Supplement dated February 4, 1994
to Prospectus for
The Lincoln National Life Insurance Company
Agents' Savings and Profit-Sharing Plan
dated April 30, 1993
This Supplement supersedes the Supplement dated September
30, 1993.
(1) The following replaces the note on the cover page of
the Prospectus:
(NOTE: FOUR (4) OF THE THIRTEEN INVESTMENT OPPORTUNITIES
AVAILABLE TO PARTICIPATING AGENTS ARE HIGH-RISK COMMON STOCK
FUNDS. SEE PAGE 7 OF THE PROSPECTUS AND PAGES S-2 to S-5 OF THIS
SUPPLEMENT.)
(2) In connection with a recent two-for-one split of
Lincoln National Corporation Common Stock, the second sentence of
paragraph 1 on page 1 of the Prospectus is hereby deleted
and the following is substituted for it:
It also relates to 1,600,000 shares of Common Stock of
Lincoln National Corporation, being offered and sold to eligible
agents of The Lincoln National Life Insurance Company and its
affiliates who participate in the Plan (singly, an 'Agent';
collectively, the "Agents"). The last sentence on page 3 is
replaced with the following:
(3) Under the Prospectus Hearing "Investment of
Contributions," the description of Fund number 1, LNC Common
Stock Fund, is hereby amended in its entirety, and as amended
reads as follows:
1. LNC Common Stock Fund, which invests in shares of
LNC Common Stock, without par value ("Common Stock" or "LNC
Common Stock"). A fund such as the LNC Common Stock Fund which
invests in the stock of a single issuer is not diversified and
therefore is a riskier investment than a fund which invests in a
diversified pool of stocks of companies with similar
characteristics as the LNC Common Stock.
(4) Under the Prospectus Heading "Investment of
Contributions," the first sentence in the description of Fund
number 8, the Government/Corporate Bond Fund, is hereby deleted
in its entirety and replaced by the following:
8. Government/Corporate Bond Fund, which invests
directly or indirectly in Corporate and U.S. Government bonds,
and mortage-backed securities.
(5) To correct a definition, the final sentence of
sub-paragraph 1 under "Agent Loans" is hereby deleted and
replaced by the following:
VESTED ACCOUNT is defined to mean the value of Pre-Tax
Contributions, After-Tax Contributions, Vested Employer
Contributions (if any), and the Rollover Account.
(6) The names of five of the available investment Funds
have been changed; however, the investment objectives and focus
of those Funds remain unchanged. Under the Prospectus heading
"Investment of Contributions" and wherever else in the Prospectus
the names of the Funds appear, the following new names are
substituted for the old ones:
New Name Old Name
Short Term Fund Short Term/Money
Market Fund
Government/Corporate Bond Fund Corporate Bond Fund
Large Capitalization Equity Fund Select Equity Fund
Core Equity Fund Growth Equity/Common
Stock Fund
Medium Capitalization Equity Fund Special Opportunities Fund
(7) The last sentence on page 3 is replaced with the
following:
Such requests should be made to C. Suzanne Womack, Secretary,
Lincoln National Corporation, 200 East Berry Street, Fort Wayne,
Indiana 46802-2706, telephone: (219) 455-3271.
(8) The address of principal executive officers of LNC in
the third paragraph on page 4 is replaced with the following:
200 East Berry Street, Fort Wayne, Indiana 46802-2706
(9) The amount of compensation which may be taken into
account and listed in paragraph 3 of page 7 is changed for 1994
to $150,000. In addition, Agent's contributions may not exceed
$9,240 for calendar year 1994.
(10) Effective April 1, 1994 the following funds are added
to the numerical list ending at page 8:
9. Value Equity Fund, which directly or indirectly
primarily invests in large capitalization stocks of conservative
companies who are leaders in their industries. This is a
conservative stock account. Therefore, investments in this
account are not as risky as investments in aggressive equity
accounts because the account invests in stocks of large,
well-known companies that are bought at low prices but which
have strong earnings power. The Trustee currently holds a group
annuity contract issued by LNL which provides for contributions
to an LNL segregated investment account whose investment
objectives are the same as those of the Value Equity Fund.
10. International Equity Fund, which directly or
indirectly invests in stocks of non-United States companies. The
International Equity Fund is an aggressive equity account which
is a high-risk investment in non-U.S. stocks involving the same
type of risk as in domestic aggressive equity stocks
but bears an additional risk factor because of changes in the
exchange rates between U.S. dollars and foreign currencies and
other variables associated with international. The Trustee
currently holds a group annuity contract issued by LNL which
provides for contributions to an LNL segregated investment
account whose investment objectives are the same as those of the
International Equity Fund.
11. High Yield Bond Fund, which directly or indirectly
primarily invests in below-investment-grade bonds. This is a
high-risk fund as there is greaterl risk in investing in this
fund than in the Government/Corporate Bond Fund because this
fund invests in lower quality bonds (commonly known as "junk
bonds") and there is a higher chance that the issuer will not be
able to repay the promised interest or principal. The Trustee
currently holds a group annuity contract issued by LNL which
provides for contributions to an LNL segregated investment
account whose investment objectives are the same as those of the
High Yield Bond Fund.
