As filed with the Securities and Exchange Commission on May 1, 1996
Registration No. 33-4711
SECURITIES AND EXCHANGE COMMISSION
POST-EFFECTIVE AMENDMENT NO. 10 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. 10
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
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 ___
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, 1996.
<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 . . . . . . . . . . . .
*Page numbers will be included in printed form of the prospectus when
prepared for distribution.
<PAGE>
Lincoln National Corporation is subject to the informational
requirements 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 information 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.
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 thirteen 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 Company is a subsidiary of LNC. 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
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
calendar 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 December 31, 1995, there were 1217 Agents eligible to
participate in the Plan, and 902 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 provided, however,
that the percentage rate of Pre-Tax contributions for any highly compensated
Agent shall not exceed the greater of the annual deferral percentage allowed
for the highly compensated for the immediately preceding Plan Year and 6%.
The Agent consents to this reduction of compensation in his enrollment form.
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
An Agent who is or may become a Participant may, in accordance with
procedures established by the LNC Benefits Committee, make a Rollover
Contribution to the Plan, in the form and manner required by the Plan and
the Code.
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
Contributions above 25 cents will be made when LNC's performance is above
the average performance of the peer companies. The maximum corporate
contribution of $1.50 will be made when LNC's performance is equal to or
better than 75% of its peers. Amounts in between 25 cents and $1.50 will be
based on LNC's relative performance between average and the 75th percentile.
The LNC Board has complete discretion to determine this comparative performance
after each plan year.
Average performance is defined as the VROE average of the middle 8 peer
companies over the 3-year performance period. The 75% level of performance is
defined as the VROE average of the peer companies ranked third, fourth and
fifth.
Each plan year the corporation will contribute from 25 cents to $1.50 for
every $1 invested, up to 6% of earnings. The amount the corporation contributes
is based on the average of LNC's performance each year over the 3-year period
ending with the plan year for which the contribution is being determined,
compared to the performance over this same time period of a peer group of 14
companies selected by the Board of Directors. Value sharing return on equity,
called VROE, is the measure used to determine performance.
The minimum Employer contribution ($.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 prior to the last day of the Plan Year 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. The Employer also
reserves the right to amend or terminate the Plan at any time; however, such
termination shall not affect already earned benefits.
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 will be refunded and
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 for 1996, and the Agent's
pre-tax contributions may not exceed $9,500 for calendar year 1996. The
figures for calendar year 1997 and thereafter, 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 ROLLOVER [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 ("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.
The fund manager is Norwest Bank.
<r/>
2. Government Bond Fund, which directly or indirectly
invests in fixed income securities issued by the U.S.
Government. This is a moderate risk fund. Because
this account invests 100% of its monies in bonds
guaranteed by the U.S. government, there is no default
risk. However, this account will often produce lower
returns than other bond accounts because of its shorter
maturities and lower risk. 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. The fund manager is Lincoln
Investment Management, Inc.
3. Guaranteed Fund, which invests primarily in contracts
which guarantee a rate of interest and principal. This
fund is considered a safe investment because of the
guarantee of the principal investment, as well as a
minimum interest guarantee. The Trustee currently holds
a group annuity contract issued by LNL which is the
primary asset of this Fund. The fund manager is Lincoln
Investment Management, Inc.
4. Core Equity Fund, which directly or indirectly primarily
invests in the common stock of established companies.
This is a conservative equity fund and has lower risk than
investments in the more aggresive equity funds, because
this fund invets primarily in large, well-established
companies which are generally less risky than a new
company or a company that is not well established. 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. The fund manager is
Vantage Global Advisors, Inc.
5. Medium Capitalization Equity Fund, which directly or
indirectly primarily invests in the stock of new, rapid
growth companies. This is a high risk aggressive equity
fund and is riskier than investments in large, established
companies, because the stock of medium-size companies may
not be as well known and may experience more sudden
fluctuations. 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 Capitaliza-
tion Equity Fund. The current description of that segregated
account identifies it as a high-risk, aggressive common stock
fund. The fund manager is Provident Investment Counsel.
6. Short Term Fund, which invests directly or indirectly
primarily in notes of government agencies and private
corporations. This is considered a low risk investment.
Because investments in this fund are high quality and
have short maturities, they are considered relatively
safe. However, the fund will generally produce lower
returns than both bonds and stocks. 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. The fund manager is
Lincoln Investment Management, Inc.
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.
The fund manager is Lynch & Mayer, Inc.
8. Government/Corporate Bond Fund, which invests directly or
indirectly in Corporate and U.S. Government bonds, and
mortgage-backed securities. This is a moderate risk fund,
with less risk than the High Yield Fund because it invests
mostly in higher-quality bonds. 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 the Government/Corporate
Bond Fund. The fund manager is Lincoln Investment Management,
Inc.
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. The fund manager
is First Fiduciary Investment Counsel, Inc.
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. The fund manager
is Walter Scott & Partners Limited.
11. High Yield 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. The fund manager is Lincoln Investment
Management, Inc.
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.
The fund manager is Delaware Management Holdings, Inc.
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.
The fund manager is Lincoln Investment Management, Inc.
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.
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 1991
through 1995. The comparison is based on past performance of the Investment
Funds and is not necessarily indicative of future performance.
