SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
ANNUAL REPORT
Pursuant to Section 15(d) of the
Securities Exchange Act of 1934
For the fiscal year ended December 31, 1996
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY
AGENTS' SAVINGS AND PROFIT-SHARING PLAN
(full title of the Plan)
[Current Reg. No. 33-04711]
Lincoln National Corporation
200 East Berry Street
Fort Wayne, Indiana 46802
(name of Issuer and principal executive office)
-i-
<PAGE>
Form 11-K
LNC Agents' Savings and Profit Sharing Plan
TABLE OF CONTENTS
Page
Facing Sheet i
Financial Statements 1
Signature
-ii-
ANNUAL REPORT ON FORM 11-K
FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 1996
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY
AGENTS' SAVINGS AND PROFIT-SHARING PLAN
FORT WAYNE, INDIANA
The Lincoln National Life Insurance Company
Agents' Savings and Profit-Sharing Plan
Financial Statements
Years ended December 31, 1996, 1995 and 1994
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, 1996 and
1995, 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, 1996. 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, 1996 and 1995, and the changes
in its net assets available for plan benefits for each of the three
years in the period ended December 31, 1996, in conformity with
generally accepted accounting principles.
Ernst & Young LLP
March 13, 1997
Fort Wayne, Indiana
The Lincoln National Life Insurance Company
Agents' Savings and Profit-Sharing Plan
Statements of Net Assets Available for Plan Benefits
December 31
1996 1995
Assets
Investments:
Common stock--Lincoln National
Corporation (cost: 1996--
$31,457,823; 1995--$28,178,295) $45,079,808 $44,791,273
Segregated investment accounts--The
Lincoln National Life Insurance
Company Separate Accounts
(cost: 1996--$24,356,726;
1995--$19,546,015) 36,246,117 28,142,841
Unallocated insurance contracts
The Lincoln National Life
Insurance Company 10,412,955 10,955,545
Participant loans 3,724,214 3,317,440
95,463,094 87,207,099
Accrued interest receivable 10,212 6,216
Cash and invested cash (deficit) 17,083 (90,446)
Other receivables 24,480 194,104
Contributions receivable:
Participants 161,828 -
The Lincoln National Life
Insurance Company 3,203,212 2,656,985
Total assets 98,879,909 89,973,958
Miscellaneous payables 134,520 23,104
Net assets available for
plan benefits $98,745,389 $89,950,854
See accompanying notes.
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
1996 1995 1994
Investment income:
Cash dividends--Lincoln
National Corporation $ 1,552,560 $ 1,414,060 $ 1,239,781
Interest:
The Lincoln National Life
Insurance Company 577,671 841,750 746,163
Other 332,634 246,464 227,602
910,305 1,088,214 973,765
2,462,865 2,502,274 2,213,546
Net realized gain on sale,
distribution and forfeitures
of investments:
Common stock--Lincoln
National Corporation 2,196,645 2,236,343 694,283
Segregated investment
accounts--The Lincoln
National Life Insurance
Company Separate
Accounts 1,056,483 864,428 704,323
3,253,128 3,100,771 1,398,606
Net unrealized appreciation
(depreciation) of
investments 301,572 18,165,654 (8,080,629)
Contributions:
Agents 4,604,114 4,724,597 4,603,511
The Lincoln National
Life Insurance Company
(net of forfeitures:
1996--$5,566; 1995--$6,078;
1994--$3,355) 3,735,645 3,087,927 3,351,434
8,339,759 7,812,524 7,954,945
Distributions to participants (5,476,308) (5,949,349) (3,413,968)
Administrative expenses (86,481) (79,139) (93,617)
Net increase (decrease) in
net assets available for
plan benefits 8,794,535 25,552,735 (21,117)
Net assets available for
plan benefits at beginning
of the year 89,950,854 64,398,119 64,419,236
Net assets available for
plan benefits at end of
the year $98,745,389 $89,950,854 $64,398,119
See accompanying notes.
