-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, QK64OaHx2fGIND45Y0MAuWittoBGJziF56NfzsXOozq7ykUSqJb95zioulAlbx2R /IogG11zRy2zsRt68G+vFg== 0000059558-96-000028.txt : 19960401 0000059558-96-000028.hdr.sgml : 19960401 ACCESSION NUMBER: 0000059558-96-000028 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19951231 FILED AS OF DATE: 19960329 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: LINCOLN NATIONAL CORP CENTRAL INDEX KEY: 0000059558 STANDARD INDUSTRIAL CLASSIFICATION: LIFE INSURANCE [6311] IRS NUMBER: 351140070 STATE OF INCORPORATION: IN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 11-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-06028 FILM NUMBER: 96541449 BUSINESS ADDRESS: STREET 1: 200 EAST BERRY STREET STREET 2: PO BOX 1110 CITY: FORT WAYNE STATE: IN ZIP: 46802 BUSINESS PHONE: 2194552000 11-K 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 11-K ANNUAL REPORT Pursuant to Section 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended December 31, 1995 THE LINCOLN NATIONAL LIFE INSURANCE COMPANY AGENTS' SAVINGS AND PROFIT-SHARING PLAN (full title of the Plan) [Current Reg. No. 33-04711] Lincoln National Corporation 200 East Berry Street Fort Wayne, Indiana 46802 (name of Issuer and principal executive office) -i- Form 11-K LNC Agents' Savings and Profit Sharing Plan TABLE OF CONTENTS Page Facing Sheet i Financial Statements 1 Signature -ii- Annual Report on Form 11-K Financial Statements Year Ended December 31, 1995 The Lincoln National Life Insurance Company Agents' Savings and Profit-Sharing Plan Fort Wayne, Indiana The Lincoln National Life Insurance Company Agents' Savings and Profit-Sharing Plan Financial Statements Years ended December 31, 1995, 1994 and 1993 Contents Report of Independent Auditors 1 Audited Financial Statements Statements of Net Assets Available for Plan Benefits 2 Statements of Changes in Net Assets Available for Plan Benefits 3 Notes to Financial Statements 4 Report of Independent Auditors Lincoln National Corporation Benefits Investment Committee Lincoln National Corporation We have audited the accompanying statements of net assets available for plan benefits of The Lincoln National Life Insurance Company Agents' Savings and Profit-Sharing Plan as of December 31, 1995 and 1994, and the related statements of changes in net assets available for plan benefits for each of the three years in the period ended December 31, 1995. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for plan benefits of the Plan at December 31, 1995 and 1994, and the changes in its net assets available for plan benefits for each of the three years in the period ended December 31, 1995, in conformity with generally accepted accounting principles. Ernst & Young LLP March 6, 1996 Fort Wayne, Indiana The Lincoln National Life Insurance Company Agents' Savings and Profit-Sharing Plan Statements of Net Assets Available for Plan Benefits December 31 1995 1994 Assets Investments: Common stock-Lincoln National Corporation (cost: 1995-$28,178,295; 1994-$24,599,109) $44,791,273 $28,245,385 Segregated investment accounts--The Lincoln National Life Insurance Company Separate Accounts (cost: 1995-$19,546,015; 1994-$15,974,421) 28,142,841 19,372,295 Unallocated insurance contracts--The Lincoln National Life Insurance Company 10,955,545 10,725,398 Participant loans 3,317,440 2,809,857 Total investments 87,207,099 61,152,935 Accrued interest receivable 6,216 5,640 Cash and invested cash (deficit) (90,446) 495,281 Other receivables 194,104 -- Contributions receivable The Lincoln National Life Insurance Company 2,656,985 2,829,134 Total assets 89,973,958 64,482,990 Miscellaneous payables 23,104 84,871 Net assets available for plan benefits $89,950,854 $64,398,119 See accompanying notes. The Lincoln National Life Insurance Company Agents' Savings and Profit-Sharing Plan Statements of Changes in Net Assets Available for Plan Benefits Year ended December 31 1995 1994 1993 Investment income: Cash dividends-Lincoln National Corporation $1,414,060 $1,239,781 $1,031,836 Interest: The Lincoln National Life Insurance Company 841,750 746,163 665,851 Other 246,464 227,602 252,487 Total interest 1,088,214 973,765 918,338 Total investment income 2,502,274 2,213,546 