**** 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. ****
<PAGE>
<TABLE>
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 1991 1992 1993 1994 1995
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
LNC Common
Stock Fund 37.24% 37.51% 15.10% (16.06%) 59.95%
Government
Bond Fund 12.83% 6.81% 7.21% (1.60%) 6.8%
Guaranteed Fund (3) 8.70% 8.15% 7.25% 7.27% 6.9%
Core Equity Fund 29.06% 2.00% 11.63% 1.00% 24.4%
Medium Capitalization
Equity Fund (2) 55.43% 12.01% 12.71% (2.40%) 19.6%
Short Term Fund 5.95% 3.49% 2.97% 3.90% (4.3%)
Large Capitalization
Equity Fund (2) 48.05% 6.24% 10.88% (2.50%) 16.7%
Government/Corporate
Bond Fund 16.43% 7.25% 12.36% (4.00%) 8.4%
Balanced Fund (4) N/A N/A N/A (2.30%) 13.2%
High Yield Fund (4) N/A N/A N/A .40% 14.5%
Value Equity Fund (2)(4) N/A N/A N/A (.70%) 27.2%
Small Capitalization
Equity Fund (2)(4) N/A N/A N/A (3.60%) 5.7%
International
Equity Fund (2)(4) N/A N/A N/A 1.40% 4.8%
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 1990 Plan Year, 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 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.
4) Effective April 1, 1994, the Plan began offering the Balanced Fund, High
Yield Fund, Value Equity Fund, Small Capitalization Equity Fund, and
International Equity Fund.
</TABLE>
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
relationship of the foreign issuer's currency to the U.S. dollar changes.
High-Yield/High Risk Bonds. Lower-rated bonds involve a higher degree of
credit risk (the risk that the issuer will not make interest or principal
payments when due). In the event of an unanticipated default, the Fund in
question would experience a reduction in its income, and could expect a
decline in the market value of the securities so affected. During an
economic downturn or substantial period of rising interest rates, highly-
leveraged issuers may experience financial stress which would adversely
affect their ability to service their principal and interest payment
obligations, to meet projected business goals, and to obtain additional
financing.
The market prices 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.
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
Certain expenses relating to the Plan are charged against the investments
in the individual account. Auditing fees are charged to all the funds.
Brokerage fees and trustee fees, however, are charged only to the LNC Common
Stock fund. Investment management fees are charged to each of the other
funds. Expenses per participant vary, based on the investment fund selected.
More specific information about these fees is available upon request.
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.
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 the entire balance of his after-tax Account for
any completed Plan Year subject to any limitation applicable to the Fund in
which such contribution is invested. An Agent may elect to withdraw all or
a portion of his Matured Company Contribution Account, subject to any
limitation of the Investment Fund in which is it invested and further subject
to the following limitations: 1) the minimum amount an Agent can withdraw
is $500; 2) if the amount in the Matured Company Contribution Account is
less than $500, 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.
Even though an Agent may be 100% vested in his Employer contributions,
he may only withdraw the matured Employer contributions. These are contribu-
tions 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.
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 attributable to Employer contributions 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.
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 $500; 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 withdrawal.
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:
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 (1) 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 one, three or five years (10, 15, or 20
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 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.
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 valuation date immediately preceding the date of distribution,
termination of service or withdrawal, 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.
Withdrawals from the Employer Contribution 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 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;
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., 111 East Wayne 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 April 21, 1996, 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
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 Committee ("Committee")is the Plan Administrator and
Named Fiduciary. Members of the Committee are appointed by the Chief
Executive Officer of LNC. 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. Members of the Committee receive no
compensation from 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.
MEMBERS OF THE LINCOLN NATIONAL
CORPORATION BENEFITS COMMITTEE
Committee
Name Title Title
- ---------------------------------------------------------------------------
Frederick P. Farkas Chairman Second Vice President of LNC
George E. Davis Member Senior Vice President of LNC
Peter P. Fettig Member Assistant Secretary of LNL
Collin Kebo Member American States Insurance Company
B. Jane Kite Member Second Vice President of Lincoln
Investment Management, Inc.
Jan A. Tindall Member Assistant Vice President of LNL
The business address of Messrs. Farkas, Davis, Fettig and Ms. Kite is
200 E. Berry Street, Fort Wayne, Indiana 46802; the business address of
Mr. Kebo is 500 North Meridian Street, Post Office Box 1636, Indianapolis,
Indiana, 46206; and the business address of Ms. Tindall is 1300 South
Clinton Street, Fort Wayne, Indiana 46802.
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.
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 withdrawals 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 ($9,500.00
for the 1996 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
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 the Agent's Accounts. In general, the amount that may be rolled
over is the taxable portion of the distribution. If less than 100% of the
balance of the Agent's Accounts is distributed, 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 distribution
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,
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.
The Plan is intended to comply with Section 404(c) of ERISA. Under
404(c), the individual is responsible for the selection of investments.
Investment information is periodically provided so that the individual has
the opportunity to exercise meaningful, independent control over the assets
in his or her account. Plan fiduciaries of a 404(c) plan are not liable for
plan losses that are the direct result of the individual's investment
instructions.
More information, including a description of the annual operating
expenses of each investment fund, copies of financial reports for each fund,
and copies of the confidentiality procedures, is available at a nominal
charge. Interested parties can contact Rosalie Bennett, Secretary of the
LNC Benefits Committee at 219-455-3839, or Human Resources, 1H14, P. O.
Box 7837, Fort Wayne, Indiana 46801-7837.
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.
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, 1995 and 1994, and the related Statements of Changes in Net
Assets Available for Plan Benefits for the years ended December 31, 1995, 1994
and 1993, and the report of Ernst & Young LLP, independent auditors, thereon,
appear elsewhere herein, and in the Registration Statement.
LINCOLN NATIONAL CORPORATION COMMON STOCK
The Plan enables Agents to acquire shares of LNC Common Stock. LNC is
authorized to issue 800,000,000 shares of Common Stock and 10,000,000 shares
of Preferred Stock. LNC currently has a Series of Preferred Stock:
$3.00 Cumulative Convertible Preferred Stock, Series A ("Series A
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, 1996, the following number of shares was issued and
outstanding: Common Stock: 104,282,125; Series A Preferred Stock: 39,859.