The Lincoln National Life Insurance Company
Agents' Savings and Profit-Sharing Plan
Notes to Financial Statements
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 specific identification method.
Use of Estimates
Preparation of the financial statements requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities at the date of the financial statements and the
related amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
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.
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 return on equity 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 certain
revisions to the contribution formula which was effective for the
1996 plan year. For 1995, the Company used a transitional approach
of the greater of the old or new contribution formula which resulted
in a contribution based on the new formula.
The Company has the right 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.
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.
Upon termination of service due to death, disability or retirement,
a participant may elect to receive either a lump-sum amount equal to
the value of the participant's vested interest in his or her
account, or annual installments over a five-year period. For
termination of service due to other reasons, a participant may
receive the value of the vested interest in his or her account as a
lump-sum distribution.
Each participant's account is credited with the participant's
contribution and the Company's matching contribution and allocations
of Plan earnings, and charged with an allocation of administrative
expenses. Allocations are based on participant earnings or account
balances, as defined. The benefit to which a participant is
entitled is the benefit that can be provided from the participant's
vested account. Forfeited nonvested amounts are used to reduce
future Company contributions.
The Lincoln National Life Insurance Company
Agents' Savings and Profit-Sharing Plan
Notes to Financial Statements (continued)
3. Investments
The following is a summary of assets held for investment:
December 31, 1996
Number of Market
Shares Value
Common stock--LNC 858,663 $45,079,808*
Segregated investment
accounts--with the Company:
Government Bond Fund 319,334.099 480,701
Core Equity Fund 1,295,357.182 10,726,542*
Medium Capitalization
Equity Fund 991,548.636 8,988,074*
Short-Term Fund 485,933.152 1,340,243
Government/Corporate
Bond Fund 196,953.329 966,139
Large Capitalization
Equity Fund 1,133,678.280 6,513,579*
Balanced Fund 91,023.162 401,269
High Yield Bond Fund 214,695.508 447,340
Small Capitalization
Equity Fund 500,743.628 1,629,157
Value Equity Fund 705,183.942 1,122,754
International Equity Fund 723,943.712 3,630,319
Total segregated investment
accounts 36,246,117
Par
Amount
Unallocated insurance
contracts with the Company $10,412,955 10,412,955*
Participant loans 3,724,214 3,724,214
Total investments $95,463,094
*Investments that represent 5% or more of the fair value of net
assets available for benefits as of the indicated date.
December 31, 1995
Number of Market
Shares Value
Common stock LNC 833,326 $44,791,273*
Segregated investment
accounts with the Company:
Government Bond Fund 388,827.030 562,704
Core Equity Fund 1,264,092.105 8,773,122*
Medium Capitalization
Equity Fund 899,403.376 7,117,250*
Short-Term Fund 407,724.196 1,068,759
Government/Corporate
Bond Fund 239,667.620 1,151,219
Large Capitalization
Equity Fund 1,054,128.353 5,127,004*
Balanced Fund 44,201.747 177,252
High Yield Bond Fund 78,023.346 146,681
Small Capitalization
Equity Fund 320,513.868 998,577
Value Equity Fund 455,888.394 626,101
International Equity Fund 521,418.540 2,394,172
Total segregated investment
accounts $28,142,841
Par
Amount
Unallocated insurance
contracts with the Company $10,955,545 10,955,545*
Participant loans 3,317,440 3,317,440
Total investments $87,207,099
*Investments that represent 5% or more of the fair value of net
assets available for benefits as of the indicated date.
