As filed with the Securities and Exchange Commission on April 30, 1999
Registration No. 33-4711
SECURITIES AND EXCHANGE COMMISSION
POST-EFFECTIVE AMENDMENT NO. 13 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 Company
Agents' Savings and registrant as specified Profit-Sharing Plan in its charter)
(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)
<PAGE>
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. 13
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
Cover Page of Prospectus Page of 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
for Securities Act Liabilities AGENTS
<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>-1-
The Lincoln National Life Insurance Company
1300 South Clinton Street
Fort Wayne, Indiana 46802-3506
(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 and certain employees of
The Lincoln National Life Insurance Company and its affiliates who participate
in the Plan. 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
PARTICIPANTS ARE HIGH-RISK COMMON STOCK FUNDS. SEE PAGE 8 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 May 3,1999.
<PAGE>-2-
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 and Pacific 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.
<PAGE>-3-
Table of contents
Page
General Information. . . . . . . . . . . . . 4
Summary of the plan. . . . . . . . . . . . . 4
Purpose. . . . . . . . . . . . . . . . . . . 4
Eligibility and participation. . . . . . . . 4
Participant Contributions. . . . . . . . . . 4
Rollover Contributions . . . . . . . . . . . 4
Suspension of Participant Contributions. . . 4
Company Contributions. . . . . . . . . . . . 4
Limitations on Contributions . . . . . . . . 5
Investment of Contributions. . . . . . . . . 5
Comparative performance
of investment funds. . . . . . . . . . . . . 8
Risk factors . . . . . . . . . . . . . . . . 9
Valuation of Investments . . . . . . . . . . 9
Expenses of the Plan
Vesting. . . . . . . . . . . . . . . . . . . 9
Accounts . . . . . . . . . . . . . . . . . . 10
Withdrawals. . . . . . . . . . . . . . . . . 10
Participant Loans. . . . . . . . . . . . . . 11
Lump Sum Distributions . . . . . . . . . . . 11
Vested Amounts . . . . . . . . . . . . . . 11
Death, Disability, Retirement
or Termination of Service. . . . . . . . 11
Distributions
At retirement . . . . . . . . . . . . . . 11
At disability . . . . . . . . . . . . . . 11
At death . . . . . . . . . . . . . . . . . 11
At Termination . . . . . . . . . . . . . . 12
Periodic Withdrawals of Distributions. . . . 12
At retirement. . . . . . . . . . . . . . . 12
At disability. . . . . . . . . . . . . . . 12
At death . . . . . . . . . . . . . . . . . 12
Fractional Shares. . . . . . . . . . . . . . 12
Company Contribution Account . . . . . . . . 12
Automatic Crediting of
Account Balances . . . . . . . . . . . . . 12
Withdrawals from the
Company Contribution Account . . . . . . . 12
Investment of Contributions. . . . . . . . 13
Beneficiary Designation. . . . . . . . . . . 13
Assignment . . . . . . . . . . . . . . . . . 13
Amendment or Termination . . . . . . . . . . 13
Administration of the Plan . . . . . . . . . 13
Trustee. . . . . . . . . . . . . . . . . . 13
Plan Administrator . . . . . . . . . . . . 13
Members of the Lincoln National Corporation
Benefits Committee . . . . . . . . . . . . . 14
Voting of Shares . . . . . . . . . . . . . . 14
Federal Income Tax Consequences. . . . . . . 14
Tax and Withholding. . . . . . . . . . . . . 15
Employee Retirement Income
Security Act of 1974 . . . . . . . . . . . . 15
Participant's Rights Under ERISA . . . . . . 15
Participation Interests
are Securities . . . . . . . . . . . . . . . 16
Financial Statements . . . . . . . . . . . . 16
Lincoln National Corporation
Common Stock . . . . . . . . . . . . . . . . 16
Dividend Rights. . . . . . . . . . . . . . . 16
Voting Rights. . . . . . . . . . . . . . . . 16
Liquidation Rights . . . . . . . . . . . . . 17
Pre-Emptive Rights . . . . . . . . . . . . . 17
Assessment . . . . . . . . . . . . . . . . . 17
Modification of Rights . . . . . . . . . . . 17
Other Provisions . . . . . . . . . . . . . . 17
Indemnification of Officers,
Directors, Employees and Agents. . . . . . . 17
Experts. . . . . . . . . . . . . . . . . . . 17
Legal Opinion. . . . . . . . . . . . . . . . 17
Incorporation of additional
documents. . . . . . . . . . . . . . . . . . 17
Index to financial statements. . . . . . . . 19
<PAGE>-4-
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 Participants 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 Participants 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 Minnesota, N.A., Minneapolis, Minnesota, 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 Participants 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 Participants in
adopting a regular savings and investment program and to help provide additional
security for their retirement.
ELIGIBILITY AND PARTICIPATION
The Plan covers agents who are independent contractors classified by an Employer
as full-time life insurance salesmen under the Federal Insurance Contributions
Act and operating under a contract directly with Company. In addition, the Plan
covers certain common-law employees in the Sagemark organization, some of whom
are agents. Such eligible independent contractors and employees may become
participants in the Plan ("Participants"). This definition does not include any
person who is a party to a subsidy or an advance agreement with Company.
Upon hire, an eligible person may become a Participant in the Plan by calling
Norwest Banks Benefit Helpline voice response system and using
his assigned Personal Identification Number. The Participant 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 Participant's death. This enrollment
also authorizes the Company to reduce a Participant's earnings for his
contributions. Participation is effective the date the Participant enrolls via
the Benefits Helpline. Deductions begin with the first Commission Statement
after the Participant's enrollment data is received by the Company from Norwest
Bank and processed by payroll.
The Benefits Helpline phone number is 1-888-245-9798.
As of December 31, 1998, there were 2,300 agents and employees eligible
to participate in the Plan, and 2,074 agents and employees actually
participating in the Plan.
PARTICIPATION IN THE PLAN IS ENTIRELY VOLUNTARY, AND THE EMPLOYERS MAKE NO
RECOMMENDATIONS AS TO WHETHER ANY ELIGIBLE AGENT OR EMPLOYEE SHOULD OR
SHOULD NOT PARTICIPATE.
PARTICIPANT CONTRIBUTIONS
A participating person may make Pre-Tax contributions at a rate of at
least 1%, but not more than 15%, of his earnings up to a maximum of $10,000
(as adjusted periodically by the IRS). However, the percentage rate of Pre-Tax
contributions for any highly compensated Participant shall be within legal
limits (currently 8%). The Participant consents to this reduction of earnings
by virtue of initiating the deferral transaction.
Contributions must be made in whole multiples of 1%. A Participant may change
the rate of contributions on any payday.
ROLLOVER CONTRIBUTIONS
A person 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 PARTICIPANT CONTRIBUTIONS
A Participant may suspend contributions to the Plan. A Participant who suspends
contributions may again begin contributing to the Plan.
COMPANY CONTRIBUTIONS
The maximum amount the corporation may contribute each Plan Year is $1.50 for
every $1.00 invested, up to 6% of eligible earnings. Certain highly compensated
Participants are limited to a maximum of $0.50 for every $1.00 invested (up to
6% of eligible earnings); such Participants are notified of such limitation.
The guaranteed minimum contribution of $.25 for every $1.00 invested is made
each pay period.
The corporation may make an additional contribution of up to $1.25 for each Plan
Year for every $1.00 invested, up to 6% of eligible earnings. The amount of
additional company contribution is determined by the Lincoln National
Corporation Board of Directors for each Plan Year. The additional contribution
will be based on the Board's assessment of Lincoln National Corporation's
performance, using measures determined by the Board, which will be announced
periodically.
Any additional contribution will be made in a lump sum following the annual
determination by the Board of Directors. To be eligible for this additional
amount, the individual must have been in service with the Company or an
Affiliate as 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. In addition,
the Participant must have completed on year of service to be eligible for any
additional company contribution.
Participants who terminated due to death, disabiltiy or retirement are deemed
not to have terminated prior to the last day of the Plan Year for purposes of
this additional Company contribution.
<PAGE>-5-
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
Participant and Company contributions. The Company 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 LNC and the Company and its
affiliates), must meet specified nondiscrimination 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 Participants. If it is determined that
the Plan (separately or, at the Company's option, when combined with other plans
maintained by LNC and its subsidiaries) 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 Participant's election to make
Contributions.
If the foregoing limits are exceeded, then, first, in order to reduce the
excess, the Plan Administrator will reduce the amount of Company contributions
for that year to the extent necessary to eliminate the excess; and, if
additional adjustments are required, the Plan Administrator will then reduce the
Participant's contributions for that year, to the extent necessary to eliminate
the excess. Excess Participant contributions will be refunded and excess Company
contributions will be held in a suspense account to reduce the amount of Company
contributions under the Plan due thereafter, or, if the Plan is terminated, the
excess amount will be allocated pro rata to the other Participants participating
in the Plan as of the date of Plan termination.
Notwithstanding the foregoing, during any calendar year, the sum of the
Participant's Pre-Tax contributions and Company contributions may not exceed
the lesser of 25% of the Participant's earnings or $30,000. In addition,
the maximum amount of compensation to be taken into account in determining
benefits under the Plan may not exceed $160,000 for 1999, and the Participant's
Pre-Tax contributions may not exceed $10,000 for calendar year 1999. The
figures for calendar year 2000 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 PARTICIPANTS. ALL
PARTICIPANTS' 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 PARTICIPANT:
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.