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.
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 Preferred Stock and any additional
preferred stock of LNC. Holders of Series A 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 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, AND EMPLOYEES
The By-Laws of LNC and the Company, pursuant to authority contained in
the Indiana Business Corporation Law and the Indiana Insurance Law, provide
for the indemnification of their officers, directors, and employees 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 corporations. LNC and the Company may also reimburse such
officers, directors, and employees 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
majority of the disinterested directors or a committee thereof or by special
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 provisions, 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 LLP, independent
auditors, as set forth in their reports thereon 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 and Vice President of LNC, 200 East Berry Street,
Fort Wayne, Indiana 46802. 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 46802.
INCORPORATION OF ADDITIONAL DOCUMENTS BY REFERENCE
LNC hereby incorporates the following documents by reference into this
prospectus:
1. LNC's 1995 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, 1995.
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.
<PAGE>
Financial Statements
Year Ended December 31, 1995
The Lincoln National Life Insurance Company
Agents' Savings and Profit-Sharing Plan
Fort Wayne, Indiana
<PAGE>
The Lincoln National Life Insurance Company
Agents' Savings and Profit-Sharing Plan
Financial Statements
Years ended December 31, 1995, 1994 and 1993
Contents
Report of Independent Auditors 1
Audited Financial Statements
Statements of Net Assets Available for Plan Benefits 2
Statements of Changes in Net Assets Available for Plan Benefits 3
Notes to Financial Statements 4
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 as of December 31, 1995 and 1994, 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, 1995. 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, 1995 and 1994, and the changes in its net assets available for
plan benefits for each of the three years in the period ended December 31,
1995, in conformity with generally accepted accounting principles.
Ernst & Young LLP
March 6, 1996
Fort Wayne, Indiana
<PAGE>
The Lincoln National Life Insurance Company
Agents' Savings and Profit-Sharing Plan
Statements of Net Assets Available for Plan Benefits
December 31
1995 1994
Assets
Investments:
Common stock-Lincoln National Corporation
(cost: 1995-$28,178,295; 1994-$24,599,109) $44,791,273 $28,245,385
Segregated investment accounts--The
Lincoln National Life Insurance
Company Separate Accounts
(cost: 1995-$19,546,015; 1994-$15,974,421) 28,142,841 19,372,295
Unallocated insurance contracts--The Lincoln
National Life Insurance Company 10,955,545 10,725,398
Participant loans 3,317,440 2,809,857
Total investments 87,207,099 61,152,935
Accrued interest receivable 6,216 5,640
Cash and invested cash (deficit) (90,446) 495,281
Other receivables 194,104 --
Contributions receivable The Lincoln
National Life Insurance Company 2,656,985 2,829,134
Total assets 89,973,958 64,482,990
Miscellaneous payables 23,104 84,871
Net assets available for plan benefits $89,950,854 $64,398,119
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
1995 1994 1993
Investment income:
Cash dividends-Lincoln
National Corporation $1,414,060 $1,239,781 $1,031,836
Interest:
The Lincoln National
Life Insurance Company 841,750 746,163 665,851
Other 246,464 227,602 252,487
Total interest 1,088,214 973,765 918,338
Total investment income 2,502,274 2,213,546 1,950,174
Net realized gain on sale, distribution
and forfeitures of investments:
Common stock-Lincoln
National Corporation 2,236,343 694,283 1,422,975
Segregated investment accounts-The
Lincoln National Life Insurance
Company Separate Accounts 864,428 704,323 424,288
Total net realized gain on sale 3,100,771 1,398,606 1,847,263
Net unrealized appreciation
(depreciation) of investments 18,165,654 (8,080,629) 3,742,424
Contributions:
Agents 4,724,597 4,603,511 4,364,477
The Lincoln National Life Insurance
Company (net of forfeitures: 1995-
$6,078; 1994-$3,355; 1993-$323) 3,087,927 3,351,434 3,806,346
Total contributions 7,812,524 7,954,945 8,170,823
Distributions to
participants (deduction) (5,949,349) (3,413,968) (3,823,008)
Administrative expenses (deduction) (79,139) (93,617) (56,171)
Net increase (decrease) in net assets
available for plan benefits 25,552,735 (21,117) 11,831,505
Net assets available for plan
benefits at beginning of the year 64,398,119 64,419,236 52,587,731
Net assets available for plan
benefits at end of the year $89,950,854 $64,398,119 $64,419,236
See accompanying notes.
<PAGE>
The Lincoln National Life Insurance Company
Agents' Savings and Profit-Sharing Plan
Notes to Financial Statements
December 31, 1995
1. Significant Accounting Policies
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 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 Lincoln National Life Insurance Company Agents' Savings and Profit-Sharing
Plan ("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 as determined and adjusted annually by the Internal Revenue
Service ("IRS").
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.
<PAGE>
The Lincoln National Life Insurance Company
Agents' Savings and Profit-Sharing Plan
Notes to Financial Statements (continued)
2. Description of the Plan (continued)
The Company's contributions to the Plan are based on 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 varies according to 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%
During 1995, the Board of Directors of the Company approved a new contribution
formula which will be effective for the 1997 plan year. The new formula gives
the Board of Directors authorization to make a discretionary change in the
percentage used to compute the Company's contribution. In transition, the
Company's contribution for 1996 will be based on the new formula; however, the
amount contributed cannot be less than the contributions calculated in
accordance with the employer contribution formula defined above.
