Edgar Filing: LINCOLN NATIONAL CORP

form11kagentsplan.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSIOIN

Washington, D.C. 20549

FORM 11- K

FOR ANNUAL REPORTS OF EMPLOYEE STOCK PURCHASE, SAVINGS

AND SIMILAR PLANS PURSUANT TO SECTION 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

(Mark One)

[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2010

[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to ________

Commission File Number 1-6028

A.	Full title of the plan and the address of the plan, if different from that of the issuer named below:

THE LINCOLN NATIONAL LIFE INSURANCE COMPANY AGENTS’

SAVINGS AND PROFIT-SHARING PLAN

B.	Name of issuer of the securities held pursuant to the plan and the address of its principal executive office:

Lincoln National Corporation

150 N. Radnor Chester Road

Radnor, PA 19087

REQUIRED INFORMATION

Financial statements and schedule for The Lincoln National Life Insurance Company Agents’ Savings and Profit-Sharing Plan, prepared in accordance with the financial reporting requirements of the Employee Retirement Income Security Act of 1974, are contained in this Annual Report on Form 11-K.

	Audited Financial Statements and Supplemental Schedule
	The Lincoln National Life Insurance Company Agents’ Savings and Profit-Sharing Plan
	As of December 31, 2010 and 2009, and for the Three Years Ended December 31, 2010, 2009 and 2008
	With Report of Independent Registered Public Accounting Firm

The Lincoln National Life Insurance Company

Agents’ Savings and Profit-Sharing Plan

Audited Financial Statements

and Supplemental Schedule

As of December 31, 2010 and 2009, and for the

Three Years Ended December 31, 2010, 2009 and 2008

Contents

Report of Independent Registered Public Accounting Firm

Audited Financial Statements

Statements of Net Assets Available for Benefits

Statements of Changes in Net Assets Available for Benefits

Notes to Financial Statements

Supplemental Schedule

Schedule H, Line 4i – Schedule of Assets (Held at End of Year)

Report of Independent Registered Public Accounting Firm

Lincoln National Corporation Plan Administrator

Lincoln National Corporation

We have audited the accompanying statements of net assets available for benefits of The Lincoln National Life Insurance Company Agents’ Savings and Profit-Sharing Plan as of December 31, 2010 and 2009, and the related statements of changes in net assets available for benefits for each of the three years in the period ended December 31, 2010. 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 of the Public Company Accounting Oversight Board (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. We were not engaged to perform an audit of the Plan’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Plan’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and 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 benefits of the Plan at December 31, 2010, and 2009, and the changes in net assets available for benefits for each of the three years in the period ended December 31, 2010, in conformity with U.S. generally accepted accounting principles.

Our audits were performed for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplemental schedule of assets (held at end of year) as of December 31, 2010, is presented for purposes of additional analysis and is not a required part of the financial statements but is 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. This supplemental schedule is the responsibility of the Plan’s management. The supplemental schedule has been subjected to the auditing procedures applied in our audits of the financial statements and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole.

/s/ Ernst & Young LLP

Philadelphia, Pennsylvania

March 31, 2011

The Lincoln National Life Insurance Company

Agents’ Savings and Profit-Sharing Plan

Statements of Net Assets Available for Benefits

	As of December 31,
	2010		2009
Assets
Investments:
Mutual funds (cost: 2010 - $56,241,358; 2009 - $55,756,924)	$	67,303,010	$	59,306,285
Collective investment trusts (cost: 2010 - $23,500,126; 2009 - $23,740,582)		30,839,384		27,479,065
Common stock - Lincoln National Corporation
(cost: 2010 - $20,582,923; 2009 - $22,476,633)		26,755,825		27,268,473
Investment contracts - The Lincoln National Life Insurance Company		36,183,046		35,474,845
Wilmington Trust money market fund		1,054,789		996,740
Brokerage account (cost: 2010 - $2,126,815)		2,176,011		-
Total investments		164,312,065		150,525,408

Notes receivable from participants		3,875,700		3,706,594
Accrued interest receivable		65,454		122,128
Contributions receivable from Sponsor company		205,463		190,446
Total assets		168,458,682		154,544,576

Liabilities
Due to (from) broker		238,401		232,549
Total liabilities		238,401		232,549
Net assets available for benefits	$	168,220,281	$	154,312,027

See accompanying notes to Financial Statements

The Lincoln National Life Insurance Company

Agents’ Savings and Profit-Sharing Plan

Statements of Changes in Net Assets Available for Benefits

	For the Years Ended December 31,
	2010			2009			2008
Investment income:
Cash dividends	$	1,283,770		$	1,033,993		$	2,480,552
Interest		1,606,174			1,728,784			1,091,696
Total investment income		2,889,944			2,762,777			3,572,248