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.
<PAGE>-6-
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 aggressive equity funds, because
this fund invests 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 Capitalization Equity Fund. The current
description of that segregated account identifies it as a high-risk,
aggressive common stock fund. The fund manager is Putnam Investments.
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 Delaware International
Advisors, Ltd.
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/ Corporate Bond Fund because
this fund invests in lower-quality bonds (commonly known as junk bonds ) and
there is a higher chance that the issuer will not be able to repay the
promised interest or principal. The Trustee currently holds a group annuity
contract issued by LNL which provides for contributions to an LNL segregated
investment account whose investment objectives are the same as those of the
High Yield Bond Fund. 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 Investments.
<PAGE>-7-
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, A PARTICIPANT MAY
CONCENTRATE OR DIVERSIFY THE INVESTMENT OF DEPOSITS IN THE FUNDS LISTED ABOVE.
ANY DIRECTION BY A PARTICIPANT FOR THE INVESTMENT OF DEPOSITS WILL BE DEEMED A
CONTINUING DIRECTION UNTIL CHANGED BY THE PARTICIPANT. THE TRUSTEE WILL INVEST A
PARTICIPANT'S DEPOSITS IN THE SHORT TERM FUND IF NO INVESTMENT DIRECTION IS IN
EFFECT. ALL COMPANY 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, the Participant may elect either distribution in shares or in Cash. The
named fiduciary reserves the right to direct the Trustee to make distributions
of assets of the Trust in kind (see Distributions).
A Participant may terminate his election to invest in a particular Fund or
change investment selection for his future deposits. In addition, other than
with respect to Company contributions which have not matured (been in the Plan
for at least 24 months or longer after the last contribution for the Plan Year
was made), a Participant may transfer part or all of the current Fund balances
to another Fund or Funds, subject to any limitations imposed by a particular
fund. Any such terminations, changes, or transfers permitted by this paragraph
will be effective the date the transaction is done via the Benefits Helpline. 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 Participant's
directions and the provisions of the Plan. LNC stock acquired under the Plan is
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
Participant 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 1994
through 1998. The comparison is based on past performance of the Investment
Funds and is not necessarily indicative of future performance.
<PAGE>-8-
PARTICIPANTS - PLEASE READ:
This table has been prepared to assist you in making your investment
designations under the Plan. However, THE VALUE OF THIS INFORMATION IS LIMITED,
AND YOU SHOULD CONSULT A QUALIFIED INVESTMENT ADVISER BEFORE MAKING YOUR
DESIGNATIONS.
COMPARATIVE PERFORMANCE OF INVESTMENT FUNDS
[PERCENTAGE INCREASE/(DECREASE) IN VALUE OF INVESTMENTS, ASSUMING SUCH
INVESTMENTS WERE HELD IN EACH FUND FOR A PLAN YEAR](1)
Plan Year
Plan Year
Investment Fund 1994 1995 1996 1997 1998
LNC Common Stock Fund(2) (16.06%) 59.95% 1.56% 53.6% 7.3%
Government Bond Fund(SA26) (1.60%) (14.1%) 4.4% 7.8% 8.5%
Guaranteed Fund (7.27%) (6.9%) 6.8% 6.6% 6.6%
Core Equity Fund(SA11) (1.00%) (38.0%) 20.4% 33.0% 19.1%
Medium Capitalization
Equity Fund(2)(SA17) (2.40%) (32.6%) 14.8% 11.5% 23.0%
Short Term Fund(SA14) (3.90%) (6.2%) 5.6% 5.7% 5.8%
Large Capitalization
Equity Fund(2)(SA23) (2.50%) (29.5%) 18.9% 31.9% 33.8%
Government/Corporate
Bond Fund (SA12) (4.00%) (20.2%) 2.5% 9.7% 10.1%
Balanced Fund(SA21) (2.30%) (25.5%) 10.5% 19.1% 16.4%
High Yield Fund(SA20) (.40%) (18.4%) 11.3% 11.7% 7.4%
Value Equity Fund(SA28) (.70%) (31.4%) 17.1% 33.9% 16.0%
Small Capitalization
Equity Fund(2)(SA24) (3.60%) (15.9%) 5.2% 24.3% 17.4%
International Equity
Fund(2)(SA22) (1.40%) (11.2%) 10.3% (3.0%) 13.0%
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.
The end of the Plan Year is December 31.
(2) This is a high-risk fund. See Investment of Contributions, in this
Prospectus.
<PAGE>-9-
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.
Securities 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 each day the
New York Stock Exchange is open 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
Participants.
The Valuation Date for loans, withdrawals and transfers is the date your
request via the Benefits helpline is processed and confirmed, as long as you
call prior to 3:00 p.m. Central Time on a business day (otherwise the next
business day).
The Valuation Date for all other distributions will be no later than the second
business day after receipt of the correctly completed distribution form.
The Valuation Date for new employee contributions, company contributions and
loan repayments is the date on or following a payday on which these monies are
received and allocated for investment by the Trustee.
EXPENSES OF THE PLAN
Certain expenses relating to the Plan are charged against the investments in the
individual account. Auditing fees and Trustee fees are charged to all the funds.
Asset management fees are charged to each fund except the LNC Common Stock Fund
and Guaranteed Fund. Expenses per Participant vary, based on the investment fund
selected.
More specific information about these fees is available upon request.
VESTING
A Participant is fully vested in his Pre-Tax contributions under the Plan at all
times.
Company 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 Participant is either a
full-time life insurance salesman or an employee in the service of the Company,
LNC, or an affiliate on the last day of that Plan Year.
<PAGE>-10-
ACCOUNTS
The Trustee will establish and maintain a separate account for each Participant.
A Pre-Tax Contribution Account will be created for each participating person to
hold the portion of a Participant's interest in the Plan which is attributable
to his Pre-Tax contributions. An After-Tax Contribution Account will also be
maintained for each Participant who had an interest in the Plan attributable to
his After-Tax contributions prior to 1989. Company Contribution Accounts will be
created for each participating person to hold the portion of his interest in the
Plan which is attributable to Company contributions made on that Participant's
behalf, including one account for Company contributions that have been in the
Plan for at least 24 months after the last contribution for the Plan Year was
made, and a second account for Company contributions in the Plan less than 24
months after the last contribution for the Plan Year was made. A Rollover
Account will be created to hold qualified rollover contributions, if any,
accepted into the Plan.
Shortly after the end of each quarter, the Trustee will furnish to each
participating Person a current statement of his accounts in the Plan. This
statement will indicate the amount of investments purchased during the quarter
with that Participant's contributions and Company contributions, the
amount, if any, of cash credits to that Participant's accounts and a
statement of the assets currently being held by the Trustee for that
Participant. Within nine months after the end of each Plan Year, the Plan
Administrator will furnish each participating person a Summary Annual Report
(see Participants' Rights under ERISA ). Appropriate adjustments resulting from
stock dividends, stock splits and similar changes will be made in Participant's
accounts invested in the LNC Common Stock Fund. A Participant should notify his
employer's benefit section within 30 days of the statement date if he believes
his statement to be incorrect; otherwise it will be deemed to be correct.
WITHDRAWALS
If a participating person needs to withdraw money, the Participant may do so,
but the rules for withdrawing money differ for withdrawals from different
accounts.
A Participant 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. A Participant 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 a Participant can withdraw is $500;
2) if the amount in the Matured Company Contribution Account is less than $500,
the Participant must withdraw the entire amount; and 3)the Participant cannot
make withdrawals if the Plan is terminated or if a notice of Plan termination
has been issued.
Even though a Participant may be 100% vested in Company contributions, only the
Matured Company contributions may be withdrawn. These are contributions that
have been in the Plan for at least 24 months after the last contribution for the
Plan Year was made. Non-matured Company contributions are amounts contributed
which have not been in the Plan for at least 24 months after the last
contribution to the Plan Year was made, and are not available for withdrawal.
A Participant 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)amounts attributable to Company contributions
which were rolled over to the Plan as the result of a spinoff or merger of the
Participant's prior plan in the Account may not be withdrawn for two years from
the date of the rollover; and, 3) the Participant cannot make withdrawals if the
Plan is terminated or if a notice of Plan termination has been issued.
If a Participant has no balance in his After-Tax Contribution Account, or his
Matured Company 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) each must be for a minimum of
$500; and 2) the maximum available for withdrawal will be reduced, under a
formula provided in the Plan, if the Participant has outstanding loan balances
with the Plan at the time he requests withdrawal.
If a Participant has no balance in his After-Tax Contribution Account, Matured
Company Contribution Account or Rollover Account and has not attained age
59-1/2, then it may be possible for that Participant to withdraw amounts
(minimum of $500) which the Participant 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 and related educational fees (including room and board) for
post-secondary education for the Participant or the Participant's dependents; 3)
purchase (excluding mortgage payments) of a primary residence; and 4) imminent
foreclosure of or eviction from the Participant's primary residence. Such a
withdrawal must be demonstrably necessary due to a Participant'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
Participant must fulfill the following conditions: 1) the Participant must have
obtained all distributions other than hardship distributions, and all
non-taxable loans currently available under all plans maintained by the Company;
2) the Participant 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 Participant in the year of the hardship
withdrawal.