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
participant's accounts excluding employer contributions that haven't been in
the Plan for two full years, 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:
<TABLE>
<CAPTION>
December 31, 1995 December 31, 1994
Number of Market Number of Market
Shares Value Shares Value
<S> <C> <C> <C> <C>
Common stock-LNC 833,326 $44,791,273 807,011 $28,245,385
Segregated investment
accounts with the Company:
Government Bond Fund 388,827.030 562,704 473,960.551 603,684
Core Equity Fund 1,264,092.105 8,773,122 1,219,492.936 6,136,775
Medium Capitalization
Equity Fund 899,403.376 7,117,250 816,126.469 4,774,932
Short-Term Fund 407,724.196 1,068,759 450,952.570 1,117,774
Government/Corporate
Bond Fund 239,667.620 1,151,219 214,023.379 856,606
Large Capitalization
Equity Fund 1,054,128.353 5,127,004 992,370.701 3,692,555
Balanced Fund 44,201.747 177,252 39,585.942 126,049
High Yield Bond Fund 78,023.346 146,681 50,940.273 81,173
Small Capitalization
Equity Fund 320,513.868 998,577 150,548.518 401,161
Value Equity Fund 455,888.394 626,101 217,759.920 229,030
International
Equity Fund 521,418.540 2,394,172 327,689.633 1,352,556
Total segregated
investment accounts 28,142,841 19,372,295
Par Par
Amount Amount
Unallocated insurance
contracts-with
the Company $10,955,545 10,955,545 $10,725,398 10,725,398
Participant loans 3,317,440 3,317,440 2,809,857 2,809,857
Total investments $87,207,099 $61,152,935
</TABLE>
<PAGE>
The Lincoln National Life Insurance Company
Agents' Savings and Profit-Sharing Plan
Notes to Financial Statements (continued)
3. Investments (continued)
Net realized gain on sale, distribution and forfeitures of investments is
summarized as follows:
Year ended December 31
1995 1994 1993
Common stock:
Proceeds from disposition of stock $10,013,495 $6,145,172 $4,695,158
Cost of stock disposed 7,777,152 5,450,889 3,272,183
Net realized gain on sale, distribution
and forfeitures of common stock $ 2,236,343 $ 694,283 $1,422,975
Segregated investment accounts:
Proceeds from disposition of units $ 4,627,606 $4,329,973 $3,664,248
Cost of units disposed 3,763,178 3,625,650 3,239,960
Net realized gain on sale, distribution
and forfeitures of common stock $ 864,428 $ 704,323 $ 424,288
The net unrealized appreciation (depreciation) of investments in total and by
investment classification is summarized as follows:
Year ended December 31
1995 1994 1993
Market value in excess of cost:
At beginning of the year $ 7,044,150 $15,124,779 $11,382,355
At end of the year 25,209,804 7,044,150 15,124,779
Net unrealized appreciation
(depreciation) of investments $18,165,654 $(8,080,629) $ 3,742,424
Common stock $12,966,702 $(7,180,098) $ 2,819,868
Segregated investment accounts 5,198,952 (900,531) 922,556
Net unrealized appreciation
(depreciation) of investments $18,165,654 $(8,080,629) $3,742,424
<PAGE>
The Lincoln National Life Insurance Company
Agents' Savings and Profit-Sharing Plan
Notes to Financial Statements (continued)
3. Investments (continued)
The unallocated insurance contracts earned an average interest rate of
approximately 6.75% and 7.16% in 1995 and 1994, respectively. The credited
interest rate for new contributions, which approximates the current market
rate, at December 31, 1995 and 1994, were 6.25% and 7.50%, respectively. The
rate on new contributions is guaranteed through the succeeding three calendar
year quarters. The credited interest rates for the remaining contract value
balance at December 31, 1995 and 1994 were 6.90% and 7.15%, respectively, and
are determined based upon the performance of the Company's general account.
The credited interest rates change at least quarterly. The minimum guaranteed
rate is 4.50% for the first 5 contract years, 4.00% for years 6-10 and 3.50%
following year 10. The guarantee is based on the Company's ability to meet its
financial obligations out of the general assets of the Company. The fair
value of the unallocated insurance contracts approximate contract value.