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
1996 1995 1994
Common stock:
Proceeds from disposition of
stock $9,419,060 $10,013,495 $6,145,172
Cost of stock disposed 7,222,415 7,777,152 5,450,889
Net realized gain on sale,
distribution and forfeitures
of common stock $2,196,645 $2,236,343 $694,283
Segregated investment accounts:
Proceeds from disposition of
units $4,948,738 $4,627,606 $4,329,973
Cost of units disposed 3,892,255 3,763,178 3,625,650
Net realized gain on sale,
distribution and forfeitures
of common stock $1,056,483 $864,428 $704,323
The net change in unrealized appreciation (depreciation) of
investments in total and by investment classification is summarized
as follows:
Year ended December 31
1996 1995 1994
Market value in excess of cost:
At beginning of the year $25,209,804 $7,044,150 $15,124,779
At end of the year 25,511,376 25,209,804 7,044,150
Change in net unrealized
appreciation (depreciation)
of investments $301,572 $18,165,654 $(8,080,629)
Common stock $(2,990,993) $12,966,702 $(7,180,098)
Segregated investment
accounts 3,292,565 5,198,952 (900,531)
Change in net unrealized
appreciation (depreciation)
of investments $301,572 $18,165,654 $(8,080,629)
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 6.82% and 6.75% in 1996 and 1995, respectively.
The credited interest rate for new contributions, which approximates
the current market rate, at December 31, 1996 and 1995, were 7.00%
and 6.25%, 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, 1996 and 1995 were 6.80% and 6.90%, 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
from the general assets of the Company. The fair value of the
unallocated insurance contracts approximates contract value.
The Lincoln National Life Insurance Company
Agents' Savings and Profit-Sharing Plan
Notes to Financial Statements (continued)
4. Investment Options
The detail of the net assets available for plan benefits by investment
option is as follows:
<TABLE>
<CAPTION>
December 31, 1996
Investment Options
Total 1 2 3 4 5 6
Assets
Investments:
<s > <C> <C> <C> <C> <C> <C> <C>
Common stock $45,079,808 $45,079,808
Segregated investment accounts 36,246,117 $480,701 $10,726,542 $8,988,074 $1,340,243
Unallocated insurance contracts 10,412,955 $10,412,955
Participant loans 3,724,214
95,463,094 45,079,808 480,701 10,412,955 10,726,542 8,988,074 1,340,243
Accrued interest receivable 10,212
Cash and invested cash (deficit) 17,083 49,125 (262) (820) (10,480) (11,943) 27,524
Other receivables 24,480 8 368 23,542
Contribution receivable:
Participant 161,828 28,231 964 10,661 23,501 25,348 627
Lincoln National Life
Insurance Company 3,203,212 3,203,212
Total assets 98,879,909 48,360,376 481,411 10,423,164 10,739,563 9,001,479 1,391,936
Miscellaneous payables 134,520 74,373 12,909 13,367
Net assets available for
plan benefits $98,745,389 $48,286,003 $481,411 $10,423,164 $10,726,654 $8,988,112 $1,391,936
</TABLE>
<TABLE>
<CAPTION>
December 31, 1995
Investment Options
Total 1 2 3 4 5 6
Assets
Investments:
<S> <C> <C> <C> <C> <C> <C> <C>
Common stock $44,791,273 $44,791,273
Segregated investment accounts 28,142,841 $562,704 $8,773,122 $7,117,250 $1,068,759
Unallocated insurance contracts 10,955,545 $10,955,545
Participant loans 3,317,440
87,207,099 44,791,273 562,704 10,955,545 8,773,122 7,117,250 1,068,759
Accrued interest receivable 6,216
Cash and invested cash (deficit) (90,446) 39,365 (14,122) 7,636 (13,848) (15,181) (29,147)
Other receivables 194,104 14,122 44,548 25,957 15,181 29,147
Contribution receivable 2,656,985 2,656,985
Total assets 89,973,958 47,487,623 562,704 11,007,729 8,785,231 7,117,250 1,068,759
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 $7,117,250 $1,068,759
</TABLE>