<PAGE>-11-
Subject to the foregoing discussion, a withdrawal of a Participant's Pre-Tax
Account will be made upon the written request of the Participant delivered to
the Plan Administrator, all other withdrawals are made via the Norwest Benefits
Help Line phone number 1-888-245-9798. The Trustee will deliver to the
Participant 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) unless a request for shares of LNC stock is
requested. See Fractional Shares for settlement of fractional share interests
in LNC Common Stock.
PARTICIPANT LOANS
A Participant may, subject to the consent of the Plan Administrator, obtain a
loan from the Plan. The amount which the Participant may borrow is
determined as follows:
1. The Participant may borrow up to fifty percent (50%)
of the Participant's vested account balance and is further limited to
a maximum loan in any event of $50,000. A Participant may have 2
outstanding loans at one time, as long as the combined amounts do not
exceed the maximums stated above.
2. There is a $50 loan origination fee charged by Norwest Bank, the Plan
recordkeeper.
3 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.
4. The requested loan amount will first be taken out of the
Participant's pre-tax account. If there isn't a sufficient amount in
the pre-tax account, the remaining amount will be taken out of the
Participant's after-tax account, rollover account, and matured
company contribution account, in that order. The loan amount will
come out of the funds in which the Participant invests on a pro-rata
basis.
5. The loan will be repaid through payroll deduction over a period of
from one to 60 months (from one to 240 months if the loan is used to
acquire a principal residence of the Participant, as defined by
Section 267(c)(4) of the Code) and for interest at the then
prevailing rate for loans of a similar nature.
6. The loan is subject to withdrawal restrictions applicable to the Funds
in which the Pre-Tax Contribution Account, the matured Company
Contribution Account, and the Rollover Account are invested.
7. In the event that a Participant has an outstanding loan balance when
his Pre-Tax Contribution Account is paid to him or to his beneficiary on
account of disability, termination or attainment of age 59-1/2, the loan
balance (including accrued interest) will be deducted from the amount
otherwise payable.
8. The Loan repayment will be invested in the same manner as the
Participant's current investment allocations. If the Participant
isn't currently making contributions, the Participant may indicate
the investment allocation for the repayment of the loan.
9. The LNC Benefits Committee can adopt written loan procedures which
may impose other terms and conditions. These are available upon
request from the Benefits Section of LNC Human Resources.
LUMP SUM 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). Amounts in the non-matured
Company Contribution Account are transferred to the matured Company Contribution
Account after the date on which these contributions have been in the Plan for
two years. A Participant 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
Participant'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
Participant, in cash or in kind. (see Fractional Shares for treatment of
fractional share interest in LNC Common Stock.) The amount in an Participant's
Pre-Tax Contribution Account will only be distributed upon an Participant's
death, disability, retirement or termination of service with the Company and all
its affiliates.
DEATH, DISABILITY, RETIREMENT OR TERMINATION OF SERVICE
A Participant (or his beneficiary or legal representative in the event of his
death) will be entitled to the full value of the Participant's Pre-Tax
Contribution, Company Contribution, Rollover, 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:
A distribution for an amount of $5,000 or less will be paid in cash and in a
lump sum. No deferral of this distribution is available.
DISTRIBUTION AT RETIREMENT
The Participant is entitled to the full value of all contributions credited to
his account (including any nonvested Company contributions) upon retirement.
Retirement is termination of the full-time contract at age 60 or older. If the
Participant retires prior to age 70-1/2, he may elect to defer the distribution
to no later than the April 1 following attainment of age 70-1/2.
DISTRIBUTION AT DISABILITY
If a Participant has been totally disabled for at least two years, or becomes
totally disabled and the disability is expected to last for more than two years
or result in death, the Participant may request a distribution at any time.
DISTRIBUTION AT DEATH
The Participant's spouse, if married, or the Participant's beneficiary, if
single, will be entitled to any remaining account balance attributable to the
Participant's contributions and Company contributions (including nonvested
portions) upon the Participant's death.
<PAGE>-12-
DISTRIBUTION AT TERMINATION
If a Participant's contract is terminated (other than for retirement, disability
or death) and the Participant is not employed with any Lincoln National
Corporation affiliate, or the Participant does not take a corporate contract,
the Participant will be entitled to the value of his Pre-tax contributions, any
after-tax contributions, and any vested Company contributions. Non-vested
Company contributions and earnings thereon are forfeited. If the Participant
terminates prior to age 70-1/2 and the account value is greater than $5,000, the
Participant may elect to defer distribution until not later than the April 1
following attainment of age 70-1/2.
If the Participant does not return a form making a selection and the account
value is greater than $5,000, the distribution will be automatically deferred
until the April 1 following the Participant's attaining age 70-1/2, unless the
Participant sends written notice prior to that time indicating his wish to
initiate the distribution.
PERIODIC PAYMENTS OF DISTRIBUTIONS
AT RETIREMENT
As an alternative to taking a lump sum distribution when the Participant
retires, the Participant may leave the account value in the Plan and make
periodic withdrawals. These withdrawals are limited to one per calendar year and
must be at least the greater of $5,000, or 20% of the account value. If the
Participant has a balance in his or her account when he or she reaches age
70-1/2, this balance will be automatically distributed to the Participant on the
April 1 following attainment of age 70-1/2. (NOTE: If there is an outstanding
loan balance at the time of retirement, the Participant must repay the entire
amount before making periodic withdrawals from the distribution amount.)
AT DISABILITY
If the Participant becomes eligible for a distribution from the Plan, he or she
may, as an alternative to taking a lump sum distribution, make periodic
withdrawals. These withdrawals are limited to one per calendar year and must be
at least the greater of $5,000, or 20% of the Participant's account value.
(NOTE: If there is an outstanding loan balance at the time of retirement, the
Participant must repay the entire amount before making periodic withdrawals from
the distribution amount.)
AT DEATH
As an alternative to the Participant's beneficiary taking a lump sum
distribution of the Participant's account at the time of the Participant's
death, the beneficiary may leave the distribution in the Plan for up to five
years and make periodic annual withdrawals during this five-year period. These
withdrawals are limited to one per calendar year and must be at least the
greater of $5,000, or 20% of the Participant's account value in the name of such
beneficiary. For example, if the account value is $10,000 on the date of the
Participant's death, and the Participant has designated two beneficiaries, they
must take an immediate distribution.
In the event that a Participant forfeits amounts in his/her Company
Contribution Account and such Participant does not incur a 5-year-break-in-
service, such forfeited amount shall be recredited to his/her Company
Contribution Account upon his/her return to service as an agent or employee
of the Company, LNC 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 Participant
terminates, during which the Participant is not a full-time life insurance
salesman under the Internal Revenue Code of 1986, as amended, a general agent,
or an employee of Company,LNC 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 a
Participant is absent from work on the last day of the Plan Year on account of
pregnancy of the Participant; the birth of a child of the Participant; the
placement of a child with the Participant in connection with the adoption of
that child by that Participant; 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 Participant is a full-time life insurance salesman under
the Federal Income Contributions Act, a general agent, or an employee of the
Company, Related Company or Affiliate on the last day of the Plan Year next
following the Plan Year in which the Participant's termination occurs, shall
not be counted in determining the break-in-service. If a Participant 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 Participant and the securities and cash in his Company 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.
COMPANY CONTRIBUTION ACCOUNT
AUTOMATIC CREDITING OF ACCOUNT BALANCES
Two years after the "matching" (additional) contribution has been made for a
Plan Year, the then value of a Participant's non-matured Company Contribution
Account from that given year shall be automatically credited to the Matured
Company Contribution Account.
WITHDRAWALS FROM THE COMPANY CONTRIBUTION ACCOUNT
Subject to certain restrictions, a Participant may from time to time withdraw
all or any part of the assets in his Matured Company Contribution Account. (See
1`Withdrawals )
<PAGE>-13-
INVESTMENT OF CONTRIBUTIONS
The Trustee will administer the Matured Company Contribution Account assets in a
manner similar to that applicable to the other accounts until the Participant's
Termination Date (see Investment of Contributions ).
BENEFICIARY DESIGNATION
Each Participant may designate on an appropriate form filed with the Plan
Administrator, a beneficiary or beneficiaries to whom, in the event of the
Participant's death, any securities and cash to which the Participant is
entitled under the Plan will be payable. A beneficiary designation may be
changed or cancelled by a Participant from time to time by filing an appropriate
form with the Plan Administrator. If the Participant was married on the date of
his death, his surviving spouse shall be deemed to be his Beneficiary, unless
that surviving 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 Participant. If no
Beneficiary designated by the Participant survives to receive payment of
benefits on account of the death of the Participant, then payment shall be made
to the Participant's surviving spouse, if any, or, if none, to the estate of the
Participant.