12. Small Capitalization Equity Fund, which directly
or indirectly primarily invests in stocks of small companies
which have the potential to grow rapidly and produce superior
returns. This Fund is an aggressive equity account that has
higher risk than investments in large- and medium-sized
companies. The additional risk over that associated with other
common stock funds may result in greater returns. The Trustee
currently holds a group annuity contract issued by LNL which
provides for contributions to an LNL segregated investment
account whose investment objectives are the same as those of the
Small Capitalization Equity Fund.
13. Balanced Fund, which directly or indirectly
primarily invests in three different assets classes: stocks,
bonds, and money market instruments. Because the Balanced Fund
contains a wide variety of investments, it has a correspondingly
wide variety of risk characteristics across those securities. A
wide variety of risk characteristics means that balanced accounts
can have less volatility over time than a fund which invests in
only one type of security. The Balanced Fund is riskier than a
pure bond account but less risky than a conservative stock
account. The Trustee currently holds a group annuity contract
issued by LNL which provides for contributions to an LNL
segregated investment account whose investment objectives
are the same as those of the Balanced Fund.
(11) The investment table on page 10 is modified by
eliminating the entry for the Guaranteed Fund and inserting
instead the following:
COMPARATIVE PERFORMANCE OF INVESTMENT FUNDS
[Percentage Increase/(Decrease) in Value of Investments,
Assuming Such Investments Were Held in Each Fund for a Plan
Year](1)
Investment Plan Year
Fund 1987 1988 1989 1990 1991 1992
Guaranteed Fund(4) 8.76% 9.49% 9.26% 8.95% 8.70% 8.15%
New Footnote (4):
(4) Effective April 1, 1994, the rate which is guaranteed
is no longer guaranteed for twelve (12) months, but rather just
for the calendar quarter in which the investment is received.
Monies invested in quarters beginning prior to April 1, 1994, are
guaranteed at a minimum to be credited with a rate of interest
not less than the guaranteed rate on those monies for the
remainder of the period of the existing guarantee.
(12) The special caution at the bottom of page 10 is
changed to read as follows:
RISK FACTORS
BECAUSE OF FLUCTUATIONS IN THE STOCK MARKET WHICH ARE GENERALLY
INHERENT IN COMMON STOCK INVESTING, IT SHOULD BE NOTED THAT
INVESTMENT IN EQUITY (I.E., STOCK) FUNDS IS GENERALLY MORE RISKY
THAN INVESTMENT IN BOND FUNDS, THE SHORT TERM FUND OR THE
GUARANTEED FUND.
Investing in Foreign Securities. Investments in foreign
securities involve risks that are different in some respects from
investments in securities of U.S. issuers, such as the risk of
fluctuations in the value of the currencies in which they
are denominated; the risk of adverse political and economic
developments; and, with respect to certain countries, the
possibility of expropriation, nationalization, or confiscatory
taxation of limitations on the removal of funds or other assets
of the particular fund in question. Securities of some
foreign countries are less liquid and more volatile than
securities of comparable domestic companies.
There may be less publicly available information about
foreign issuers than domestic issuers, and foreign issuers
generally are not subject to the uniform accounting, auditing and
financial reporting standards, practices and requirements
applicable to domestice issuers. Delays may be encountered in
settling securities transactions in certain foreign markets and
the fund in question will incur cost in converting foreign
currencies into U.S. dollars.
Custody charges are generally higher for foreign securities.
Special currency-hedging strategies may also be necessary as the
relationship of the foreign issuer's currency to the U.S. dollar
changes.
High-Yield/High Risk Bonds. Lower-rated bonds involve a
higher degree of credit risk (the risk that the issuer will not
make interest or principal payments when due). In the event of
an unanticipated default, the Fund in question would
experience a reduction in its income, and could expect a decline
in the market value of the securities so affected. During an
economic downturn or substantial period of rising interest
rates, highly-leveraged issuers may experience financial stress
which would adversely affect their ability to service their
principal and interest payment obligations, to meet
projected business goals, and to obtain additional financing.
The market prices of lower-grade securities are generally
less sensitive to interest rate changes than higher rated
investments, but more sensitive to adverse economic or political
changes, or in the case of corporate issuers, individual
corporate developments. Periods of economic or political
uncertainty and change can be expected to result in volatility of
prices of these securities. Since the last major economic
recession, there has been a substantial increase in the use of
high-yield debt securities to fund highly-leveraged corporate
acquisitions and restructurings, so past experience with
high-yield securities in a prolonged economic downturn may not
provide an accurate indication of future performance during
such periods. Lower-rated securities may also have less
liquid markets than higher-rated securities, and their liquidity
as well as their value may be negatively affected by adverse
economic conditions. Adverse publicity and investor
perceptions, as well as new or proposed laws, may also have a
negative impact on the market for high-yield/high-risk bonds.
Finally, unrated debt securities--including sovereign debt
of foreign governments--may also be deemed high-risk securities
by the fund in question.
(13) The business address of the members of the Benefits
Investment Committee is changed for Fort Wayne as follows:
200 East Berry Street, Fort Wayne, Indiana 46802-2706.
PLEASE KEEP THIS SUPPLEMENT WITH YOUR COPY OF THE PROSPECTUS
FOR FUTURE REFERENCE.
THIS SUPPLEMENT IS DATED FEBRUARY 4, 1994.