1,950,174 Net realized gain on sale, distribution and forfeitures of investments: Common stock-Lincoln National Corporation 2,236,343 694,283 1,422,975 Segregated investment accounts-The Lincoln National Life Insurance Company Separate Accounts 864,428 704,323 424,288 Total net realized gain on sale 3,100,771 1,398,606 1,847,263 Net unrealized appreciation (depreciation) of investments 18,165,654 (8,080,629) 3,742,424 Contributions: Agents 4,724,597 4,603,511 4,364,477 The Lincoln National Life Insurance Company (net of forfeitures: 1995- $6,078; 1994-$3,355; 1993-$323) 3,087,927 3,351,434 3,806,346 Total contributions 7,812,524 7,954,945 8,170,823 Distributions to participants (deduction) (5,949,349) (3,413,968) (3,823,008) Administrative expenses (deduction) (79,139) (93,617) (56,171) Net increase (decrease) in net assets available for plan benefits 25,552,735 (21,117) 11,831,505 Net assets available for plan benefits at beginning of the year 64,398,119 64,419,236 52,587,731 Net assets available for plan benefits at end of the year $89,950,854 $64,398,119 $64,419,236 See accompanying notes. The Lincoln National Life Insurance Company Agents' Savings and Profit-Sharing Plan Notes to Financial Statements December 31, 1995 1. Significant Accounting Policies Investments The investment in Lincoln National Corporation ("LNC") common stock is valued at the last reported sales price per the national securities exchange on the last business day of the year. The fair value of the participation units in segregated investment accounts is based on quoted redemption value on the last business day of the year. The unallocated insurance contracts are valued at contract value as estimated by The Lincoln National Life Insurance Company ("Company"). Contract value represents net contributions made under the contract plus interest at the contract rate. Participant loans are valued at cost which approximates fair value. The cost of investments sold, distributed or forfeited is determined using the average cost method. 2. Description of the Plan The Lincoln National Life Insurance Company Agents' Savings and Profit-Sharing Plan ("Plan") is a contributory, defined contribution plan which covers eligible agents of the Company. Any person 21 years of age or older who is a full-time agent of the Company is eligible to enroll in the Plan if the agent has completed one eligibility year of service as defined in the Plan agreement. A participant may make pre-tax contributions at a rate of at least 1%, but not more than 15% of earned commissions, up to a maximum annual amount as determined and adjusted annually by the Internal Revenue Service ("IRS"). Participants direct the Plan to invest their contributions in any combination of the investment options as described in Note 4. Participants can direct employer contributions, but only after the contributions have been in the Plan for two full plan years following the plan year for which they were contributed. The Lincoln National Life Insurance Company Agents' Savings and Profit-Sharing Plan Notes to Financial Statements (continued) 2. Description of the Plan (continued) The Company's contributions to the Plan are based on an amount equal to a participant's contributions, not to exceed 6% of eligible earnings, multiplied by a percentage, ranging from 25% to 150%, which varies according to LNC's increase in book value in relation to similar companies in the insurance industry. The Company's contributions are invested in the LNC Common Stock Fund. Agents are fully vested in their contributions. The Company contributions vest based upon years of service as defined in the Plan agreement as follows: Years of Service Percent Vested 1 0% 2 50% 3 or more 100% During 1995, the Board of Directors of the Company approved a new contribution formula which will be effective for the 1997 plan year. The new formula gives the Board of Directors authorization to make a discretionary change in the percentage used to compute the Company's contribution. In transition, the Company's contribution for 1996 will be based on the new formula; however, the amount contributed cannot be less than the contributions calculated in accordance with the employer contribution formula defined