ASSIGNMENT
No right or interest of any Participant or beneficiary in the Plan is assignable
or transferable in whole or in part, either directly or by operation of law or
otherwise, including, without limitation, execution, levy, garnishment,
attachment, pledge, or bankruptcy, except in connection with a loan from the
Plan to a Participant, or as provided under the terms of a qualified domestic
relations order ("QDRO") (as defined in 414(p) of the Code) as determined by the
Plan Administrator. The LNC Benefits Committee shall adopt QDRO procedures which
shall be available upon request from the Benefits Area.
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 the
Company 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 a Participant as
to the continuance of vesting of such securities and cash attributable
to Company contributions or earnings thereon;
4. Upon the termination or suspension of the Plan, the rights of
all Participants to the amounts credited to their account as of the
date of such termination or suspension shall be nonforfeitable.
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 Minnesota, N.A., 510 Marquette Bldg., Fifth
and Marquette, Minneapolis, MN 55479-0035( NBIN ), 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 30, 1999, the Company and its affiliates
owned no outstanding common stock of the Trustee; however, Ian M. Rolland,
former Chief Executive Officer of LNC, is on the board of directors 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 Company 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 discontinuance 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 Company assumes 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 tha 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.
<PAGE>-14-
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 Company, 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
Company, and to the other Committee members.
MEMBERS OF THE LINCOLN NATIONAL CORPORATION BENEFITS COMMITTEE
Committee
Name Title Title
George E. Davis Member Senior Vice President of LNC
Peter P. Fettig Member Assistant Vice-President of LNC
Martha K. Mullins Member Manager, Payroll & Benefit
Services
Walter Wiley Member Assistant Vice-President & Director of Human
Resources Operations
Luann Boyer Member Agents Benefits Manager
The business address of Messrs. Davis and Fettig is 200 E. Berry Street, Fort
Wayne, Indiana 46802-2706; the business address of Ms. Boyer and Ms. Mullins is
1300 South Clinton Street, Fort Wayne, Indiana 46802-3506; the business address
of Mr. Whiley is 1700 Magnavox Way, Fort Wayne, Indiana 46804.
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 PARTICIPANT 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.
Company contributions to the plan are deductible by the Company under Section
404(a) of the Code. Participants will not be subject to Federal Income Tax on
Company contributions, on their contributions, or on income of the trust except
to the extent they receive distribution or withdrawals from the Plan.
Participants 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.
Participant's 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 Pre-tax contributions to $10,000.00 for the 1999
tax year (subject to cost-of-living adjustments). The Code also requires that
the sum of Pre-Tax contributions, Company 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 a Participant 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 Participant'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 earnings
thereon. If the Participant 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 Participant's After-Tax contributions will
not be taxed at the time of distribution (unless the Participant elects
to be taxed at that time, under procedures to be prescribed by the IRS).
In general, a distribution under the Plan upon a Participant's retirement,
disability, death, or other separation from service is taxable as ordinary
income to the extent that it exceeds the amount of the Participant's Net
Unrecovered Contributions and Net Unrealized Appreciation attributed to the
Participant's After-Tax contributions (unless the Participant elects to be taxed
on this latter amount). However, if distribution of all amounts to the
Participant'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
Participant does not rollover all or a part of the lump sum distribution, the
Participant 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
Participant.
2. The remaining amount is taxable to the Participant as ordinary income
and may be eligible for a special income averaging method of taxation.
The special income averaging rules apply for amounts distributed before
January 1, 2000, except that transitional rules apply to individuals who
attained age 50 before January 1, 1986.
<PAGE>-15-
A Participant may also be eligible to make a tax-free rollover of a distribution
of the Participant's Accounts; the rollover can be "direct" or "indirect". 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 Participant's Accounts is
distributed, any subsequent distribution will not be eligible for the special
lump sum distribution rules described above. The rollover may be made to an
individual retirement account or annuity or to another qualified plan. Indirect
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 no longer require distributions to commence by April 1 of the calendar year
after an Participant attains age 70-1/2, if the Participant has retired.
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.
For purposes of taxation on the subsequent sale or disposition of any
LNC Common Stock received by an Participant in a distribution, the
Participant'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
Participant in the year of distribution plus the amount, if any, of the
distribution of the LNC Common Stock attributable to the Participant's After-Tax
contributions (plus any other amount of the distribution of LNC Common Stock on
which the Participant was taxed at his election at the time of distribution).
Upon the sale or other taxable disposition of the LNC Common Stock acquired
from the Plan as a lump sum distribution 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.
If a Participant dies, 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 Participant. A beneficiary
who is the surviving spouse of the Participant may be eligible to make a
tax-free rollover of a distribution under the same rules applicable to rollovers
by Participants. 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 distributions. 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 a Participant 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 Retirement 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.
PARTICIPANTS RIGHTS UNDER ERISA
Participants 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 information upon written
request to the Plan Administrator. The Plan Administrator may make a reasonable
charge for the copies.
<PAGE>-16-
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 a Company, a union, or any other person, may fire or otherwise
discriminate against a Participant 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 a
Participant 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 $110 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
Persons 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, Participants 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, 1998
and 1997, and the related Statements of Changes in Net Assets Available for Plan
Benefits for the years ended December 31, 1998, 1997 and 1996, 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 Participants 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, Chicago,
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 Chicago Stock
Exchanges.
On March 15, 1999, the following number of shares were issued and
outstanding: Common Stock: 101,260,672; Series A Preferred Stock: 32,067.
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.
<PAGE>-17-
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.
Boston EquiServe acts as Transfer Agent and Registrar for the LNC Common Stock.
INDEMNIFICATION OF OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS
The By-Laws of LNC and the Company, pursuant to authority contained in the
Indiana Business Corporation Law and the Indiana Insurance Law, provide for the
indemnification of their officers, directors, employees and agents against
reasonable expenses that may be incurred by them in connection with the defense
of any action, suit or proceeding to which they are made or threatened to be
made parties except with respect to matters as to which they are adjudged liable
for negligence or misconduct in the performance of duties to their respective
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 of The Lincoln National Life Insurance Company Agents'
Savings and Profit-Sharing Plan as of December 31, 1998 and 1997, and for each
of the three years in the period ended December 31, 1998, appearing in this
Prospectus and Registration Statement have been audited by Ernst & Young LLP,
independent auditors, as set forth in their report thereon appearing elsewhere
herein and in the Registration Statement. In addition, the consolidated
financial statements and schedules of Lincoln National Corporation, incorporated
by reference from the Lincoln National Corporation's Annual Report (Form 10-K)
for the year ended December 31, 1998 in this Prospectus and Registration
Statement, have been audited by Ernst & Young LLP, independent auditors, as set
forth in their report thereon also incorporated by reference. The financial
statements and schedules referred to above are included 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 46802-2706. Certain matters with respect to the interests in the Plan to
which this Prospectus relates were passed upon for the Plan by Elizabeth
A. Frederick, Esquire, Vice President and Deputy General Counsel of LNC, 1300
South Clinton Street, Fort Wayne, Indiana 46802-3506.
INCORPORATION OF ADDITIONAL DOCUMENTS BY REFERENCE
LNC hereby incorporates the following documents by reference into this
prospectus:
1. LNC's 1997 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, 1998.
3. LNC's definitive proxy statement (except for the Performance Graph and
Compensation Committee Report which are NOT incorporated by reference)
filed pursuant to Section 14 of the 1934 Act in connection with LNC's
latest annual meeting of stockholders.
<PAGE>-18-
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 or the Plan 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>-19-
ANNUAL REPORT ON FORM-11K
FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 1998
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, 1998, 1997 and 1996
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
<PAGE>-1-
Report of Independent Auditors
Lincoln National Corporation Benefits Investment Committee
Lincoln National Corporation
We have audited the accompanying statements of net assets available for plan
benefits of The Lincoln National Life Insurance Company Agents' Savings and
Profit-Sharing Plan as of December 31, 1998 and 1997, 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, 1998. 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, 1998 and 1997, and the changes in its net assets available for plan
benefits for each of the three years in the period ended December 31, 1998, in
conformity with generally accepted accounting principles.
Ernst & Young LLP
March 22, 1999
Fort Wayne, Indiana
<PAGE>-2-
The Lincoln National Life Insurance Company
Agents' Savings and Profit-Sharing Plan
Statements of Net Assets Available for Plan Benefits
<TABLE>
<CAPTION>
December 31
1998 1997
---- ----
<S> <C> <C>
Assets
Investments:
Common stock--Lincoln National Corporation
(cost: 1998-$33,969,141; 1997-$31,095,120) $ 65,019,912 $ 61,674,219
Norwest Bank Short-Term Investment Fund 1,905,255 1,807,117
Pooled separate accounts--The Lincoln National
Life Insurance Company Separate Accounts
(cost: 1998-$40,946,428; 1997-$33,536,806) 67,032,542 51,104,187
Investment contracts --
The Lincoln National Life Insurance Company 12,081,039 10,993,958
Participant loans 5,207,903 4,980,382
----------- ----------
151,246,651 130,559,863
Accrued interest receivable 8,454 7,758
Cash and invested cash 92,786 847
Contributions receivable from Employer companies 4,103,596 4,318,154
----------- -----------
Net assets available for plan benefits $155,451,487 $134,886,622
=========== ===========
</TABLE>
See accompanying notes.
