On July 10, 2009, Lincoln National Corporation ("LNC") entered into a Letter Agreement, which includes the Securities Purchase Agreement - Standard Terms (collectively, the "Purchase Agreement"), and a related side letter (the "Side Letter") with the United States Department of the Treasury (the "Treasury"), as part of the Capital Purchase Program (the "CPP"). Pursuant to the Purchase Agreement, LNC issued and sold (i) 950,000 shares of LNC's Fixed Rate Cumulative Perpetual Preferred Stock, Series B (the "Preferred Stock") and (ii) a warrant (the "Warrant") to purchase 13,049,451 shares of LNC common stock, no par value per share ("Common Stock"), for an aggregate purchase price of $950,000,000 in cash.

The following summary of the terms of the Purchase Agreement, the Side Letter, the Preferred Stock, the Warrant and Form of Waiver is not intended to be complete and is qualified in its entirety by reference to the Purchase Agreement, the Side Letter, the Articles of Amendment (as defined below), the Warrant and the Form of Waiver, which are attached hereto as Exhibits 10.1, 10.2, 3.1, 4.1 and 10.3 respectively, and are incorporated herein by reference.

The Preferred Stock has a liquidation preference of $1,000.00 per share and will pay cumulative dividends at the rate of 5% per year for the first five years and 9% per year thereafter. Although the Articles of Amendment provide that LNC may not redeem the Preferred Stock during the first three years after its issuance except with the proceeds from a "Qualified Equity Offering" (as defined in the Articles of Amendment filed as Exhibit 3.1 hereto), the Side Letter provides that LNC shall be permitted to repay the Preferred Stock in accordance with the American Recovery and Reinvestment Act of 2009, as amended, and any rules and regulations thereunder. The repurchase or redemption price of the Preferred Stock is equal to the liquidation amount plus accrued and unpaid dividends. Under current guidance and the Purchase Agreement, when the Preferred Stock is repaid, LNC may repurchase the Warrants at "fair market value" as defined in the Purchase Agreement. The Side Letter and current guidance provide that, if LNC does not choose to exercise its option to repurchase the Warrants in conjunction with the repurchase of the Preferred Stock, the Treasury shall liquidate the Warrants associated with such Preferred Stock.

The Preferred Stock ranks senior to LNC's Common Stock and pari passu with LNC's outstanding preferred stock and will rank pari passu with any other future preferred stock (excepting any future preferred stock that by its terms ranks junior to any other preferred stock).

The Preferred Stock is generally non-voting, except for class voting rights on the issuance of shares ranking senior to the Preferred Stock, amendments to the rights of the holders of Preferred Stock or any merger, exchange or similar transaction which would adversely affect the rights of the holders of the Preferred Stock. In addition, if dividends on the Preferred Stock have not been paid in full for an aggregate of six quarterly dividend periods or more, whether consecutive or not, the holders of the Preferred Stock, voting together with holders of any then outstanding voting parity stock, will have the right to elect two directors.

The Warrant has a 10-year term and is immediately exercisable upon its issuance, with an exercise price, subject to adjustment pursuant to anti-dilution provisions, equal to $10.92 per share of Common Stock. If LNC receives aggregate gross cash proceeds of not less than $950,000,000 from Qualified Equity Offerings on or prior to December 31, 2009, the number of shares of Common Stock issuable pursuant to the Treasury's exercise of the Warrant will be reduced by one half of the original number of shares, taking into account all adjustments, underlying the Warrant. Pursuant to the Purchase Agreement, the Treasury has . . .

The information set forth under "Item 1.01. Entry into a Material Definitive Agreement" is incorporated herein by reference.

The information set forth under "Item 1.01. Entry into a Material Definitive Agreement" is incorporated herein by reference.

The information set forth under "Item 1.01. Entry into a Material Definitive Agreement" is incorporated herein by reference.

On July 9, 2009, LNC filed Articles of Amendment (the "Articles of Amendment") with the Indiana Secretary of State for the purpose of amending its Restated Articles of Incorporation to establish the designations, preferences, limitations and relative rights of the Preferred Stock. The information set forth under "Item 1.01. Entry into a Material Definitive Agreement" is incorporated herein by reference.

On July 10, 2009, LNC issued a press release announcing the consummation of the transaction described above under "Item 1.01. Entry into a Material Definitive Agreement." A copy of the press release is attached hereto as Exhibit 99.1.

(d) Exhibits.

Exhibit
Number   Description

  3.1      Articles of Amendment to LNC's Restated Articles of
         Incorporation establishing the Preferred Stock

  4.1      Warrant for the Purchase of Shares of Common Stock

10.1 Letter Agreement, dated July 10, 2009, between LNC and the Treasury

10.2 Side Letter, dated July 10, 2009, between LNC and the Treasury

10.3 Form of Waiver

99.1 Press Release dated July 10, 2009