above. The Plan allows loans to participants in amounts up to 50% of the vested account value to a maximum of $50,000 but not more than the total value of the participant's accounts excluding employer contributions that haven't been in the Plan for two full years, less the highest outstanding loan balance in the previous twelve month period. The Company has the right under the Plan to discontinue contributions at any time and terminate the Plan. In the event of termination of the Plan, all amounts allocated to participants' accounts shall become vested. The Lincoln National Life Insurance Company Agents' Savings and Profit-Sharing Plan Notes to Financial Statements (continued) 3. Investments The following is a summary of assets held for investment:
December 31, 1995 December 31, 1994 Number of Market Number of Market Shares Value Shares Value Common stock-LNC 833,326 $44,791,273 807,011 $28,245,385 Segregated investment accounts with the Company: Government Bond Fund 388,827.030 562,704 473,960.551 603,684 Core Equity Fund 1,264,092.105 8,773,122 1,219,492.936 6,136,775 Medium Capitalization Equity Fund 899,403.376 7,117,250 816,126.469 4,774,932 Short-Term Fund 407,724.196 1,068,759 450,952.570 1,117,774 Government/Corporate Bond Fund 239,667.620 1,151,219 214,023.379 856,606 Large Capitalization Equity Fund 1,054,128.353 5,127,004 992,370.701 3,692,555 Balanced Fund 44,201.747 177,252 39,585.942 126,049 High Yield Bond Fund 78,023.346 146,681 50,940.273 81,173 Small Capitalization Equity Fund 320,513.868 998,577 150,548.518 401,161 Value Equity Fund 455,888.394 626,101 217,759.920 229,030 International Equity Fund 521,418.540 2,394,172 327,689.633 1,352,556 Total segregated investment accounts 28,142,841 19,372,295 Par Par Amount Amount Unallocated insurance contracts-with the Company $10,955,545 10,955,545 $10,725,398 10,725,398 Participant loans 3,317,440 3,317,440 2,809,857 2,809,857 Total investments $87,207,099 $61,152,935
The Lincoln National Life Insurance Company Agents' Savings and Profit-Sharing Plan Notes to Financial Statements (continued) 3. Investments (continued) Net realized gain on sale, distribution and forfeitures of investments is summarized as follows: Year ended December 31 1995 1994 1993 Common stock: Proceeds from disposition of stock $10,013,495 $6,145,172 $4,695,158 Cost of stock disposed 7,777,152 5,450,889 3,272,183 Net realized gain on sale, distribution and forfeitures of common stock $ 2,236,343 $ 694,283 $1,422,975 Segregated investment accounts: Proceeds from disposition of units $ 4,627,606 $4,329,973 $3,664,248 Cost of units disposed 3,763,178 3,625,650 3,239,960 Net realized gain on sale, distribution and forfeitures of common stock $ 864,428 $ 704,323 $ 424,288 The net unrealized appreciation (depreciation) of investments in total and by investment classification is summarized as follows: Year ended December 31 1995 1994 1993 Market value in excess of cost: At beginning of the year $ 7,044,150 $15,124,779 $11,382,355 At end of the year 25,209,804 7,044,150 15,124,779 Net unrealized appreciation (depreciation) of investments $18,165,654 $(8,080,629) $ 3,742,424 Common stock $12,966,702 $(7,180,098) $ 2,819,868 Segregated investment accounts 5,198,952 (900,531) 922,556 Net unrealized appreciation (depreciation) of investments $18,165,654 $(8,080,629) $3,742,424 The Lincoln National Life Insurance Company Agents' Savings and Profit-Sharing Plan Notes to Financial Statements (continued) 3. Investments (continued) The unallocated insurance contracts earned an average interest rate of approximately 6.75% and 7.16% in 1995 and 1994, respectively. The credited interest rate for new contributions, which approximates the current market rate, at December 31, 1995 and 1994, were 6.25% and 7.50%, respectively. The rate on new contributions is guaranteed through the succeeding three calendar year quarters. The credited interest rates for the remaining contract value balance at December 31, 1995 and 1994 were 6.90% and 7.15%, respectively, and are determined based upon the performance of the Company's general account. The credited interest rates change at least quarterly. The minimum guaranteed rate is 4.50% for the first 5 contract years, 4.00% for years 6-10 and 3.50% following year 10. The guarantee is based on the Company's ability to meet its financial obligations out of the general assets of the Company. The fair value of the unallocated insurance contracts approximate contract value. 4. Investment Options The detail of the net assets available for plan benefits by investment option is as follows:
December 31, 1995 Investment Options Total 1 2 3 4 Assets Investments: Common stock $44,791,273 $44,791,273 Segregated investment accounts 28,142,841 $ 562,704 $8,773,122 Unallocated insurance contracts 10,955,545 $10,955,545 Participant loans 3,317,440 Total investments 87,207,099 44,791,273 562,704 10,955,545 8,773,122 Accrued interest receivable 6,216 Cash and invested cash (deficit) (90,446) 39,365 (14,122) 7,636 (13,848) Other receivables 194,104 14,122 44,548 25,957 Contribution receivable 2,656,985 2,656,985 Total assets 89,973,958 47,487,623 562,704 11,007,729 8,785,231 Miscellaneous payables 23,104 23,104 Net assets available for plan benefits $89,950,854 $47,464,519 $ 562,704 $11,007,729 $8,785,231 5 6 7 8 9 Assets Investments: Common stock Segregated investment accounts $ 7,117,250 $ 1,068,759 $1,151,219 $ 5,127,004 $ 177,252 Unallocated insurance contracts Participant loans Total investments 7,117,250 1,068,759 1,151,219 5,127,004 177,252 Accrued interest receivable Cash and invested cash (deficit) (15,181) (29,147) (9,218) (23,108) (201) Other receivables 15,181 29,147 9,218 23,108 201 Contribution receivable Total assets 7,117,250 1,068,759 1,151,219 5,127,004 177,252 Miscellaneous payables Net assets available for plan benefits $ 7,117,250 $ 1,068,759 $1,151,219 $ 5,127,004 $ 177,252 10 11 12 13 Loans Assets Investments: Common stock Segregated investment accounts $ 146,681 $ 998,577 $ 626,101 $ 2,394,172 Unallocated insurance contracts Participant loans $3,317,440 Total investments 146,681 998,577 626,101 2,394,172 3,317,440 Accrued interest receivable 6,216 Cash and invested cash (deficit) (2,308) (11,809) (5,410) (13,095) Other receivables 2,308 11,809 5,410 13,095 Contribution receivable Total assets 146,681 998,577 626,101 2,394,172 3,323,656 Miscellaneous payables Net assets available for plan benefits $ 146,681 $ 998,577 $ 626,101 $ 2,394,172 $3,323,656 December 31, 1994 Investment Options Total 1 2 3 4 Assets Investments: Common stock $28,245,385 $28,245,385 Segregated investment accounts 19,372,295 $ 603,684 $6,136,775 Unallocated insurance contracts 10,725,398 $10,725,398 Participant loans 2,809,857 Total investments 61,152,935 28,245,385 603,684 10,725,398 6,136,775 Accrued interest receivable 5,640 Cash and invested cash 495,281 87,428 262,880 39,223 Contribution receivable 2,829,134 2,829,134 Total assets 64,482,990 31,161,947 603,684 10,988,278 6,175,998 Miscellaneous payables 84,871 33,439 210 8,497 Net assets available for plan benefits $64,398,119 $31,128,508 $603,684 $10,988,068 $6,167,501 5 6 7 8 9 Assets Investments: Common stock Segregated investment accounts $ 4,774,932 $ 1,117,774 $ 856,606 $ 3,692,555 $ 126,049 Unallocated insurance contracts Participant loans Total investments 4,774,932 1,117,774 856,606 3,692,555 126,049 Accrued interest receivable Cash and invested cash 55,801 1,422 32,506 Contribution receivable Total assets 4,830,733 1,119,196 856,606 3,725,061 126,049 Miscellaneous payables 16,823 9,881 Net assets available for plan benefits $4,813,910 $1,119,196 $856,606 $3,715,180 $126,049 10 11 12 13 Loans Assets Investments: Common stock Segregated investment accounts $ 81,173 $ 401,161 $ 229,030 $ 1,352,556 Unallocated insurance contracts Participant loans $2,809,857 Total investments 81,173 401,161 229,030 1,352,556 2,809,857 Accrued interest receivable 5,640 Cash and invested cash 2,000 3,000 2,999 8,022 Contribution receivable Total assets 83,173 404,161 229,030 1,355,555 2,823,519 Miscellaneous payables 2,000 3,000 2,999 8,022 Net assets available for plan benefits $ 81,173 $ 401,161 $ 229,030 $ 1,352,556 $2,815,497 4. Investment Options (continued) The detail of the changes in net assets available for plan benefits by investment option is as follows: Year ended December 31, 1995 Investment Options Total 1 2 3 4 Investment income: Cash dividends $ 1,414,060 $ 1,414,060 Interest 