<TABLE>
4. Investment Options
The detail of the net assets available for plan benefits by investment option is as follows:
<CAPTION>
December 31, 1995
Investment Options
Total 1 2 3 4
Assets
Investments:
<S> <C> <C> <C> <C> <C>
Common stock $44,791,273 $44,791,273
Segregated investment accounts 28,142,841 $ 562,704 $8,773,122
Unallocated insurance contracts 10,955,545 $10,955,545
Participant loans 3,317,440
Total investments 87,207,099 44,791,273 562,704 10,955,545 8,773,122
Accrued interest receivable 6,216
Cash and invested cash (deficit) (90,446) 39,365 (14,122) 7,636 (13,848)
Other receivables 194,104 14,122 44,548 25,957
Contribution receivable 2,656,985 2,656,985
Total assets 89,973,958 47,487,623 562,704 11,007,729 8,785,231
Miscellaneous payables 23,104 23,104
Net assets available for plan benefits $89,950,854 $47,464,519 $ 562,704 $11,007,729 $8,785,231
5 6 7 8 9
Assets
Investments:
Common stock
Segregated investment accounts $ 7,117,250 $ 1,068,759 $1,151,219 $ 5,127,004 $ 177,252
Unallocated insurance contracts
Participant loans
Total investments 7,117,250 1,068,759 1,151,219 5,127,004 177,252
Accrued interest receivable
Cash and invested cash (deficit) (15,181) (29,147) (9,218) (23,108) (201)
Other receivables 15,181 29,147 9,218 23,108 201
Contribution receivable
Total assets 7,117,250 1,068,759 1,151,219 5,127,004 177,252
Miscellaneous payables
Net assets available for plan benefits $ 7,117,250 $ 1,068,759 $1,151,219 $ 5,127,004 $ 177,252
10 11 12 13 Loans
Assets
Investments:
Common stock
Segregated investment accounts $ 146,681 $ 998,577 $ 626,101 $ 2,394,172
Unallocated insurance contracts
Participant loans $3,317,440
Total investments 146,681 998,577 626,101 2,394,172 3,317,440
Accrued interest receivable 6,216
Cash and invested cash (deficit) (2,308) (11,809) (5,410) (13,095)
Other receivables 2,308 11,809 5,410 13,095
Contribution receivable
Total assets 146,681 998,577 626,101 2,394,172 3,323,656
Miscellaneous payables
Net assets available for plan benefits $ 146,681 $ 998,577 $ 626,101 $ 2,394,172 $3,323,656
December 31, 1994
Investment Options
Total 1 2 3 4
Assets
Investments:
Common stock $28,245,385 $28,245,385
Segregated investment accounts 19,372,295 $ 603,684 $6,136,775
Unallocated insurance contracts 10,725,398 $10,725,398
Participant loans 2,809,857
Total investments 61,152,935 28,245,385 603,684 10,725,398 6,136,775
Accrued interest receivable 5,640
Cash and invested cash 495,281 87,428 262,880 39,223
Contribution receivable 2,829,134 2,829,134
Total assets 64,482,990 31,161,947 603,684 10,988,278 6,175,998
Miscellaneous payables 84,871 33,439 210 8,497
Net assets available for plan benefits $64,398,119 $31,128,508 $603,684 $10,988,068 $6,167,501
5 6 7 8 9
Assets
Investments:
Common stock
Segregated investment accounts $ 4,774,932 $ 1,117,774 $ 856,606 $ 3,692,555 $ 126,049
Unallocated insurance contracts
Participant loans
Total investments 4,774,932 1,117,774 856,606 3,692,555 126,049
Accrued interest receivable
Cash and invested cash 55,801 1,422 32,506
Contribution receivable
Total assets 4,830,733 1,119,196 856,606 3,725,061 126,049
Miscellaneous payables 16,823 9,881
Net assets available for plan benefits $4,813,910 $1,119,196 $856,606 $3,715,180 $126,049
10 11 12 13 Loans
Assets
Investments:
Common stock
Segregated investment accounts $ 81,173 $ 401,161 $ 229,030 $ 1,352,556
Unallocated insurance contracts
Participant loans $2,809,857
Total investments 81,173 401,161 229,030 1,352,556 2,809,857
Accrued interest receivable 5,640
Cash and invested cash 2,000 3,000 2,999 8,022
Contribution receivable
Total assets 83,173 404,161 229,030 1,355,555 2,823,519
Miscellaneous payables 2,000 3,000 2,999 8,022
Net assets available for plan benefits $ 81,173 $ 401,161 $ 229,030 $ 1,352,556 $2,815,497
<PAGE>
4. Investment Options (continued)
The detail of the changes in net assets available for plan benefits by investment option is as follows:
Year ended December 31, 1995
Investment Options
Total 1 2 3 4
Investment income:
Cash dividends $ 1,414,060 $ 1,414,060
Interest 1,088,214 $ 841,750
Total investment income 2,502,274 1,414,060 841,750
Net realized gain on sale, distri-
bution and forfeitures of investments:
Common stock 2,236,343 2,236,343
Segregated investment accounts 864,428 $ 23,782 $ 254,878
Net realized gain on sale 3,100,771 2,236,343 23,782 254,878
Net unrealized appreciation of investments 18,165,654 12,966,702 51,735 2,075,087
Contributions:
Agents 4,724,597 1,031,057 28,085 444,269 564,727
The Lincoln National
Life Insurance Company 3,087,927 3,087,927
Total contributions 7,812,524 4,118,984 28,085 444,269 564,727
Distributions to participants (deduction) (5,949,349) (3,084,570) (49,394) (1,235,196) (387,089)
Administrative expenses (deduction) (79,139) (62,984) (310) (5,320) (3,289)
Net transfers (deduction) -- (1,252,524) (94,878) (25,842) 113,416
Net increase (decrease) in net assets
available for plan benefits 25,552,735 16,336,011 (40,980) 19,661 2,617,730
Net assets available for plan
benefits at beginning of the year 64,398,119 31,128,508 603,684 10,988,068 6,167,501
Net assets available for plan
benefits at end of the year $89,950,854 $47,464,519 $ 562,704 $11,007,729 $8,785,231
5 6 7 8 9
Investment income:
Cash dividends
Interest
Total investment income
Net realized gain on sale, distri-
bution and forfeitures of investments:
Common stock
Segregated investment accounts $ 302,908 $ 38,216 $ 36,634 $ 166,663 $ 4,767
Net realized gain on sale 302,908 38,216 36,634 166,663 4,767
Net unrealized appreciation of investments 1,473,852 28,481 140,554 1,009,582 28,318
Contributions:
Agents 718,984 31,138 91,685 650,298 50,131
The Lincoln National
Life Insurance Company
Total contributions 718,984 31,138 91,685 650,298 50,131
Distributions to participants (deduction) (431,930) (148,671) (36,650) (245,114) (23,412)
Administrative expenses (deduction) (2,723) (599) (454) (2,079) (68)
Net transfers (deduction) 242,249 998 62,844 (167,526) (8,533)
