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, 2002

THE LINCOLN NATIONAL LIFE INSURANCE COMPANY
AGENTS’ SAVINGS AND PROFIT-SHARING PLAN

(Full title of the Plan)

[Current Registration Number 33-04711]

Lincoln National Corporation
1500 Market Street, Suite 3900
Centre Square West Tower
Philadelphia, PA 19102

(Name of Issuer and principal executive office)

 

---

 

Financial Statements

The Lincoln National Life Insurance Company
Agents’ Savings and Profit-Sharing Plan

Years ended December 31, 2002, 2001 and 2000 with Report of Independent Auditors

 

---

 

The Lincoln National Life Insurance Company
Agents’ Savings and Profit-Sharing Plan

Financial Statements

Years ended December 31, 2002, 2001 and 2000

Contents

Report of Independent Auditors			1
Audited Financial Statements
Statements of Net Assets Available for Plan Benefits Statements of Changes in Net Assets Available for Plan Benefits Notes to Financial Statements			2 3 4
Schedules
Schedule H, Line 4i—Schedule of Assets (Held At End of Year) Schedule H, Line 4j—Schedule of Reportable Transactions			27 28

---

 

Report of Independent Auditors

Lincoln National Corporation Plan Administrator
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, 2002 and 2001, 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, 2002. 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 auditing standards generally accepted in the United States. 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 Lincoln National Life Insurance Company Agents’ Savings and Profit-Sharing Plan at December 31, 2002 and 2001, and the changes in its net assets available for plan benefits for each of the three years in the period ended December 31, 2002, in conformity with accounting principles generally accepted in the United States.

Our audits were made for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplemental schedules of assets (held at end of year) as of December 31, 2002, and reportable transactions for the year then ended, are presented for purpose of additional analysis and are not a required part of the financial statements but are supplementary information required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. These supplemental schedules are the responsibility of the Plan’s management. The supplemental schedules have been subjected to the auditing procedures applied in our audits of the financial statements and, in our opinion, are fairly stated in all material respects in relation to the financial statements taken as a whole.

/s/ Ernst & Young LLP

Philadelphia, Pennsylvania
March 24, 2003

1

---

 

The Lincoln National Life Insurance Company
Agents’ Savings and Profit-Sharing Plan

Statements of Net Assets Available for Plan Benefits

			December 31
			2002				2001
Assets
Investments:
	Common stock—Lincoln National Corporation (cost: 2002—$47,412,802; 2001—$49,395,098)		$	47,322,819			$	79,310,536
	Wells Fargo Bank Short-Term Investment Fund			1,396,626				1,550,053
	Pooled separate accounts—The Lincoln National Life Insurance Company Separate Accounts (cost: 2002—$62,674,128; 2001—$61,386,569)			63,805,780				74,348,874
	Investment contracts—The Lincoln National Life Insurance Company			15,383,328				12,875,716
	Participant loans			4,149,421				4,853,048
Total investments				132,057,974				172,938,227
Accrued interest receivable				1,961				3,965
Cash and invested cash				—				16,030
Due from broker				—				35,535
Contributions receivable from participant deferrals				185,765				—
Contributions receivable from Employer companies				234,230				1,710,548
Total assets				132,479,930				174,704,305
Liabilities
Due to broker				215,477				—
Total liabilities				215,477				—
Net assets available for plan benefits			$	132,264,453			$	174,704,305

See accompanying notes.

2

---

 

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
					2002				2001				2000
Investment income:
	Cash dividends—Lincoln National Corporation				$	1,954,337			$	2,023,000			$	2,028,687
	Interest:
			The Lincoln National Life Insurance Company			677,376				871,198				933,730
			Other			371,221				432,431				499,724
						1,048,597				1,303,629				1,433,454
						3,002,934				3,326,629				3,462,141
Net realized gain (loss) on sale and distributions of investments:
			Common stock—Lincoln National Corporation			4,050,730				4,871,991				5,437,923
			Pooled separate accounts—The Lincoln National Life Insurance Company Separate Accounts			(2,592,752	)			(626,764	)			5,757,246
						1,457,978				4,245,227				11,195,169
Net unrealized depreciation of investments						(41,836,079	)			(16,443,315	)			(1,757,421	)
Contributions:
		Participants				6,068,580				6,244,407				9,893,688
		Employer companies				2,258,564				1,756,656				11,852,039
						8,327,144				8,001,063				21,745,727
Transfers to affiliated plans						(42,253	)			(9,410,752	)			—
Distributions to participants						(13,242,739	)			(15,811,537	)			(11,536,259	)
Administrative expenses						(106,837	)			(123,858	)			(96,034	)
Net (decrease) increase in net assets available for plan benefits						(42,439,852	)			(26,216,543	)			23,013,323
Net assets available for plan benefits at beginning of the year						174,704,305				200,920,848				177,907,525
Net assets available for plan benefits at end of the year					$	132,264,453			$	174,704,305			$	200,920,848

See accompanying notes.

3

---

 

The Lincoln National Life Insurance Company
Agents’ Savings and Profit-Sharing Plan

Notes to Financial Statements

December 31, 2002

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 Wells Fargo 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” or “Employer”). 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 or distributed is determined using the specific identification method.

Use of Estimates

Preparation of financial statements 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 Lincoln National Life Insurance Company Agents’ Savings and Profit-Sharing Plan (“Plan”) is a contributory, defined contribution plan which covers eligible agents of Lincoln Life and other participating agents who are employed by Lincoln Life. Any person who is a full-time agent of Lincoln Life, currently employed by Lincoln Life, is eligible to enroll in 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”).

During 2001, Plan assets relating to the former employees of Sagemark were transferred into another affiliated Plan of Lincoln Life, in the amount of $9,410,752.

Participants direct the Plan to invest their contributions and the guaranteed Employer contributions in any combination of the investment options as described in Note 4. Prior to April 1, 2002, discretionary Employer contributions were required to be invested in the LNC Common Stock Fund. Effective April 1, 2002, participants can immediately direct the investment of the discretionary Employer contributions to other funds.

4

---

 

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 50% of the first 6% of eligible earnings. The Employer may also make a discretionary matching contribution which varies based on LNC’s operating income. The Board of Directors of Lincoln Life approved a provision that provided an additional match up to 50% for the 2000 Plan year based on the Company’s achieving a certain level of earnings over the three-year period from 1998 through 2000, to be paid in 2001. During 2000, the Employer contribution to the Plan matched 200% (150% maximum discretionary match plus additional 50% special match) of participant contributions up to 6% of eligible earnings.

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	%

The Employer 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. Vested account balances less than $5,000 are immediately distributable under the terms of the Plan, without the Participant’s consent, unless a timely election of rollover to an IRA or another qualified plan has been made.

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. Forfeitures used to offset contributions were $0, $150,588 and $24,871 in 2002, 2001 and 2000, respectively.