1,088,214 $ 841,750 Total investment income 2,502,274 1,414,060 841,750 Net realized gain on sale, distri- bution and forfeitures of investments: Common stock 2,236,343 2,236,343 Segregated investment accounts 864,428 $ 23,782 $ 254,878 Net realized gain on sale 3,100,771 2,236,343 23,782 254,878 Net unrealized appreciation of investments 18,165,654 12,966,702 51,735 2,075,087 Contributions: Agents 4,724,597 1,031,057 28,085 444,269 564,727 The Lincoln National Life Insurance Company 3,087,927 3,087,927 Total contributions 7,812,524 4,118,984 28,085 444,269 564,727 Distributions to participants (deduction) (5,949,349) (3,084,570) (49,394) (1,235,196) (387,089) Administrative expenses (deduction) (79,139) (62,984) (310) (5,320) (3,289) Net transfers (deduction) -- (1,252,524) (94,878) (25,842) 113,416 Net increase (decrease) in net assets available for plan benefits 25,552,735 16,336,011 (40,980) 19,661 2,617,730 Net assets available for plan benefits at beginning of the year 64,398,119 31,128,508 603,684 10,988,068 6,167,501 Net assets available for plan benefits at end of the year $89,950,854 $47,464,519 $ 562,704 $11,007,729 $8,785,231 5 6 7 8 9 Investment income: Cash dividends Interest Total investment income Net realized gain on sale, distri- bution and forfeitures of investments: Common stock Segregated investment accounts $ 302,908 $ 38,216 $ 36,634 $ 166,663 $ 4,767 Net realized gain on sale 302,908 38,216 36,634 166,663 4,767 Net unrealized appreciation of investments 1,473,852 28,481 140,554 1,009,582 28,318 Contributions: Agents 718,984 31,138 91,685 650,298 50,131 The Lincoln National Life Insurance Company Total contributions 718,984 31,138 91,685 650,298 50,131 Distributions to participants (deduction) (431,930) (148,671) (36,650) (245,114) (23,412) Administrative expenses (deduction) (2,723) (599) (454) (2,079) (68) Net transfers (deduction) 242,249 998 62,844 (167,526) (8,533) Net increase (decrease) in net assets available for plan benefits 2,303,340 (50,437) 294,613 1,411,824 51,203 Net assets available for plan benefits at beginning of the year 4,813,910 1,119,196 856,606 3,715,180 126,049 Net assets available for plan benefits at end of the year $ 7,117,250 $ 1,068,759 $1,151,219 $ 5,127,004 $ 177,252 10 11 12 13 Loans Investment income: Cash dividends Interest $ 246,464 Total investment income 246,464 Net realized gain on sale, distri- bution and forfeitures of investments: Common stock Segregated investment accounts $ 1,322 $ 15,881 $ 7,592 $ 11,785 Net realized gain on sale 1,322 15,881 7,592 11,785 Net unrealized appreciation of investments 11,398 83,069 109,101 187,775 Contributions: Agents 32,280 326,608 193,369 561,966 The Lincoln National Life Insurance Company Total contributions 32,280 326,608 193,369 561,966 Distributions to participants (deduction) (3,412) (42,492) (39,639) (91,402) (130,378) Administrative expenses (deduction) (33) (289) (160) (831) Net transfers (deduction) 23,953 214,639 126,808 372,323 392,073 Net increase (decrease) in net assets available for plan benefits 65,508 597,416 397,071 1,041,616 508,159 Net assets available for plan benefits at beginning of the year 81,173 401,161 229,030 1,352,556 2,815,497 Net assets available for plan benefits at end of the year $ 146,681 $ 998,577 $ 626,101 $ 2,394,172 $3,323,656
Year ended December 31, 1994 Investment Options Total 1 2 3 4 Investment income: Cash dividends $ 1,239,781 $ 1,239,781 Interest 973,765 $ 746,163 Total investment income 2,213,546 1,239,781 746,163 Net realized gain (loss) on sale, distri- bution and forfeitures of investments: Common stock 694,283 694,283 Segregated investment accounts 704,323 $ 16,784 $ 279,387 Total net realized gain on sale 1,398,606 694,283 16,784 279,387 Net unrealized appreciation (depreciation) of investments (8,080,629) (7,180,098) (26,448) (169,276) Contributions: Agents 4,603,511 1,176,997 50,527 432,329 725,798 The Lincoln National Life Insurance Company 3,351,434 3,351,434 Total contributions 7,954,945 4,528,431 50,527 432,329 725,798 Distributions to participants (deduction) (3,413,968) (1,771,486) (84,469) (623,233) (393,695) Administrative expenses (deduction) (93,617) (78,744) (317) (5,563) (3,107) Net transfers (deduction) -- (267,333) (71,115) 