<PAGE>-3-
The Lincoln National Life Insurance Company
Agents' Savings and Profit-Sharing Plan
Statements of Changes in Net Assets Available for Plan Benefits
<TABLE>
<CAPTION>
Year ended December 31
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
Investment income:
Cash dividends--Lincoln National Corporation $ 1,639,615 $ 1,604,366 $ 1,552,560
Interest:
The Lincoln National Life Insurance Company 653,432 690,992 577,671
Other 342,801 320,146 332,634
----------- ----------- -----------
996,233 1,011,138 910,305
----------- ---------- -----------
2,635,848 2,615,504 2,462,865
Net realized gain on sale, distribution and forfeitures of
investments:
Common stock--Lincoln National Corporation 2,636,667 4,343,393 2,196,645
Pooled separate accounts--The Lincoln National
Life Insurance Company Separate Accounts 2,122,479 2,482,267 1,056,483
----------- ----------- -----------
4,759,146 6,825,660 3,253,128
Net unrealized appreciation of investments 8,990,405 22,635,104 301,572
Contributions:
Participants 11,249,342 4,839,046 4,604,114
Employer companies
(net of forfeitures:; 1998--$18,660
1997--$12,050; 1996--$5,566;) 4,436,110 5,430,354 3,735,645
----------- ----------- -----------
15,685,452 10,269,400 8,339,759
Distributions to participants (11,405,338) (6,096,184) (5,476,308)
Administrative expenses (100,648) (108,251) (86,481)
----------- ---------- -----------
Net increase in net assets available for plan benefits 20,564,865 36,141,233 8,794,535
Net assets available for plan benefits
at beginning of the year 134,886,622 98,745,389 89,950,854
----------- ----------- -----------
Net assets available for plan benefits
at end of the year $155,451,487 $134,886,622 $98,745,389
=========== =========== ==========
</TABLE>
See accompanying notes.
<PAGE>-4-
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 Norwest Bank Short-Term Investment Fund is valued at cost which approximates
fair value.
The fair value of participation units in pooled separate accounts is based on
quoted redemption value on the last business day of the year.
The investment contracts are valued at contract value as estimated by The
Lincoln National Life Insurance Company ("Lincoln Life"). Contract value
represents net contributions plus interest at the contract rate. The contracts
are fully benefit responsive.
Participant loans are valued at their outstanding balances which approximate
fair value.
The cost of investments sold, distributed or forfeited is determined using the
specific identification method.
Use of Estimates
Preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.
2. Description of the Plan
The Agents' Savings and Profit-Sharing Plan ("Plan") is a contributory, defined
contribution plan which covers eligible agents of Lincoln Life and agents and
employees of Sagemark Consulting, Inc. ("Sagemark"). Any person who is a
full-time agent of Lincoln Life or is an agent or employee of Sagemark is
eligible to enroll in the Plan. Lincoln Life and Sagemark are the employer
companies ("Employer") contributing to the Plan. A participant may make pre-tax
contributions at a rate of at least 1%, but not more than 15% of eligible
earnings, 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 the
investment of Employer contributions, but only after the contributions have been
in the Plan for two years following the date the last contribution for the plan
year was 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)
Employer 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. In
early 1998, the Board of Directors of Lincoln Life adopted an amendment
approving certain changes to the contribution formula that became effective
April 1, 1998. Under the new formula, Employer contributions to the Plan are
based on LNC's increase in operating income. The Employer match on eligible
participants' contributions during their first year of employment is limited to
a maximum of 25%. The maximum match for Sagemark agents is 50%.
Employer contributions are invested in the LNC Common Stock Fund. Participants'
contributions are fully vested. Employer 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%
Lincoln Life 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 disability or retirement, a participant or
beneficiary, in case of the participant's death, 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 contributions,
matching contributions from the Employer and allocations of Plan earnings, and
is charged with an allocation of administrative expenses. Allocations are based
on participant 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 non-vested amounts are used to reduce future Employer
contributions.
<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, 1998 December 31, 1997
Number of Number of
Shares, Units Market Shares, Units Market
or Par Value Value or Par Value Value
<S> <C> <C> <C> <C>
Quoted Market Values:
Common stock--LNC 794,743 $ 65,019,912* 789,430 $ 61,674,219*
Pooled separate account
investment contracts
underwritten by Lincoln Life:
Government Bond Fund 484,630.307 847,854 261,930.867 423,797
Core Equity Fund 1,403,540.627 18,309,961* 1,429,480.452 15,723,099*
Medium Capitalization
Equity Fund 930,687.431 11,504,791* 974,528.962 9,829,271*
Short-Term Fund 1,190,036.159 3,645,178 904,830.388 2,629,519
Government/Corporate
Bond Fund 205,814.429 1,211,364 163,420.177 876,241
Large Capitalization
Equity Fund 1,309,420.549 13,204,880* 1,212,360.575 9,168,971*
Balanced Fund 191,351.379 1,162,706 132,931.628 695,965
High Yield Bond Fund 515,601.420 1,280,241 485,187.946 1,126,837
Small Capitalization
Equity Fund 1,085,472.627 5,124,246 810,613.569 3,270,682
Value Equity Fund 2,231,259.184 5,484,306 1,577,096.377 3,356,102
International Equity Fund 974,670.259 5,257,015 830,895.558 4,003,703
------------- -------------
67,032,542 51,104,187
Contract Value:
Investment contracts
underwritten by Lincoln Life $12,081,039 12,081,039* $10,993,958 10,993,958*
Estimated Values:
Norwest Bank short-term
investment fund 1,905,255 1,905,255 1,807,117 1,807,117
Participant loans 5,207,903 5,207,903 4,980,382 4,980,382
------------- -------------
Total investments $151,246,651 $130,559,863
=========== ===========
</TABLE>
* Investments that represent 5% or more of the fair value of net assets
available for benefits as of the indicated date.
<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:
<TABLE>
<CAPTION>
Year ended December 31
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
Common stock:
Proceeds from disposition of stock $ 4,297,217 $ 11,100,882 $9,419,060
Cost of stock disposed 1,660,550 6,757,489 7,222,415
--------- ----------- ---------
Net realized gain on sale, distribution and
forfeitures of common stock $ 2,636,667 $ 4,343,393 $2,196,645
========= ========= =========
Pooled separate accounts:
Proceeds from disposition of units $ 28,814,807 $ 12,728,284 $4,948,738
Cost of units disposed 26,692,328 10,246,017 3,892,255
---------- ---------- ---------
Net realized gain on sale, distribution and
forfeitures of pooled separate accounts $ 2,122,479 $ 2,482,267 $1,056,483
========= ========= =========
</TABLE>
The net change in unrealized appreciation (depreciation) of investments in total
and by investment classification as determined by quoted market price is
summarized as follows:
<TABLE>
<CAPTION>
Year ended December 31
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
Market value in excess of cost:
At beginning of the year $ 48,146,480 $25,511,376 $25,209,804
At end of the year 57,136,885 48,146,480 25,511,376
---------- ----------- ----------
Change in net unrealized appreciation
of investments $ 8,990,405 $22,635,104 $ 301,572
========= ========== =======
Common stock $ 471,672 $16,957,113 $(2,990,993)
Pooled separate accounts 8,518,733 5,677,991 3,292,565
--------- ----------- ---------
Change in net unrealized appreciation
of investments $ 8,990,405 $22,635,104 $ 301,572
========= ========== =======
</TABLE>
The investment contracts (Guaranteed Fund) earned an average interest rate of
approximately 6.45%, 6.60% and 6.82% in 1998, 1997 and 1996, respectively. The
credited interest rates for new contributions, which approximate the current
market rate, were 5.50% and 6.00% at December 31, 1998 and 1997, respectively.
The rate on new contributions is guaranteed through the three succeeding
calendar year quarters. The credited interest rates for the remaining contract
value balance were 6.40% and 6.50% at December 31, 1998 and 1997, 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 investment contracts approximates contract value.