Net increase (decrease) in net assets
available for plan benefits 2,303,340 (50,437) 294,613 1,411,824 51,203
Net assets available for plan
benefits at beginning of the year 4,813,910 1,119,196 856,606 3,715,180 126,049
Net assets available for plan
benefits at end of the year $ 7,117,250 $ 1,068,759 $1,151,219 $ 5,127,004 $ 177,252
10 11 12 13 Loans
Investment income:
Cash dividends
Interest $ 246,464
Total investment income 246,464
Net realized gain on sale, distri-
bution and forfeitures of investments:
Common stock
Segregated investment accounts $ 1,322 $ 15,881 $ 7,592 $ 11,785
Net realized gain on sale 1,322 15,881 7,592 11,785
Net unrealized appreciation of investments 11,398 83,069 109,101 187,775
Contributions:
Agents 32,280 326,608 193,369 561,966
The Lincoln National
Life Insurance Company
Total contributions 32,280 326,608 193,369 561,966
Distributions to participants (deduction) (3,412) (42,492) (39,639) (91,402) (130,378)
Administrative expenses (deduction) (33) (289) (160) (831)
Net transfers (deduction) 23,953 214,639 126,808 372,323 392,073
Net increase (decrease) in net assets
available for plan benefits 65,508 597,416 397,071 1,041,616 508,159
Net assets available for plan
benefits at beginning of the year 81,173 401,161 229,030 1,352,556 2,815,497
Net assets available for plan
benefits at end of the year $ 146,681 $ 998,577 $ 626,101 $ 2,394,172 $3,323,656
Year ended December 31, 1994
Investment Options
Total 1 2 3 4
<S> <C> <C> <C> <C> <C>
Investment income:
Cash dividends $ 1,239,781 $ 1,239,781
Interest 973,765 $ 746,163
Total investment income 2,213,546 1,239,781 746,163
Net realized gain (loss) on sale, distri-
bution and forfeitures of investments:
Common stock 694,283 694,283
Segregated investment accounts 704,323 $ 16,784 $ 279,387
Total net realized gain on sale 1,398,606 694,283 16,784 279,387
Net unrealized appreciation
(depreciation) of investments (8,080,629) (7,180,098) (26,448) (169,276)
Contributions:
Agents 4,603,511 1,176,997 50,527 432,329 725,798
The Lincoln National
Life Insurance Company 3,351,434 3,351,434
Total contributions 7,954,945 4,528,431 50,527 432,329 725,798
Distributions to participants (deduction) (3,413,968) (1,771,486) (84,469) (623,233) (393,695)
Administrative expenses (deduction) (93,617) (78,744) (317) (5,563) (3,107)
Net transfers (deduction) -- (267,333) (71,115) 7,158 (616,625)
Net increase (decrease) in net
assets available for plan benefits (21,117) (2,835,166) (115,038) 556,854 (177,518)
Net assets available for plan
benefits at beginning of the year 64,419,236 33,963,674 718,722 10,431,214 6,345,019
Net assets available for plan
benefits at end of the year $64,398,119 $31,128,508 $ 603,684 $10,988,068 $6,167,501
5 6 7 8 9
Investment income:
Cash dividends
Interest
Total investment income
Net realized gain (loss) on sale, distri-
bution and forfeitures of investments:
Common stock
Segregated investment accounts $ 226,810 $ 65,801 $ 41,814 $ 73,006 $ 11
Total net realized gain on sale 226,810 65,801 41,814 73,006 11
Net unrealized appreciation
(depreciation) of investments (373,844) (19,300) (78,492) (194,754) 306
Contributions:
Agents 765,034 139,329 125,867 778,686 20,754
The Lincoln National
Life Insurance Company
Total contributions 765,034 139,329 125,867 778,686 20,754
Distributions to participants (deduction) (193,109) (20,387) (109,478) (121,048) (25)
Administrative expenses (deduction) (2,411) (620) (448) (1,818) (48)
Net transfers (deduction) (93,452) (377,317) (100,238) (172,593) 105,051
Net increase (decrease) in net
assets available for plan benefits 329,028 (212,494) (120,975) 361,479 126,049
Net assets available for plan
benefits at beginning of the year 4,484,882 1,331,690 977,581 3,353,701 --
Net assets available for plan
benefits at end of the year $ 4,813,910 $ 1,119,196 $ 856,606 $ 3,715,180 $ 126,049
10 11 12 13 Loans
Investment income:
Cash dividends
Interest $ 227,602
Total investment income 227,602
Net realized gain (loss) on sale, distri-
bution and forfeitures of investments:
Common stock
Segregated investment accounts $ 21 $ 30 $ 831 $ (172)
Total net realized gain on sale 21 30 831 (172)
Net unrealized appreciation
(depreciation) of investments 1,456 (2,408) 7,160 (44,931)
Contributions:
Agents 14,032 90,582 30,701 252,875
The Lincoln National
Life Insurance Company
Total contributions 14,032 90,582 30,701 252,875
Distributions to participants (deduction) (15) (361) (658) (96,004)
Administrative expenses (deduction) (11) (111) (59) (360)
Net transfers (deduction) 65,690 313,429 190,397 1,145,802 (128,854)
Net increase (decrease) in net
assets available for plan benefits 81,173 401,161 229,030 1,352,556 2,744
Net assets available for plan
benefits at beginning of the year -- -- -- -- 2,812,753
Net assets available for plan
benefits at end of the year $ 81,173 $ 401,161 $ 229,030 $ 1,352,556 $2,815,497
</TABLE>
<PAGE>
<TABLE>
4. Investment Options (continued)
The detail of the changes in net assets available for plan benefits by investment option is as follows:
<CAPTION>
Year ended December 31, 1993
Investment Options
Total 1 2 3 4
Investment income:
<S> <C> <C> <C> <C> <C>
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, distri-
bution 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 on sale 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
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
5 6 7 8 Loans
Investment income:
Cash dividends
Interest $ 252,487
Total investment income 252,487
Net realized gain on sale, distri-
bution and forfeitures of investments:
Common stock
Segregated investment accounts $ 119,958 $ 36,281 $ 46,491 $ 55,852
Total net realized gain on sale 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
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
</TABLE>
<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 Common Stock Fund, which invests exclusively in the stock of
Lincoln National Corporation.