7,158 (616,625) Net increase (decrease) in net assets available for plan benefits (21,117) (2,835,166) (115,038) 556,854 (177,518) Net assets available for plan benefits at beginning of the year 64,419,236 33,963,674 718,722 10,431,214 6,345,019 Net assets available for plan benefits at end of the year $64,398,119 $31,128,508 $ 603,684 $10,988,068 $6,167,501 5 6 7 8 9 Investment income: Cash dividends Interest Total investment income Net realized gain (loss) on sale, distri- bution and forfeitures of investments: Common stock Segregated investment accounts $ 226,810 $ 65,801 $ 41,814 $ 73,006 $ 11 Total net realized gain on sale 226,810 65,801 41,814 73,006 11 Net unrealized appreciation (depreciation) of investments (373,844) (19,300) (78,492) (194,754) 306 Contributions: Agents 765,034 139,329 125,867 778,686 20,754 The Lincoln National Life Insurance Company Total contributions 765,034 139,329 125,867 778,686 20,754 Distributions to participants (deduction) (193,109) (20,387) (109,478) (121,048) (25) Administrative expenses (deduction) (2,411) (620) (448) (1,818) (48) Net transfers (deduction) (93,452) (377,317) (100,238) (172,593) 105,051 Net increase (decrease) in net assets available for plan benefits 329,028 (212,494) (120,975) 361,479 126,049 Net assets available for plan benefits at beginning of the year 4,484,882 1,331,690 977,581 3,353,701 -- Net assets available for plan benefits at end of the year $ 4,813,910 $ 1,119,196 $ 856,606 $ 3,715,180 $ 126,049 10 11 12 13 Loans Investment income: Cash dividends Interest $ 227,602 Total investment income 227,602 Net realized gain (loss) on sale, distri- bution and forfeitures of investments: Common stock Segregated investment accounts $ 21 $ 30 $ 831 $ (172) Total net realized gain on sale 21 30 831 (172) Net unrealized appreciation (depreciation) of investments 1,456 (2,408) 7,160 (44,931) Contributions: Agents 14,032 90,582 30,701 252,875 The Lincoln National Life Insurance Company Total contributions 14,032 90,582 30,701 252,875 Distributions to participants (deduction) (15) (361) (658) (96,004) Administrative expenses (deduction) (11) (111) (59) (360) Net transfers (deduction) 65,690 313,429 190,397 1,145,802 (128,854) Net increase (decrease) in net assets available for plan benefits 81,173 401,161 229,030 1,352,556 2,744 Net assets available for plan benefits at beginning of the year -- -- -- -- 2,812,753 Net assets available for plan benefits at end of the year $ 81,173 $ 401,161 $ 229,030 $ 1,352,556 $2,815,497
4. Investment Options (continued) The detail of the changes in net assets available for plan benefits by investment option is as follows: Year ended December 31, 1993 Investment Options Total 1 2 3 4 Investment income: Cash dividends $ 1,031,836 $ 1,031,836 Interest 918,338 $ 665,851 Total investment income 1,950,174 1,031,836 665,851 Net realized gain on sale, distri- bution and forfeitures of investments: Common stock 1,422,975 1,422,975 Segregated investment accounts 424,288 $ 30,713 $ 134,993 Total net realized gain on sale 1,847,263 1,422,975 30,713 134,993 Net unrealized appreciation (depreciation) of investments 3,742,424 2,819,868 13,065 436,205 Contributions: Agents 4,364,477 1,246,320 70,397 631,515 831,779 The Lincoln National Life Insurance Company 3,806,346 3,806,346 Total contributions 8,170,823 5,052,666 70,397 631,515 831,779 Distributions to participants (deduction) (3,823,008) (2,085,728) (96,162) (1,084,881) (5,515) Administrative expenses (deduction) (56,171) (40,293) (445) (6,248) (3,562) Net transfers (deduction) -- (310,428) (36,902) 86,793 (229,862) Net increase (decrease) in net available for plan benefits 11,831,505 7,890,896 (19,334) 293,030 1,164,038 Net assets available for plan benefits at beginning of the year 52,587,731 26,072,778 738,056 10,138,184 5,180,981 Net assets available for plan benefits at end of the year $64,419,236 $33,963,674 $ 718,722 $10,431,214 $6,345,019 5 6 7 8 Loans Investment income: Cash dividends Interest $ 252,487 Total investment income 252,487 Net realized gain on sale, distri- bution and forfeitures of investments: Common stock Segregated investment accounts $ 119,958 $ 36,281 $ 46,491 $ 55,852 Total net realized gain on sale 119,958 36,281 