<PAGE>
The Lincoln National Life Insurance Company
Agents' Savings and Profit-Sharing Plan
Notes to Financial Statements (continued)
4. Investment Options (continued)
The detail of the net assets available for plan benefits by investment option is
as follows:
<TABLE>
<CAPTION>
Investment Options
December 31, 1998 Total 1 2 3 4 5 6
<S> <C> <C> <C> <C> <C> <C> <C>
Assets
Investments:
Common stock $ 65,019,912 $65,019,912
Short-term investment fund 1,905,255 1,905,255
Pooled separate accounts 67,032,542 $847,854 $18,309,961 $11,504,791 $3,645,178
Investment contracts 12,081,039 $12,081,039
Participant loans 5,207,903
---------- ----------- -------- --------- --------- ---------- ----------
Total investments 151,246,651 66,925,167 847,854 12,081,039 18,309,961 11,504,791 3,645,178
Accrued interest receivable 8,454 8,454
Cash and invested cash
(deficit) 92,786 93,986 (21,131) (298) (149)
Other receivables
Contributions receivable
from Employer companies 4,103,596 4,103,596
--------- -------- -------- --------- -------- --------- ----------
Net assets available for
plan benefits Total assets $155,451,487 $71,131,203 $826,723 $12,081,039 $18,309,663 $11,504,642 $3,645,178
=========== ========== ======= ========== ========== ========== =========
</TABLE>
<TABLE>
<CAPTION>
Investment Options
December 31, 1998 7 8 9 10 11 12 13 Loans
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Assets
Investments:
Common stock
Pooled separate accounts $1,211,364 $13,204,880 $1,162,706 $1,280,241 $5,124,246 $5,484,306 $5,257,015
Investment contracts
Participant loans $5,207,903
---------- --------- -------- ---------- -------- ------- --------- ---------
Total investments 1,211,364 13,204,880 1,162,706 1,280,241 5,124,246 5,484,306 5,257,015 5,207,903
Accrued interest
receivable
Cash and invested
cash (deficit) 21,131 (407) 236,830 (14) (236,829) 4 (337)
Other receivables
Contributions receivable
from Employer companies
Net assets available for --------- --------- --------- --------- --------- --------- --------- ---------
plan benefits $1,232,495 $13,204,473 $1,399,536 $1,280,241 $5,124,232 $5,247,477 $5,257,019 $5,207,566
========= ========== ========= ========= ========= ========= ========= =========
</TABLE>
<PAGE>
The Lincoln National Life Insurance Company
Agents' Savings and Profit-Sharing Plan
Notes to Financial Statements (continued)
4. Investment Options
The detail of the net assets available for plan benefits by investment option is
as follows:
<TABLE>
<CAPTION>
Investment Options
December 31, 1997 Total 1 2 3 4 5 6
<S> <C> <C> <C> <C> <C> <C> <C>
Assets
Investments:
Common stock $ 61,674,219 $61,674,219
Short-term investment fund 1,807,117 1,807,117
Pooled separate accounts 51,104,187 $423,797 $15,723,099 $9,829,271 $2,629,519
Investment contracts 10,993,958 $10,993,958
Participant loans 4,980,382
--------- ----------- -------- ---------- ---------- -------- --------
Total investments 130,559,863 63,481,336 423,797 10,993,958 15,723,099 9,829,271 2,629,519
Accrued interest receivable 7,758 7,758
Cash and invested cash
(deficit) 847 (122) (727) (1,217) (863) (227)
Contribution receivable--
The Lincoln National Life
Insurance Company 4,318,154 4,318,154
------------ -------- ------- ---------- ---------- ------- --------
Net assets available for
plan benefits $134,886,622 $67,807,248 $423,675 $10,993,231 $15,721,882 $9,828,408 $2,629,292
=========== ========== ======= ========== ========== ========= =========
</TABLE>
<TABLE>
<CAPTION>
Investment Options
December 31, 1997 7 8 9 10 11 12 13 Loans
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Assets
Investments:
Common stock
Pooled separate accounts $876,241 $9,168,971 $695,965 $1,126,837 $3,270,682 $3,356,102 $4,003,703
Investment contracts
Participant loans $4,980,382
------- ---------- ------- --------- -------- --------- --------- ----------
Total investments 876,241 9,168,971 695,965 1,126,837 3,270,682 3,356,102 4,003,703 4,980,382
Accrued interest
receivable
Cash and invested
cash (deficit) (170) (995) 21 (141) (24) (198) (490) 6,000
Contribution receivable--
The Lincoln National Life
Insurance Company
Net assets available for
plan benefits $876,071 $9,167,976 $695,986 $1,126,696 $3,270,658 $3,355,904 $4,003,213 $4,986,382
======= ========= ======= ========= ========= ========= ========= =========
</TABLE>
<PAGE>
The Lincoln National Life Insurance Company
Agents' Savings and Profit-Sharing Plan
Notes to Financial Statements (continued)
4. Investment Options (continued)
The detail of the changes in net assets available for plan benefits by
investment option is as follows:
<TABLE>
<CAPTION>
Investment Options
December 31, 1998 Total 1 2 3 4 5 6
<S> <C> <C> <C> <C> <C> <C> <C>
Investment income:
Cash dividends $ 1,639,615 $ 1,639,615
Interest 996,233 126,274 653,432
---------- --------- ------- --------- --------- ------- --------
Total investment income 2,635,848 1,765,889 $ 653,432
Net realized gain on sale,
distribution and forfeitures
of investments:
Common stock 2,636,667 2,636,667
Pooled separate accounts 2,122,479 $ 49,765 $ 699,872 $ 367,765 $ 131,980
------------ --------- ------- ------- ----------- ------- ----------
Total realized gains 4,759,146 2,636,667 49,765 699,872 367,765 131,980
Net unrealized appreciation 8,990,405 471,672 14,412 2,231,163 1,741,637 (3,455)
of investments
Contributions:
Participant 11,249,342 1,774,165 52,317 351,590 1,648,079 1,268,764 372,083
Employer companies 4,436,110 4,436,110
----------- --------- -------- ---------- --------- -------- -------
Total contributions 15,685,452 6,210,275 52,317 351,590 1,648,079 1,268,764 372,083
Distributions to participants (11,405,338) (4,446,390) (9,056) (1,787,303) (1,490,497) (524,278) (448,308)
Administrative expenses (100,648) (55,518) (848) (7,090) (11,076) (5,520) (2,072)
Net transfers (3,258,640) 296,458 1,877,179 (489,760) (1,172,134) 965,658
----------- ---------- ------- ---------- ----------- ----------- ---------
Net increase (decrease) in
net assets available for
plan benefits 20,564,865 3,323,955 403,048 1,087,808 2,587,781 1,676,234 1,015,886
Net assets available for
plan benefits at beginning
of the year 134,886,622 67,807,248 423,675 10,993,231 15,721,882 9,828,408 2,629,292
----------- ---------- ------- ---------- ---------- ----------- ----------
Net assets available for plan
benefits at end of the year $155,451,487 $71,131,203 $826,723 $12,081,039 $18,309,663 $11,504,642 $3,645,178
=========== ========== ======= ========== ========== ========== =========
</TABLE>
<TABLE>
<CAPTION>
Investment Options
December 31, 1998 7 8 9 10 11 12 13 Loans
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Investment income:
Cash dividends
Interest $ 216,527
-------- --------- ---------- ------- ---------- ------- ---------- -------
Total investment income 216,527
Net realized gain on sale,
distribution and forfeitures
of investments:
Common stock
Pooled separate accounts $ 46,160 $ 584,743 $ 28,588 $ 39,390 $ 127,318 $ 152,507 $ (105,609)
-------- ---------- ---------- -------- --------- --------- --------- -------
Total realized gains 46,160 584,743 28,588 39,390 127,318 152,507 (105,609)
Net unrealized appreciation
of investments 51,305 1,540,806 313,928 410,896 1,072,488 1,089,923 1,157,610
Employer companies
-------- ---------- -------- ------- ---------- ------ -------- -------
Total contributions 196,693 1,540,806 313,928 410,896 1,072,488 1,089,923 1,157,610
Distributions to participants (214,675) (912,062) (101,930) (49,831) (147,455) (256,067) (255,782) (761,704)
Administrative expenses (1,053) (6,500) (1,116) (2,029) (2,283) (2,870) (2,673)
Net transfers 277,994 181,922 350,389 (278,899) 198,264 438,882 (153,674) 766,361
-------- ---------- ---------- ---------- ---------- ---------- ---------- ---------
Net increase (decrease) in
net assets available for
plan benefits 356,424 4,036,497 703,550 153,545 1,853,574 1,891,573 1,253,806 221,184
Net assets available for
plan benefits at beginning
of the year 876,071 9,167,976 695,986 1,126,696 3,270,658 3,355,904 4,003,213 4,986,382
---------- ---------- ---------- --------- ---------- --------- --------- ---------
Net assets available for
plan benefits at end of
the year $1,232,495 $13,204,473 $1,399,536 $1,280,241 $5,124,232 $5,247,477 $5,257,019 $5,207,566
========= ========== ========= ========= ========= ========= ========= =========
</TABLE>
<PAGE>
The Lincoln National Life Insurance Company
Agents' Savings and Profit-Sharing Plan
Notes to Financial Statements (continued)
4. Investment Options (continued)
The detail of the changes in net assets available for plan benefits by
investment option is as follows:
<TABLE>
<CAPTION>
Investment Options
December 31, 1997 Total 1 2 3 4 5 6
<S> <C> <C> <C> <C> <C> <C> <C>
Investment income:
Cash dividends $ 1,604,366 $ 1,604,366
Interest 1,011,138 $ 690,992
----------- -------- ------ -------- --------- ---------- ---------
Total investment income 2,615,504 1,604,366 690,992
Net realized gain on sale,
distribution and forfeitures
of investments:
Common stock 4,343,393 4,343,393
Pooled separate accounts 2,482,267 $ 38,502 $ 792,850 $ 704,233 $ 33,725
------------ ---------- ------ ------- ---------- ---------- ---------
Total realized gains 6,825,660 4,343,393 38,502 792,850 704,233 33,725
Net unrealized appreciation
(depreciation) of investments 22,635,104 16,957,113 (6,849) 2,912,192 303,028 63,418
Contributions:
Participant 4,839,046 804,479 13,642 225,243 796,555 745,763 143,661
The Lincoln National Life
Insurance Company 5,430,354 5,430,354
----------- --------- --------- ------- ---------- --------
Total contributions 10,269,400 6,234,833 13,642 225,243 796,555 745,763 143,661
Distributions to participants (6,096,184) (2,966,329) (24,350) (1,036,813) (355,330) (313,285) (443,836)
Administrative expenses (108,251) (73,949) (476) (5,364) (6,762) (4,220) (1,155)
Net transfers (6,578,182) (78,205) 696,009 855,723 (595,223) 1,441,543
-------- ---------- -------- ------- ----------- ----------- ---------
Net increase (decrease) in
