As filed with the Securities and Exchange Commission on April 4, 1994
Registration No. 33-4711
SECURITIES AND EXCHANGE COMMISSION
POST-EFFECTIVE AMENDMENT NO. 8 TO THE
REGISTRATION STATEMENT ON FORM S-1 UNDER THE
SECURITIES ACT OF 1933
(WITH S-3 INFORMATION ABOUT LINCOLN NATIONAL CORPORATION)
Lincoln National Corporation The Lincoln National Life Insurance
(Exact name of registrant as Company Agents' Savings and
specified in its charter) Profit-Sharing Plan
(Exact name of registrant
as specified in its charter)
Indiana Indiana
(State of Incorporation) (State of Incorporation)
35-1140070 35-0472300
(I.R.S. Employer (I.R.S. Employer
Identification No.) Identification No.)
200 E.Berry Street 1300 South Clinton Street
Fort Wayne, Indiana 46802 Fort Wayne, Indiana 46802
(219)455-2000 (219)455-2000
(Address, including zip code and (Address, including zip code and
telephone number, including area telephone number, including area
code of registrant's principal code of registrant's principal
executive offices) executive offices)
Jack D. Hunter
200 E. Berry Street
Fort Wayne, Indiana 46802
(219)455-2000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in
connection with dividend or interest reinvestment plans, check the
following box. [ X ]
Pursuant to Rule 429 of the General Rules and Regulations under the
Securities Act of 1933, as amended, the Prospectus contained in this
Registration Statement will also be used in connection with the
securities registered pursuant to Registration Statements Nos. 2-91708
and 2-83029.
<PAGE>
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY AGENTS'
SAVINGS AND PROFIT-SHARING PLAN
POST-EFFECTIVE AMENDMENT No. 8
Cross Reference Sheet
Showing Location in Prospectus of Information Required by Items of
Form S-1 Pursuant to Item 501(b) of Regulation S-K.
Item of Form S-1 Location in Prospectus
Item 1. Forepart of the Registration Forepart of the Registration
Statement and Outside Front Statement and Front Cover Page of
Cover Page of Prospectus Prospectus
Item 2. Inside Front and Outside Back Inside Front Cover Page of
Cover Pages of Prospectus Prospectus
Item 3. Summary Information, Risk GENERAL INFORMATION
Factors and Ratio of Earnings
to Fixed Charges
Item 4. Use of Proceeds SUMMARY OF THE PLAN -- Investment
of Contributions
Item 5. Determination of Offering Price Not Applicable
Item 6. Dilution Not Applicable
Item 7. Selling Security Holders Not Applicable
Item 8. Plan of Distribution SUMMARY OF THE PLAN -- Sale of
Stock to the Trustee
Item 9. Description of Securities to SUMMARY OF THE PLAN
be Registered
Item 10. Interests of Named Experts Not Applicable
and Counsel
Item 11. Information with Respect to SUMMARY OF THE PLAN
the Registrant
Item 12. Disclosure of Commission INDEMNIFICATION OF OFFICERS,
Position on Indemnification DIRECTORS, EMPLOYEES AND AGENTS
for Securities Act Liabilities
<PAGE>
LINCOLN NATIONAL CORPORATION
Cross Reference Sheet
Showing Location in Prospectus of Information Required by Items of Form
S-3 Pursuant to Item 501(b) of Regulation S-K.
Item of Form S-3 Location in Prospectus
Item 1. Forepart of the Registration Forepart of the Registration
Statement and Front Cover Page Statement and Front Cover
of Prospectus Page of Prospectus
Item 2. Inside Front and Outside Back Inside Front and Outside Back
Cover Pages of Prospectus Cover Pages of Prospectus
Item 3. Summary Information, Risk GENERAL INFORMATION
Factors and Ratio of Earnings
to Fixed Charges
Item 4. Use of Proceeds Not Applicable
Item 5. Determination of Offering Not Applicable
Price
Item 6. Dilution Not Applicable
Item 7. Selling Security Holders Not Applicable
Item 8. Plan of Distribution SUMMARY OF THE PLAN -- Sale of
Stock to the Trustee
Item 9. Description of Securities to LINCOLN NATIONAL CORPORATION
be Registered COMMON STOCK
Item 10. Interests of Named Experts Not Applicable
and Counsel
Item 11. Material Changes Not Applicable
Item 12. Incorporation of Certain INCORPORATION OF ADDITIONAL
Information by Reference DOCUMENTS BY REFERENCE
Item 13. Disclosure of Commission INDEMNIFICATION OF OFFICERS,
Position on Indemnification DIRECTORS, EMPLOYEES AND
for Securities Act Liabilities AGENTS
<PAGE>
THE LINCOLN NATIONAL
LIFE INSURANCE COMPANY
1300 South Clinton Street
Fort Wayne, Indiana 46802
(219)455-2000
AGENTS' SAVINGS AND PROFIT-SHARING PLAN
Offering
LINCOLN NATIONAL CORPORATION
Common Stock
Without Par Value
This amended Prospectus relates to 20,000,000 "Plan Interests" in The
Lincoln National Life Insurance Company Agents' Savings and Profit-Sharing
Plan (the Plan) registered by the initial Registration Statement on April 30,
1986. 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"). A previous registration is still in
effect with respect to the above-mentioned shares of Lincoln National
Corporation Common Stock.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION NOR HAS THE
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
(NOTE: FOUR (4) OF THE THIRTEEN INVESTMENT OPPORTUNITIES
AVAILABLE TO PARTICIPATING AGENTS ARE HIGH-RISK
COMMON STOCK FUNDS. SEE PAGE 7
OF THE PROSPECTUS.)
No person is authorized to give any information or to make any
representation not contained in this Prospectus and, if given or made, such
information or representation must not be relied upon as having been
authorized by Lincoln National Corporation or the Plan. This Prospectus does
not constitute an offer to sell or the solicitation of an offer to buy any of
the securities offered hereby in any jurisdiction to or from any person to
whom it is unlawful to make or solicit such offer in such jurisdiction.
Neither the delivery of this Prospectus nor any sale made hereunder shall
under any circumstances create any implication that there has or has not been
any change in the information contained herein since the date hereof.
The date of this Prospectus is April 30, 1994.
<PAGE>
TABLE OF CONTENTS
Page
GENERAL INFORMATION . . . . . . . . . . . . . . . . .
SUMMARY OF THE PLAN . . . . . . . . . . . . . . . . .
Purpose . . . . . . . . . . . . . . . . . . . . .
Eligibility and Participation . . . . . . . . . .
Agent Contributions . . . . . . . . . . . . . . .
Rollover Contributions. . . . . . . . . . . . . .
Suspension of Agent Contributions . . . . . . . .
Employer Contributions. . . . . . . . . . . . . .
Limitations on Contributions. . . . . . . . . . .
Investment of Contributions . . . . . . . . . . .
Valuation of Investments. . . . . . . . . . . . .
Expenses of the Plan. . . . . . . . . . . . . . .
Vesting . . . . . . . . . . . . . . . . . . . . .
Accounts. . . . . . . . . . . . . . . . . . . . .
Withdrawals . . . . . . . . . . . . . . . . . . .
Agent Loans . . . . . . . . . . . . . . . . . . .
Distributions . . . . . . . . . . . . . . . . . .
Vested Amounts . . . . . . . . . . . . . . .
Death, Disability, Retirement or
Termination of Service. . . . . . . . . .
Fractional Shares . . . . . . . . . . . . . . . .
Employer Contribution Account . . . . . . . . . .
Automatic Crediting of Account Balances. . .
Withdrawals from the Retirement Option
Account. . . . . . . . . . . . . . . . . .
Investment of Contributions . . . . . . . .
Beneficiary Designation . . . . . . . . . . . . .
Assignment. . . . . . . . . . . . . . . . . . . .
Amendment or Termination. . . . . . . . . . . . .
Administration of the Plan. . . . . . . . . . . .
Trustee. . . . . . . . . . . . . . . . . . .
Plan Administrator . . . . . . . . . . . . .
Voting of Shares. . . . . . . . . . . . . . . . .
Federal Income Tax Consequences . . . . . . . . .
Tax and Withholding . . . . . . . . . . . . . . .
Employee Retirement Income Security Act of 1974 .
Sale of Stock to the Trustee. . . . . . . . . . .
Agent's Rights Under ERISA. . . . . . . . . . . .
Participation Interests Are Securities. . . . . .
Financial Statements. . . . . . . . . . . . . . .
LINCOLN NATIONAL CORPORATION COMMON STOCK . . . . . .
Dividend Rights . . . . . . . . . . . . . . . . .
Voting Rights . . . . . . . . . . . . . . . . . .
Liquidation Rights. . . . . . . . . . . . . . . .
Pre-emptive Rights . . . . . . . . . . . . . . .
Assessment. . . . . . . . . . . . . . . . . . . .
Modification of Rights. . . . . . . . . . . . . .
Other Provisions. . . . . . . . . . . . . . . . .
INDEMNIFICATION OF OFFICERS, DIRECTORS, EMPLOYEES
AND AGENTS. . . . . . . . . . . . . . . . . . . .
EXPERTS . . . . . . . . . . . . . . . . . . . . . . .
LEGAL OPINION . . . . . . . . . . . . . . . . . . . .
INCORPORATION OF ADDITIONAL DOCUMENTS . . . . . . . .
INDEX TO FINANCIAL STATEMENTS . . . . . . . . . . . .
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<PAGE>
Lincoln National Corporation is subject to the informational
require- ments of the Securities and Exchange Act of 1934 and in accordance
therewith files reports and other information with the Securities and
Exchange Commission. Such reports, proxy statements and other information
can be inspected and copied at the Commission's Public Reference Room: 450
Fifth Street, N.W., Room 1024, Washington, D.C.; and at certain of its
Regional Offices located at Room 1204, Everett McKinley Dirksen Building,
219 South Dearborn Street, Chicago, Illinois 60604; and at the Federal
Building, 75 Park Place, Room 1228, New York, New York 10007. Copies of
these materials may also be obtained from the Commission at prescribed
rates by mailing a request to the Public Reference Branch, Securities and
Exchange Commission, Washington, D.C. 20549. Such reports, proxy
statements and other informa- tion can also be inspected at the offices of
the New York, Midwest, Pacific, London and Tokyo Stock Exchanges. In
addition, Lincoln National Corporation will provide without charge to each
person to whom this Prospectus is delivered, upon written or oral request
of such person, a copy of any and all of the information that has been
incorporated by reference into this Prospectus (excluding unincorporated
exhibits) but not delivered with it. 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.
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<PAGE>
GENERAL INFORMATION
The Plan was first adopted by the Board of Directors of The Lincoln
National Life Insurance Company (the "Company") on May 11, 1978, effective
January 1, 1979, for the benefit of eligible Agents of the Company and any
participating affiliates, sometimes collectively referred to in this
Prospectus as "Employers". However, as of the date of this Prospectus, the
Company was the only "Employer".
The Plan enables eligible Agents serving the Employer as independent
contractors a convenient and systematic method of saving. Under the Plan
there are eight investment funds, one of which is the Lincoln National
Corporation ("LNC") Stock Fund (see "Investment of Contributions").
Norwest Bank Fort Wayne, N.A., Fort Wayne, Indiana, is the Trustee of the
Plan (see "Administration of the Plan - Trustee").
LNC, an Indiana corporation, is an insurance holding company which
provides through its subsidiaries and on a national basis life and health
insurance and annuities, property-casualty insurance, reinsurance and other
financial services. The Lincoln National Life Insurance Company, LNC's
largest subsidiary, is one of the largest stockholder-owned life insurers
in the United States. The principal executive offices of LNC are at 200
East Berry Street, Fort Wayne, Indiana 46802-2706. Its telephone number
is (219)455-2000.
The major features of the Plan, as amended, are described below. The
statements contained in this Prospectus concerning the Plan are brief
summaries and are qualified in their entirety by reference to the terms of
the Plan itself. Copies of the Plan may be examined by eligible Agents and
their beneficiaries upon request at the principal executive offices of the
Company.
SUMMARY OF THE PLAN
Purpose
The purpose of the Plan is to encourage and assist eligible Agents in
adopting a regular savings and investment program and to help provide
additional security for their retirement.
Eligibility and Participation
Agents who are at least 21 years of age and have completed one
Eligibility Year of Service are qualified to participate in the Plan. An
Agent is an independent contractor classified by an Employer as a full-time
life insurance salesman under the Federal Insurance Contributions Act and
operating under a contract directly with an Employer. This definition does
not include any person who is a party to a subsidy or an advance agreement
V10N0XLU/8/LCT
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<PAGE>
with an Employer. An Eligibility Year of Service is the first twelve-month
period in which an Agent has completed at least 22 weeks of service. If
22 weeks of service are not completed in the initial twelve-month period,
an Eligibility Year of Service will be any calendar year (including the
calen- dar year next following an Agent's first day of service) in which
the Agent has completed at least 22 weeks of service. For purposes of
determining eligibility, service includes any service as an employee of the
Company or of an affiliate.
An eligible Agent may become a participant in the Plan by filing an
appropriate enrollment form with the Plan Administrator (see "Plan Admini-
strator") which designates his rate of pre-tax contributions (minimum 1%),
the manner in which his contributions are to be invested (see "Investment
of Contributions"), and a beneficiary to receive benefits under the Plan
in the event of the Agent's death. The enrollment form also authorizes the
Employers to reduce an Agent's earned commissions for his contributions.