46,491 55,852 Net unrealized appreciation (depreciation) of investments 198,293 (11,404) 49,764 236,633 Contributions: Agents 725,553 93,977 129,777 635,159 The Lincoln National Life Insurance Company Total contributions 725,553 93,977 129,777 635,159 Distributions to participants (deduction) (269,254) (34,161) (52,390) (25,732) (169,185) Administrative expenses (deduction) (2,409) (828) (578) (1,808) Net transfers (deduction) 197,840 (256,081) (94,229) 334,227 308,642 Net increase (decrease) in net available for plan benefits 969,981 (172,216) 78,835 1,234,331 391,944 Net assets available for plan benefits at beginning of the year 3,514,901 1,503,906 898,746 2,119,370 2,420,809 Net assets available for plan benefits at end of the year $ 4,484,882 $ 1,331,690 $ 977,581 $ 3,353,701 $2,812,753
The Lincoln National Life Insurance Company Agents' Savings and Profit-Sharing Plan Notes to Financial Statements (continued) 4. Investment Options (continued) Information with respect to investment options is as follows: Option Description of Investment Option 1 LNC Common Stock Fund, which invests exclusively in the stock of Lincoln National Corporation. 2 Government Bond Fund, which invests primarily in bonds backed by the United States government that will mature in 3 to 5 years. 3 Guaranteed Fund, which invests primarily in contracts which guarantee a rate of return and principal. 4 Core Equity Fund, which invests primarily in large capitalization stocks of well-established companies. 5 Medium Capitalization Equity Fund, which invests primarily in medium-sized companies. 6 Short-Term Fund, which invests in high quality money market securities that include commercial paper, bankers acceptances, certificates of deposit, loan participation and short-term U.S. government debt. 7 Government/Corporate Bond Fund, which invests primarily in corporate and U.S. government bonds and mortgage-backed securities. 8 Large Capitalization Equity Fund, which invests primarily in high-risk common stocks which have the potential for a significant appreciation in value within 18 months from the date of purchase. The Lincoln National Life Insurance Company Agents' Savings and Profit-Sharing Plan Notes to Financial Statements (continued) 4. Investment Options (continued) 9 Balanced Fund, which invests in three different asset classes: stocks, bonds and money market instruments, which provides growth through the stock portion and reduced risk through the bond and money market portion. 10 High Yield Bond Fund, which invests primarily in below-investment- grade bonds, providing higher rates of return to compensate higher risk. 11 Small Capitalization Equity Fund, which invests primarily in the stock of new, rapid growth companies. 12 Value Equity Fund, which invests primarily in large capitalization stocks of undervalued companies that are industry leaders. 13 International Equity Fund, which invests primarily in stocks of non-United States companies. The information as to the number of agents selecting each investment option is not readily available. Beginning January 1, 1994, the Plan began offering investment options 9 through 13 noted above to participants. Investment options 2 through 13 are provided by a group annuity contract issued by the Company. Interest charged on new loans to participants is established monthly based upon prevailing rates for similar loans. Loans are repaid over 1, 3, 5, 10, 15 or 20 year periods depending on the purpose of the loan or when a participant withdraws from the Plan. 5. Income Tax Status The IRS ruled (February 9, 1995) that the Plan qualifies as defined by Section 401(a) of the Internal Revenue Code ("IRC") and, therefore, is not subject to tax based on the present income tax laws. Further, the Plan is required to operate in conformity with the IRC to maintain its qualification. The Plan's administrator is not aware of any course of action or series of events that have occurred that might adversely affect the Plan's qualified status. The Lincoln National Life Insurance Company Agents' Savings and Profit-Sharing Plan Notes to Financial Statements (continued) 6. Tax Implications to Participating Agents There are no income tax consequences to participating agents arising from their pre-tax contributions, the Company's contributions and income earned in the Plan until actual distribution or withdrawal from the Plan. The tax basis of securities distributed to the agent is provided by the Lincoln National Corporation Benefits Investment Committee. 