2 Government Bond Fund, which invests primarily in bonds backed by
the United States government that will mature in 3 to 5 years.
3 Guaranteed Fund, which invests primarily in contracts which
guarantee a rate of return and principal.
4 Core Equity Fund, which invests primarily in large capitalization
stocks of well-established companies.
5 Medium Capitalization Equity Fund, which invests primarily in
medium-sized companies.
6 Short-Term Fund, which invests in high quality money market
securities that include commercial paper, bankers acceptances,
certificates of deposit, loan participation and short-term U.S.
government debt.
7 Government/Corporate Bond Fund, which invests primarily in
corporate and U.S. government bonds and mortgage-backed
securities.
8 Large Capitalization Equity Fund, which invests primarily in
high-risk common stocks which have the potential for a significant
appreciation in value within 18 months from the date of purchase.
<PAGE>
The Lincoln National Life Insurance Company
Agents' Savings and Profit-Sharing Plan
Notes to Financial Statements (continued)
4. Investment Options (continued)
9 Balanced Fund, which invests in three different asset classes:
stocks, bonds and money market instruments, which provides growth
through the stock portion and reduced risk through the bond and
money market portion.
10 High Yield Bond Fund, which invests primarily in below-investment-
grade bonds, providing higher rates of return to compensate higher
risk.
11 Small Capitalization Equity Fund, which invests primarily in the
stock of new, rapid growth companies.
12 Value Equity Fund, which invests primarily in large capitalization
stocks of undervalued companies that are industry leaders.
13 International Equity Fund, which invests primarily in stocks of
non-United States companies.
The information as to the number of agents selecting each investment option is
not readily available. Beginning January 1, 1994, the Plan began offering
investment options 9 through 13 noted above to participants. Investment
options 2 through 13 are provided by a group annuity contract issued by the
Company.
Interest charged on new loans to participants is established monthly based upon
prevailing rates for similar loans. Loans are repaid over 1, 3, 5, 10, 15 or
20 year periods depending on the purpose of the loan or when a participant
withdraws from the Plan.
5. Income Tax Status
The IRS ruled (February 9, 1995) that the Plan qualifies as defined by Section
401(a) of the Internal Revenue Code ("IRC") and, therefore, is not subject to
tax based on the present income tax laws. Further, the Plan is required to
operate in conformity with the IRC to maintain its 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.
<PAGE>
The Lincoln National Life Insurance Company
Agents' Savings and Profit-Sharing Plan
Notes to Financial Statements (continued)
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.
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. The Company charges
the Plan for administrative expenses which were $79,139, $93,617 and $56,171 in
1995, 1994 and 1993, respectively. 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.
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 $44,791,273,
$28,142,841 and $10,955,545, respectively, at December 31, 1995 (49.8%, 31.3%
and 12.2% of net assets, respectively). LNC and the Company operates
predominately in the insurance and investment management industries.
<PAGE>
The Lincoln National Life Insurance Company
Agents' Savings and Profit-Sharing Plan
Notes to Financial Statements (continued)
9. Reconciliation of Financial Statements to 1995 Form 5500
The following is a reconciliation of net assets available for plan benefits per
the financial statements to the 1995 Form 5500:
December 31
1995 1994
Net assets available for plan
benefits per the financial statements $89,950,854 $64,398,119
Amounts allocated to withdrawing participants (152,999) (450,814)
Net assets available for plan
benefits per the 1995 Form 5500 $89,797,855 $63,947,305
The following is a reconciliation of distributions to participants per the
financial statements to the 1995 Form 5500:
Year ended
December 31
1995
Distributions to participants per the financial statements $5,949,349
Add amounts allocated to withdrawing
participants at December 31, 1995 152,999
Deduct amounts allocated to withdrawing
participants at December 31, 1994 (450,814)
Distributions to participants per the 1995 Form 5500 $5,651,534
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 the 1995 Form 5500 net realized gain and net unrealized
appreciation of $1,385,510 (unaudited) and $19,880,915 (unaudited),
respectively, for the year ended December 31, 1995. Such amounts, which differ
from the amounts reported herein, were computed in accordance with the
requirements of the Department of Labor.
<PAGE>
FORM S-1
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)), as amended from time to time, and to the respective by-laws of LNC
and the Company, present and former directors, officers, or employees of LNC
and the Company will be indemnified by their respective corporations against
liability incurred in their capacities as directors, officers, or employees,
or arising from their status as such.
Further, as permitted by IND. CODE ANN. Sec. 23-1-37-14 (Burns 1994), as
amended from time to time, and the by-laws, LNC and LNL have purchased
insurance designed to protect and indemnify their officers, directors, and
employees 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.
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.
<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 1995, in connection with the
issuance and distribution of the securities to be registered, other than
underwriting discounts and commission.
<TABLE>
<S> <C>
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
</TABLE>
The Registrant paid in 1995 an annual premium of approximately $907,808
(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), as amended from time to time and to the respective by-laws of LNC and
the Company, present and former directors, officers, or employees of LNC and
the Company will be indemnified by their respective corporations against
liability incurred in their capacities as directors, officers, or employees,
or arising from their status as such.
Further, as permitted by IND. CODE ANN. Sec. 23-1-37-14 (Burns 1989)
as amended from time to time, and the by-laws, LNC and LNL have purchased
insurance designed to protect and indemnify their officers, directors, or
employees 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.