Enrollment forms are available from the Company's Benefit Section. Parti-
cipation in the Plan will become effective on the Enrollment Date (which
is defined as January 1, April 1, July 1, or October 1) next following (by
at least 10 days) the date the form is received by the Plan Administrator.
As of November 5, 1994, there were 1298 Agents eligible to
participate in the Plan, and 869 Agents actually participating in the Plan.
PARTICIPATION IN THE PLAN IS ENTIRELY VOLUNTARY, AND
THE EMPLOYERS MAKE NO RECOMMENDATIONS AS TO WHETHER ANY
ELIGIBLE AGENT SHOULD OR SHOULD NOT PARTICIPATE.
Agent Contributions
A participating Agent may make pre-tax contributions at a rate of at
least 1%, but not more than 15%, of his earned commissions. The Agent
consents to this reduction of compensation in his enrollment form.
[Effective January 1, 1989, the Plan stopped accepting after-tax
contributions. After-tax contributions to the Plan prior to that date
remain in the Plan.]
Contributions must be made in whole multiples of 1%. An Agent may
change the rate of contributions on any payday, by completing a new
enrollment card with his Employer within ten working days prior to that
payday.
Rollover Contributions
Upon application and prior consent of the Benefits Investment
Committee, a participating Agent may make a Rollover Contribution to the
Plan, in the form and manner required by the Plan and the Code.
V10N0XLU/9/LCT
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<PAGE>
Suspension of Agent Contributions
A participating Agent, upon written notice to the Plan Administrator,
may suspend contributions to the Plan. An Agent who suspends contributions
may again begin contributing to the Plan only upon executing and filing a
new enrollment form (see "Eligibility and Participation").
Employer Contributions
Employer contributions will be made solely out of accumulated profits
and earnings. The Employer will make a contribution based on the ratio of
the percentage increase in LNC Common Stock book value to the average
percentage increase in book value of a peer group of companies as selected
by the Board of Directors prior to the end of the first quarter of each
plan year. This ratio will be determined annually for purposes of the Plan
by the Board of Directors. (See Item B, below, for Employer Contributions
for 1992 transition year.)
The Employer will contribute an amount determined from the following
schedule for each dollar contributed up to 6% of eligible commissions each
pay period:
Percentage Increase in LNC
Book Value as a Percentage of
Peer Group Average Increase Employer Contribution
100% or less $ .25
110% .50
120% .75
130% 1.00
140% 1.25
150% 1.50
In the event that the book value comparison falls between the
increments noted in the schedule above, the Employer contribution will be
adjusted proportionately. For example, if the comparison is 124%, the
Employer contribution will be $.85.
The minimum Employer contribution ($.25) will be made each pay period.
Any additional Employer contribution necessary to bring the total employer
contribution to the level noted above will be made in a lump sum following the
annual determination of the ratio of percentage increase. To be eligible for
this additional amount, the individual must have been either a full time life
insurance salesman or an employee on the last day of the plan year for which
the contribution is being made.
Agents who terminated due to death, disability, or retirement are deemed
not to have terminated for purposes of this section.
Limitations on Contributions
It may be necessary to amend the Plan from time to time in order to
establish and maintain its qualified status under the Internal Revenue Code of
1986, as amended (the "Code"). These amendments may cause prospective
reductions to the Agent and Employer contributions.
V10N0XLU/10/LCT
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<PAGE>
The Plan (and other similar plans maintained by the Employer), must meet
specified non-discrimination rules as established by the Internal Revenue
Service ("IRS"). The IRS has established these rules to assure that the Plan
does not favor higher paid Agents. If it is determined that the Plan
(separately or, at the Employer's option, when combined with other plans
maintained by the Employer) is not in compliance and does not meet the non-
discrimination rules, adjustments may be necessary and may require that the
Plan Administrator revoke or modify the Agent's election to make
Contributions, or direct the Employer to delay payment of Agent Pre-Tax
Contributions for a period not to exceed 30 days past the end of the Plan Year
in question.
If the foregoing limits are exceeded, then, first, in order to reduce the
excess, the Plan Administrator will reduce the amount of employer con-
tributions for that year to the extent necessary to eliminate the excess; and,
if additional adjustments are required, the Plan Administrator will then
reduce the Agent's contributions for that year, to the extent necessary to
eliminate the excess. Excess Agent contributions and non-forfeitable Employer
contributions will be refunded and forfeitable excess Employer contributions
will be held in a suspense account to reduce the amount of Employer
contributions under the Plan due thereafter, or, if the Plan is terminated,
the excess amount will be allocated pro rata to the other Agents participating
in the Plan as of the date of Plan termination.
Notwithstanding the foregoing, during any calendar year, the sum of the
Agent's pre-tax contributions and employer contributions may not exceed the
lesser of 25% of the Agent's taxable income or $30,000. In addition, the
maximum amount of compensation to be taken into account in determining
benefits under the Plan may not exceed $150,000.00 for 1994, and the Agent's
contributions may not exceed $9,240.00 for calendar year 1994. The figures
for calendar year 1994 may also change, depending upon certain cost-of-living
adjustments.
Investment of Contributions
ALL CONTRIBUTIONS UNDER THE PLAN WILL BE HELD IN TRUST FOR THE AGENTS.
ALL AGENTS' PRE-TAX AND AFTER-TAX [IF ANY] CONTRIBUTIONS (AND EARNINGS
THEREON) WILL BE INVESTED BY THE TRUSTEE IN ONE OR MORE OF THE FOLLOWING FUNDS
AT THE DIRECTION OF THE AGENT:
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.
2. Government Bond Fund, which directly or indirectly
invests in fixed income securities issued by the U.S.
Government. The Trustee currently holds a group annuity
contract issued by The Lincoln National Life Insurance
Company ("LNL") which provides for contributions to an
LNL segregated investment account whose investment
objectives are the same as those of the Government Bond
Fund.
3. Guaranteed Fund, which invests primarily in contracts
which guarantee a rate of interest and principal. The
Trustee currently holds a group annuity contract issued
by LNL which is the primary asset of this Fund;
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<PAGE>
4. Core Equity Fund, which directly or indirectly primarily
invests in the common stock of established companies.
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 Core Equity
Fund;
5. Medium Capitalization Equity Fund, which directly or
indirectly primarily invests in the stock of new, rapid
growth companies. 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
Medium Capitalization Equity Fund. The current
description of that segregated account identifies it as
a high-risk, aggressive common stock fund.
6. Short Term Fund, which invests directly or indirectly
primarily in notes of government agencies and private
corporations. 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
Short Term Fund;
7. Large Capitalization Equity Fund, which directly or
indirectly invests primarily in high-risk common stocks
which have the potential for a significant appreciation
in value over an 18 to 24-month period. 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 Large Capitalization Equity Fund.
8. Government/Corporate Bond Fund, which invests directly or
indirectly in Corporate and U.S. Government bonds, and
mortgage-backed secuties.
9. Value Equity Fund, which directly or indirectly
primarily invests in large capitalization stocks of
conservative companies which 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 earning 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 investing. 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. There is greater risk in
investing in this fund than in the Government/Cor-
porate 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.
DEPENDING ON HIS OR HER INVESTMENT NEEDS AND OBJECTIVES, AN AGENT MAY
CONCENTRATE OR DIVERSIFY THE INVESTMENT OF DEPOSITS IN THE FUNDS LISTED
ABOVE. ANY DIRECTION BY AN AGENT FOR THE INVESTMENT OF DEPOSITS WILL BE
DEEMED A CONTINUING DIRECTION UNTIL CHANGED BY THE AGENT. THE TRUSTEE WILL
INVEST AN AGENT'S DEPOSITS IN THE SHORT TERM FUND IF NO
INVESTMENT DIRECTION IS IN EFFECT. ALL EMPLOYER CONTRIBUTIONS (AND
EARNINGS THEREON), WHEN MADE, WILL BE INVESTED BY THE TRUSTEE IN THE LNC
COMMON STOCK FUND.
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Distributions will generally be in cash or, in the case of the LNC
Common Stock Fund, in LNC Common Stock. The named fiduciary reserves the
right to direct the Trustee to make distributions of assets of the Trust
in kind (see "Distributions").
An Agent may terminate his election to invest in a particular Fund or
change investment selection for his future deposits by filing with the Plan
Administrator a written direction specifying such termination or change.
In addition, other than with respect to Employer contributions which have
not matured (been in the Plan for at least two plan years after the plan
year for which they were contributed), an Agent may, no more than once each
quarter, transfer part or all of the current Fund balances to another Fund
or Funds, subject to any limitations imposed by a particular fund. Forms
for making changes are available from the Company's Benefits Section. Any
such terminations, changes, or transfers permitted by this paragraph and
for which the Plan Administrator is given proper written direction, will
take effect on a date to be determined by the Plan Administrator, which,
under normal circumstances, will be the next valuation date following
receipt of the written direction. In the event market conditions restrict
the ability of the Trustee to comply with transfer requests, transfer
amounts will be pro-rated per each Participant making a transfer request.
This will be based on the total value of the amounts being requested for
transfer.
Amounts contributed to the Plan will be invested by the Trustee as soon
as reasonably possible after receipt, and in accordance with the Agent's
directions and the provisions of the Plan. Assets acquired under the Plan are
purchased primarily in the open market. In addition to purchasing LNC Common
Stock on the open market, the Trustee may from time to time purchase
authorized and unissued shares directly from LNC, or purchase outstanding
shares directly from LNC shareholders. Under the terms of the Plan certain
fees, commissions, and other expenses are charged to the Plan.
The election of investment Funds is the sole responsibility of the Agent
and should be made in light of his investment needs and objectives. The
following Table sets forth, for the various Investment Funds in the Plan, the
annualized yield earned on investments in those Funds (assuming the
reinvestment of dividends and interest, respectively) for the Plan Years 1987
through 1992. The comparison is based on past performance of the Investment
Funds and is not necessarily indicative of future performance.
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**** AGENTS -- PLEASE READ: This table has been prepared to assist you in
making your investment designations under the Plan. However, THE VALUE OF
THIS INFORMATION IS LIMITED, AND YOU SHOULD CONSULT A QUALIFIED INVESTMENT
ADVISER BEFORE MAKING YOUR DESIGNATIONS. ****
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)1
Investment Plan Year
Fund 1988 1989 1990 1991 1992 1993
LNC Common
Stock Fund 14.29% 46.17% (26.94%) 37.24% 37.51% 15.10%
Government
Bond Fund 5.35% 14.08% 8.33% 12.83% 6.81% 7.21%
Guaranteed Fund(4) 9.49% 9.26% 8.95% 8.70%
8.15% 7.25%
Growth Equity/Common
Stock Fund 9.85% 23.04% .40% 29.06% 2.00% 11.63%
Special Opportunities
Common Stock Fund 10.81% 35.15% 5.19% 55.43%
12.01% 12.71%
Short Term/Money
Market Fund 7.70% 9.29% 8.09% 5.95% 3.49% 2.97%
Select Equity
Fund2,3 N/A N/A N/A 48.05% 6.24% 10.88%
Corporate Bond Fund 8.16% 13.78% 6.31% 16.43%
7.25% 12.36%
Footnotes:
1) The yield information given here is measured by overall performance of
each Fund as if the investments were held for the entire Plan Year.
This table should not be compared to tables presented prior to April 30,
1986. For the 1989 and 1990 Plan Years, the last day of the Plan Year
was December 30. For all other years it is December 31.
2) This is a high-risk fund. See "Investment of Contributions", in this
Prospectus.
3) Effective January 1, 1991, the Plan began offering the Select Equity
Fund.
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.
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,
or of limitations on the removal of funds or other assets of the
particular fund in question. Securties of such 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 domestic issuers. Delays may be encountered
in settling securities transactions in certain foreign markets, and the
Fund in question will incur costs 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
realtionship 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 for lower-grade securities are generally less sensitive to
interest rate changes than are the prices for higher-rated investments, but
they are more sensitive to adverse economic or political changes (or, in the
case of corporate issuers, to 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.
V10N0XLU/14/LCT - 10 -
<PAGE>
Valuation of Investments
Securities authorized for investment under the Plan will be valued as of
the Valuation Date on the basis of (1) the closing price on an exchange on
which such securities are listed, (2) the average bid quotations for such
securities (3) quotations from other sources deemed by the Plan Administrator
to be reliable as fairly reflecting the market price or redemption price of
the securities, (4) the value as reported by an insurance company with respect
to a segregated investment account in which the Plan invests, or (5) the
average sale or purchase price of the securities when the Trustee is required
to sell or purchase securities on the open market to comply with the requests
of employees. A Valuation Date is the date following a payday, on which all
distributions, loans and transfers are processed but normally no longer than
14 days from the payday following receipt of the written request. The named
fiduciary may declare additional Valuation Dates throughout the year.
Expenses of the Plan
Expenses of administration of the Plan, including fees, brokerage
commissions and annuity sales charges, transfer taxes and other expenses
charged or incurred by the Trustee, will be paid out of the assets of the Plan
except to the extent paid by the Employers.
Vesting
An Agent is fully vested in his pre-tax contributions under the Plan at
all times.