The Lincoln National Life Insurance Company
Agents' Savings and Profit-Sharing Plan
Notes to Financial Statements (continued)
4. Investment Options
The detail of the net assets available for plan benefits by
investment option is as follows:
<TABLE>
<CAPTION>
December 31, 1996
Investment Options
7 8 9 10 11 12 13 Loans
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Assets
Investments:
Common stock
Segregated investment accounts $966,139 $6,513,579 $401,269 $447,340 $1,629,157 $1,122,754 $3,630,319
Unallocated insurance contracts
Participant loans $3,724,214
966,139 6,513,579 401,269 447,340 1,629,157 1,122,754 3,630,319 3,724,214
Accrued interest receivable 10,212
Cash and invested cash (deficit) (1,802) (9,317) (2,058) (1,933) (13,763) 1,438 (8,626)
Other receivables 7 555
Contribution receivable:
Participant 2,776 22,539 2,051 1,938 15,004 6,654 21,534
Lincoln National Life
Insurance Company
Total assets 967,113 6,526,801 401,269 447,900 1,630,398 1,130,846 3,643,227 3,734,426
Miscellaneous payables 974 12,305 720 7,496 12,376
Net assets available for
plan benefits $966,139 $6,514,496 $401,269 $447,900 $1,629,678 $1,123,350 $3,630,851 $3,734,426
</TABLE>
<TABLE>
<CAPTION>
December 31, 1995
Investment Options
7 8 9 10 11 12 13 Loans
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Assets
Investments:
Common stock
Segregated investment accounts $1,151,219 $5,127,004 $177,252 $146,681 $998,577 $626,101 $2,394,172
Unallocated insurance contracts
Participant loans $3,317,440
1,151,219 5,127,004 177,252 146,681 998,577 626,101 2,394,172 3,317,440
Accrued interest receivable 6,216
Cash and invested cash (deficit) (9,218) (23,108) (201) (2,308) (11,809) (5,410) (13,095)
Other receivables 9,218 23,108 201 2,308 11,809 5,410 13,095
Contribution receivable
Total assets 1,151,219 5,127,004 177,252 146,681 998,577 626,101 2,394,172 3,323,656
Miscellaneous payables
Net assets available for
plan benefits $1,151,219 $5,127,004 $177,252 $146,681 $998,577 $626,101 $2,394,172 $3,323,656
</TABLE>
The Lincoln National Life Insurance Company
Agents' Savings and Profit-Sharing Plan
Notes to Financial Statements (continued)
4. Investment Options (continued)
The detail of the changes in net assets available for plan benefits by
investment option is as follows:
<TABLE>
<CAPTION>
December 31, 1996
Investment Options
Total 1 2 3 4 5 6
<S> <C> <C> <C> <C> <C> <C> <C>
Investment income:
Cash dividends $ 1,552,560 $ 1,552,560
Interest 910,305 $ 577,671
2,462,865 1,552,560 577,671
Net realized gain on sale,
distribution and forfeitures
of investments:
Common stock 2,196,645 2,196,645
Segregated investment accounts 1,056,483 $ 24,494 $ 376,640 $ 229,263 $ 66,209
3,253,128 2,196,645 24,494 376,640 229,263 66,209
Net unrealized appreciation
(depreciation) of investments 301,572 (2,990,993) (5,603) 1,328,719 840,656 (20,585)
Contributions:
Participant 4,604,114 928,146 18,739 280,525 648,453 757,878 24,023
The Lincoln National
Life Insurance Company 3,735,645 3,735,645
8,339,759 4,663,791 18,739 280,525 648,453 757,878 24,023
Distributions to participants (5,476,308) (2,519,969) (45,389) (1,825,737) (361,544) (162,972) (90,761)
Administrative expenses (86,481) (72,414) (182) (3,649) (3,152) (2,632) (368)
Net transfers - (2,008,136) (73,352) 386,625 (47,693) 208,669 344,659
Net increase (decrease) in net
assets available for plan
benefits 8,794,535 821,484 (81,293) (584,565) 1,941,423 1,870,862 323,177
Net assets available for plan
benefits at beginning of the year 89,950,854 47,464,519 562,704 11,007,729 8,785,231 7,117,250 1,068,759
Net assets available for plan
benefits at end of the year $98,745,389 $48,286,003 $481,411 $10,423,164 $10,726,654 $8,988,112 $1,391,936
</TABLE>
<TABLE>
<CAPTION>