net assets available for
plan benefits 36,141,233 19,521,245 (57,736) 570,067 4,995,228 840,296 1,237,356
Net assets available for
plan benefits at beginning
of the year 98,745,389 48,286,003 481,411 10,423,164 10,726,654 8,988,112 1,391,936
----------- ---------- ------- ---------- ---------- --------- ---------
Net assets available for
plan benefits at end of
the year $134,886,622 $67,807,248 $423,675 $10,993,231 $15,721,882 $9,828,408 $2,629,292
=========== ========== ======= ========== ========== ========= ========
</TABLE>
<TABLE>
<CAPTION>
Investment Options
December 31, 1997 7 8 9 10 11 12 13 Loans
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Investment income:
Cash dividends
Interest $ 320,146
-------- ---------- ------- ------- -------- --------- ------- ---------
Total investment income 320,146
Net realized gain on sale,
distribution and forfeitures
of investments:
Common stock
Pooled separate accounts $ 92,386 $ 545,130 $ 18,465 $ 19,644 $ 69,093 $ 63,683 $ 104,556
------- ---------- -------- --------- -------- ---------- ---------- ---------
Total realized gains 92,386 545,130 18,465 19,644 69,093 63,683 104,556
Net unrealized appreciation
(depreciation) of investments (12,556) 1,574,956 77,891 56,692 446,475 557,280 (294,536)
Contributions:
Participant 54,900 686,925 77,923 61,750 396,285 272,302 559,618
The Lincoln National Life
Insurance Company
Total contributions 54,900 686,925 77,923 61,750 396,285 272,302 559,618
Distributions to participants (57,010) (429,179) (5,494) (35,262) (64,180) (26,482) (160,100) (178,534)
Administrative expenses (726) (3,794) (715) (815) (1,238) (1,455) (2,182) (5,400)
Net transfers (167,062) 279,442 126,647 576,787 794,545 1,367,226 165,006 1,115,744
------- ---------- ------- ---------- --------- --------- ---------- ---------
Net increase (decrease)
in net assets available
for plan benefits (90,068) 2,653,480 294,717 678,796 1,640,980 2,232,554 372,362 1,251,956
Net assets available for
plan benefits at beginning
of the year 966,139 6,514,496 401,269 447,900 1,629,678 1,123,350 3,630,851 3,734,426
------- --------- ------- ---------- --------- --------- --------- ---------
Net assets available for
plan benefits at end of
the year $876,071 $9,167,976 $695,986 $1,126,696 $3,270,658 $3,355,904 $4,003,213 $4,986,382
======= ========= ======= ========= ========= ========= ========= =========
</TABLE>
<PAGE>
The Lincoln National Life Insurance Company
Agents' Savings and Profit-Sharing Plan
Notes to Financial Statements (continued)
4. Investment Options (continued)
The detail of the changes in net assets available for plan benefits by
investment option is as follows:
<TABLE>
<CAPTION>
Investment Options
December 31, 1996 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
---------- -------- -------- -------- --------- ------ -------
Total investment income 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
Pooled separate accounts 1,056,483 $ 24,494 $ 376,640 $ 229,263 $ 66,209
----------- ---------- --------- -------- --------- ---------- --------
Total realized gains 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
----------- --------- ------- ------- ---------- ------- ------
Total contributions 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>
Investment Options
December 31, 1996 7 8 9 10 11 12 13 Loans
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Investment Income:
Cash dividends
Interest $332,634
--------- ------ ------ ------- -------- ------- -------- ---------
Total investment income 332,634
Net realized gain on sale,
distribution and forfeitures
of investments:
Common stock
Pooled separate accounts $ 72,847 $ 10,364 $ 1,747 $ 5,366 $ 12,575 $ 18,728 $ 38,250
-------- -------- --------- -------- -------- ---------- ---------- --------
Total realized gains 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
Total contributions 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>
<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. However, some funds may be invested in
the Norwest Bank Short-Term Investment Fund until the LNC stock can be
purchased.
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.
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, 1998, the fair value of LNC common stock in the LNC Common Stock
Fund not subject to agent direction was $5,438,893.
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 and 4 through 13 are invested in pooled separate accounts of Lincoln
Life through a group annuity contract issued by Lincoln Life.
Interest charged on new loans to participants is established monthly based upon
the prime rate plus 1%. Loans may be repaid over any period selected by the
participant up to a maximum repayment period of 5 years except that the maximum
repayment period may be 20 years for the purchase of a principal residence.
<PAGE>
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 Participants
There are no income tax consequences to participants arising from their pre-tax
contributions, the Employer'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
The Plan has investments in common stock of LNC, and in pooled separate accounts
and investment contracts with Lincoln Life. Lincoln Life charges the Plan for
certain administrative expenses including trustee and audit fees. Total
administrative expenses charged were $100,648, $108,251, and $86,481 in 1998,
1997, and 1996, respectively.
8. Concentrations of Credit Risks
The Plan has investments in common stock of LNC, and in pooled separate accounts
and unallocated investment contracts with Lincoln Life of $65,019,912,
$67,032,542 and $12,081,039 respectively, at December 31, 1998 (41.8%, 43.1% and
7.8% of net assets, respectively). LNC and Lincoln Life operate predominately in
the insurance and investment management industries.
9. Century Compliance (unaudited)
The year 2000 issue is pervasive and complex and affects virtually every aspect
of Lincoln Life's businesses. Lincoln Life's computer systems and interfaces
with the computer systems of vendors, suppliers, customers and business partners
are particularly vulnerable. Lincoln Life has been redirecting a large portion
of its internal Information Technology ("IT") efforts and contracting with
outside consultants to update its systems to address Year 2000 issues. Experts
have been engaged to assist in developing work plans and cost estimates and to
complete remediation activities.
For the year ended December 31, 1998, Lincoln Life identified expenditures of
$22.0 million ($14.3 million after-tax) to address this issue. This brings the
expenditures for 1996-98 to $27.6 million ($17.9 million after-tax). Lincoln
Life's financial plans for 1999-2000 include expected expenditures of an
additional $36.5 million ($23.7 million after-tax) bringing estimated overall
Year 2000 expenditures to $64.1 million ($41.6 million after-tax). Because
updating systems and procedures is an integral part of Lincoln Life's on-going
operations, approximately 50% of expenditures shown above are expected to
continue after all Year 2000 issues have been resolved. Actual Year 2000
expenditures through December 31, 1998 and future Year 2000 expenditures are
expected to be funded from operating cash flows. The anticipated cost of
addressing Year 2000 issues is based on management's current best estimates
which were derived utilizing numerous assumptions of future events, including
the continued availability of certain resources, third party modification plans
and other factors. Such costs will be monitored closely by management.
Nevertheless, there can be no guarantee that actual costs will not be higher
than these estimated costs. Specific factors that might cause such differences
include, but are not limited to, the availability and cost of personnel trained
in this area, the ability to locate and correct all relevant computer problems
and other uncertainties.
<PAGE>
The Lincoln National Life Insurance Company
Agents' Savings and Profit-Sharing Plan
Notes to Financial Statements (continued)
The projects to address IT and non-It readiness have four major phases. Phase
one involves raising awareness and creating an inventory of all IT and non-IT
assets. The second phase consists of assessing all items inventoried to
initially determine whether they are affected by the Year 2000 issues and
preparing general plans and strategies. The third phase entails the detailed
planning and remediation of affected systems and equipment. The last phase
consists of testing to verify Year 2000 readiness.
Lincoln Life has completed these four phases for over two-thirds of its high
priority IT systems, including those provided by software vendors. While Lincoln
Life's Year 2000 program for nearly all high priority IT systems is expected to
be complete in the first quarter of 1999, phase four, for a small but important
subset of these systems, will continue through the end of the second quarter
1999. As of December 31, 1998, the status of projects addressing readiness of IT
assets is: 100% of IT assets have been inventoried (Phase 1) and assessed (Phase
2); 94% of IT projects have been through the remediation phase (Phase 3) with
the last project scheduled for completion by the end of March 1999; and 69% of
IT projects have completed the testing phase (Phase 4) with the last project
scheduled to finish testing by the end of June 1999. A portion of the effort
that extends into 1999 is dependent on outside third parties and is behind the
original schedule. Lincoln Life is working with these parties to modify the
completion schedule.
As of December 31, 1998, the status of projects that address readiness of high
priority non-IT assets is: 100% of non-IT assets have been inventoried (Phase 1)
and assessed (Phase 2); 79% of non-IT projects addressing remediation (Phase 3)
have been completed and 21% of non-IT projects have completed the testing phase
(Phase 4). Lincoln Life expects to have all phases related to high priority
non-IT projects completed by the end of October 1999.