Employer contributions vest based upon years of service:
Years of Service Percent Vested
1 0%
2 50%
3 or more 100%
A "year of service" means any calendar year in which the Agent is at
least 18 years of age and is either a full-time life insurance salesman or
an employee in the service of the Employer on the last day of that Plan
Year.
Accounts
The Trustee will establish and maintain for each participating Agent
separate participant accounts. A "Pre-tax Contribution Account" will be
created for each participating Agent to hold the portion of an Agent's
interest in the Plan which is attributable to his pre-tax contributions.
An "After-tax Contribution Account" will also be maintained for each Agent
who had an interest in the Plan attributable to his after-tax contributions
prior to 1989. "Employer Contribution Accounts" will be created for each
participating Agent to hold the portion of his interest in the Plan which
is attributable to Employer contributions made on that Agent's behalf,
including one account for Employer contributions that have been in the Plan
for at least two plan years after the plan year for which they were
contributed, and a second account for Employer contributions in the Plan
less than two plan years after the plan year for which they were
contributed. A "Rollover Account" will be created to hold rollover
contributions, if any, accepted into the Plan.
V10N0XLU/15/LCT
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<PAGE>
Shortly after the end of each Plan Year, the Trustee will furnish to
each participating Agent a current statement of his accounts in the Plan.
This statement will indicate the amount of investments purchased during the
Plan Year with that Agent's contributions and Employer contributions, the
amount, if any, of cash credits to that Agent's accounts and a statement
of the assets currently being held by the Trustee for that Agent. Within
nine months after the end of each Plan Year, the Plan Administrator will
furnish each participating Agent a Summary Annual Report (see "Agents'
Rights under ERISA"). Appropriate adjustments resulting from stock
dividends, stock splits and similar changes will be made in Agent's
accounts invested in the LNC Common Stock Fund.
Withdrawals
If a participating Agent needs to withdraw money, the Agent may do so,
but the rules for withdrawing money differ for withdrawals from different
accounts.
An Agent may withdraw all or a portion of his after-tax Account subject
to any limitation applicable to the Fund in which such contribution is
invested and further subject to the following limitations: 1) the minimum
amount an Agent can withdraw is $250; 2) if the amount in the Retirement
Option Account is less than $250, the Agent must withdraw the entire amount;
3) no more than four withdrawals may be made in twelve months; and, 4) the
Agent cannot make withdrawals if the Plan is terminated or if a notice of Plan
termination has been issued.
An Agent may withdraw all or a portion of the Rollover Account, subject
to any withdrawal limitations which apply to the Fund in which the Account is
invested and further subject to the following limitations: 1) the minimum
withdrawal is $500; 2) no more than four withdrawals may be made in twelve
months; 3) amounts in the Account may not be withdrawn for two years from the
date of the rollover; and, 4) the Agent cannot make withdrawals if the Plan
is terminated or if a notice of Plan termination has been issued.
Even though an Agent may be 100% vested in his Employer contributions, he
may only withdraw the matured Employer contributions. These are contributions
that have been in the Plan for at least two plan years after the plan year for
which they were contributed. Non-matured Employer contributions are amounts
contributed which have not been in the Plan for at least two plan years after
the plan year for which they were contributed, and are not available for
withdrawal.
V10N0XLU/16/LCT
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<PAGE>
If an Agent has no balance in his After-Tax Contribution Account, or his
matured Employer Contribution Account, and he has attained age 59-1/2, he may
make a full withdrawal or partial withdrawals from his Pre-Tax Contribution
Account, subject to the following conditions: 1) these withdrawals are
limited to 4 in a 12-month period; 2) each must be for a minimum of $250; and
3) the maximum available for withdrawal will be reduced, under a formula
provided in the Plan, if the Agent has outstanding loan balances with the Plan
at the time he requests withdrawal.
If an Agent has no balance in his After-Tax Contribution Account, matured
Employer Contribution Account or Rollover Account and has not attained age 59-
1/2, then it may be possible for that Agent to withdraw amounts which the
Agent contributed (not including earnings on such amounts) from the Pre-Tax
Contribution Account for a hardship. Only the following four situations are
currently designated by I.R.S. regulations to be hardship situations: 1)
existence of nonreimbursable medical expenses; 2) tuition for post-secondary
education for the Agent or the Agent's dependents; 3) purchase of a primary
residence; and 4) imminent foreclosure of or eviction from the Agent's primary
residence. Such a withdrawal must be demonstrably necessary due to an Agent's
immediate and heavy financial need and the withdrawal cannot exceed the exact
amount required to meet the hardship. (However, the withdrawal may include
an amount necessary to pay any taxes and penalties associated with the
withdrawal.) In order to be deemed to meet the immediate and heavy financial
need requirement, the Agent must fulfill the following conditions: 1) the
Agent must have obtained all distributions other than hardship distributions,
and all non-taxable loans currently available under all plans maintained by
his Employer; 2) the Agent may not make any contributions to the Pre-Tax
Contribution Account or to any other pension, profit-sharing or deferred
compensation plan for 12 months from the date of receipt of the hardship
withdrawal; and 3) the amount which may be contributed to the Pre-Tax
Contribution Account during the calendar year after the year in which the
hardship withdrawal is received is reduced by the amount contributed by the
Agent in the year of the hardship with- drawal.
Subject to the foregoing discussion, a withdrawal will be made upon the
written request of the Agent delivered to the Plan Administrator. At the
election of the Agent, the Trustee will deliver to the Agent the securities
and cash in the applicable account, or a total cash distribution (based upon
the current market value or any applicable current redemption value of the
securities in the account as of the date of withdrawal). See "Fractional
Shares" for settlement of fractional share interests in LNC Common Stock.
A withdrawal payment will be paid by check normally within 60 days after
the Valuation Date.
Agent Loans
An Agent may, subject to the consent of the Plan Administrator, obtain a
loan from the Plan. The amount which the Agent may borrow is determined as
follows:
V10N0XLU/17/LCT
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<PAGE>
1. The Agent may borrow up to fifty percent (50%) of the
VESTED ACCOUNT, but not more than the total value of the
Pre-Tax Contribution, matured Employer Contribution, and
Rollover Accounts, and further limited to a maximum loan
in any event of $50,000. VESTED ACCOUNT is defined to
mean the value of Pre-Tax Contributions, After-Tax
Contributions, Vested Employer Contributions (if any),
and the Rollover Account.
2. The $50,000 maximum loan referred to in (2) above will be
further reduced by the highest outstanding loan balance
for the previous 12-month period.
3. The loan will be evidenced by a written note which pro-
vides for repayment by the Agent through payroll deduc-
tion over a period of five years (10 years if the loan
is used to acquire a principal residence of the Agent,
as defined by Section 267(c)(4) of the Code) and for
interest at the then prevailing rate for loans of a
similar nature.
4. The loan is subject to withdrawal restrictions applica-
ble to the Funds in which the Pre-Tax Contribution
Account, the matured Employer Contribution Account, and
the Rollover Account are invested.
5. The Plan Administrator may from time to time impose such
other terms and conditions that he shall determine in his
sole discretion.
6. In the event that an Agent has an outstanding loan balance
when his Pre-Tax Contribution Account is paid to him or to
his beneficiary on account of death, disability,
termination or attainment of age 59-1/2, the loan balance
(including accrued interest) will be deducted from the
amount otherwise payable.
Distributions
Vested Amounts
Distribution of the Pre-Tax Contribution Account is not made until
termination of service or attainment of age 59-1/2 (see below). All
amounts in the Agent's non-matured Employer Contribution Account are
transferred to the matured Employer Contribution Account as soon as
practicable after December 31 of the year in which these contributions have
been in the Plan for two years. An Agent who has invested in funds other
than the LNC Stock Fund will generally not receive the underlying
investment at distribution; subject, however, to the Plan Administrator
directing the Trustee to make an in-kind distribution. Instead, the
Trustee will distribute in cash the value of the Agent's proportionate
share of the fund in which his contributions have been
V10N0XLU/18/LCT
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<PAGE>
invested. Distributions from the LNC Stock Fund are, at the election of
the Agent, in cash or in kind. (see "Fractional Shares" for treatment of
fractional share interest in LNC Common Stock.) The amount in an Agent's
Pre-Tax Contribution Account will only be distributed upon an Agent's
death, disability, retirement or termination of service with the Company
and all its affiliates.
Death, Disability, Retirement or Termination of Service
An Agent (or his beneficiary or legal representative in the event of
his death) will be entitled to the full value of the Agent's Pre-Tax
Contribution, Employer Contribution, and After-Tax Contribution Accounts
upon the date of his termination of service by reason of death, disability
or retirement ("Termination Date"). Such amount shall be paid in a lump
sum, in accordance with the following rules:
1. If the total amount of the distribution is no more than
$3,500 or if the distribution is to a Beneficiary on
account of the death of a Agent, distribution shall be
made either (i) as soon as practicable after the last day
of the Plan Year in which an Agent's Termination Date
occurs, unless the Plan Administrator in its sole
discretion directs an earlier distribution; or (ii) in
the case of an Agent's Termination Date prior to age 55,
as soon as practicable after that Termination Date.
2. If the total amount of the distribution is greater than
$3,500, the agent's termination date is prior to age 55,
and the Agent has elected in a writing filed with the
Plan Administrator to receive the distribution,
distribution shall be made as soon as practicable after
his Termination Date.
3. If the total amount of the distribution is greater than
$3,500 and the Agent has not filed an election in
accordance with Rule (2) above, distribution shall be
made no later than the sixtieth calendar day next
following the last day of the Plan Year in which the
latest of the following occurs: (i) the Agent attains age
65 years; (ii) the Agent's Termination Date occurs; or
(iii) the 10th anniversary of the Plan Year in which the
Agent commenced his participation in the Plan.
4. If the account balances have not been distributed in
accordance with the preceding three rules, then
distribution shall be made no later than the April 1 next
following the last day of the calendar year in which the
Agent attains age 70-1/2 years, regardless of the Agent's
termination date.
V10N0XLU/19/LCT
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<PAGE>
If an Agent's service is terminated prior to age 55 and for any reason
other than death or disability the balances in all of his accounts except
the balance in his Employer Contribution Account which is non-vested and
earnings thereon, will be distributable.
In the event that an Agent forfeits amounts in his Employer
Contribution Account and such Agent does not incur a 5-year-break-in-
service, such forfeited amount shall be recredited to his Employer
Contribution Account upon his return to service as an agent or employee of
the Company or an affiliate, and shall vest in accordance with the Plan's
vesting schedule. A 5-year-break-in-service is a period of five
consecutive Plan Years, beginning with the Plan Year in which the Agent
terminates, during which the Agent is not a full-time life insurance
salesman under the Internal Revenue Code of 1986, as amended, a general
agent, or an employee of an Employer or an Affiliate on the last day of
each Plan Year. For the purposes of determining a break-in-service, any
Plan Year in which an Agent is absent from work on the last day of the Plan
Year on account of pregnancy of the Agent; the birth of a child of the
Agent; the placement of a child with the Agent in connection with the
adoption of that child by that Agent; or the care of a child for a period
beginning immediately after a child's birth or placement because of the
preceding three reasons, and the Agent is a full-time life insurance
salesman under the Federal Income Contributions Act, a general agent, or
an employee of an Employer, Related Company or Affiliate on the last day
of the Plan Year next following the Plan Year in which the Agent's
termination occurs, shall not be counted in determining the break-in-
service. If an Agent is no longer a full-time life insurance salesman and
becomes an employee of the Company or of an affiliate, no further
contributions will be made on behalf of that Agent and the securities and
cash in his Employer Contribution Account will continue to vest.
Fractional Shares
Interests in fractional shares of LNC Common Stock will not be subject to
distribution or withdrawal. Rather, fractional share interests in LNC Common
Stock will be paid in cash on the basis of the market value of such security,
as of the date of distribution, termination of service or with- drawal, as may
be applicable.
Employer Contribution Account
Automatic Crediting of Account Balances.
Two years after the end of any given Plan Year, the then value of an
Agent's non-matured Employer Contribution Account from that given year
shall be automatically credited to the matured Employer Contribution
Account as of the Valuation Date following the end of that given Plan Year.
V10N0XLU/20/LCT
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<PAGE>
Withdrawals from the Retirement Option Account.
Subject to certain restrictions, an Agent may from time to time with-
draw all or any part of the assets in his matured Employer Contribution
Account. (See "Withdrawals")
Investment of Contributions
The Trustee will administer the matured Employer Contribution Account
assets in a manner similar to that applicable to the other accounts until
the Agent's Termination Date (see "Investment of Contributions").
Beneficiary Designation
Each Agent may designate on an appropriate form filed with the Plan
Administrator, a beneficiary or beneficiaries to whom, in the event of the
Agent's death, any securities and cash to which the Agent is entitled under
the Plan will be payable. A beneficiary designation may be changed or can-
celled by an Agent from time to time by filing an appropriate form with the
Plan Administrator. If the Agent was married on the date of his death, his
surviving spouse shall be deemed to be his Beneficiary, unless that survi-
ving spouse consents or has consented (in the manner required by the Code)
by writing filed with the Plan Administrator in such form as it may
require, to the otherwise effective Beneficiary designation by the Agent.