5

---

 

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, 2002							December 31, 2001
		Number of							Number of
		Shares, Units			Fair				Shares, Units			Fair
		or Par Value			Value				or Par Value			Value
Quoted Market Values
Common stock—LNC			1,498,506		$	47,322,819	*			1,632,912		$	79,310,536	*
Pooled separate account investment contracts underwritten by Lincoln Life:
Government Bond Fund			—			—				—			—
Core Equity Fund			954,956.965			9,325,441	*			1,042,478.322			12,954,461	*
Medium Capitalization Equity Fund			818,731.445			6,729,972	*			850,458.860			9,954,621	*
Short Term Fund			2,388,799.176			8,643,870	*			2,539,094.322			9,050,602	*
Government/Corporate Bond Fund			336,368.921			2,542,747				240,565.401			1,666,926
Large Capitalization Equity Fund			1,316,490.767			8,643,025	*			1,312,128.741			12,164,614	*
Balanced Fund			219,595.706			1,271,415				232,236.514			1,517,828
High Yield Bond Fund			510,776.918			1,325,261				488,623.323			1,239,344
Small Capitalization Equity Fund			1,486,056.176			7,656,013	*			1,437,032.033			9,168,408	*
Value Equity Fund			2,108,481.408			3,643,245				1,852,637.180			3,940,189
International Equity Fund			856,385.074			4,326,372				790,992.900			4,401,718
Conservative Balanced Fund			218,189.490			382,268				82,609.176			145,301
Aggressive Balanced Fund			185,948.674			317,693				185,944.483			365,492
Delaware Growth and Income Fund			410,902.398			493,329				281,949.398			447,256
Scudder VIT Equity 500 Index Fund			2,612,449.526			1,861,370				1,865,979.358			1,714,089
Fidelity VIP Contrafund			2,155,409.188			1,825,200				1,320,387.520			1,236,279
Janus Fund			—			—
Neuberger-Berman AMT Regency Fund			1,153,223.566			992,810				970,815.564			935,769
Social Awareness Fund			459,948.576			330,565				234,290.682			216,531
T Rowe Price International Equity Fund			—			—
Janus Aspen Series Worldwide Growth Fund			2,198,999.953			1,536,221				1,822,238.647			1,711,447
Delaware Global Bond Fund			—			—
Neuberger Berman Mid-Cap Growth Fund			1,492,950.088			1,075,521				1,056,334.289			1,078,517
Scudder VIT Small Cap Index Fund			753,643.462			682,500				384,835.126			439,482
Janus Aspen Growth Fund			13,467.484			93,370
Fidelity VIP Overseas Fund			14,179.022			107,572
Total pooled separate accounts						63,805,780							74,348,874
Contract value
Investment contracts underwritten by Lincoln Life			15,383,328			15,383,328	*			12,875,716			12,875,716	*
Estimated value
Wells Fargo Bank short-term investment fund			1,396,626			1,396,626				1,550,053			1,550,053
Participants loans			4,149,421			4,149,421				4,853,048			4,853,048
Total investments					$	132,057,974						$	172,938,227

*

Investments that represent 5% or more of the fair value of net assets available for benefits as of the indicated date.

6

---

 

The Lincoln National Life Insurance Company
Agents’ Savings and Profit-Sharing Plan

Notes to Financial Statements (continued)

3. Investments (continued)

Net realized gain (loss) on sale and distribution of investments is summarized as follows:

		Year ended December 31
		2002				2001				2000
Common stock
Proceeds from disposition of stock		$	9,787,848			$	10,870,074			$	11,119,267
Cost of stock disposed			5,737,118				5,998,083				5,681,344
Net realized gain on sale and distribution of common stock		$	4,050,730			$	4,871,991			$	5,437,923
Pooled separate accounts
Proceeds from disposition of units		$	38,447,890			$	49,062,442			$	40,023,820
Cost of units disposed			41,040,642				49,689,206				34,266,574
Net realized (loss) gain on sale and distribution of pooled separate accounts		$	(2,592,752	)		$	(626,764	)		$	5,757,246

The net change in unrealized depreciation of investments in total and by investment classification as determined by quoted market price is summarized as follows:

		Year ended December 31
		2002				2001				2000
Fair value in excess of cost:
At beginning of the year		$	42,877,747			$	59,321,062			$	61,078,483
At end of the year			1,041,668				42,877,747				59,321,062
Change in net unrealized depreciation of investments		$	(41,836,079	)		$	(16,443,315	)		$	(1,757,421	)
Common stock		$	(30,005,422	)		$	(2,749,982	)		$	10,023,055
Pooled separate accounts			(11,830,657	)			(13,693,333	)			(11,780,476	)
Change in net unrealized depreciation of investments		$	(41,836,079	)		$	(16,443,315	)		$	(1,757,421	)

The investment contracts (Guaranteed Fund) earned an average interest rate of approximately 4.90%, 5.95% and 6.26% in 2002, 2001 and 2000, respectively. The credited interest rates for new contributions, which approximate the current market rate, were 4.50% and 5.50% at December 31, 2002 and 2001, 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 4.50% and 5.50% at December 31, 2002 and 2001, respectively, and are determined based upon the performance of the Lincoln Life’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 Lincoln Life’s ability to meet its financial obligations from the general assets of Lincoln Life. The fair value of the investment contracts approximates contract value.

7

---

 

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:

		Investment Options
		Total				1				2				3				4				5				6
December 31, 2002
Assets
Investment:
Common stock		$	47,322,819			$	47,322,819			$	—			$	—			$	—			$	—			$	—
Short-term investment fund			1,396,626				1,396,626				—				—				—				—				—
Pooled separate accounts			63,805,780				—				—				—				9,325,441				6,729,972				8,643,870
Investment contracts			15,383,328				—				—				15,383,328				—				—				—
Participant loans			4,149,421				—				—				—				—				—				—
Total investments			132,057,974				48,719,445				—				15,383,328				9,325,441				6,729,972				8,643,870
Accrued interest receivable			1,961				1,961				—				—				—				—				—
Contributions receivable from participant deferrals			185,765				185,765				—				—				—				—				—
Contributions receivable from Employer companies			234,230				234,230				—				—				—				—				—
Total assets			132,479,930				49,141,401				—				15,383,328				9,325,441				6,729,972				8,643,870
Liabilities
Due to (from) broker — Pooled separate accounts			210,632				—				—				—				17,175				29,661				8,895
Due to broker — Investment contracts			4,845				—				—				4,845				—				—				—
Total liabilities			215,477				—				—				4,845				17,175				29,661				8,895
Net assets available for plan benefits		$	132,264,453			$	49,141,401			$	—			$	15,378,483			$	9,308,266			$	6,700,311			$	8,634,975
		Investment Options
			7				8				9				10				11				12				13
December 31, 2002
Assets
Investments:
Common stock		$	—			$	—			$	—			$	—			$	—			$	—			$	—
Short-term investment fund			—				—				—				—				—				—				—
Pooled separate accounts			2,542,747				8,643,025				1,271,415				1,325,261				7,656,013				3,643,245				4,326,372
Investment contracts			—				—				—				—				—				—				—
Participant loans			—				—				—				—				—				—				—
Total investments			2,542,747				8,643,025				1,271,415				1,325,261				7,656,013				3,643,245				4,326,372
Accrued interest receivable			—				—				—				—				—				—				—
Cash and invested cash (deficit)			—				—				—				—				—				—				—
Net pending trades — Pooled separate accounts			—				—				—				—				—				—				—
Net pending trades — Investment contracts			—				—				—				—				—				—				—
Contributions receivable from Employer companies			—				—				—				—				—				—				—
Total assets			2,542,747				8,643,025				1,271,415				1,325,261				7,656,013				3,643,245				4,326,372
Liabilities
Due to (from) broker — Pooled separate accounts			3,331				35,678				8,122				8,843				29,180				21,876				23,148
Due to broker — Investment contracts			—				—				—				—				—				—				—
Total liabilities			3,331				35,678				8,122				8,843				29,180				21,876				23,148
Net assets available for plan benefits		$	2,539,416			$	8,607,347			$	1,263,293			$	1,316,418			$	7,626,833			$	3,621,369			$	4,303,224