7. Transactions with Parties-In-Interest All investments held by the Plan and related investment transactions, except for short-term cash investments, were with the Company. The Company charges the Plan for administrative expenses which were $79,139, $93,617 and $56,171 in 1995, 1994 and 1993, respectively. Expenses incurred solely for the LNC Stock Fund are charged directly to the LNC Stock Fund while all other administrative expenses are charged to earnings of the other investment options based upon the market value of the respective funds applicable to each investment option. 8. Concentrations of Credit Risks The Plan has investments in common stock of LNC, and in segregated investment accounts and unallocated insurance contracts with the Company of $44,791,273, $28,142,841 and $10,955,545, respectively, at December 31, 1995 (49.8%, 31.3% and 12.2% of net assets, respectively). LNC and the Company operates predominately in the insurance and investment management industries. The Lincoln National Life Insurance Company Agents' Savings and Profit-Sharing Plan Notes to Financial Statements (continued) 9. Reconciliation of Financial Statements to 1995 Form 5500 The following is a reconciliation of net assets available for plan benefits per the financial statements to the 1995 Form 5500: December 31 1995 1994 Net assets available for plan benefits per the financial statements $89,950,854 $64,398,119 Amounts allocated to withdrawing participants (152,999) (450,814) Net assets available for plan benefits per the 1995 Form 5500 $89,797,855 $63,947,305 The following is a reconciliation of distributions to participants per the financial statements to the 1995 Form 5500: Year ended December 31 1995 Distributions to participants per the financial statements $5,949,349 Add amounts allocated to withdrawing participants at December 31, 1995 152,999 Deduct amounts allocated to withdrawing participants at December 31, 1994 (450,814) Distributions to participants per the 1995 Form 5500 $5,651,534 Amounts allocated to withdrawing participants are recorded on the Form 5500 for distributions that have been processed and approved for payment prior to year end but have not yet been paid. The Plan reported on the 1995 Form 5500 net realized gain and net unrealized appreciation of $1,385,510 (unaudited) and $19,880,915 (unaudited), respectively, for the year ended December 31, 1995. Such amounts, which differ from the amounts reported herein, were computed in accordance with the requirements of the Department of Labor. SIGNATURE THE PLAN. Pursuant to the requirements of the Securities Exchange Act of 1934, the Administrator of the Plan has duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized. March 29, 1996 /S/ FREDRICK P. FARKAS ______________________________________ Fredrick P. Farkas, Administrator THE LINCOLN NATIONAL LIFE INSURANCE COMPANY AGENTS' SAVINGS AND PROFIT- SHARING PLAN March 29, 1996 Securities and Exchange Commission Judiciary Plaza 450 Fifth Street, NW Washington, DC 20549 RE: Registration No. 033-04711 The Lincoln National Life Insurance Company Agents' Savings and Profit-Sharing Plan Form 11-K Annual Report Ladies and Gentlemen: On behalf of The Lincoln National Life Insurance Company Agents' Savings and Profit-Sharing Plan (the "Plan") and The Lincoln National Life Insurance Company, and pursuant to Section 15(d) of the Securities Exchange Act of 1934, we hereby file on the EDGAR system our Form 11-K for the Plan. This Form is for the Plan's fiscal year ended December 31, 1995. Please note that a wire transfer to Mellon Bank of sufficient amount to pay the $250 fee for this filing was effected under Rule 202.3a on March 26, 1996. The CIK number for Lincoln National Corporation is 0000059558. The Transfer was marked "N" -- Nonrestricted. If you have any questions or comments, please call me at 219-455-1263. Sincerely, Dennis L. Schoff Assistant General Counsel Enclosure -----END PRIVACY-ENHANCED MESSAGE-----