If no Beneficiary designated by the Agent survives to receive payment of
benefits on account of the death of the Agent, then payment shall be made
to the Agent's surviving spouse, if any, or, if none, to the estate of the
Agent.
Assignment
No right or interest of any Agent or beneficiary in the Plan is assign-
able or transferable in whole or in part, either directly or by operation of
law or otherwise, including, without limitation, execution, levy, garnish-
ment, attachment, pledge, or bankruptcy, except in connection with a loan from
the Plan to an Agent, or as provided under the terms of a qualified domestic
relations order (as defined in 414(p) of the Code) as determined by the Plan
Administrator.
Amendment or Termination
By action of its Board of Directors, the Company may terminate or amend
the Plan or suspend the operation of any provision of the Plan, provided,
however, that:
1. No amendment shall be made which will result in the
recovery by an Employer of any part of its contribution
to the Plan, except under limited circumstances as may be
provided under the trust agreement and permitted under
the Code;
V10N0XLU/21/LCT
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<PAGE>
2. Any amendment that affects the rights and duties of the
Trustee may be made only with the consent of the Trustee;
3. No amendment of the Plan shall affect the rights of an
Agent as to the continuance of vesting of such securities
and cash attributable to Employer contributions or
earnings thereon;
4. Upon the termination or suspension of the Plan, the rights
of all Agents to the amounts credited to their account as
of the date of such termination or suspension shall be
nonforfeitable.
An Employer may at any time by action of its Board of Directors termi-
nate the participation of its Agents in the Plan by giving to the Plan
Administrator a certified copy of such resolution.
At such time as an Employer ceases to be an affiliate of the Company, the
Plan shall terminate as to such Employer and its Agents.
Upon termination of an Employer's participation in the Plan, the Trustee
shall make available for distribution amounts attributable to the participants
as to whom the Plan terminated, except as to such arrangements as a
terminating Employer may make with the Plan Administrator.
Administration of the Plan
Trustee
The Company, acting by its Board of Directors, has the authority to
appoint one or more individuals or corporations to act as Trustee. The
Trustee is responsible for the custody, investment and distribution of Plan
assets. No specific bond is furnished by the Trustee in connection with
custody of Plan assets.
The Trustee, Norwest Bank Fort Wayne, N.A., 116 East Berry Street, Fort
Wayne, Indiana, 46802 ("NBFW"), is a major banking facility used in processing
monies received by the Company and its affiliates and is the principal bank
through which the Company and its affiliates make payments to policyholders
and others. As of March 31, 1994, the Company and its affiliates owned no
outstanding common stock of the trustee. The Trustee, in its capacity as
trustee for various corporations and individuals, may own shares of LNC Common
Stock for its beneficiaries.
The Trustee serves pursuant to the terms of a written trust agreement.
This agreement is available for inspection by Plan participants. The Com-
pany may discharge or remove the Trustee and appoint a successor Trustee upon
30 days' written notice to the Trustee; provided, however, that such successor
is a banking institution legally qualified to serve as a Trustee. In the
event of discharge or removal, the Trustee agrees to transfer the Trust assets
to its named successor, and upon such transfer, the Trustee
V10N0XLU/22/LCT
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<PAGE>
will be discharged and relieved of its duties. In the event of discontin-
uance of the Plan, the Trust Agreement may be discontinued by action of the
Company's Board of Directors; provided, however, that until all assets of the
trust have been distributed, the Trustee will have all the rights and powers
given to it by the Trust Agreement.
The Employers assume all expenses reasonably incurred by the Trustee in
connection with the administration and operation of the trust and the Plan.
The Trustee receives no compensation from the assets of the Plan.
Plan Administrator
The LNC Benefits Investment Committee is the Plan Administrator and Named
Fiduciary. Members of the Committee are appointed by the Company. A listing
of current members appears below. Members of the Committee are "named
fiduciaries", as that term is defined by ERISA, and, as such, have the
authority to control and manage the operation and administration of the Plan.
The Committee's responsibilities include enforcing the Plan in accordance
with its terms; determining all questions arising under the Plan (including
determinations of eligibility and of benefits payable); and directing payments
of benefits. In aid of its responsibilities, the Committee is empowered to
adopt regulations and procedures necessary for the proper and efficient
administration of the Plan.
A Committee member may resign by giving 10 days' written notice to the
Company, to the Employer, and to the other Committee members. The Company may
remove a member at any time by giving advanced written notice to the member,
to the Employers, and to the other Committee members.
V10N0XLU/23/LCT
- 19 -
<PAGE>
MEMBERS OF THE LINCOLN NATIONAL
CORPORATION BENEFITS INVESTMENT
COMMITTEE (BIC)
BIC Position with Position
Name Title the Company with LNC
Jon A. Boscia Chairman Director Executive Vice
President
Robert A. Anker Member President and President and
Director Director
George E. Davis Member None Senior Vice
President
P. Kenneth Dunsire Member Executive Executive
Vice President Vice President
F. Cedric McCurley Member None None
Richard S. Robertson Member None
Executive
Vice President
Richard C. Vaughan Member Senior Senior
Vice President Vice President
The members of the Lincoln National Corporation Benefits Investment
Committee are appointed by the Chief Executive Officer of LNC; they receive
no compensation from the Plan.
The business address of Messrs. Boscia, Anker, Dunsire, Robertson and
Vaughan is 200 E. Berry Street, Fort Wayne, Indiana 46802; the business
address of Mr. McCurley is: 500 North Meridian Street, Post Office Box
1636, Indianapolis, Indiana, 46206.
Voting of Shares
Voting rights with respect to all securities held by the Plan will be
exercised by the Trustee or by a proxy solicited by the Trustee.
Federal Income Tax Consequences
The following is a general discussion of the federal income tax effects
of participation in the plan based on provisions of the Code and applicable
regulations as in effect as of the date of this Supplement to the Prospectus.
The actual tax consequences for any individual will depend on his or her own
circumstances. EACH AGENT SHOULD CONSULT A QUALIFIED TAX ADVISER TO DETERMINE
THE APPLICATION OF THE FEDERAL INCOME TAX LAWS TO HIS OR HER INDIVIDUAL
CIRCUMSTANCES.
V10N0XLU/24/LCT
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<PAGE>
The Plan is a qualified employee benefit plan under Section 401(a) of the
Code. Employer contributions to the plan are deductible by the Employers
under Section 404(a) of the Code. Agents will not be subject to Federal
Income Tax on employer contributions, on their contributions, or on income of
the trust except to the extent they receive distribution or with- drawals from
the Plan. Agents will not be taxed on loans from the Plan made in accordance
with Federal Tax requirements if they are repaid in accordance with their
terms. Agents' pre-tax contributions will, however, be subject to social
security taxes and federal unemployment taxes. Income of the trust is exempt
from federal income tax.
The Code limits current contributions to the lesser of 15% of compensa-
tion or $7,000 annually, with certain cost of living adjustments ($9,240.00
for the 1993 tax year). The Code also requires that the sum of pre-tax
contributions, Employer contributions plus all after-tax contributions may not
exceed the lesser of 25% of compensation or $30,000.00 (also subject to
certain cost of living adjustments).
Amounts received by an Agent upon withdrawal prior to termination of
service will be taxable as ordinary income to the extent that the amounts
received exceed the amount of that Agent's after-tax contributions made prior
to January 1, 1987 and not previously received ("Net Unrecovered
Contributions"). Once the amount of after-tax contributions made prior to
January 1, 1987, is deemed to have been recovered, subsequent distributions
will be taxed as pro-rata distributions of after-tax contributions and earn-
ings thereon. If the Agent receives LNC Common Stock, the fair market value
of the stock on the date of distribution over its basis ("Net Unrealized
Appreciation") attributable to that Agent's after-tax contributions will not
be taxed at the time of distribution (unless the Agent elects to be taxed at
that time, under procedures to be prescribed by the IRS).
In general, a distribution under the Plan upon an Agent's retirement,
disability, death, or other separation from service is taxable as ordinary
income to the extent that it exceeds the amount of the Agent's Net Unrecovered
Contributions and Net Unrealized Appreciation attributed to the Agent's after-
tax contributions (unless the Agent elects to be taxed on this latter amount).
However, if distribution of all amounts to the Agent's credit under the Plan
is received within one taxable year in a lump sum distribution as defined in
Section 402(e) of the Code and the Agent does not rollover all or a part of
the lump sum distribution, the Agent will be taxed as follows:
1. The Net Unrecovered Contributions and the total Net
Unrealized Appreciation in LNC Common Stock received are
not taxable to the Agent.
2. The remaining amount is taxable to the Agent as ordinary
income and may be eligible for a special income averaging
V10N0XLU/25/LCT
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<PAGE>
method of taxation. The special income averaging rules, for
amounts distributed, have been modified, subject to transi-
tional rules for individuals who attained age 50 before
January 1, 1986.
An Agent may also be eligible to make a tax-free rollover of a distri-
bution of at least 50% of the balance of the Agent's Accounts. In general,
the amount that may be rolled over is the taxable portion of the distribu-
tion. If less than 100% of the balance of the Agent's Accounts is distri-
buted, the distribution must be on account of death, disability or separa-
tion from service; the rollover must be made to an individual retirement
account or annuity; and any subsequent distribution will not be eligible for
the special lump sum distribution rules described above. If 100% of the
balance of the Agent's Accounts is distributed, the rollover may be made to
an individual retirement account or annuity or to another qualified plan.
Rollovers must be made within 60 days of receipt of the distribution and are
subject to other rules.
The Code provisions for required distributions from the Plan have been
modified and require distributions to commence by April 1 of the calendar year
after an Agent attains age 70-1/2, even if the Agent has not separated from
service. Distributions prior to death, disability or age 59-1/2 are subject
to a penalty tax of 10% of the taxable amount distributed unless certain
exceptions are applicable. A 15% penalty tax will generally be imposed on the
aggregate amount of distributions from the Plan and other specified retirement
arrangements in excess of $150,000 annually, subject to transitional rules and
certain other special rules.
For purposes of taxation on the subsequent sale or disposition of any LNC
Common Stock received by an Agent in a distribution, the Agent's basis in the
stock will be equal to the sum of the amount of the distribution that is
required to be included as income by the Agent in the year of distribu- tion
plus the amount, if any, of the distribution of the LNC Common Stock
attributable to the Agent's after-tax contributions (plus any other amount of
the distribution of LNC Common Stock on which the Agent was taxed at his
election at the time of distribution). Upon the sale or other taxable dis-
position of the LNC Common Stock acquired from the Plan as a lump sum dis-
tribution as defined in Section 402(e) of the Code, any gain up to the amount
of the Net Unrealized Appreciation which was not taxed at the time of
distribution shall be treated as long-term capital gain. Any additional gain
on LNC Common Stock acquired in a lump sum distribution will be treated as
long-term or short-term capital gain, depending on the combined holding period
of the Plan and the Seller. All gain on LNC Common Stock acquired from the
Plan other than a lump sum distribution, will be treated as long-term or
short-term capital gain, depending on the Seller's holding period. Long-term
capital gains generally are taxed at the same rates as ordinary income, but
capital gains will still be offset against capital losses.
If an Agent dies, the amount of the distribution paid to his estate or
beneficiary which is attributable to Employer contributions, up to $5,000,
V10N0XLU/26/LCT
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<PAGE>
may be exempt from federal income tax. Generally, the amount which is not
exempt from federal income tax will be taxable to the beneficiary under the
same rules which are applicable to distributions to the Agent. A benefici-
ary who is the surviving spouse of the Agent may be eligible to make a tax-
free rollover of a distribution under the same rules applicable to rollovers
by Agents. Other beneficiaries may not make rollovers.
Tax and Withholding
Under the Unemployment Compensation Amendments of 1992 ("UCA"), twenty
percent (20%) income tax withholding may apply to "eligible rollover distri-
butions." All taxable distributions from the Plan are "eligible rollover
distributions," except (1) annuities paid out over life or life expectancy,
(2) installments paid for a period spanning ten (10) years or more, and (3)
required minimum distributions. The UCA imposes mandatory twenty percent
(20%) income tax withholding on any eligible rollover distribution that an
Agent does not elect to have paid in a direct rollover to another qualified
plan, or individual retirement account. In the event a distribution is
comprised of LNC Common Stock, LNC Common Stock is not required to be sold to
satisfy income tax withholding requirements.
Employee Retirement Income Security Act of 1974
The Plan is subject to many of the provisions of the Employee Retire-
ment Income Security Act of 1974 (ERISA). Principal among these are ERISA
requirements regarding reporting and disclosure to government agencies and
participants, fiduciary responsibility and transactions with parties-in-
interest. The Plan is a profit-sharing plan and is, therefore, not subject
to the funding standards of Title I of ERISA. The Plan is an "individual
account plan," and is, therefore, not covered by the plan termination
insurance program of Title IV of ERISA which is administered by the Pension
Benefit Guaranty Corporation.
Sale of Stock to the Trustee
The Trustee is independent of the Company and its affiliates and
determines the timing, price, amount, source and all other circumstances under
which it will purchase LNC Common Stock. In addition, if it has sufficient
funds, the Trustee may be willing to purchase LNC Common Stock from present
Agents of companies participating in the Plan. It should be noted, however,
that there may be restrictions on the resale of Common Stock by some
participants considered to be "affiliates" of the Company. It is the duty of
each participant to determine whether such restrictions are applicable.