December 31, 1995
Investment Options
Total 1 2 3 4 5 6
<S> <C> <C> <C> <C> <C> <C> <C>
Investment income:
Cash dividends $ 1,414,060 $ 1,414,060
Interest 1,088,214 $ 841,750
2,502,274 1,414,060 841,750
Net realized gain on sale,
distribution and forfeitures
of investments:
Common stock 2,236,343 2,236,343
Segregated investment accounts 864,428 $ 23,782 $ 254,878 $ 302,908 $ 38,216
3,100,771 2,236,343 23,782 254,878 302,908 38,216
Net unrealized appreciation
of investments 18,165,654 12,966,702 51,735 2,075,087 1,473,852 28,481
Contributions:
Participant 4,724,597 1,031,057 28,085 444,269 564,727 718,984 31,138
The Lincoln National Life
Insurance Company 3,087,927 3,087,927
7,812,524 4,118,984 28,085 444,269 564,727 718,984 31,138
Distributions to participants (5,949,349) (3,084,570) (49,394) (1,235,196) (387,089) (431,930) (148,671)
Administrative expenses (79,139) (62,984) (310) (5,320) (3,289) (2,723) (599)
Net transfers - (1,252,524) (94,878) (25,842) 113,416 242,249 998
Net increase (decrease) in net
assets available for plan
benefits 25,552,735 16,336,011 (40,980) 19,661 2,617,730 2,303,340 (50,437)
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 4,813,910 1,119,196
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 $7,117,250 $1,068,759
</TABLE>
The Lincoln National Life Insurance Company
Agents' Savings and Profit-Sharing Plan
Notes to Financial Statements (continued)
<TABLE>
<CAPTION>
4. Investment Options (continued)
The detail of the changes in net assets available for plan benefits by
investment option is as follows:
December 31, 1996
Investment Options
7 8 9 10 11 12 13 Loans
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Investment income:
Cash dividends
Interest $ 332,634
332,634
Net realized gain on sale,
distribution and forfeitures
of investments:
Common stock
Segregated investment accounts $ 72,847 $ 210,364 $ 1,747 $ 5,366 $ 12,575 $ 18,728 $ 38,250
72,847 210,364 1,747 5,366 12,575 18,728 38,250
Net unrealized appreciation
(depreciation) of investments (53,517) 761,371 29,524 32,985 43,342 109,712 225,961
Contributions:
Participant 78,660 675,819 69,712 45,269 351,168 175,491 550,231
The Lincoln National Life
Insurance Company
78,660 675,819 69,712 45,269 351,168 175,491 550,231
Distributions to participants (31,195) (155,289) (4,176) (7,064) (19,452) (64,952) (73,291) (114,517)
Administrative expenses (378) (1,922) (106) (70) (373) (264) (971)
Net transfers (251,497) (102,851) 127,316 224,733 243,841 258,534 496,499 192,653
Net increase (decrease) in net
assets available for plan
benefits (185,080) 1,387,492 224,017 301,219 631,101 497,249 1,236,679 410,770
Net assets available for plan
benefits at beginning of the year 1,151,219 5,127,004 177,252 146,681 998,577 626,101 2,394,172 3,323,656
Net assets available for plan
benefits at end of the year $ 966,139 $6,514,496 $401,269 $447,900 $1,629,678 $1,123,350 $3,630,851 $3,734,426
</TABLE>
<TABLE>
<CAPTION>
December 31, 1995
Investment Options
7 8 9 10 11 12 13 Loans
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Investment income:
Cash dividends
Interest $ 246,464
246,464
Net realized gain on sale,
distribution and forfeitures
of investments:
Common stock
Segregated investment accounts $ 36,634 $ 166,663 $ 4,767 $ 1,322 $ 15,881 $ 7,592 $ 11,785
36,634 166,663 4,767 1,322 15,881 7,592 11,785
Net unrealized appreciation
of investments 140,554 1,009,582 28,318 11,398 83,069 109,101 187,775
Contributions:
Participant 91,685 650,298 50,131 32,280 326,608 193,369 561,966
The Lincoln National Life
Insurance Company
91,685 650,298 50,131 32,280 326,608 193,369 561,966
Distributions to participants (36,650) (245,114) (23,412) (3,412) (42,492) (39,639) (91,402) (130,378)
