________ Restricted Stock Units (“RSUs”) subject to the terms and restrictions as set forth in the Plan and in this Agreement. In the event an adjustment pursuant to Section 8(c) of the Plan is required, the number of RSUs awarded under this Agreement and/or the number of shares of common stock issued pursuant to RSUs granted under this Agreement shall be adjusted in accordance with Section 8(c) of the Plan. All RSUs after such adjustment (and/or shares of DIUS common stock issued or issuable pursuant to an RSU granted under this Agreement) shall be subject to the same restrictions applicable to such RSUs (and/or shares of DIUS common stock issued or issuable pursuant to an RSU granted under this Agreement) before the adjustment.

2. Restrictions . The RSUs granted pursuant to this Agreement shall be subject to the terms of the Plan and the following restrictions until such time as the restrictions shall lapse, as described in Paragraph 5 below: (a) neither the RSUs nor any interest or right therein or part thereof shall be sold, transferred, pledged, hypothecated, margined or otherwise encumbered by the Grantee; and (b) in the event that Grantee’s Service (as defined below) with DMHI, Lincoln National Corporation (“LNC”), and all subsidiaries terminates prior to the vesting dates set forth in subparagraph 5(a) below, other than under the circumstances described in subparagraphs 5(b) through (e) below, the RSUs shall be forfeited and automatically transferred back to DIUS. Upon forfeiture, Grantee shall have no further rights in such RSUs or shares of common stock issuable pursuant to an RSU granted hereunder.

For purposes of this Agreement, the term “Service” includes service as a common law employee of DMHI, LNC, or any subsidiaries.

3. Voting Rights . Grantee shall have no voting rights on the RSUs.

4. Compliance with Non-Competition, Non-Solicitation, Non-Disparagement and Non-Disclosure Provisions . Any RSUs may be cancelled by action of the Committee or its delegate if Grantee fails to comply with the non-competition, non-solicitation, non-disparagement and/or non-disclosure provisions described below during the vesting period described in subparagraphs 4(a) through (d) below. Upon vesting of a RSU granted pursuant to this Agreement, Grantee shall certify on a form acceptable to the Committee that Grantee is in compliance with the terms and conditions of the Plan, and with the provisions in subparagraphs 4(a) through 4(d) below. Failure to comply with these conditions prior to, or during the six months after vesting of a RSU granted pursuant to this Agreement shall cause the shares issued pursuant to the RSU granted hereunder to be rescinded, except as provided under the Plan

(b) Non-Solicitation . Grantee shall not directly or indirectly hire, manage, solicit or recruit any employees, agents, financial planners, salespeople, financial advisors, vendors or service providers of DMHI whom Grantee had hired, managed, supervised, or otherwise became familiar with as a result of his/her employment with DMHI.

(c) Non-Disparagement . Grantee shall not (i) make any public statements regarding his/her employment with DMHI (other than factual statements concerning the dates of employment and positions held) or his/her termination or retirement from DMHI that are not agreed to by DMHI, such approval not to be unreasonably withheld or delayed; and (ii) Grantee shall not disparage DMHI or any of its subsidiaries or affiliates, its and their respective employees, executives, officers, or Boards of Directors.

(d) Non-Disclosure . Grantee shall not, without prior written authorization from DMHI, disclose to anyone outside DMHI or Lincoln National Corporation (“LNC”), or use in other than DMHI’s or LNC’s business, any information or material relating to the business of DMHI or LNC that DMHI or LNC considers confidential and/or proprietary pursuant to its Code of Conduct.