If an Agent wishes to make an offer to sell LNC Common Stock to the
Trustee, he should contact the Trustee or the Benefits Section of the Company.
The Benefits Section will perform no functions other than to facilitate
contact with the Trustee and, if desired by the parties, certain ministerial
functions (e.g., supplying the Agent with the Trustee's offer-to-sell letter,
witnessing stock assignments, making messenger service
V10N0XLU/27/LCT
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<PAGE>
available for correspondence with the Trustee, etc.). The Company's Benefits
Section will advise an Agent as to the procedure to be followed in making a
sale of stock to the Trustee. The Company's Benefits Section must be in
possession of executed copies of an offer-to-sell letter, the stock
assignment and stock certificates before they will attempt to obtain a
commitment from the Trustee.
The Trustee will only accept offers at times when the New York Stock
Exchange is open for business. If the Trustee is willing to purchase shares,
it will inform the Agent or the Company's Benefits Section of the terms on
which it would accept an offer. The shares are normally valued at the price
of the most recent trade on the New York Stock Exchange on the day and at the
time an offer to sell is received by the Trustee. The Agent may advise the
Company's Benefits Section in writing or by telephone whether or not the
Trustee's terms are acceptable; if they are, he should instruct the Company's
Benefits Section to complete the offer-to-sell letter by inserting the sale
price of the stock. This letter specifies the details of the transaction,
including price per share, number of shares offered, total price, and stock
certificate number. A representative of the Company's Benefits Section is
available to witness the assignment of the stock certificate if the
registered owner executes the assignment in the representative's presence.
Alternatively, the registered owner may execute and submit an assignment which
includes a signature guarantee acceptable to the Trustee. The offer-to-sell
letter, stock certificate and separate assignment form (if necessary) will
be sent to the Trustee. The Trustee then pays for the shares by its check,
made payable to the registered owner. Over-delivered shares, if any, will be
returned to the owner after a new certificate has been issued by the
Transfer Agent.
Neither the Trustee nor the Company can provide any investment advice.
The Agent must determine without assistance from the Trustee or the Company's
Benefits Section whether to sell at a particular time and price. All Agent
sales to the Trustee are handled on a first-come first-served basis.
Agents' Rights Under ERISA
Agents in the Plan are entitled to certain rights and protections under
ERISA. ERISA provides that all Plan participants are entitled to:
Examine, without charge, at the Plan Administrator's office
and at other locations, all Plan documents including copies
of all documents filed by the Plan Administrator with the
U.S. Department of Labor, such as detailed annual reports and
Plan descriptions.
Obtain copies of all Plan documents and other Plan informa-
tion upon written request to the Plan Administrator. The
Plan Administrator may make a reasonable charge for the
copies.
Receive a summary of the Plan's annual financial report. The
Plan Administrator is required by law to furnish each
participant with a copy of this summary annual report.
V10N0XLU/28/LCT
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<PAGE>
In addition to creating rights for Plan participants, ERISA imposes
duties upon the persons who are responsible for the operation of the Plan.
The persons who operate the Plan, called "fiduciaries," have a duty to do
so prudently and in the interest of Plan participants and beneficiaries.
Fiduciaries who violate ERISA may be removed and required to repay losses
they have caused the Plan.
No one, including an Employer, a union, or any other person, may fire
or otherwise discriminate against an Agent in any way to prevent him from
obtaining a Plan benefit or exercising any rights under ERISA. If a claim
for Plan benefits is denied in whole or in part, a written explanation of
the reason for the denial must be provided to the claimant. The claimant
has the right to have the Plan Administrator review and reconsider a claim.
Under ERISA, there are steps an Agent can take to enforce the above rights.
For instance, if a participant requests materials from the Plan
Administrator and does not receive them within 30 days, he may file suit
in a federal court. In such a case, the court may require the Plan
Administrator to provide the materials and pay up to $100 a day until the
materials are provided, unless the materials were not sent because of
reasons beyond the control of the Plan Administrator. If a participant has
a claim for benefits which is denied or ignored, in whole or in part, he
may file suit in a state or federal court. If the Plan fiduciaries misuse
the Plan's money, or if a participant is discriminated against for
asserting any of his rights, the participant may seek assistance from the
U.S. Department of Labor, or may file suit in a federal court. The court
will decide who should pay court costs and legal fees. If the participant
is successful, the court may order the person he has sued to pay these
costs and fees. If the participant loses, the court may order the
participant to pay these costs and fees, for example, if it finds the claim
is frivolous. If a participant has any questions about the Plan, he should
contact the Plan Administrator. If a participant has any questions about
this statement or about his rights under ERISA, he should contact the
nearest Area Office of the U.S. Labor-Management Services Administration,
Department of Labor.
Participation Interests are Securities
Agents participating in the Plan acquire an interest in the Plan assets
held and administered by the Trustee. This interest is itself a security and
its acquisition entails the risk of loss as well as the possibility of gain.
The character and extent of the participant's interest in the Plan assets and
his rights and options in relation thereto are discussed in detail beginning
on page 4 of this Prospectus. Before deciding to participate, Agents should
carefully consider and assess the risks and opportunities in view of their
individual situation.
Financial Statements
The Statements of Net Assets Available for Plan Benefits as of December
31, 1993 and 1992, and the related Statements of Changes in Net Assets
Available for Plan Benefits for the years ended December 31, 1993, 1992 and
1991, and the report of Ernst & Young, independent auditors, thereon, appear
elsewhere herein, and in the Registration Statement.
V10N0XLU/29/LCT
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<PAGE>
LINCOLN NATIONAL CORPORATION COMMON STOCK
The Plan enables Agents to acquire shares of LNC Common Stock. LNC is
authorized to issue 400,000,000 shares of Common Stock, without par value, and
10,000,000 shares of Preferred Stock. LNC currently has three Series of
Preferred Stock: 1) $3.00 Cumulative Convertible Preferred Stock, Series A
("Series A Preferred Stock"); 2) 5 1/2% Cumulative Convertible, Ex-
changeable Preferred Stock, Series E ("Series E Preferred Stock"); and
3) 5 1/2% Cumulative Convertible, Exchangeable Preferred Stock, Series F
("Series F Preferred Stock"). A portion of the shares of Common Stock is
authorized for quotation on the New York, Midwest, Pacific, London And Tokyo
Stock Exchanges. A portion of the shares of Series A Preferred stock is
authorized for quotation on the New York and Midwest Stock Exchanges.
On March 15, 1994, the following number of shares was issued and
outstanding: Common Stock: 94,721,675; Series A Preferred Stock: 46306; Series
E Preferred Stock: 2,201,443; Series F Preferred Stock: 2,216,454.
The following brief summary contains certain information regarding the
LNC Common Stock and does not purport to be complete, but is qualified in its
entirety by reference to the LNC Articles of Incorporation, The Indiana
General Corporation Act, and the LNC by-laws. The Articles of Incorporation
of LNC contain provisions relating to the size, classification and removal of
directors, and to the fair pricing of LNC stock, which could have the effect
of delaying, deferring, or preventing a hostile or unsolicited attempt to gain
control of LNC.
Dividend Rights
Holders of Common Stock are entitled to dividends when and as declared by
the Board of Directors out of funds legally available for the payment of
dividends after dividends accrued on all preferred or special classes of
shares entitled to preferential dividends have been paid, or declared and set
apart for payment.
Voting Rights
Each shareholder of LNC Common Stock has the right to one vote for each
share of LNC Common Stock standing in his name on the books of LNC on each
matter submitted to a vote at any meeting of the shareholders. The vote of
holders of at least three-fourths of the outstanding shares of LNC Common
Stock is necessary to approve (i) the sale, lease, exchange, mortgage, pledge
or other disposition of the shares of LNC Common Stock and (ii) the removal of
any or all members of the Board of Directors of LNC.
V10N0XLU/30/LCT
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<PAGE>
Liquidation Rights
On any liquidation or dissolution of LNC the holders of LNC Common Stock
are entitled to share ratably in such assets of LNC as remain after due
payment or provision for payment of the debts and other liabilities of LNC
including amounts to which the holders of preferred or special classes of
shares may be entitled.
Pre-Emptive Rights
Holders of LNC Common Stock have no pre-emptive right to subscribe for or
purchase additional issues of shares or any treasury shares of LNC Common
Stock.
Assessment
The LNC Common Stock issued and outstanding is fully paid and non-
assessable, and the LNC Common Stock when issued upon conversion of the Series
A, E and F Preferred Stock will be fully paid and non-assessable.
Modification of Rights
The rights of holders of LNC Common Stock are subject to the preference
granted to the holders of the Series A, E and F Preferred Stock and any
additional preferred stock of LNC. Holders of Series A, E and F Preferred
Stock have the right to vote, upon the basis of one vote per share, together
with the holders of LNC Common Stock, upon matters submitted to shareholders;
and, to vote as a class, to elect two directors at the next annual meeting of
shareholders if six or more quarterly dividends on the Series A, E and F
Preferred Stock shall be in default.
Other Provisions
The LNC Common Stock has no conversion rights or cumulative voting rights
for the election of directors. There are no restrictions on the repurchase or
redemption of shares of LNC Common Stock from funds legally available
therefor.
First National Bank of Boston acts as Transfer Agent and Registrar for
the LNC Common Stock.
INDEMNIFICATION OF OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS
The By-Laws of LNC and the Company, pursuant to authority contained in
The Indiana General Corporation Act, provide for the indemnification of their
officers, directors, employees and agents against reasonable expenses that may
be incurred by them in connection with the defense of any action, suit or
proceeding to which they are made or threatened to be made parties except with
respect to matters as to which they are adjudged liable for negligence or
misconduct in the performance of duties to their respective
V10N0XLU/31/LCT
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<PAGE>
corporations. LNC and the Company may also reimburse such officers, direc-
tors, employees and agents for reasonable costs of settlement of any such
action, suit or proceeding. In the case of directors, a determination as to
whether indemnification or reimbursement is proper shall be made by a major-
ity of the disinterested directors or by written opinion from independent
legal counsel. In the case of individuals who are not directors, such
determination shall be made by the chief executive officer of the respective
corporation or, if he so directs, in the manner it would be made if the
individual were a director of the corporation.
Such indemnification may apply to claims arising under the Securities Act
of 1933, as amended. Insofar as indemnification for liabilities arising under
the Securities Act of 1933 may be permitted to directors, officers, or persons
controlling LNC and the Company pursuant to the foregoing provi- sions, LNC
and the Company have been informed that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in that Act and therefore unenforceable.
EXPERTS
The financial statements and schedules of Lincoln National Corporation
and The Lincoln National Life Insurance Company Agents' Savings and Profit-
Sharing Plan appearing or incorporated by reference in this Prospectus and
Registration Statement have been audited by Ernst & Young, independent
auditors, as set forth in their reports thereon also appearing elsewhere
herein and in the Registration Statement or incorporated by reference. The
financial statements and schedules have been included herein or incorporated
herein by reference in reliance upon such reports given upon the authority of
such firm as experts in accounting and auditing.
LEGAL OPINION
Certain matters with respect to the LNC Common Stock to which this
Prospectus relates were passed upon for LNC by John L. Steinkamp, Esquire,
Associate General Counsel of LNC, 1300 South Clinton Street, Fort Wayne,
Indiana 46801. Certain matters with respect to the interests in the Plan to
which this Prospectus relates were passed upon for the Plan by Jacquelyn M.
Abbott, Esquire, Senior Counsel of LNC, 1300 South Clinton Street, Fort Wayne,
Indiana 46801.
INCORPORATION OF ADDITIONAL DOCUMENTS BY REFERENCE
LNC hereby incorporates the following documents by reference into this
prospectus:
1. LNC's 1993 Annual Report on Form 10-K filed pursuant to
the Securities Exchange Act of 1934 (the "1934 Act").
2. All other LNC reports filed pursuant to Section 13(a) or
15 (d) of the 1934 Act since December 31, 1993.
V10N0XLU/32/LCT
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<PAGE>
3. LNC's definitive proxy statement filed pursuant to Section
14 of the 1934 Act in connection with LNC's latest annual
meeting of stockholders.
4. The description of LNC Common Stock contained in Form 10
filed by LNC pursuant to the 1934 Act on April 28, 1969,
including any amendment or reports filed for the purpose
of updating such description.
In addition, all documents filed by LNC with the Commission pursuant to
Sections 13, 14, and 15(d) of the 1934 Act prior to the termination of the
offering made hereby shall be deemed to be incorporated by reference into this
Prospectus and to be a part thereof from the date of filing of such documents.
V10N0XLU/33/LCT
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<PAGE>
INDEX TO FINANCIAL STATEMENTS
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY
AGENTS' SAVINGS AND PROFIT-SHARING PLAN Page
AUDITED FINANCIAL STATEMENTS
Report of Independent Auditors . . . . . . . . . . . . . 1
Statements of Net Assets Available
For Plan Benefits as of December 31, 1993 and 1992 . . . 2
Statements of Changes in Net Assets
Available For Plan Benefits for the Years ended
December 31, 1993, 1992 and 1991 . . . . . . . . . . . . 3
Notes to Financial Statements . . . . . . . . . . . . . 4 to 17
V10N0XLU/34/LCT
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<PAGE>
Form S-1
Report of Independent Auditors
Lincoln National Corporation Benefits Investment Committee
Lincoln National Corporation
We have audited the accompanying statements of net assets available for
plan benefits of The Lincoln National Life Insurance Company Agents'
Savings and Profit-Sharing Plan ("Plan") as of December 31, 1993 and
1992, and the related statements of changes in net assets available for
plan benefits for each of the three years in the period ended December 31,
1993. These financial statements are the responsibility of the Plan's
management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the net assets available for plan
benefits of the Plan at December 31, 1993 and 1992, and the changes in
its net assets available for plan benefits for each of the three years
in the period ended December 31, 1993, in conformity with generally
accepted accounting principles.