Net realized gain (loss) on sale and distributions of investments:
Mutual funds		925,684			(2,592,510	)		(2,203,395	)
Collective investment trusts		1,116,307			(597,295	)		(760,263	)
Common stock - Lincoln National Corporation		1,931,327			(5,869,682	)		(3,553,903	)
Brokerage account		100,546			-			-
Pooled separate accounts - The Lincoln National Life
Insurance Company separate accounts		-			-			16,379,942
Total realized gain (loss)		4,073,864			(9,059,487	)		9,862,381

Net change in unrealized appreciation (depreciation)
of investments		12,543,324			40,916,992			(84,114,674	)

Contributions:
Participants		7,076,063			7,252,863			7,988,435
Sponsor company		2,007,331			1,735,437			3,653,901
Total contributions		9,083,394			8,988,300			11,642,336

Transfers from (to) affiliated plans		1,092,826			97,748			2,511,221

Distributions to participants		(15,772,704	)		(18,114,613	)		(17,704,133	)
Administrative expenses		(2,394	)		(869	)		(88,650	)
Total distributions and expenses		(15,775,098	)		(18,115,482	)		(17,792,783	)

Net increase (decrease) in net assets available for benefits		13,908,254			25,590,848			(74,319,271	)
Net assets available for benefits at beginning-of-year		154,312,027			128,721,179			203,040,450
Net assets available for benefits at end-of-year	$	168,220,281		$	154,312,027		$	128,721,179

See accompanying notes to Financial Statements

The Lincoln National Life Insurance Company

Agents’ Savings and Profit-Sharing Plan

Notes to Financial Statements

1. Description of the Plan

The following description of The Lincoln National Life Insurance Company Agents’ Savings and Profit-Sharing Plan (“Plan”) is a summary only and a detailed Plan document can be obtained from Human Resources. The Plan is intended to be qualified under Internal Revenue Code section 401(a) by the terms and provisions of the Plan document and in operation.

The Plan is a contributory, defined contribution plan that covers eligible full-time agents of The Lincoln National Life Insurance Company (“LNL” or “Plan Sponsor”), Lincoln Financial Advisors Corporation (“LFA”), Jefferson-Pilot Corporation (“JP”) and Lincoln Life & Annuity Company of New York.

Participants are permitted to make pre-tax contributions or elect to reduce their compensation to make Roth 401(k) contributions at a combined rate of at least 1% but not more than 50% of eligible earnings (10% for highly compensated agents, as defined in the Plan, beginning January 1, 2008), up to a maximum annual amount as determined under applicable law. Roth 401(k) contributions are includable in a participant’s gross income at the time of deferral and must be irrevocably designated as Roth 401(k) contributions. The Plan, although not subject to the Employee Retirement Income Security Act of 1974, as amended, (“ERISA”), is administered in accordance with the provisions of ERISA.

Plan Sponsor matching contributions are made to the participants’ accounts in accordance with the Plan. The Plan Sponsor matching contribution for eligible participants is equal to 50% of each participant’s contributions, not to exceed 6% of eligible earnings. In addition, the Plan Sponsor may contribute an additional discretionary match to eligible LFA participants. The Plan Sponsor discretionary match is an amount determined by the sole discretion of the Lincoln National Corporation (“LNC”) Board of Directors. One requirement for eligibility for the discretionary match is that the participant must have an agent relationship with LNL or an affiliate as of the last day of the year or have died, retired or became disabled during the year. The amount of the Plan Sponsor discretionary matching contribution varies according to whether LFA has met certain performance-based criteria, as determined by the Compensation Committee of LNC’s Board of Directors.

Participants’ contributions and any earnings thereon are fully vested at all times. Plan Sponsor contributions vest based upon years of service as defined in the Plan document as follows:

	Years of Service		Percent Vested
	1		0%
	2		50%
	3 or more		100%

Participants direct the Plan to invest their contributions, the basic Plan Sponsor matching contributions, and the Plan Sponsor discretionary matching contribution in any combination of the investment options offered under the Plan.

The Plan Sponsor has the right to discontinue contributions at any time and terminate the Plan in accordance with the provisions of ERISA. In the event of Plan termination, all non-vested amounts allocated to participant accounts will become fully vested.