5. Vesting of Restricted Stock Units . Subject to Paragraph 4 above, the RSUs indicated below shall vest on the earlier of the following dates:

(a) [# units or ¼] on February 7, 2009;

[# units or ¼] on February 7, 2010;

[# Units or ¼] on February 7, 2011;

[# Units or ¼] on February 7, 2012; or

(b) The date on which the Grantee is certified as disabled and becomes eligible for long-term disability (“LTD”) benefits under a LTD program sponsored by DMHI or LNC; or

(d) The date on which a Change of Control occurs as that term is defined by Section 2(c) of the Plan pursuant to the definition in effect on the day immediately preceding such Change of Control; or

(e) The date Grantee’s position is job eliminated, as that term is defined under the LNC Severance Pay Plan, and Grantee no longer provides Service to DMHI, LNC, or any subsidiaries.

Unless a Restricted Stock Unit has been canceled or forfeited, a share of common stock of DIUS, shall be distributed to Grantee (or to Grantee’s estate) subject to the restrictions set forth in this Agreement, the Plan, the DIUS certificate of incorporation, by-laws, and applicable law as soon as practicable after vesting, but in no event later than March 15 th of the calendar year following the calendar year in which the RSU has vested. The appropriate officer or agent of DIUS shall create a book entry account in the name of the Grantee, to which shares of DIUS common stock representing the RSUs shall be credited.

6. Ownership . Grantee is required to and agrees to maintain ownership of at least seventeen (17%) percent of the gross vested RSUs at all times.

7. Tax Withholding . Grantee must remit to DMHI (or if directed by DMHI, to DIUS) an amount equal to any tax withholding required by federal, state, or local law on the value of the RSUs at such time as they are taxable to Grantee. Grantee may elect, in accordance with procedures established by the Committee, to surrender shares of DIUS common stock (including the shares which are a part of this award) with a fair market value on the date of surrender that satisfies all or part of the withholding requirements.

8. Investment Intent . Grantee is acquiring the RSUs and the underlying DIUS common stock for investment only and without any present intention to sell or distribute them to others in violation of any law, rule or regulation, and by Grantee’s signature below, Grantee hereby certifies the foregoing. Neither the RSUs nor the underlying shares of common stock have been registered under the Securities Act of 1933, as amended (the "Act"), or any applicable state securities laws and, therefore, they cannot be sold unless they are subsequently registered under the Act and such state laws or an exemption from such registration is available. Grantee agrees not to sell or otherwise transfer the RSUs or the underlying shares of common stock unless such transfer is made (i) pursuant to a registration statement under the Act and applicable state securities laws or in accordance with an exemption from the registration requirements of the Act and any applicable state securities laws, and (ii) in accordance with the restrictions on transfer contained in the Plan and DIUS' certificate of incorporation, as amended from time to time, and its bylaws.

The shares underlying the common stock shall not be issued with respect to RSUs unless the issuance and delivery of such common stock shall comply with all relevant provisions of state and federal laws, rules and regulations, and, in the discretion of the DIUS, shall be further subject to the approval of counsel for DIUS with respect to that compliance. Grantee acknowledges that shares of common stock issued pursuant to RSUs granted hereunder may be uncertificated. Grantee consents to the imposition of a legend on the certificate (if any) or such other document as determined by DIUS representing the underlying shares of common stock and restricting their transferability as may be required by the Plan, DIUS' certificate of incorporation and bylaws and applicable laws, rules and regulations.

9. Incorporation of Plan Terms . This Award is subject to the terms and conditions of the Plan, including the right of DMHI or DIUS to call shares of DIUS stock under section 4(d) of the Plan. Such terms and conditions of the Plan are incorporated into and made a part of this Agreement by reference. In the event of any conflicts between the provisions of this Agreement and the terms of the Plan, the terms of the Plan will control. Capitalized terms used but not defined in the Agreement shall have the meanings set forth in the Plan unless the context clearly requires an alternative meaning.

IN WITNESS WHEREOF, LNC, by its duly authorized officer has signed this Agreement as of the effective date set out above. The terms and provisions of this Agreement are acknowledged and agreed to by Grantee, as evidenced by his or her signature below.

DELAWARE INVESTMENTS U.S., INC.

By:

Philip N. Russo

Executive Vice President

Agreed and Acknowledged by Grantee:

By: ______________________