ERNST & YOUNG
Fort Wayne, Indiana
March 15, 1994
<PAGE>
The Lincoln National Life Insurance Company
Agents' Savings and Profit-Sharing Plan
Statements of Net Assets Available For Plan Benefits
December 31
1993 1992
Assets
Investments (Notes 3, 7 and 8):
Common stock-Lincoln National Corporation
(cost: 1993-$19,799,192; 1992-$15,509,954) $30,625,566 $23,516,460
Segregated investment accounts-The Lincoln
National Life Insurance Company Separate
Accounts (cost: 1993-$12,740,656;
1992-$10,580,111) 17,039,061 13,955,960
Unallocated insurance contracts-
The Lincoln National Life Insurance Company 10,431,214 10,138,184
Participant loans 2,761,764 2,414,489
Total investments 60,857,605 50,025,093
Accrued interest receivable 6,509 6,320
Cash and invested cash (overdraft) 326,609 (32,600)
Other receivables 51,905 46,159
Contributions receivable:
Agents - 132,412
The Lincoln National Life Insurance Company 3,206,975 2,410,347
Total contributions receivable 3,206,975 2,542,759
Total assets 64,449,603 52,587,731
Miscellaneous payables 30,367 -
Net assets available for plan benefits $64,419,236 $52,587,731
See accompanying notes.
<PAGE>
The Lincoln National Life Insurance Company
Agents' Savings and Profit-Sharing Plan
Statements of Changes in Net Assets Available For Plan Benefits
Year ended December 31
1993 1992 1991
Investment income:
Cash dividends-Lincoln
National Corporation $1,031,836 $960,231 $905,616
Interest:
The Lincoln National Life
Insurance Company 665,851 703,971 625,370
Other 252,487 247,825 245,959
Total interest 918,338 951,796 871,329
Total investment income 1,950,174 1,912,027 1,776,945
Net realized gain on sale,
distribution and forfeitures
of investments (Note 3):
Common stock-Lincoln National
Corporation 1,422,975 948,569 283,940
Segregated investment
accounts-The Lincoln National
Life Insurance Company
Separate Accounts 424,288 402,143 334,025
United States Government
obligations - - 7,837
Total net realized gains 1,847,263 1,350,712 625,802
Net unrealized appreciation
of investments (Note 3) 3,742,424 5,754,416 6,174,090
Contributions:
Agents 4,364,477 3,700,880 3,186,223
The Lincoln National Life
Insurance Company (net
of forfeitures: 1993-
$323; 1992-$1,238; 1991-
$4,580) 3,806,346 2,988,118 502,765
Total net unrealized
appreciation 8,170,823 6,688,998 3,688,988
Distributions to
participants (deduction) (3,823,008) (2,674,106) (2,773,457)
Administrative expenses
(deduction) (Note 7) (56,171) - -
Net increase in net assets
available for plan benefits 11,831,505 13,032,047 9,492,368
Net assets available for
plan benefits at beginning
of the year 52,587,731 39,555,684 30,063,316
Net assets available for
plan benefit at end of the
year $64,419,236 $52,587,731 $39,555,684
See accompanying notes.
<PAGE>
The Lincoln National Life Insurance Company
Agents' Savings and Profit-Sharing Plan
Notes to Financial Statements
December 31, 1993
1. Significant Accounting Policies
Basis of Financial Statements
The accounting records of The Lincoln National Life Insurance Company
Agents' Savings and Profit Sharing Plan ("Plan") are maintained on the
accrual basis.
Investments
The investment in Lincoln National Corporation ("LNC") common stock is
valued at the last reported sales price per the national securities
exchange on the last business day of the year. The fair value of the
participation units owned by the Plan in segregated investment accounts
is based on quoted redemption value on the last business day of the
year.
The unallocated insurance contracts are valued at contract value as
estimated by The Lincoln National Life Insurance Company ("Company").
Contract value represents net contributions made under the contract plus
interest at the contract rate.
Participant loans are valued at cost which approximates fair value.
The cost of investments sold, distributed or forfeited is determined
using the average cost method.
2. Description of the Plan
The Plan is a contributory, defined contribution plan which covers
eligible agents of the Company. Any person 21 years of age or older who
is a full-time agent of the Company is eligible to enroll in the Plan if
the agent has completed one eligibility year of service as defined in
the Plan agreement. A participant may make pre-tax contributions at a
rate of at least 1%, but not more than 15% of earned commissions, up to
a maximum annual amount of $8,994 for the 1993 tax year. Prior to
January 1, 1989, the Plan accepted after-tax contributions at rates as
defined in the Plan agreement.
<PAGE>
The Lincoln National Life Insurance Company
Agents' Savings and Profit-Sharing Plan
Notes to Financial Statements (continued)
2. Description of the Plan (continued)
Participants direct the Plan to invest their contributions in any
combination of the investment options as described in Note 4.
Participants can direct employer contributions, but only after the
contributions have been in the Plan for two full plan years following
the plan year for which they were contributed.
Prior to 1992, the Company contributed to the Plan an amount equal to a
participant's contributions, not to exceed 6% of eligible earnings,
multiplied by a percentage, ranging from 25% to 150%, which varied
according to LNC's return on equity as determined by LNC's Board of
Directors. Effective January 1992, the LNC Board of Directors approved
a change in the basis for the Company's contribution. The contribution
is based on LNC's increase in book value in relation to similar
companies in the insurance industry. The Company's contributions are
invested in the LNC Common Stock Fund. Agents are fully vested in their
contributions. The Company contributions vest based upon years of
service as defined in the Plan agreement as follows:
Years of Service Percent Vested
1 0%
2 50%
3 or more 100%
The Plan allows loans to participants in amounts up to 50% of the vested
account value to a maximum of $50,000 but not more than the total value
of the pre-tax account plus the retirement option account, less the
highest outstanding loan balance in the previous twelve month period.
The Company has the right under the Plan to discontinue contributions at
any time and terminate the Plan. In the event of termination of the
Plan, all amounts allocated to participants' accounts shall become
vested.
<PAGE>
The Lincoln National Life Insurance Company
Agents' Savings and Profit-Sharing Plan
Notes to Financial Statements (continued)
3. Investments
The following is a summary of assets held for investment:
December 31, 1993 December 31, 1992
Number of Market Number of Market
Shares Value Shares Value
Common stock-Lincoln
National Corporation 704,036 $30,625,566 317,790 $23,516,460
Segregated investment
accounts-The Lincoln
National Life Insurance
Company Separate
Accounts:
U.S. Government Bond
Fund 555,928.450 718,722 611,131.939 38,056
Core Equity Fund 1,246,703.712 6,172,485 1,165,182.773 5,180,981
Medium Capitalization
Equity Fund 743,490.277 4,484,882 645,359.089 3,514,901
Short-Term Fund 558,333.482 1,331,690 649,508.276 1,503,906
Government/Corporate
Bond Fund 234,598.932 977,581 242,210.265 898,746
Large Capitalization
Equity Fund 872,313.615 3,353,701 610,100.015 2,119,370
Total segregated
investment accounts $17,039,061 $13,955,960
<PAGE>
The Lincoln National Life Insurance Company
Agents' Savings and Profit-Sharing Plan
Notes to Financial Statements (continued)
3. Investments (continued)
December 31, 1993 December 31, 1992
Par Market Par Market
Amount Value Amount Value
Unallocated insurance
contracts-The Lincoln
National Life Insurance
Company $10,431,214 $10,431,214 $10,138,184 $10,138,184
Participant loans 2,761,764 2,761,764 2,414,489 2,414,489
Total investments $60,857,605 $50,025,093
Net realized gain on sale, distribution and forfeitures of investments
is summarized as follows:
Year ended December 31
1993 1992 1991
Common stock:
Proceeds from
disposition of stock $4,695,158 $7,041,177 $3,152,062
Cost of stock disposed 3,272,183 6,092,608 2,868,122
$1,422,975 $ 948,569 $ 283,940
Segregated investment
accounts:
Proceeds from
disposition of units $3,664,248 $3,154,773 $2,781,912
Cost of units disposed 3,239,960 2,752,630 2,447,887
$ 424,288 $ 402,143 $ 334,025
United States government
obligations:
Proceeds from sale
of securities $ - $ - $ 403,815
Cost of securities sold - - 395,978
$ - $ - $ 7,837
<PAGE>
The Lincoln National Life Insurance Company
Agents' Savings and Profit-Sharing Plan
Notes to Financial Statements (continued)
3. Investments (continued)
The net unrealized appreciation (depreciation) of investments in total
and by investment classification is summarized as follows:
Year ended December 31
1993 1992 1991
Market value in excess
of(less than) cost:
At beginning of the year $11,382,355 $ 5,627,939 $ (546,151)
At end of the year 15,124,779 11,382,355 5,627,939
$ 3,742,424 $ 5,754,416 $6,174,090
Common stock $ 2,819,868 $ 5,370,972 $4,121,627
Segregated investment
accounts 922,556 383,444 2,060,301
United States
government obligations - - (7,838)
$ 3,742,424 $ 5,754,416 $6,174,090
<PAGE>
The Lincoln National Life Insurance Company
Agents' Savings and Profit-Sharing Plan
Notes to Financial Statements (continued)
4. Investment Options
The detail of the net assets available for plan benefits by investment
option is as follows:
December 31, 1993
Investment Options
Total 1 2 3 4
Assets
Investments:
Common stock $30,625,566 $30,625,566
Segregated investment
accounts 17,039,061 $718,722 $6,172,485
Unallocated insurance
contracts 10,431,214 $10,431,214
Participant loans 2,761,764
Total investments 60,857,605 30,625,566 718,722 10,431,214 6,172,485
Accrued interest
receivable 6,509
Cash and invested cash
(overdraft) 326,609 117,647 (1,502) (270) 172,119
Other receivables 51,905 43,853 1,502 270 415
Contribution receivable
from The Lincoln National
Life Insurance Company 3,206,975 3,206,975
Total assets 64,449,603 33,994,041 718,722 10,431,214 6,345,019
Miscellaneous payables 30,367 30,367 - - -
Net assets available
for plan benefits $64,419,236 $33,963,674 $718,722 $10,431,214 $6,345,019
December 31, 1993
Investment Options
5 6 7 8 Loans
Assets
Investments:
Common stock
Segregated investment
accounts $4,484,882 $1,331,690 $977,581 $3,353,701
Unallocated insurance
contracts
Participant loans $2,761,764
Total investments 4,484,882 1,331,690 977,581 3,353,701 2,761,764
Accrued interest
receivable 6,509
Cash and invested
cash (overdraft) (2,354) (1,011) (1,002) (1,495) 44,477
Other receivables 2,354 1,011 1,002 1,495 3
Contribution receivable
from The Lincoln
National Life Insurance
Company
Total assets 4,484,882 1,331,690 977,581 3,353,701 2,812,753
Miscellaneous payables - - - - -
Net assets available
for plan benefits $4,484,882 $1,331,690 $977,581 $3,353,701 $2,812,753
p. 9
<PAGE>
The Lincoln National Life Insurance Company
Agents' Savings and Profit-Sharing Plan
Notes to Financial Statements (continued)
4. Investment Options (continued)
The detail of the net assets available for plan benefits by investment
option is as follows:
December 31, 1992
Investment Options
Total 1 2 3 4
Assets
Investments:
Common stock $23,516,460 $23,516,460
Segregated investment
accounts 13,955,960 $738,056 $5,180,981
Unallocated insurance
contracts 10,138,184 $10,138,184
Participant loans 2,414,489
Total investments 50,025,093 23,516,460 738,056 10,138,184 5,180,981
Accrued interest
receivable 6,320
Cash overdraft (32,600) (32,600)
Other receivables
(payables) 46,159 138,539 (1,780) (23,639) (24,290)
Contribution receivable:
Agents 132,412 40,032 1,780 23,639 24,290
The Lincoln National
Life Insurance Company 2,410,347 2,410,347
Total contribution
receivable 2,542,759 2,450,379 1,780 23,639 24,290
Total assets and net
assets available for
plan benefits $52,587,731 $26,072,778 $738,056 $10,138,184 $5,180,981
December 31, 1992
Investment Options
5 6 7 8 Loans
Assets
Investments:
Common stock
Segregated investment
accounts $3,514,901 $1,503,906 $898,746 $2,119,370
Unallocated insurance
contracts
Participant loans $2,414,489
Total investments 3,514,901 1,503,906 898,746 2,119,370 2,414,489
Accrued interest
receivable 6,320
Cash overdraft
Other receivables
(payables) (18,555) (3,308) (3,919) (16,889)
Contribution receivable:
Agents 18,555 3,308 3,919 16,889
The Lincoln National Life
Insurance Company
Total contribution
receivable 18,555 3,308 3,919 16,889 -
Total assets and net
assets available for
plan benefits $3,514,901 $1,503,906 $898,746 $2,119,370 $2,420,809
p. 10
<PAGE>
The Lincoln National Life Insurance Company
Agents' Savings and Profit-Sharing Plan
Notes to Financial Statements (continued)
4. Investment Options (continued)
The detail of the net assets available for plan benefits by investment
option is as follows:
Year ended December 31, 1993
Investment Options
Total 1 2 3 4
Investment income:
Cash dividends $ 1,031,836 $ 1,031,836
Interest 918,338 $ 665,851
Total investment
income 1,950,174 1,031,836 665,851
Net realized gain on
sale, distribution
and forfeitures of
investments:
Common stock 1,422,975 1,422,975
Segregated investment
accounts 424,288 $ 30,713 $ 134,993
Total net realized
gain 1,847,263 1,422,975 30,713 134,993