Concurrent with the IT and non-IT projects, the readiness of key business
partners is being reviewed and Year 2000 contingency plans are being developed.
The most significant categories of key business partners are financial
institutions, software vendors, and utility providers (gas, electric and
telecommunications). Surveys have been mailed to these key business partners.
Based on responses received, current levels of readiness are being assessed,
follow-up contacts are underway, alternative strategies are being developed and
testing is being scheduled were feasible. This effort is expected to continue
well into 1999. As noted above, software vendor assessments are considered part
of the IT projects and, therefore, would follow the schedule shown above for
such projects.
While Lincoln Life is working to meet the schedules outlined above, some
uncertainty remains. Specific factors that give rise to this uncertainty include
a possible loss of technical resources to perform the work, failure to identify
all susceptible systems, non-compliance by third parties whose systems and
operations impact Lincoln Life and other similar uncertainties.
A worst case scenario might include Lincoln Life's inability to achieve Year
2000 readiness with respect to one or more of Lincoln Life's significant
policyholder systems, resulting in a material disruption to Lincoln Life's
operations. Specifically, Lincoln Life could experience an interruption in its
ability to collect and process premiums or deposits, process claim payments,
accurately maintain policyholder information, accurately maintain accounting
records, and/or perform adequate customer service. Should the worst case
scenario occur, it could, depending on its duration, have a material impact on
Lincoln Life's results of operations and financial position. Simple failures can
be repaired and returned to production within a matter of hours with no material
impact. Unanticipated failures with a longer service disruption period would
have a more serious impact. For this reason, Lincoln Life is placing significant
emphasis on risk management and Year 2000 contingency planning. Lincoln Life is
in the process of modifying its contingency plans to address potential Year 2000
issues. Where these efforts identify high risks due either to unacceptable work
around procedures or significant readiness risks, appropriate risk management
techniques are being defined. These techniques, such as resource shifting or use
of alternate providers, will be employed to provide stronger assurances of
readiness. Lincoln Life has gone through exercises to identify worst case
scenario failures. At this time, Lincoln Life believes its plans are sufficient
to mitigate identified worst case scenarios.
<PAGE>
The Lincoln National Life Insurance Company
Agents' Savings and Profit-Sharing Plan
Notes to Financial Statements (continued)
The record keeping for the Plan is currently done by Norwest Bank, Minnesota.
Record keeping consists of the day to day maintenance of the individual accounts
within the Plan. As a result of the arrangement with Norwest Bank, and as part
of Lincoln Life's century compliance efforts, Lincoln Life has surveyed, and
continues to survey, Norwest Bank with respect to Norwest Bank's Year 2000
readiness. In response to Lincoln Life's Year 2000 surveys, Norwest has
represented to Lincoln Life, that although there can be no guarantees that any
one product will not be affected in some way by a Year 2000 problem, Norwest has
dedicated sufficient resources to both address and minimize the impact of the
century date change. Separately, Norwest Bank has represented on its web site
that Norwest Bank has identified mission critical systems based on Federal
Institutions Examination Council (FIEC) guidelines, addressed all other systems,
largely completed remediation and testing of internal systems, and is currently
developing comprehensive contingency plans to address any Year 2000 problems
that may arise.
<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, 1994)), 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
<PAGE>
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 1997, 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 200
Legal fees -0-
Accounting fees 29,400
State blue sky fees and expenses -0-
Miscellaneous -0-
------
TOTAL $29,600
</TABLE>
The Registrant paid in 1997 an annual premium of approximately $970,340
(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 1994)), 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, 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.
<PAGE>
Item 17. Undertakings
(a) The undersigned registrant undertakes -- (1) to file, during any period
in which offers or sales are being made, a post-effective amendment to this
Registration Statement: (i) to include any Prospectus required by Section
10(a)(3) of the Securities Act of 1933; (ii) to reflect in the Prospectus any
facts or events arising after the effective date of the Registration Statement
(or the most recent post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information set forth in
the Registration Statement; (iii) to include any material information with
respect to the plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the Registration
Statement; (2) that, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new Registration Statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof; and (3) to remove from registration by means of a
post-effective amendment any of the securities being registered which remain
unsold at the termination of the offering.
(b) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
(c) The registrant hereby undertakes that, for purposes of determining any
liability under the Securities Act of 1933, each filing of the registrant's
annual report pursuant to section 13(a) or section 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
<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 30, 1999.
LINCOLN NATIONAL CORPORATION
/S/JON A. BOSCIA
Jon A. Boscia
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/JON A. BOSCIA President, Chief Executive
(Jon A. Boscia) Officer& Director 4/30/99
(Principal Executive Officer)
/S/DONALD L. VANWYNGARDEN Second Vice President & 4/30/99
(Donald L. VanWyngarden) Controller (Principal
Accounting Officer)
/S/RICHARD C. VAUGHAN Executive Vice President 4/30/99
(Richard C. Vaughan) (Principal Financial
Officer)
/S/J. PATRICK BARRETT Director 4/30/99
(J. Patrick Barrett)
/S/** Director 4/30/99
(Thomas D. Bell, Jr.)
/S/* Director 4/30/99
(Daniel K. Efroymson)
/S/** Director 4/30/99
(Harry L. Kavetas)
/S/* Director 4/30/99
(M. Leanne Lachman)
/S/ ERIC G. JOHNSON Director 4/30/99
(Eric G. Johnson)
<PAGE>
/S/ROEL PIEPER Director 4/30/99
(Roel Pieper)
/S/** Director 4/30/99
(John M. Pietruski)
/S/* Director 4/30/99
(Jill S. Ruckelshaus)
/S/** Director 4/30/99
(Gilbert R. Whitaker, Jr.)
*/S/JOHN L. STEINKAMP
John L. Steinkamp pursuant to a Power of Attorney filed with the original
Registration Statement, effective April 30, 1986.
**/S/JOHN L. STEINKAMP
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 30, 1999.
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY
By: /S/GABRIEL L. SHAHEEN
(Gabriel L. Shaheen, 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/GABRIEL L. SHAHEEN President and Chief Executive 4/30/99
(Gabriel L. Shaheen) Officer and Director
/S/KEITH J. RYAN Senior Vice President, Chief 4/30/99
(Keith J. Ryan) Financial Officer, and
(Assistant Treasurer)
/S/H. THOMAS MCMEEKIN Director 4/30/99
(H. Thomas McMeekin)
<PAGE>
/S/JON A. BOSCIA Director 4/30/99
(Jon A. Boscia)
/S/LARRY ROWLAND Director 4/30/99
(Larry Rowland)
/S/RICHARD C. VAUGHAN Director 4/30/99
(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 30, 1999.
THE LINCOLN NATIONAL LIFE INSURANCE
COMPANY AGENTS' SAVINGS AND PROFIT-
SHARING PLAN
By: /S/GEORGE E. DAVIS
George E. Davis, Chairman
Lincoln National Corporation
Benefits Committee
<PAGE>
INDEX TO EXHIBITS
Exhibit No. Description
23 Consent of Ernst &
Young LLP, Independent
Auditors
<PAGE>
219-455-1263
April 30, 1999
Securities and Exchange Commission
Division of Corporation Finance
450 Fifth Street, NW
Washington, DC 20549
Re: The Lincoln National Life Insurance
Company Agents' Savings and Profit-
Sharing Plan -- Reg. No. 33-4711:
Post-Effective Amendment Number 13 on Form S-1 (with Form S-3
Information about Lincoln National Corporation)
Ladies and Gentlemen:
On behalf of the Lincoln National Life Insurance Company Agents' Savings and
Profit-Sharing Plan (the "Plan") and Lincoln National Corporation (the
"Registrant"), and in conformity with Section 8(c) of the Securities Act of 1933
and Regulation C thereunder, I enclose Post-Effective Amendment No. 13 to the
Registration Statement of reference which includes the Plan's financial
statements. Also enclosed is a separate letter requesting acceleration of the
effective date of the Prospectus to May 3,1999 and the consent of Ernst &
Young LLP.
As with prior filings, this Amendment follows the hybrid registration format
agreed upon after extensive discussions with the Commission staff in 1983. It
was agreed at that time that the Plan would file on Form S-1 and in addition,
would provide S-3-type disclosure with respect to the Issuer, and S-8-type
disclosure with respect to the Plan itself.
If you have any questions or comments with respect to this Registration, please
call me at the above number. The Registrant sincerely hopes that the Staff will
see fit to grant acceleration of the effective date of this amended Prospectus
to May 3, 1999.
Sincerely,
/S/DENNIS L. SCHOFF
Dennis L. Schoff
Vice President and
Associate General Counsel
Enclosures
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. 13 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
(the "Plan") dated May 3, 1999, and to the use in such Registration Statement
and related Prospectus of our reports dated (a) March 22, 1999, included therein
with respect to the financial statements of the Plan as of December 31, 1998 and
1997, and for each of the three years in the period ended December 31, 1998, and
(b) February 1, 1999, incorporated by reference therein with respect to the
consolidated financial statements and schedules of Lincoln National Corporation
included in its Annual Report (Form 10-K) for the year ended December 31, 1998,
filed with the Securities and Exchange Commission.
/S/ ERNST & YOUNG LLP
Fort Wayne, Indiana
April 30, 1999