The Plan may make loans to participants in amounts up to 50% of the vested account value to a maximum of $50,000 reduced by the highest outstanding loan balance in the previous 12-month period. Interest charged on new loans to participants is established monthly based upon the prime rate plus 1%. Interest income credited on loans was $218,998, $238,346 and $284,652 in 2010, 2009 and 2008, respectively. 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.

Upon termination of service, retirement or disability, a participant may elect to receive either a lump-sum amount equal to the entire value of the participant’s vested account or an installment option if certain criteria are met. In cases of death, the participant’s beneficiary makes that election. Vested account balances less than $1,000 are immediately distributable as a lump-sum under the terms of the Plan without the participant’s consent, unless the participant has made a timely election of rollover to an Individual Retirement Account or other qualified arrangement.

Each participant’s account is credited with the participant’s contributions, Plan Sponsor contributions and applicable investment earnings thereon, and is charged with an allocation of administrative expenses and applicable investment losses. Forfeited non-vested amounts are used to reduce future Plan Sponsor contributions. Forfeitures of $5,281 and $11,141 were used to offset contributions in 2010 and 2009, respectively.

2. Summary of Significant Accounting Policies

Investments Valuation and Income Recognition

As of January 1, 2010, the TD Ameritrade broker investments (“brokerage account”) were added to the Plan’s investment options available to the participants. The brokerage account is administered by TD Ameritrade and allows participants to self-direct their contributions into mutual funds and securities within the brokerage account. The brokerage account primarily consists of mutual funds, securities and a money market account, which are stated at fair value as discussed below.

As of October 1, 2008, Wilmington Trust (“Trustee”) became the trustee for the Plan and Lincoln Alliance (“Recordkeeper”) assumed responsibility as the recordkeeper for the Plan. Prior to that date, Wells Fargo Bank (“WFB”) acted as the Plan’s trustee and recordkeeper. Assets transferred from WFB to the Trustee on October 1, 2008, totaled $162,671,965.

As of December 31, 2010, the assets of the Plan consisted primarily of mutual funds, collective investment trusts, LNC common stock, investment contracts issued by LNL, Wilmington Trust money market fund (“money market fund”), brokerage account, and notes receivable from participants. Marketable securities are stated at fair value based on quoted market prices in an active market at the Plan’s year end. The investment in LNC common stock is valued at the closing sales price reported on the New York Stock Exchange Composite Listing on the last business day of the Plan year. Securities traded on a national securities exchange are valued at the last reported sales price on the last business day of the Plan year. The fair value of ownership interest of the collective investment trusts is established by the Trustee based on the quoted redemption values of the underlying investments on the last business day of the Plan year. The money market fund, which approximates fair value, is also utilized by the Trustee to hold money that has been removed from the participants’ funds and is waiting for distribution to participants.

Prior to October 1, 2008, the Plan’s assets consisted of LNC common stock, pooled separate account investment contracts underwritten by LNL, investment contracts underwritten by LNL, WFB Short-Term Investment Account and notes receivable from participants. The WFB Short-Term Investment Account, which was invested in the common stock fund, was valued at cost, which approximated fair value. The fair value of participation units in the pooled separate accounts estimated by LNL was based on quoted redemption value of the underlying investments on the last business day of the Plan year.

As described in Financial Accounting Standards Board (“FASB”) Accounting Standards CodificationTM (“ASC”) Fully Benefit-Responsive Investment Contracts Topic, investment contracts held by a defined contribution plan that are fully benefit responsive are required to be reported at fair value and an adjustment to total net assets is required to show net assets at contact value. The investment contracts held by the Plan are fully benefit responsive; therefore, contract value reporting is required. In this instance, contract value approximates fair value as a result of current interest rates credited to the contracts. Contract value represents net contributions plus interest at the contract rate.

Notes receivable from participants are valued at unpaid principal balance plus any accrued but unpaid interest.

The cost of investments sold, distributed, or forfeited is determined using the specific identification method. Investment purchases and sales are accounted for on a trade-date basis.

Interest and dividend income are recorded when earned.

Accounting Estimates and Assumptions

The accompanying financial statements are prepared in accordance with United States generally accepted accounting principles. Management is required to make estimates and assumptions affecting the amounts reported in the financial statements and accompanying notes. Those estimates are inherently subject to change and actual results could differ from those estimates.