Net unrealized
appreciation
(depreciation)of
investments 3,742,424 2,819,868 13,065 436,205
Contributions:
Agents 4,364,477 1,246,320 70,397 631,515 831,779
The Lincoln National
Life Insurance Company 3,806,346 3,806,346
Total contributions 8,170,823 5,052,666 70,397 631,515 831,779
Distributions to
participants
(deduction) (3,823,008) (2,085,728) (96,162) (1,084,881) (5,515)
Administrative expenses
(deduction) (56,171) (40,293) (445) (6,248) (3,562)
Net transfers
(deduction) - (310,428) (36,902) 86,793 (229,862)
Net increase (decrease)
in net assets available
for plan benefits 11,831,505 7,890,896 (19,334) 293,030 1,164,038
Net assets available
for plan benefits at
beginning of the year 52,587,731 26,072,778 738,056 10,138,184 5,180,981
Net assets available
for plan benefits
at end of the year $64,419,236 $33,963,674 $718,722 $10,431,214 $6,345,019
Year ended December 31, 1993
Investment Options
5 6 7 8 Loans
Investment income:
Cash dividends
Interest $ 252,487
Total investment income 252,487
Net realized gain on
sale, distribution and
forfeitures of
investments:
Common stock
Segregated investment
accounts $ 119,958 $ 36,281 $ 46,491 $ 55,852
Total net realized gain 119,958 36,281 46,491 55,852
Net unrealized
appreciation
(depreciation)of
investments 198,293 (11,404) 49,764 236,633
Contributions:
Agents 725,553 93,977 129,777 635,159
The Lincoln National
Life Insurance Company
Total contributions 725,553 93,977 129,777 635,159
Distributions to
participants (deduction) (269,254) (34,161) (52,390) (25,732) (169,185)
Administrative expenses
(deduction) (2,409) (828) (578) (1,808)
Net transfers (deduction) 197,840 (256,081) (94,229) 334,227 308,642
Net increase (decrease)
in net assets available
for plan benefits 969,981 (172,216) 78,835 1,234,331 391,944
Net assets available for
plan benefits at
beginning of the year 3,514,901 1,503,906 898,746 2,119,370 2,420,809
Net assets available for
plan benefits at end of
the year $4,484,882 $1,331,690 $977,581 $3,353,701 $2,812,753
p. 11
<PAGE>
The Lincoln National Life Insurance Company
Agents' Savings and Profit-Sharing Plan
Notes to Financial Statements (continued)
4. Investment Options (continued)
The detail of the net assets available for plan benefits by investment
option is as follows:
Year ended December 31, 1992
Investment Options
Total 1 2 3 4
Investment income:
Cash dividends $ 960,231 $ 960,231
Interest 951,796 $ 703,971
Total investment
income 1,912,027 960,231 703,971
Net realized gain on
sale, distribution and
forfeitures of
investments:
Common stock 948,569 948,569
Segregated investment
accounts 402,143 $ 25,857 $ 119,044
Total net realized
gain 1,350,712 948,569 25,857 119,044
Net unrealized
appreciation
(depreciation)
of investments 5,754,416 5,370,972 18,469 (7,000)
Contributions:
Agents 3,700,880 1,101,494 53,782 634,157 793,120
The Lincoln National
Life Insurance Company 2,988,118 2,988,118
Total contributions 6,688,998 4,089,612 53,782 634,157 793,120
Distributions to
participants
(deduction) (2,674,106) (1,341,691) (37,650) (683,002) (158,122)
Net transfers
(deduction) - (2,488,136) 25,335 1,391,747 370,346
Net increase in net
assets available for
plan benefits 13,032,047 7,539,557 85,793 2,046,873 1,117,388
Net assets available
for plan benefits at
beginning of the year 39,555,684 18,533,221 652,263 8,091,311 4,063,593
Net assets available
for plan benefits at
end of the year $52,587,731 $26,072,778 $738,056 $10,138,184 $5,180,981
Year ended December 31, 1992
Investment Options
5 6 7 8 Loans
Investment income:
Cash dividends
Interest $ 247,825
Total investment income 247,825
Net realized gain on
sale, distribution and
forfeitures of
investments:
Common stock
Segregated investment
accounts $ 140,906 $ 59,197 $ 34,831 $ 22,308
Total net realized gain 140,906 59,197 34,831 22,308
Net unrealized
appreciation
(depreciation) of
investments 245,940 (7,590) 18,577 115,048
Contributions:
Agents 444,698 118,822 96,678 458,129
The Lincoln National Life
Insurance Company
Total contributions 444,698 118,822 96,678 458,129
Distributions to
participants (deduction) (126,437) (112,517) (42,182) (36,655) (135,850)
Net transfers (deduction) 131,015 (911) 113,907 499,355 (42,658)
Net increase in net assets
available for plan
benefits 836,122 57,001 221,811 1,058,185 69,317
Net assets available for
plan benefits at beginn-
ing of the year 2,678,779 1,446,905 676,935 1,061,185 2,351,492
Net assets available for
plan benefits at end of
the year $3,514,901 $1,503,906 $898,746 $2,119,370 $2,420,809
12
<PAGE>
The Lincoln National Life Insurance Company
Agents' Savings and Profit-Sharing Plan
Notes to Financial Statements (continued)
4. Investment Options (continued)
The detail of the net assets available for plan benefits by investment
option is as follows:
Year ended December 31, 1991
Investment Options
Total 1 2 3 4
Investment income:
Cash dividends $ 905,616 $ 905,616
Interest 871,329 4,757 $ 171 $ 625,370
Total investment
income 1,776,945 910,373 171 625,370
Net realized gain on
sale, distribution
and forfeitures of
investments:
Common stock 283,940 283,940
Segregated investment
accounts 334,025 5,787 $ 128,778
United States government
obligations 7,837 7,837
Total net realized gain 625,802 283,940 13,624 128,778
Net unrealized
appreciation of
investments 6,174,090 4,121,627 66,023 796,229
Contributions:
Agents 3,186,223 1,154,803 43,803 632,984 637,765
The Lincoln National
Life Insurance Company
(net of forfeitures) 502,765 500,495 11 319
Total contributions 3,688,988 1,655,298 43,803 632,995 638,084
Distributions to
participants
(deduction) (2,773,457) (971,281) (99,218) (1,047,792) (143,630)
Net transfers
(deduction) - (1,399,379) (15,226) 824,279 35,040
Net increase (decrease)
in net assets available
for plan benefits 9,492,368 4,600,578 9,177 1,034,852 1,454,501
Net assets available
for plan benefits at
beginning of the year 30,063,316 13,932,643 643,086 7,056,459 2,609,092
Net assets available
for plan benefits at
end of the year $39,555,684 $18,533,221 $652,263 $8,091,311 $4,063,593
Year ended December 31, 1991
Investment Options
5 6 7 8 Loans
Investment income:
Cash dividends
Interest $ 241,031
Total investment income 241,031
Net realized gain on
sale, distribution
and forfeitures of
investments:
Common stock
Segregated investment
accounts $ 130,757 $ 51,528 $ 11,835 $ 5,340
United States government
obligations
Total net realized gain 130,757 51,528 11,835 5,340
Net unrealized
appreciation of
investments 848,864 32,929 81,098 227,320
Contributions:
Agents 278,619 180,203 79,356 178,690
The Lincoln National
Life Insurance Company
(net of forfeitures) 327 667 946
Total contributions 278,946 180,870 79,356 179,636
Distributions to
participants (deduction) (174,923) (155,972) (16,834) (483) (163,324)
Net transfers
(deduction) 2,489 (384,987) 132,474 649,372 155,938
Net increase
(decrease) in net
assets available for
plan benefits 1,086,133 (275,632) 287,929 1,061,185 233,645
Net assets available
for plan benefits at
beginning of the year 1,592,646 1,722,537 389,006 2,117,847
Net assets available
for plan benefits
at end of the year $2,678,779 $1,446,905 $676,935 $1,061,185 $2,351,492
13
<PAGE>
The Lincoln National Life Insurance Company
Agents' Savings and Profit-Sharing Plan
Notes to Financial Statements (continued)
4. Investment Options (continued)
Information with respect to investment options is as follows:
Option Description of Investment Option
1 LNC Stock Fund, which invests primarily in
shares of Lincoln National Corporation's common
stock;
2 U.S. Government Bond Fund, which invests primarily
in United States government bonds, notes and other
direct obligations of the United States;
3 Guaranteed Fund, which invests primarily in contracts
which guarantee a rate of return and principal;
4 Core Equity Fund, which directly or indirectly invests
primarily in the common stock of established companies;
5 Medium Capitalization Equity Fund, which directly or
indirectly invests primarily in the stock of new, rapid
growth companies;
6 Short-Term Fund, which directly or indirectly invests
primarily in notes of government agencies and private
corporations;
7 Government/Corporate Bond Fund, which directly or
indirectly invests primarily in corporate and U.S.
government bonds and mortgage-backed securities;
8 Large Capitalization Equity Fund, which directly or
indirectly invests primarily in high-risk common
stocks which have the potential for a significant
appreciation in value over an 18 to 24 month period.
<PAGE>
The Lincoln National Life Insurance Company
Agents' Savings and Profit-Sharing Plan
Notes to Financial Statements (continued)
4. Investment Options (continued)
Subsequent to December 31, 1993, the Plan began offering five additional
segregated investment accounts as investment options to participants. These
five investment options consist of the International Equity Fund which
invests in common stocks of foreign companies with a long-term growth
potential; the Small Capitalization Growth Equity Fund which invests in
undervalued, small emerging growth companies; the Balanced Fund which invests
in common stocks, bonds and other short-term assets; the Value Equity Fund
which invests in undervalued, large capitalization companies; and the High
Yield Fund which invests in a diversified portfolio of below investment grade
securities.
The information as to the number of agents selecting each investment option
is not readily available.
Interest charged on new loans to participants is established monthly based
upon prevailing rates for similar loans. Loans are repaid over five or ten
year periods depending on the purpose of the loan or when a participant
withdraws from the Plan.
5. Income Tax Status
The Internal Revenue Service has ruled (May 5, 1986) that the Plan qualifies
under Section 401(a) of the Internal Revenue Code ("IRC") and, therefore, is
not subject to tax under the present income tax laws. Further, the Plan is
required to operate in conformity with the IRC to maintain it's
qualification. The Plan's administrator is not aware of any course of action
or series of events that have occurred that might adversely affect the Plan's
qualified status.
6. Tax Implications to Participating Agents
There are no income tax consequences to participating agents arising from
their pre-tax contributions, the Company's contributions and income earned in
the Plan until actual distribution or withdrawal from the Plan. The tax
basis of securities distributed to the agent is provided by the Lincoln
National Corporation Benefits Investment Committee.
15
<PAGE>
The Lincoln National Life Insurance Company
Agents' Savings and Profit-Sharing Plan
Notes to Financial Statements (continued)
7. Transactions With Parties-In-Interest
All investments held by the Plan and related investment transactions, except
for short-term cash investments, were with the Company. Prior to January 1,
1993, the Company provided certain administrative services at no cost to the
Plan. In 1993, the Company began charging for administrative services to the
Plan. Expenses incurred solely for the LNC Stock Fund are charged directly
to the LNC Stock Fund while all other administrative expenses are charged to
earnings of the other investment options based upon the market value of the
respective funds applicable to each investment option. The Plan incurred
$56,171 in 1993 for administrative services provided by the Company for the
Plan.
8. Concentrations of Credit Risks
The Plan has investments in common stock of LNC, and in segregated investment
accounts and unallocated insurance contracts with the Company of $30,625,566,
$17,039,061 and $10,431,214, respectively, at December 31, 1993 (47.5%, 26.5%
and 16.2% of net assets, respectively). LNC and the Company operate
predominately in the insurance industry.
9. Reconciliation of Financial Statements to Form 5500
The following is a reconciliation of net assets available for plan benefits
per the financial statements to the Form 5500:
December 31,
1993
Net assets available for plan benefits per the
financial statements $64,419,236
Amounts allocated to withdrawing participants (289,810)
Net assets available for plan benefits per the Form 5500 $64,129,426
16
<PAGE>
The Lincoln National Life Insurance Company
Agents' Savings and Profit-Sharing Plan
Notes to Financial Statements (continued)
9. Reconciliation of Financial Statements to Form 5500
(continued)
Amounts allocated to withdrawing participants by fund option is as follows:
December 31,
1993
LNC Stock Fund $117,276
Core Equity Fund 172,534
$289,810
The following is a reconciliation of distributions to participants per the
financial statements to the Form 5500:
December 31,
1993
Distributions to participants per the
financial statements $3,823,008
Amounts allocated to withdrawing participants
at December 31, 1993 289,810
Distributions to participants per the Form 5500 $4,112,818
Amounts allocated to withdrawing participants are recorded on the Form 5500
for distributions that have been processed and approved for payment prior to
year-end but have not yet been paid.