Administrative expenses (454) (2,079) (68) (33) (289) (160) (831)
Net transfers 62,844 (167,526) (8,533) 23,953 214,639 126,808 372,323 392,073
Net increase (decrease) in net
assets available for plan
benefits 294,613 1,411,824 51,203 65,508 597,416 397,071 1,041,616 508,159
Net assets available for plan
benefits at beginning of the year 856,606 3,715,180 126,049 81,173 401,161 229,030 1,352,556 2,815,497
Net assets available for plan
benefits at end of the year $1,151,219 $5,127,004 $177,252 $146,681 $998,577 $626,101 $2,394,172 $3,323,656
</TABLE>
The Lincoln National Life Insurance Company
Agents' Savings and Profit-Sharing Plan
Notes to Financial Statements (continued)
<TABLE>
<CAPTION>
4. Investment Options (continued)
The detail of the changes in net assets available for plan benefits by
investment option is as follows:
December 31, 1994
Investment Options
Total 1 2 3 4 5 6
<S> <C> <C> <C> <C> <C> <C> <C>
Investment income:
Cash dividends $ 1,239,781 $ 1,239,781
Interest 973,765 $ 746,163
2,213,546 1,239,781 746,163
Net realized gain (loss) on sale,
distribution and forfeitures of
investments:
Common stock 694,283 694,283
Segregated investment accounts 704,323 $ 16,784 $ 279,387 $ 226,810 $ 65,801
1,398,606 694,283 16,784 279,387 226,810 65,801
Net unrealized appreciation
(depreciation) of investments (8,080,629) (7,180,098) (26,448) (169,276) (373,844) (19,300)
Contributions:
Participant 4,603,511 1,176,997 50,527 432,329 725,798 765,034 139,329
The Lincoln National Life
Insurance Company 3,351,434 3,351,434
7,954,945 4,528,431 50,527 432,329 725,798 765,034 139,329
Distributions to participants (3,413,968) 1,771,486 (84,469) (623,233) (393,695) (193,109) (20,387)
Administrative expenses (93,617) (78,744) (317) (5,563) (3,107) (2,411) (620)
Net transfers - (267,333) (71,115) 7,158 (616,625) (93,452) (377,317)
Net increase (decrease) in net
assets available for plan
benefits (21,117) (2,835,166) (115,038) 556,854 (177,518) 329,028 (212,494)
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 4,484,882 1,331,690
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 $4,813,910 $1,119,196
</TABLE>
The Lincoln National Life Insurance Company
Agents' Savings and Profit-Sharing Plan
Notes to Financial Statements (continued)
<TABLE>
<CAPTION>
4. Investment Options (continued)
The detail of the changes in net assets available for plan benefits by
investment option is as follows:
December 31, 1994
Investment Options
7 8 9 10 11 12 13 Loans
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Investment income:
Cash dividends
Interest $ 227,602
Net realized gain (loss) on sale, 227,602
distribution and forfeitures
of investments:
Common stock
Segregated investment accounts $ 41,814 $ 73,006 $ 11 $ 21 $ 30 $ 831 $ (172)
41,814 73,006 11 21 30 831 (172)
Net unrealized appreciation
(depreciation) of investments (78,492) (194,754) 306 1,456 (2,408) 7,160 (44,931)
Contributions:
Participant 125,867 778,686 20,754 14,032 90,582 30,701 252,875
The Lincoln National Life
Insurance Company 125,867 778,686 20,754 14,032 90,582 30,701 252,875
Distributions to participants (109,478) (121,048) (25) (15) (361) (658) (96,004)
Administrative expenses (448) (1,818) (48) (11) (111) (59) (360)
Net transfers (100,238) (172,593) 105,051 65,690 313,429 190,397 1,145,802 (128,854)
Net increase (decrease) in net
assets available for plan
benefits (120,975) 361,479 126,049 81,173 401,161 229,030 1,352,556 2,744
Net assets available for plan
benefits at beginning of the year 977,581 3,353,701 - - - - - 2,812,753
Net assets available for plan
benefits at end of the year $856,606 $3,715,180 $126,049 $81,173 $401,161 $229,030 $1,352,556 $2,815,497
</TABLE>
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.