8

---

 

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:

		Investment Options
		14				15				16				17				18				19				20				21
December 31, 2002
Assets
Investments:
Common stock		$	—			$	—			$	—			$	—			$	—			$	—			$	—			$	—
Short-term investment fund			—				—				—				—				—				—				—				—
Pooled separate accounts			382,268				317,693				493,329				1,861,370				1,825,200				—				992,810				330,565
Investment contracts			—				—				—				—				—				—				—				—
Participant loans			—				—				—				—				—				—				—				—
Total investments			382,268				317,693				493,329				1,861,370				1,825,200				—				992,810				330,565
Accrued interest receivable			—				—				—				—				—				—				—				—
Cash and invested cash (deficit)			—				—				—				—				—				—				—				—
Contributions receivable from Employer companies			—				—				—				—				—				—				—				—
Total assets			382,268				317,693				493,329				1,861,370				1,825,200				—				992,810				330,565
Liabilities
Due to (from) broker — Pooled separate accounts			424				1,167				1,152				639				4,742				—				3,414				(1,244	)
Due to broker — Investment contracts			—				—				—				—				—				—				—				—
Total liabilities			424				1,167				1,152				639				4,742				—				3,414				(1,244	)
Net assets available for plan benefits		$	381,844			$	316,526			$	492,177			$	1,860,731			$	1,820,458			$	—			$	989,396			$	331,809
		Investment Options
			22				23				24				25				26				27				28			Loans
December 31, 2002
Assets
Investments:
Common stock		$	—			$	—			$	—			$	—			$	—			$	—			$	—			$	—
Short-term investment fund			—				—				—				—				—				—				—				—
Pooled separate accounts							1,536,221								1,075,521				682,500				93,370				107,572				—
Investment contracts			—				—				—				—				—				—				—				—
Participant loans			—				—				—				—				—				—				—				4,149,421
Total investments			—				1,536,221				—				1,075,521				682,500				93,370				107,572				4,149,421
Accrued interest receivable			—				—				—				—				—				—				—				—
Cash and invested cash (deficit)			—				—				—				—				—				—				—				—
Contributions receivable from Employer companies			—				—				—				—				—				—				—				—
Total assets			—				1,536,221				—				1,075,521				682,500				93,370				107,572				4,149,421
Liabilities
Due to (from) broker — Pooled separate accounts			—				5,209				—				5,563				3,583				—				74				—
Due to broker — Investment contracts			—				—				—				—				—				—				—				—
Total liabilities			—				5,209				—				5,563				3,583				—				74				—
Net assets available for plan benefits		$	—			$	1,531,012			$	—			$	1,069,958			$	678,917			$	93,370			$	107,498			$	4,149,421

9

---

 

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:

		Investment Options
December 31, 2001		Total				1				2				3				4				5								6
Assets
Investments:
Common stock		$	79,310,536			$	79,310,536			$	—			$	—			$	—			$	—							$	—
Short-term investment fund			1,550,053				1,550,053				—				—				—				—								—
Pooled separate accounts			74,348,874				—				—				—				12,954,461				9,954,621								9,050,602
Investment contracts			12,875,716				—				—				12,875,716				—				—								—
Participant loans			4,853,048				—				—				—				—				—								—
Total investments			172,938,227				80,860,589				—				12,875,716				12,954,461				9,954,621								9,050,602
Accrued interest receivable			3,965				3,965				—				—				—				—								—
Cash and invested cash (deficit)			16,030				(9	)			—				—				—				—								—
Due from (to) broker — Pooled separate accounts			23,909				—				—				—				(17,443	)			8,210								77,889
Due from broker — Investment contracts			11,626				—				—				11,626				—				—								—
Contributions receivable from Employer companies			1,710,548				1,710,548				—				—				—				—								—
Net assets available for plan benefits		$	174,704,305			$	82,575,093			$	—			$	12,887,342			$	12,937,018			$	9,962,831							$	9,128,491
		Investment Options
			7				8				9				10				11				12								13
December 31, 2001
Assets
Investments:
Common stock		$	—			$	—			$	—			$	—			$	—			$	—							$	—
Short-term investment fund			—				—				—				—				—				—								—
Pooled separate accounts			1,666,926				12,164,614				1,517,828				1,239,344				9,168,408				3,940,189								4,401,718
Investment contracts			—				—				—				—				—				—								—
Participant loans			—				—				—				—				—				—								—
Total investments			1,666,926				12,164,614				1,517,828				1,239,344				9,168,408				3,940,189								4,401,718
Accrued interest receivable			—				—				—				—				—				—								—
Cash and invested cash (deficit)			—				—				—				—				—				—								—
Due from (to) broker — Pooled separate accounts			427				(7,318	)			(48,396	)			858				(14,245	)			(8,721	)							7,572
Due from broker — Investment contracts			—				—				—				—				—				—								—
Contributions receivable from Employer companies			—				—				—				—				—				—								—
Net assets available for plan benefits		$	1,667,353			$	12,157,296			$	1,469,432			$	1,240,202			$	9,154,163			$	3,931,468							$	4,409,290

10

---

 

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:

			Investment Options
			14				15				16				17				18				19				20
December 31, 2001
Assets
Investments:
	Common stock		$	—			$	—			$	—			$	—			$	—			$	—			$	—
	Short-term investment fund			—				—				—				—				—				—				—
	Pooled separate accounts			145,301				365,492				447,256				1,714,089				1,236,279				—				935,769
	Investment contracts			—				—				—				—				—				—				—
	Participant loans			—				—				—				—				—				—				—
Total investments				145,301				365,492				447,256				1,714,089				1,236,279				—				935,769
Accrued interest receivable				—				—				—				—				—				—				—
Cash and invested cash (deficit)				—				—				—				—				—				—				—
Due from (to) broker — Pooled separate accounts				37				95				(3,659	)			632				534				—				441
Due from broker — Investment contracts				—				—				—				—				—				—				—
Contributions receivable from Employer companies				—				—				—				—				—				—				—
Net assets available for plan benefits			$	145,338			$	365,587			$	443,597			$	1,714,721			$	1,236,813			$	—			$	936,210
			Investment Options
				21				22				23				24				25				26			Loans
December 31, 2001
Assets
Investments:
	Common stock		$				$	—			$	—			$	—			$	—			$	—			$	—
	Short-term investment fund			—				—				—				—				—				—				—
	Pooled separate accounts			216,531				—				1,711,447				—				1,078,517				439,482				—
	Investment contracts			—				—				—				—				—				—				—
	Participant loans			—				—				—				—				—				—				4,853,048
Total investments				216,531				—				1,711,447				—				1,078,517				439,482				4,853,048
Accrued interest receivable				—				—				—				—				—				—				—
Cash and invested cash (deficit)				—				—				—				—				—				—				16,039
Due from (to) broker — Pooled separate accounts				(3,831	)			—				628				—				10,697				19,502				—
Due from broker — Investment contracts				—				—				—				—				—				—				—
Contributions receivable from Employer companies				—				—				—				—				—				—				—
Net assets available for plan benefits			$	212,700			$	—			$	1,712,075			$	—			$	1,089,214			$	458,984			$	4,869,087

11

---

 

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:

			Investment Options
				Total				1				2				3				4				5				6
December 31, 2002
Investment income:
	Cash dividends			$	1,954,337			$	1,954,337			$	—			$	—			$	—			$	—			$	—
	Interest				1,048,597				32,665				—				644,711				—				—				—
	Total investment income				3,002,934				1,987,002				—				644,711				—				—				—
	Net realized gain (loss) on sale and distributions of investments:
		Common stock			4,050,730				4,050,730				—				—				—				—				—
		Pooled separate accounts			(2,592,752	)			—				100,813				—				(253,270	)			(472,407	)			197,620
	Total net realized gains (losses)				1,457,978				4,050,730				100,813				—				(253,270	)			(472,407	)			197,620
	Net unrealized appreciation (depreciation) of investments				(41,836,079	)			(30,005,422	)			(100,813	)			—				(2,472,769	)			(2,515,825	)			(65,128	)
	Contributions:
		Participant			6,068,580				1,164,032				—				139,184				590,732				572,190				259,361
		Employer companies			2,258,564				621,512				—				50,303				202,712				194,473				87,963
	Total contributions				8,327,144				1,785,544				—				189,487				793,444				766,663				347,324
	Transfers to affiliated plans				(42,253	)			(174,166	)			—				(8,922	)			46,286				4,439				12,428
	Distributions to participants				(13,242,739	)			(5,986,944	)			—				(947,254	)			(660,430	)			(502,205	)			(1,737,364	)
	Administrative expenses				(106,837	)			(46,821	)			—				(9,052	)			(8,097	)			(6,212	)			(6,356	)
	Net transfers				—				(5,043,615	)			—				2,622,171				(1,073,916	)			(536,973	)			757,960
	Net (decrease) increase in net assets available for plan benefits				(42,439,852	)			(33,433,692	)			—				2,491,141				(3,628,752	)			(3,262,520	)			(493,516	)
	Net assets available for plan benefits at beginning of the year				174,704,305				82,575,093				—				12,887,342				12,937,018				9,962,831				9,128,491
	Net assets available for plan benefits at end of the year			$	132,264,453			$	49,141,401			$	—			$	15,378,483			$	9,308,266			$	6,700,311			$	8,634,975

12

---

 

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:

				Investment Options
				7				8				9				10				11				12				13
December 31, 2002
Investment income:
	Cash dividends			$	—			$	—			$	—			$	—			$	—			$	—			$	—
	Interest				—				—				—				—				—				—				—
	Total investment income				—				—				—				—				—				—				—
	Net realized gain (loss) on sale and distributions of investments:
		Common stock			—				—				—				—				—				—				—
		Pooled separate accounts			128,462				(647,710	)			(12,538	)			(12,251	)			(400,749	)			(238,697	)			(28,967	)
	Total net realized gains (losses)				128,462				(647,710	)			(12,538	)			(12,251	)			(400,749	)			(238,697	)			(28,967	)
	Net unrealized appreciation (depreciation) of investments				61,596				(2,980,705	)			(168,217	)			36,874				(1,343,817	)			(548,135	)			(419,400	)
	Contributions:
		Participant			83,869				786,073				111,369				108,073				633,221				397,522				379,964
		Employer companies			27,224				252,249				39,860				40,432				197,214				132,360				130,153
	Total contributions				111,093				1,038,322				151,229				148,505				830,435				529,882				510,117
	Transfers to affiliated plans				52,250				(18,100	)			—				(24,805	)			(4,158	)			(4,536	)			1,818
	Distributions to participants				(176,883	)			(700,483	)			(94,582	)			(167,138	)			(579,365	)			(173,951	)			(219,333	)
	Administrative expenses				(1,551	)			(7,859	)			(1,077	)			(922	)			(6,127	)			(2,866	)			(3,233	)
	Net transfers				697,096				(233,414	)			(80,954	)			95,953				(23,549	)			128,204				52,932
	Net (decrease) increase in net assets available for plan benefits				872,063				(3,549,949	)			(206,139	)			76,216				(1,527,330	)			(310,099	)			(106,066	)
	Net assets available for plan benefits at beginning of the year				1,667,353				12,157,296				1,469,432				1,240,202				9,154,163				3,931,468				4,409,290
	Net assets available for plan benefits at end of the year			$	2,539,416			$	8,607,347			$	1,263,293			$	1,316,418			$	7,626,833			$	3,621,369			$	4,303,224

13

---

 

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:

				Investment Options
				14				15				16				17				18				19				20				21
December 31, 2002
Investment income:
	Cash dividends			$	—			$	—			$	—			$	—			$	—			$	—			$	—			$	—
	Interest				—				—				—				—				—				—				—				—
	Total investment income				—				—				—				—				—				—				—				—
	Net realized gain (loss) on sale and distributions of investments:
		Common stock			—				—				—				—				—				—				—				—
		Pooled separate accounts			(1,205	)			(16,947	)			(46,485	)			(82,669	)			(42,364	)			—				(57,377	)			(22,034	)
	Total net realized gains (losses)				(1,205	)			(16,947	)			(46,485	)			(82,669	)			(42,364	)			—				(57,377	)			(22,034	)
	Net unrealized appreciation (depreciation) of investments				189				(15,289	)			(74,029	)			(452,930	)			(113,994	)			—				(75,724	)			(65,549	)
	Contributions:
		Participant			23,988				40,194				64,486				109,092				125,242				—				88,624				24,539
		Employer companies			8,248				12,974				22,387				35,487				42,174				—				32,030				8,403
	Total contributions				32,236				53,168				86,873				144,579				167,416				—				120,654				32,942
	Transfers to affiliated plans				—				—				—				9,512				3,823				—				—				—
	Distributions to participants				(364	)			(15,507	)			(26,195	)			(18,360	)			(47,672	)			—				(34,315	)			5,902
	Administrative expenses				(174	)			(234	)			(332	)			(1,296	)			(1,088	)			—				(764	)			(194	)
	Net transfers				205,824				(54,252	)			108,748				547,174				617,524				—				100,712				168,042
	Net (decrease) increase in net assets available for plan benefits				236,506				(49,061	)			48,580				146,010				583,645				—				53,186				119,109
	Net assets available for plan benefits at beginning of the year				145,338				365,587				443,597				1,714,721				1,236,813				—				936,210				212,700
	Net assets available for plan benefits at end of the year			$	381,844			$	316,526			$	492,177			$	1,860,731			$	1,820,458			$	—			$	989,396			$	331,809