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.
<PAGE>
SIGNATURES-REGISTRANT
Lincoln National Corporation ("Registrant") - Pursuant to the
requirements of the Securities Act of 1933, the registrant certifies that it
has reasonable grounds to believe that it meets all of the requirements for
filing on Form S-3 and Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Fort Wayne, State of Indiana on April 29, 1996.
LINCOLN NATIONAL CORPORATION
/S/ROBERT A. ANKER
Robert A. Anker,
President
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
/S/IAN M. ROLLAND Chairman of the Board, CEO 4/29/96
(Ian M. Rolland) & Director (Principal
Executive Officer)
/S/ROBERT A. ANKER President, Chief Operating 4/29/96
(Robert A. Anker) Officer and Director
/S/DONALD L. VANWYNGARDEN Second Vice President & 4/29/96
(Donald L. VanWyngarden) Controller (Principal
Accounting Officer)
/S/RICHARD C. VAUGHAN Executive Vice President 4/29/96
(Richard C. Vaughan) (Principal Financial
Officer)
/S/J. PATRICK BARRETT Director 4/29/96
(J. Patrick Barrett)
**/S/THOMAS D. BELL, JR. Director 4/29/96
(Thomas D. Bell, Jr.)
*/S/DANIEL K. EFROYMSON Director 4/29/96
(Daniel K. Efroymson)
**/S/HARRY L. KAVETAS Director 4/29/96
(Harry L. Kavetas)
*/S/M. LEANNE LACHMAN Director 4/29/96
(M. Leanne Lachman)
*/S/EARL L. NEAL Director 4/29/96
(Earl L. Neal)
**/S/JOHN M. PIETRUSKI Director 4/29/96
(John M. Pietruski)
*/S/JILL S. RUCKELSHAUS Director 4/29/96
(Jill S. Ruckelshaus)
*/S/GORDON A. WALKER Director 4/29/96
(Gordon A. Walker)
**/S/GILBERT R. WHITAKER, JR. Director 4/29/96
(Gilbert R. Whitaker, Jr.)
*John L. Steinkamp pursuant to a Power of Attorney filed with the original
Registration Statement, effective April 30, 1986.
**John L. Steinkamp pursuant to a Power of Attorney Statement, filed with
Post-Effective Amendment No. 5 to the registration statement, effective
April 30, 1991.
<PAGE>
POWER OF ATTORNEY
LET IT BE KNOWN that each officer or director of The Lincoln National
Life Insurance Company whose signature appears in paragraph (b) under
"SIGNATURES-REGISTRANT" below revokes all Powers of Attorney authorizing
any person to act as his/her attorney-in-fact relative to The Lincoln
National Life Insurance Company Agents' Savings and Profit-Sharing Plan which
were previously executed by him/her and appoints John L. Steinkamp, Dennis L.
Schoff, and C. Suzanne Womack, jointly and severally, his/her attorneys-in-
fact, with power of substitution, for him/her in all capacities to sign
amendments and post-effective amendments to the Registration Statement of
The Lincoln National Life Insurance Company Agents' Savings and Profit
Sharing Plan, and to file such amendments with exhibits with the Securities
and Exchange Commission, hereby ratifying all that each attorney-in-fact
may do or cause to be done by virtue of this power.
SIGNATURES-REGISTRANT
(a) Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Forms S-3 and S-8 and has duly caused
this registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Fort Wayne, State of Indiana, on
April 29, 1996.
THE LINCOLN NATIONAL LIFE INSURANCE
COMPANY
By: /S/JON A. BOSCIA
(Jon A. Boscia, President)
(b) Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
/S/ROBERT A. ANKER Chairman of the board and 4/29/96
(Robert A. Anker) Chief Executive Officer and
Director
/S/JON A. BOSCIA President and Chief Operating 4/29/96
(Jon A. Boscia) Officer and Director
/S/O. DOUGLAS WORTHINGTON Vice President, Controller and 4/29/96
(O. Douglas Worthington) Assistant Secretary (Principal
Financial and Accounting Officer)
/S/JACK D. HUNTER Director 4/29/96
(Jack D. Hunter)
/S/H. THOMAS MCMEEKIN Director 4/29/96
(H. Thomas McMeekin)
/S/IAN M. ROLLAND Director 4/29/96
(Ian M. Rolland)
/S/GABRIEL L. SHAHEEN Director 4/29/96
(Gabriel L. Shaheen)
/S/RICHARD C. VAUGHAN Director 4/29/96
(Richard C. Vaughan)
<PAGE>
SIGNATURES-PLAN
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 certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8 and has duly caused
this registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Fort Wayne, State of Indiana
on April 29, 1996.
THE LINCOLN NATIONAL LIFE INSURANCE
COMPANY AGENTS' SAVINGS AND PROFIT-
SHARING PLAN
By: /S/FREDERICK P. FARKAS
Frederick P. Farkas, Chairman
Lincoln National Corporation
Benefits Committee
<PAGE>
INDEX TO EXHIBITS
Page No. in the
Sequential Numbering
Exhibit No. Description System
23 Consent of Ernst &
Young LLP, Independent
Auditors
EXHIBIT 23
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the reference to our firm under the captions
"Experts" and "Financial Statements" in Post-Effective Amendment
No. 10 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 6, 1996, 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 7, 1996, with respect to the
consolidated financial statements and schedules of Lincoln
National Corporation included in its Annual Report (Form 10-K),
both for the year ended December 31, 1995, filed with the
Securities and Exchange Commission.
/S/ ERNST & YOUNG LLP
Fort Wayne, Indiana
April 25, 1996