The Plan reported on Form 5500 net realized gains and net unrealized
appreciation of $671,689 (unaudited) and $4,917,998 (unaudited),
respectively, for the year ended December 31, 1993. Such amounts, which
differ from the amounts reported herein, were computed in accordance with the
requirements of the Department of Labor.
17
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13. Other Expenses of Issuance and Distribution
Reference is hereby made to Item 14 of Form S-3, "Other Expenses of
Issuance and Distribution."
Item 14. Indemnification of Directors and Officers
Pursuant to Indiana law (IND. CODE ANN. Sec. 23-1-37-1 et seq. (Burns,
1989 Repl. Volume)), and to the respective by-laws of LNC and the Company,
present and former directors, officers, employees and agents of LNC and the
Company will be indemnified by their respective corporations against liabil-
ity incurred in their capacities as directors, officers, employees, or agents,
or arising from their status as such.
Further, as permitted by IND. CODE ANN. Sec. 23-1-37-14 (Burns, 1989
Repl. Volume) and the by-laws, LNC has purchased insurance designed to pro-
tect and indemnify itself and the Company and their officers, directors,
employees and agents in the event they are required to pay any amounts arising
from certain civil claims, including claims under the Securities Act of 1933,
which might be made against them by reason of any actual or alleged act,
error, omission, misstatement, misleading statement, neglect or breach of duty
while acting in their respective capacities as directors, officers, employees
or agents of the Company.
Item 15. Recent Sales of Unregistered Securities
Not Applicable.
Item 16. Exhibits and Financial Statement Schedules
a) The exhibits furnished with this Registration Statement are listed on
page II-5.
b) All schedules for which provision is made in the applicable
accounting
regulation of the Securities and Exchange Commission are not required under
the related instructions, are inapplicable, or the required information has
been included in the financial statements, and therefore has been omitted.
V10N0XLU/35/LCT
II-1
<PAGE>
Item 17. Undertakings
(a) The undersigned registrant undertakes -- (1) to file, during any
period in which offers or sales are being made, a post-effective amendment to
this Registration Statement: (i) to include any Prospectus required by Section
10(a)(3) of the Securities Act of 1933; (ii) to reflect in the Prospectus any
facts or events arising after the effective date of the Registration Statement
(or the most recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the information set forth
in the Registration Statement; (iii) to include any material information with
respect to the plan of distribution not previously disclosed in the
Registration Statement or any material change to such information in the
Registration Statement; (2) that, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new Registration Statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof; and (3) to remove from registration
by means of a post-effective amendment any of the securities being registered
which remain unsold at the termination of the offering.
(b) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question of
whether such indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such issue.
(c) The registrant hereby undertakes that, for purposes of determining
any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
V10N0XLU/36/LCT
II-2
<PAGE>
Form S-3
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
Set forth below are estimates of all additional expenses incurred or to
be incurred by the Issuer paid in calendar year 1993, in connection with the
issuance and distribution of the securities to be registered, other than
underwriting discounts and commission.
Registration fees $ -0-
Printing and engraving -0-
Legal fees -0-
Accounting fees 4,000
State blue sky fees and expenses -0-
Miscellaneous -0-
TOTAL $4,000
The Issuer paid in 1994 an annual premium of approximately $1,018,675
(for itself and all subsidiaries) in respect of directors' and officers'
liability insurance which would cover, among other things, certain claims
made against its directors and officers including claims arising under the
Securities Act of 1933, as amended.
Item 15. Indemnification of Directors and Officers
Pursuant to Indiana law (IND. CODE ANN. Sec. 23-1-37-1 et seq. (Burns,
1989 Repl. Volume)), and to the respective by-laws of LNC and the Company,
present and former directors, officers, employees and agents of LNC and the
Company will be indemnified by their respective corporations against liability
incurred in their capacities as directors, officers, employees, or agents, or
arising from their status as such.
Further, as permitted by IND. CODE ANN. Sec. 23-1-37-14 (Burns, 1989
Repl. Volume) and the by-laws, LNC has purchased insurance designed to protect
and indemnify itself and the Company and their officers, directors, employees
and agents in the event they are required to pay any amounts arising from
certain civil claims, including claims under the Securities Act of 1933, which
might be made against them by reason of any actual or alleged act, error,
omission, misstatement, misleading statement, neglect or breach of duty while
acting in their respective capacities as directors, officers, employees or
agents of the Company.
Item 16. Exhibits
The exhibits furnished with this Registration Statement are listed on
page II-5.
V10N0XLU/37/LCT
II-3
<PAGE>
Item 17. Undertakings
(a) The undersigned registrant undertakes -- (1) to file, during any
period in which offers or sales are being made, a post-effective amendment to
this Registration Statement: (i) to include any Prospectus required by
Section 10(a)(3) of the Securities Act of 1933; (ii) to reflect in the
Prospectus any facts or events arising after the effective date of the
Registration Statement (or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a fundamental change in the
information set forth in the Registration Statement; (iii) to include any
material information with respect to the plan of distribution not previously
disclosed in the Registration Statement or any material change to such
information in the Registration Statement; (2) that, for the purpose of
determining any liability under the Securities Act of 1933, each such post-
effective amendment shall be deemed to be a new Registration Statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof; and (3) to remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than payment by the registrant
of expenses incurred or paid by a director, officer or controlling person of
the registrant in the successful defense of any action, suit or proceeding)
is asserted by such director, officer or controlling person in connection with
the securities being registered, the registrant will, unless in the opinion
of its counsel the matter has been settled by controlling precedent, submit
to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
(c) The registrant hereby undertakes that, for purposes of determining
any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
V10N0XLU/38/LCT
II-4
<PAGE>
SIGNATURES
Lincoln National Corporation ("Issuer") - Pursuant to the requirements of
the Securities Act of 1933, the Issuer has duly cuased this Post-Effective
Amendment to the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Fort Wayne, the State
of Indiana on the 1st day of April, 1994.
LINCOLN NATIONAL CORPORATION
/S/ROBERT A. ANKER
Robert A. Anker,
President
Pursuant to the requirements of the Securities Act of 1933, this Post-
Effective Amendment to the Registration Statement has been signed below by
the following persons in the capacities and on the dates indicated.
Signature Title Date
/S/IAN M. ROLLAND Chairman of the Board 4/1/94
(Ian M. Rolland) & Director (Principal
Executive Officer)
/S/ROBERT A. ANKER President, Chief Operating 4/1/94
(Robert A. Anker) Officer and Director
/S/DONALD L. VANWYNGARDEN Second Vice President & 4/1/94
(Donald L. VanWyngarden) Controller (Principal
Accounting Officer)
/S/RICHARD C. VAUGHAN Senior Vice President 4/1/94
(Richard C. Vaughan) (Principal Financial
Officer)
Director
(J. Patrick Barrett)
**/S/THOMAS D. BELL, JR. Director 4/1/94
(Thomas D. Bell, Jr.)
Director
(Daniel K. Efroymson)
V10N0XLU/42/LCT
<PAGE>
Signature Title Date
/S/HARRY L. KAVETAS Director 4/1/94
(Harry L. Kavetas)
*/S/M. LEANNE LACHMAN Director 4/1/94
(M. Leanne Lachman)
Director
(Leo J. McKernan)
*/S/EARL L. NEAL Director 4/1/94
(Earl L. Neal)
**/S/JOHN M. PIETRUSKI Director 4/1/94
(John M. Pietruski)
*/S/JILL S. RUCKELSHAUS Director 4/1/94
(Jill S. Ruckelshaus)
/S/GORDON A. WALKER Director 4/1/94
(Gordon A. Walker)
**/S/GILBERT R. WHITAKER, JR.Director 4/1/94
(Gilbert R. Whitaker, Jr.)
*/S/JEREMY SACHS, pursuant to a Power of Attorney filed with the
Jeremy Sachs original Registration Statement, effective April
30, 1986.
**/S/JEREMY SACHS, pursuant to a Power of Attorney Statement, filed
Jeremy Sachs with Post-Effective Amendment No. 5 to the
Registration Statement, effective April 30, 1991.
V10N0XLU/43/LCT
<PAGE>
SIGNATURES
The Lincoln National Life Insurance Company ("Company") Pursuant to the
requirements of the Securities Act of 1933, the Company has duly caused this
Post-Effective Amendment to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Fort
Wayne, the State of Indiana on the 1st day of April, 1994.
THE LINCOLN NATIONAL
LIFE INSURANCE COMPANY
By: /S/ROBERT A. ANKER
Robert A. Anker,
President
Pursuant to the requirements of the Securities Act of 1933, this Post-
Effective Amendment to the Registration Statement has been signed below by
the following persons in the capacities and on the dates indicated.
Signature Title Date
/S/IAN M. ROLLAND Chairman, Chief Executive 4/1/94
(Ian M. Rolland) Officer & Director
(Principal Executive Officer)
/S/ROBERT A. ANKER President, Chief Operating 4/1/94
(Robert A. Anker) Officer & Director
/S/O. DOUGLAS WORTHINGTON Vice President, Controller 4/1/94
(O. Douglas Worthington) and Assistant Treasurer
(Principal Financial &
Accounting Officer)
*/S/P. KENNETH DUNSIRE Executive Vice President 4/1/94
(P. Kenneth Dunsire) and Director
*/S/EDWARD D. IRONS Director 4/1/94
(Edward D. Irons)
*/S/M. JOYCE SCHLATTER Director 4/1/94
(M. Joyce Schlatter)
V10N0XLU/46/LCT
<PAGE>
Signature Title Date
*/S/THOMAS M. WEST Director and Executive 4/1/94
(Thomas M. West) Vice President
*/S/JEREMY SACHS, pursuant to a Power of Attorney filed with the
Jeremy Sachs the original Registration Statement, effective
April 30, 1986.
**/S/JEREMY SACHS, pursuant to a Power of Attorney filed with Post-
Jeremy Sachs Effective Amendment Number 5 to the Registration
Statement, effective April 30, 1991.
V10N0XLU/47/LCT
<PAGE>
SIGNATURES
The Lincoln National Life Insurance Company Agents' Savings and Profit-
Sharing Plan ("Plan"). Pursuant to the requirements of the Securities Act of
1933, the Plan has duly caused this Post-Effective Amendment to the
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Fort Wayne, and the State of Indiana
on the 1st day of April, 1994.
THE LINCOLN NATIONAL LIFE INSURANCE
COMPANY AGENTS' SAVINGS AND PROFIT-
SHARING PLAN
By: /S/JON A. BOSCIA
Jon A. Boscia, Chairman of The
Lincoln National Corporation
Benefits Investment Committee
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment to the Registration Statement has been signed below
by the following persons in the capacities and on the dates indicated.
Signature Title Date
/S/JON A. BOSCIA Chairman 4/1/94
(Jon A. Boscia)
**/S/ROBERT A. ANKER Member 4/1/94
(Robert A. Anker)
Member
(George E. Davis)
**/S/P. KENNETH DUNSIRE Member 4/1/94
(P. Kenneth Dunsire)
Member
(F. Cedric McCurley)
*/S/RICHARD S. ROBERTSON Member 4/1/94
(Richard S. Robertson)
/S/RICHARD C. VAUGHAN Member 4/1/94
(Richard C. Vaughan)
V10N0XLU/50/LCT
<PAGE>
*/S/JEREMY SACHS, pursuant to a Power of Attorney filed with the
Jeremy Sachs original Registration Statement, effective April 30,
1986.
**/S/JEREMY SACHS, pursuant to a Power of Attorney filed with Post-
Jeremy Sachs Effective Amendment No. 5 to the Registration
Statement, effective April 30, 1991.
V10N0XLU/51/LCT
<PAGE>
INDEX TO EXHIBITS
Page No. in the
Sequential Numbering
Exhibit No. Description System
23 Consent of Ernst &
Young, Independent
Auditors
EXHIBIT 23
CONSENT OF ERNST & YOUNG, INDEPENDENT AUDITORS
We consent to the reference to our firm under the captions
"Experts" and "Financial Statements" in Post-Effective Amendment
No. 8 to the Registration Statement (Form S-1 No. 33-4711) and
related Prospectus pertaining to The Lincoln National Life
Insurance Company Agents' Savings and Profit-Sharing Plan and
(a) to the use of our report dated March 15, 1994, pertaining to
The Lincoln National Life Insurance Company Agents' Savings and
Profit-Sharing Plan in the Registration Statement and related
Prospectus and (b) to the incorporation by reference therein of
our report dated February 10, 1994, with respect to the
consolidated financial statements and schedules of Lincoln
National Corporation included in its Annual Repoprt (Form 10-K),
both for the year ended December 31, 1993, filed with the
Securities and Exchange Commission.
/S/ Ernst & Young
Fort Wayne, Indiana
March 28, 1994