14

---

 

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:

				Investment Options
				22				23				24				25				26				27				28				Loans
December 31, 2002
Investment income:
	Cash dividends			$	—			$	—			$	—			$	—			$	—			$	—			$	—			$	—
	Interest				—				—				—				—				—				—				—				371,221
	Total investment income				—				—				—				—				—				—				—				371,221
	Net realized gain (loss) on sale and distributions of investments:
		Common stock			—				—				—				—				—				—				—				—
		Pooled separate accounts			—				(215,497	)			—				(421,707	)			(27,372	)			(12,174	)			(7,227	)			—
	Total net realized gains (losses)				—				(215,497	)			—				(421,707	)			(27,372	)			(12,174	)			(7,227	)			—
	Net unrealized appreciation (depreciation) of investments				—				(278,665	)			—				(66,601	)			(157,741	)			(5,914	)			(8,071	)			—
	Contributions:
		Participant			—				160,898				—				135,227				58,510				5,619				6,571				—
		Employer companies			—				52,320				—				46,589				18,013				1,677				1,807				—
	Total contributions				—				213,218				—				181,816				76,523				7,296				8,378				—
	Transfers to affiliated plans				—				20,255				—				20,416				21,207				—				—				—
	Distributions to participants				—				(17,714	)			—				(38,899	)			(14,053	)			247				1,010				(1,090,887	)
	Administrative expenses				—				(1,208	)			—				(873	)			(441	)			(26	)			(34	)			—
	Net transfers				—				98,548				—				306,592				321,810				103,941				113,442				—
	Net (decrease) increase in net assets available for plan benefits				—				(181,063	)			—				(19,256	)			219,933				93,370				107,498				(719,666	)
	Net assets available for plan benefits at beginning of the year				—				1,712,075				—				1,089,214				458,984				—				—				4,869,087
	Net assets available for plan benefits at end of the year			$	—			$	1,531,012			$	—			$	1,069,958			$	678,917			$	93,370			$	107,498			$	4,149,421

15

---

 

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:

				Investment Options
				Total				1				2				3				4				5				6
December 31, 2001
Investment income:
	Cash dividends			$	2,023,000			$	2,023,000			$	—			$	—			$	—			$	—			$	—
	Interest				1,303,629				89,904				—				787,654				—				—				—
	Total investment income				3,326,629				2,112,904				—				787,654				—				—				—
	Net realized gain (loss) on sale and distributions of investments:
		Common stock			4,871,991				4,871,991
		Pooled separate accounts			(626,764	)			—				61,275				—				354,102				224,511				304,907
	Total net realized gains (losses)				4,245,227				4,871,991				61,275				—				354,102				224,511				304,907
	Net unrealized appreciation (depreciation) of investments				(16,443,315	)			(2,749,982	)			(21,748	)			—				(2,117,826	)			(5,306,791	)			516
	Contributions:
		Participant			6,244,407				1,055,952				12,393				95,881				770,119				752,272				206,641
		Employer companies			1,756,656				27,185				4,067				43,402				240,235				252,222				62,199
	Total contributions				8,001,063				1,083,137				16,460				139,283				1,010,354				1,004,494				268,840
	Transfers to affiliated plans				(9,410,752	)			(3,675,051	)			(40,612	)			(497,724	)			(727,398	)			(670,943	)			(223,492	)
	Distributions to participants				(15,811,537	)			(5,845,392	)			(88,418	)			(2,923,298	)			(981,409	)			(518,143	)			(1,469,290	)
	Administrative expenses				(123,858	)			(70,863	)			(397	)			(6,371	)			(7,074	)			(5,854	)			(3,826	)
	Net transfers				—				(4,369,422	)			(422,458	)			2,372,546				(815,227	)			(615,437	)			3,672,577
	Net increase (decrease) in net assets available for plan benefits				(26,216,543	)			(8,642,678	)			(495,898	)			(127,910	)			(3,284,478	)			(5,888,163	)			2,550,232
	Net assets available for plan benefits at beginning of the year				200,920,848				91,217,771				495,898				13,015,252				16,221,496				15,850,994				6,578,259
	Net assets available for plan benefits at end of the year			$	174,704,305			$	82,575,093			$	—			$	12,887,342			$	12,937,018			$	9,962,831			$	9,128,491

16

---

 

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:

				Investment Options
				7				8				9				10				11				12				13
December 31, 2001
Investment income:
	Cash dividends			$	—			$	—			$	—			$	—			$	—			$	—			$	—
	Interest				—				—				—				—				—				—				—
	Total investment income				—				—				—				—				—				—				—
	Net realized gain (loss) on sale and distributions of investments:
		Common stock			—				—				—				—				—				—				—
		Pooled separate accounts			116,662				250,685				46,477				42,824				(2,923	)			(65,907	)			40,057
	Total net realized gains (losses)				116,662				250,685				46,477				42,824				(2,923	)			(65,907	)			40,057
	Net unrealized appreciation (depreciation) of investments				(16,207	)			(3,665,314	)			(123,273	)			(69,808	)			(1,848,079	)			(150,404	)			(574,247	)
	Contributions:
		Participant			38,913				908,465				117,925				109,375				702,292				402,758				405,485
		Employer companies			16,363				290,363				42,068				36,629				230,822				134,079				148,130
	Total contributions				55,276				1,198,828				159,993				146,004				933,114				536,837				553,615
	Transfers to affiliated plans				(208,189	)			(929,925	)			(232,278	)			(172,201	)			(789,746	)			(434,893	)			(406,531	)
	Distributions to participants				(68,786	)			(802,781	)			(192,777	)			(88,585	)			(754,491	)			(211,619	)			(455,896	)
	Administrative expenses				(816	)			(6,958	)			(1,099	)			(1,151	)			(5,192	)			(2,752	)			(2,566	)
	Net transfers				740,619				(643,259	)			67,585				(71,394	)			(548,013	)			77,540				(393,652	)
	Net increase (decrease) in net assets available for plan benefits				618,559				(4,598,724	)			(275,372	)			(214,311	)			(3,015,330	)			(251,198	)			(1,239,220	)
	Net assets available for plan benefits at beginning of the year				1,048,794				16,756,020				1,744,804				1,454,513				12,169,493				4,182,666				5,648,510
	Net assets available for plan benefits at end of the year			$	1,667,353			$	12,157,296			$	1,469,432			$	1,240,202			$	9,154,163			$	3,931,468			$	4,409,290