The Lincoln National Life Insurance Company
Agents' Savings and Profit-Sharing Plan
Notes to Financial Statements (continued)
4. Investment Options (continued)
Option Description of Investment Option
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.
At December 31, 1996, the fair value of LNC Common Stock in the LNC
Common Stock Fund not subject to agent direction was $4,353,249.
The information as to the number of participants 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.
The Lincoln National Life Insurance Company
Agents' Savings and Profit-Sharing Plan
Notes to Financial Statements (continued)
5. Income Tax Status
On February 9, 1995, the IRS ruled 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.
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
participant 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 certain administrative expenses including trustee and audit
fees. Total administrative expenses charged were $86,481, $79,139 and
$93,617 in 1996, 1995 and 1994, respectively. The Company also provides
certain administrative services at no charge to the plan. Expenses incurred
solely for the LNC Stock Fund are charged directly to the LNC Stock
Fund while all other administrative expenses are charged to earnings
of the other investment options based upon the market value of the
respective funds applicable to each investment option. These transactions
are exempt.
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 $45,079,808, $36,246,117 and $10,412,955, respectively,
at December 31, 1996 (45.7%, 36.7% and 10.5% of net assets,
respectively). LNC and the Company operate predominately in the
insurance and investment management industries.
The Lincoln National Life Insurance Company
Agents' Savings and Profit-Sharing Plan
Notes to Financial Statements (continued)
9. Reconciliation of Financial Statements to 1996 Form 5500
The following is a reconciliation of net assets available for plan
benefits per the financial statements to the 1996 Form 5500:
December 31
1996 1995
Net assets available for plan
benefits per the financial statements $98,745,389 $89,950,854
Amounts allocated to withdrawing participants (611,241) (152,999)
Net assets available for plan
benefits per the 1996 Form 5500 $98,134,148 $89,797,855
The following is a reconciliation of distributions to participants
per the financial statements to the 1996 Form 5500:
Year ended
December 31,
1996
Distributions to participants per the
financial statements $5,476,308
Add amounts allocated to withdrawing
participants at December 31, 1996 611,241
Deduct amounts allocated to withdrawing
participants at December 31, 1995 (152,999)
Distributions to participants per the
1996 Form 5500 $5,934,550
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.
Form 5500 net realized gain and net unrealized appreciation were
computed in accordance with the requirements of the Department of
Labor. Such amounts differ from amounts reported herein.
SIGNATURE
THE PLAN. Pursuant to the requirements of the Securities Exchange Act
of 1934, the Administrator of the Plan has duly caused this annual report
to be signed on its behalf by the undersigned hereunto duly authorized.
/S/ GEORGE E. DAVIS
March 27, 1997 _________________________________
George E. Davis, Administrator
THE LINCOLN NATIONAL LIFE INSURANCE
COMPANY AGENTS' SAVINGS AND PROFIT-
SHARING PLAN