17

---

 

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:

				Investment Options
				14				15				16				17				18				19				20
December 31, 2001
Investment income:
	Cash dividends			$	—			$	—			$	—			$	—			$	—			$	—			$	—
	Interest				—				—				—				—				—				—				—
	Total investment income				—				—				—				—				—				—				—
	Net realized gain (loss) on sale and distributions of investments:
		Common stock			—				—				—				—				—				—				—
		Pooled separate accounts			720				(3,140	)			(4,009	)			(109,182	)			(42,165	)			(1,011,529	)			(139,152	)
	Total net realized gains (losses)				720				(3,140	)			(4,009	)			(109,182	)			(42,165	)			(1,011,529	)			(139,152	)
	Net unrealized appreciation (depreciation) of investments				2,544				(4,792	)			(10,947	)			34,842				(59,897	)			503,683				(47,917	)
	Contributions:
		Participant			1,100				19,331				33,873				59,804				62,774				134,421				56,738
		Employer companies			681				5,682				12,820				20,840				22,644				41,892				21,007
	Total contributions				1,781				25,013				46,693				80,644				85,418				176,313				77,745
	Transfers to affiliated plans				(25	)			(1,426	)			(25,301	)			(41,834	)			(17,327	)			(139,891	)			(11,507	)
	Distributions to participants				(39,749	)			1,742				2,731				(15,547	)			(3,498	)			(32,330	)			(16,536	)
	Administrative expenses				(298	)			(406	)			(386	)			(856	)			(906	)			(1,357	)			(947	)
	Net transfers				90,291				285,700				256,123				1,136,725				433,837				(2,208,996	)			636,062
	Net increase (decrease) in net assets available for plan benefits				55,264				302,691				264,904				1,084,792				395,462				(2,714,107	)			497,748
	Net assets available for plan benefits at beginning of the year				90,074				62,896				178,693				629,929				841,351				2,714,107				438,462
	Net assets available for plan benefits at end of the year			$	145,338			$	365,587			$	443,597			$	1,714,721			$	1,236,813			$	—			$	936,210

18

---

 

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:

				Investment Options
				21				22				23				24				25				26				Loans
December 31, 2001
Investment income:
	Cash dividends			$	—			$	—			$	—			$	—			$	—			$	—			$	—
	Interest				—				—				—				(6,360	)			—				—				432,431
	Total investment income				—				—				—				(6,360	)			—				—				432,431
	Net realized gain (loss) on sale and distributions of investments:
		Common stock			—				—				—				—				—				—				—
		Pooled separate accounts			(13,459	)			(197,258	)			(118,617	)			607				(326,130	)			(36,120	)			—
	Total net realized gains (losses)				(13,459	)			(197,258	)			(118,617	)			607				(326,130	)			(36,120	)			—
	Net unrealized appreciation (depreciation) of investments				3,031				68,423				(298,808	)			(2,646	)			(22,552	)			34,884				—
	Contributions:
		Participant			3,897				39,263				150,588				232				87,390				16,525				—
		Employer companies			1,233				12,809				51,368				41				31,001				6,874				—
	Total contributions				5,130				52,072				201,956				273				118,391				23,399				—
	Transfers to affiliated plans				5,818				(38,094	)			(45,433	)			(24	)			(68,466	)			(18,259	)			—
	Distributions to participants				1,602				(29,011	)			(21,102	)			—				(42,123	)			(30,444	)			(1,186,387	)
	Administrative expenses				(341	)			(465	)			(1,388	)			(160	)			(968	)			(461	)			—
	Net transfers				153,480				(536,047	)			242,966				(32,562	)			187,355				303,061				—
	Net increase (decrease) in net assets available for plan benefits				155,261				(680,380	)			(40,426	)			(40,872	)			(154,493	)			276,060				(753,956	)
	Net assets available for plan benefits at beginning of the year				57,439				680,380				1,752,501				40,872				1,243,707				182,924				5,623,043
	Net assets available for plan benefits at end of the year			$	212,700			$	—			$	1,712,075			$	—			$	1,089,214			$	458,984			$	4,869,087

19

---

 

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:

		Investment Options
		Total				1				2				3				4				5				6
December 31, 2000
Investment income:
Cash dividends		$	2,028,687			$	2,028,687			$	—			$	—			$	—			$	—			$	—
Interest			1,433,454				134,262				—				793,109				—				—				—
Total investment income			3,462,141				2,162,949				—				793,109				—				—				—
Net realized gain (loss) on sale and distributions of investments:
Common stock			5,437,923				5,437,923				—				—				—				—				—
Pooled separate accounts			5,757,246				—				21,541				—				1,303,926				1,517,830				403,353
Total net realized gains (losses)			11,195,169				5,437,923				21,541				—				1,303,926				1,517,830				403,353
Net unrealized appreciation (depreciation) of investments			(1,757,421	)			10,023,056				18,507				—				(3,249,854	)			(1,799,375	)			(18,078	)
Contributions:
Participant			9,893,688				1,511,764				39,707				244,302				1,196,948				1,241,026				152,159
Employer companies			11,852,039				11,852,039				—				—				—				—				—
Total contributions			21,745,727				13,363,803				39,707				244,302				1,196,948				1,241,026				152,159
Distributions to participants			(11,536,259	)			(3,357,209	)			(76,775	)			(1,195,735	)			(796,650	)			(1,258,902	)			(1,042,476	)
Administrative expenses			(96,034	)			(44,287	)			(592	)			(6,345	)			(8,769	)			(7,541	)			(2,857	)
Net transfers			—				(7,237,104	)			(44,949	)			444,358				(2,931,896	)			358,594				(841,175	)
Net increase (decrease) in net assets available for plan benefits			23,013,323				20,349,131				(42,561	)			279,689				(4,486,295	)			51,632				(1,349,074	)
Net assets available for plan benefits at beginning of the year			177,907,525				70,868,640				538,459				12,735,563				20,707,791				15,799,362				7,927,333
Net assets available for plan benefits at end of the year		$	200,920,848			$	91,217,771			$	495,898			$	13,015,252			$	16,221,496			$	15,850,994			$	6,578,259

20

---

 

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:

		Investment Options
		7				8				9				10				11				12				13
December 31, 2000
Investment income:
Cash dividends		$	—			$	—			$	—			$	—			$	—			$	—			$	—
Interest			—				—				—				—				—				—				—
Total investment income			—				—				—				—				—				—				—
Net realized gain (loss) on sale and distributions of investments:
Common stock			—				—				—				—				—				—				—
Pooled separate accounts			14,713				1,229,294				86,997				44,150				1,236,329				(76,604	)			128,917
Total net realized gains (losses)			14,713				1,229,294				86,997				44,150				1,236,329				(76,604	)			128,917
Net unrealized appreciation (depreciation) of investments			68,411				(2,940,788	)			(82,209	)			(9,815	)			(2,207,548	)			(205,129	)			(102,201	)
Contributions:
Participant			120,709				1,590,112				280,168				272,153				1,226,453				759,178				822,253
Employer companies			—				—				—				—				—				—				—
Total contributions			120,709				1,590,112				280,168				272,153				1,226,453				759,178				822,253
Distributions to participants			(109,399	)			(1,106,048	)			(89,111	)			(87,665	)			(854,425	)			(266,771	)			(313,815	)
Administrative expenses			(899	)			(8,594	)			(1,546	)			(1,476	)			(6,810	)			(3,161	)			(2,735	)
Net transfers			(128,786	)			210,802				(330,310	)			42,184				2,301,309				(878,467	)			(1,038,552	)
Net increase (decrease) in net assets available for plan benefits			(35,251	)			(1,025,222	)			(136,011	)			259,531				1,695,308				(670,954	)			(506,133	)
Net assets available for plan benefits at beginning of the year			1,084,045				17,781,242				1,880,815				1,194,982				10,474,185				4,853,620				6,154,643
Net assets available for plan benefits at end of the year		$	1,048,794			$	16,756,020			$	1,744,804			$	1,454,513			$	12,169,493			$	4,182,666			$	5,648,510

21

---

 

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:

		Investment Options
		14				15				16				17				18				19				20
December 31, 2000
Investment income:
Cash dividends		$	—			$	—			$	—			$	—			$	—			$	—			$	—
Interest			—				—				—				—				—				—				—
Total investment income			—				—				—				—				—				—				—
Net realized gain (loss) on sale and distributions of investments:
Common stock			—				—				—				—				—				—				—
Pooled separate accounts			—				(641	)			3,711				(6,703	)			(781	)			(124,440	)			(916	)
Total net realized gains (losses)			—				(641	)			3,711				(6,703	)			(781	)			(124,440	)			(916	)
Net unrealized appreciation (depreciation) of investments			641				(2,725	)			6,149				(58,855	)			(43,355	)			(503,683	)			7,009
Contributions:
Participant			—				1,895				7,643				43,218				27,731				109,244				20,373
Employer companies			—				—				—				—				—				—				—
Total contributions			—				1,895				7,643				43,218				27,731				109,244				20,373
Distributions to participants			—				(7,718	)			(17,167	)			(16,541	)			(37,075	)			(13,546	)			(16,738	)
Administrative expenses			(3	)			(2	)			(6	)			(73	)			(79	)			(102	)			(15	)
Net transfers			89,436				72,087				178,363				668,883				894,910				3,246,634				428,749
Net increase (decrease) in net assets available for plan benefits			90,074				62,896				178,693				629,929				841,351				2,714,107				438,462
Net assets available for plan benefits at beginning of the year			—				—				—				—				—				—				—
Net assets available for plan benefits at end of the year		$	90,074			$	62,896			$	178,693			$	629,929			$	841,351			$	2,714,107			$	438,462

22

---

 

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:

		Investment Options
		21				22				23				24				25				26				Loans
December 31, 2000
Investment income:
Cash dividends		$	—			$	—			$	—			$	—			$	—			$	—			$	—
Interest			—				—				—				6,360				—				—				499,723
Total investment income			—				—				—				6,360				—				—				499,723
Net realized gain (loss) on sale and distributions of investments:
Common stock			—				—				—				—				—				—				—
Pooled separate accounts			43				(4,893	)			(4,698	)			—				(7,822	)			(6,060	)			—
Total net realized gains (losses)			43				(4,893	)			(4,698	)			—				(7,822	)			(6,060	)			—
Net unrealized appreciation (depreciation) of investments			(5,227	)			(68,423	)			(346,155	)			2,646				(236,130	)			(4,290	)			—
Contributions:
Participant			1,674				25,525				105,254				5,905				59,534				28,760				—
Employer companies			—				—				—				—				—				—				—
Total contributions			1,674				25,525				105,254				5,905				59,534				28,760				—
Distributions to participants			(17,705	)			2,907				(3,953	)			(4	)			(64,585	)			(5,628	)			(783,525	)
Administrative expenses			(3	)			(24	)			(63	)			(1	)			(44	)			(7	)			—
Net transfers			78,657				725,288				2,002,116				25,966				1,492,754				170,149				—
Net increase (decrease) in net assets available for plan benefits			57,439				680,380				1,752,501				40,872				1,243,707				182,924				(283,802	)
Net assets available for plan benefits at beginning of the year			—				—				—				—				—				—				5,906,845
Net assets available for plan benefits at end of the year		$	57,439			$	680,380			$	1,752,501			$	40,872			$	1,243,707			$	182,924			$	5,623,043

23

---

 

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 LNC. However, some funds may be invested in the Wells Fargo Bank Short-Term Investment Fund until the LNC stock can be purchased.
2			Government Bond Fund (SA#26), which invests primarily in fixed income securities backed by the United States government that will mature in 3 to 5 years.
3			Guaranteed Fund, which invests in investment contracts underwritten by Lincoln Life. The account’s balances are backed by the general assets of Lincoln Life.
4			Core Equity Fund (SA#11), which invests primarily in large capitalization stocks of well-established companies.
5			Medium Capitalization Equity Fund (SA#17), which invests primarily in medium-sized companies.
6			Short-Term Fund (SA#14), 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 (SA#12), which invests primarily in U.S. government and high-quality corporate bonds and securities.
8			Large Capitalization Equity Fund (SA#23), 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 (SA#21), 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 (SA#20), which invests primarily in below-investment-grade bonds, providing higher rates of return to compensate for higher risk.
11			Small Capitalization Equity Fund (SA#24), which invests primarily in the stock of new, rapid growth companies.
12			Value Equity Fund (SA#28), which invests primarily in large capitalization stocks of undervalued companies that are industry leaders.
13			International Equity Fund (SA#22), which invests primarily in stocks of non-United States companies.
14			Conservative Balanced Account (SA#30), which invests in three different asset classes with a bias towards fixed-income investments and some equity exposure. The emphasis is on maximum long-term return.

24

---

 

The Lincoln National Life Insurance Company
Agents’ Savings and Profit-Sharing Plan

Notes to Financial Statements (continued)

4. Investment Options (continued)

15			Aggressive Balanced Fund (SA#32), which invests in three different asset classes with a bias towards equities. The emphasis is on maximum long-term total return.
16			Delaware Growth and Income Fund (SA#61), which invests in large-capitalization/value securities and seeks to provide high returns with reduced risk over the long term.
17			Scudder VIT Equity 500 Index Fund (formerly Deutsche VIT Equity 500 Index Fund) (SA#27), which invests in large cap/blend equities and seeks to provide maximum long-term total return.
18			Fidelity VIP Contrafund (SA#35), which seeks diversified capital appreciation by investing in VIP II Contrafund Portfolio.
19			Janus Fund (SA#42), which seeks to provide long-term growth of capital in a manner consistent with preservation of capital by investing in the Janus Fund which has an emphasis on large-cap/growth securities.
20			Neuberger Berman AMT Regency Fund (SA#38), which seeks capital growth by investing in AMT Partners Portfolio which has an aggressive growth investment style.
21			Social Awareness Fund (SA#33), which seeks capital growth and social responsibility by investing in the Social Awareness Portfolio.
22			T. Rowe Price International Equity Fund (SA#45), which seeks to provide long-term growth of capital by investing in non-U.S. large cap/growth and value-blend securities.
23			Janus Aspen Series Worldwide Growth Fund (SA#34), which seeks long-term growth of capital by investing in the Janus Aspen Series Worldwide Growth Portfolio.
24			Delaware Global Bond Fund (SA#60), which seeks to provide high total return with reduced risk over the long-term by investments in high-quality global fixed income/intermediate-term maturities.
25			Neuberger Berman Mid-Cap Growth Fund (SA#37), which seeks growth of capital by investing in the AMT Mid-Cap Growth Portfolio.
26			Scudder VIT Small Cap Index Fund (formerly Deutsche VIT Small Cap Index Fund)(SA#36), which seeks to reflect Russell 2000 performance by investing in the Small Cap Index Portfolio.
27			Janus Aspen Growth Fund (SA#70), which seeks long-term growth of capital in a manner consistent with the preservation of capital.
28			Fidelity VIP Overseas Fund (SA#59), which seeks long-term growth of capital by investing mainly in foreign securities.

The fair value of LNC common stock in the LNC Common Stock Fund not subject to participant direction was $0.00 and $19,373,868 at December 31, 2002 and 2001, respectively.

25

---

 

The Lincoln National Life Insurance Company
Agents’ Savings and Profit-Sharing Plan

Notes to Financial Statements (continued)

4. Investment Options (continued)

The information as to the number of participants selecting each investment option is not readily available. During 2000, the Plan began offering investment options 14 through 26. During 2002, the Plan also began offering investment options 27 and 28. Investment options 4 through 28 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.

5. Income Tax Status

The Plan has received a determination letter from the Internal Revenue Service dated February 9, 1995, stating that the Plan is qualified under Section 401(a) of the Internal Revenue Code (the “Code”) and, therefore, the related trust is exempt from taxation. However, subsequent to the issuance of the favorable determination letter, the Plan was amended. Once qualified, the Plan, as amended, is required to operate in conformity with the Code to maintain its qualification. The Plan administrator believes the Plan, as amended, is being operated in compliance with the applicable requirements of the Code and, therefore, believes that the Plan is qualified and the related trust is tax exempt. The Plan Sponsor has indicated that it will take the necessary steps, if any, to maintain 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.

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 $106,837, $123,858 and $96,034 in 2002, 2001 and 2000, respectively.

8. Concentrations of Credit Risks

The Plan has investments in common stock of LNC, pooled separate accounts, and unallocated investment contracts with Lincoln Life of $47,322,819, $63,805,780, and $15,383,328, respectively, at December 31, 2002 (35.8%, 48.3% and 11.6% of net assets, respectively). LNC and Lincoln Life operate predominately in the insurance and investment management industries.

26

---

 

The Lincoln National Life Insurance Company
Agents’ Savings and Profit-Sharing Plan

Plan Number: 006
EIN: 35-0472300

Schedule H, Line 4i—Schedule of Assets (Held At End of Year)

December 31, 2002

(b)

(c)

(d)

(e)

Identity of Issue, Borrower, Lessor or Similar Party

Description of Investment Including Maturity Date Rate of Interest, Par or Maturity Value

Cost

Current Value

*Common stock fund:

Lincoln National Corporation common stock

1,498,506

shares

**

$

47,322,819

Wells Fargo Bank Short-Term Investment Fund

1,396,626

par value

$

1,396,626

1,396,626

1,396,626

48,719,445

*Pooled separate accounts—

The Lincoln National Life Insurance Company Separate Accounts:

Core Equity Fund

954,956.965

participation units

**

9,325,441

Medium Capitalization Equity Fund

818,731.445

participation units

**

6,729,972

Short Term Fund

2,388,799.176

participation units

**

8,643,870

Government/Corporate Bond Fund

336,368.921

participation units

**

2,542,747

Large Capitalization Equity Fund

1,316,490.767

participation units

**

8,643,025

Balanced Fund

219,595.706

participation units

**

1,271,415

High Yield Bond Fund

510,776.918

participation units

**

1,325,261

Small Capitalization Equity Fund

1,486,056.176

participation units

**

7,656,013

Value Equity Fund

2,108,481.408

participation units

**

3,643,245

International Equity Fund

856,385.074

participation units

**

4,326,372

Conservative Balanced Fund

218,189.490

participation units

**

382,268

Aggressive Balanced Fund

185,948.674

participation units

**

317,693

Delaware Growth and Income Fund

410,902.398

participation units

**

493,329

Scudder VIT Equity 500 Index Fund

2,612,449.526

participation units

**

1,861,370

Fidelity VIP Contrafund

2,155,409.188

participation units

**

1,825,200

Neuberger-Berman AMT Regency Fund

1,153,223.566

participation units

**

992,810

Social Awareness Fund

459,948.576

participation units

**

330,565

Janus Aspen Series Worldwide Growth Fund

2,198,999.953

participation units

**

1,536,221

Neuberger Berman Mid-Cap Growth Fund

1,492,950.088

participation units

**

1,075,521

Scudder VIT Small Cap Index Fund

753,643.462

participation units

**

682,500

Janus Aspen Growth Fund

13,467.484

participation units

**

93,370

Fidelity VIP Overseas Fund

14,179.022

participation units

**

107,572

63,805,780

*Investment contracts—

The Lincoln National Life Insurance Company (Guaranteed Fund)

4.50% interest rate

**

15,383,328

Participant loans

Various loans at interest rates

varying from 5.25% to 10.5%.

4,149,421

$

132,057,974

* Indicates party-in-interest to the Plan.

** Indicates a participant-directed fund. The cost disclosure is not required.

27

---

 

The Lincoln National Life Insurance Company
Agents’ Savings and Profit-Sharing Plan

Plan Number: 006
EIN: 35-0472300

Schedule H, Line 4j—Schedule of Reportable Transactions

Year ended December 31, 2002

(a)

(b)

(c)

(d)

(g)

(h)

(i)

Current Value of Assets on

Net

Identity of

Purchase

Selling

Cost of

Transaction

Gain

Party Involved

Description of Assets

Price

Price

Assets

Date

(Loss)

Category (iii)-Series of transactions in excess of 5 percent of Plan assets.

Wells Fargo Bank

Wells Fargo Bank Short-Term Investment Fund:

Purchases

21,625,462

—

21,625,462

21,625,462

—

Sales

—

21,778,889

21,778,889

21,778,889

—

Note: Columns (e) and (f), and categories (I), (ii) and (iv) are not applicable.

28