Fair Value Measurement

The measurement of fair value is based on assumptions used by market participants in pricing the asset. The estimate of an exchange price is the price in an orderly transaction between market participants to sell the asset (“exit price”) in the principal market, or the most advantageous market in the absence of a principal market, for that asset, as opposed to the price that would be paid to acquire the asset (“entry price”). Pursuant to the Fair Value Measurements and Disclosures Topic of the FASB ASC, the financial instruments carried at fair value are categorized into a three-level fair value hierarchy, based on the priority of inputs to the respective valuation technique. The three-level hierarchy for fair value measurement is defined as follows:

Level 1 – Inputs to the valuation methodology are quoted prices available in active markets for identical investments as of the reporting date;

Level 2 – Inputs to the valuation methodology are other than quoted prices in active markets, which are either directly or indirectly observable as of the reporting date, and fair value can be determined through the use of models or other valuation methodologies; and

Level 3 – Inputs to the valuation methodology are unobservable inputs in situations where there is little or no market activity for the asset or liability and the reporting entity makes estimates and assumptions related to the pricing of the asset or liability including assumptions regarding risk.

A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The following is a description of the valuation methodologies used for instruments measured at fair value, including the general classification of such instruments pursuant to the fair value hierarchy.

Mutual funds, including those within the brokerage account, are public investment vehicles valued using the Net Asset Value (“NAV”) provided by the administrator of the fund and focused on accumulating earnings while maintaining the appropriate level of diversified risk. The NAV is a quoted price in an active market; therefore, the mutual funds are classified within Level 1 of the fair value hierarchy.

Collective investment trusts are public investment vehicles valued using the NAV provided by the Trustee and focused on stability of maintaining principal and a steady growth of earnings while matching the appropriate level of risk to the type of trust. The NAV is based on the value of the underlying assets owned by the trust, minus its liabilities, and then divided by the number of shares outstanding. The NAV is not a quoted price in an active market; therefore, the trusts are classified within Level 2 of the fair value hierarchy.

LNC common stock and common stock within the brokerage account are valued at the closing price reported on the New York Stock Exchange Composite Listing and is classified within Level 1 of the fair value hierarchy.

The Plan invests in an Unallocated Group Fixed Annuity Contract issued by LNL, who guarantees a fixed interest rate. The NAV for the investment contracts is $1. The investment contracts are classified within Level 3 of the fair value hierarchy.

The money market fund, including the money market fund within the brokerage account, is a public investment vehicle valued using $1 for the NAV. The money market fund is classified within Level 2 of the fair value hierarchy.

See “Fair Value of Financial Investments, Carried at Fair Value” in Note 5 for additional fair value disclosures.

Adoption of New Accounting Standards

In February 2008, the FASB amended the Fair Value Measurements and Disclosures Topic of the FASB ASC in order to delay the effective date of fair value measurement for non-financial assets and non-financial liabilities to fiscal years beginning after November 15, 2008, except for items that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually). We applied fair value measurement to non-financial assets and non-financial liabilities beginning on January 1, 2009. The application did not have a material impact on the Plan’s financial statements.

In April 2009, the FASB amended the Fair Value Measurements and Disclosures Topic to provide additional guidance on estimating fair value when the volume and level of activity for an asset or liability have significantly decreased in relation to normal market activity for the asset or liability and additional guidance on circumstances that may indicate a transaction is not orderly. The FASB provided illustrative examples of key considerations when applying fair value measurement principles to estimate fair value in non-active markets when there has been a significant decrease in the volume and level of activity for the asset. Additional financial statement disclosures are also required about an entity’s fair value measurements in annual and interim reporting periods. Any changes in valuation techniques resulting from the adoption of this amended guidance are accounted for as a change in accounting estimate in accordance with the FASB ASC guidance related to accounting changes and error corrections. As permitted under the transition guidance, we adopted these amendments to the Fair Value Measurements and Disclosures Topic effective January 1, 2009. The adoption did not have a material impact on the Plan’s financial statements.

In August 2009, the FASB issued ASU No. 2009-05, “Measuring Liabilities at Fair Value” (“ASU 2009-05”) which amends the Fair Value Measurements and Disclosures Topic of the FASB ASC to provide further guidance on the application of fair value measurements, due to the general lack of observable market information available for liabilities. These amendments to the Fair Value Measurements and Disclosures Topic identify valuation techniques which can be used to measure the fair value of a liability when a quoted price in an active market is not available. In addition, the amendments clarify that an entity is not required to include a separate input or adjustment to other inputs related to a restriction that prevents the transfer of the liability and clarifies when a quoted price for a liability would be considered a Level 1 input. ASU 2009-05 is effective for the reporting period ending December 31, 2009. Any revisions resulting from a change in a valuation technique, or its application, must be accounted for as a change in accounting estimate and the specified disclosure for a change in accounting estimate must be included in the notes to

the financial statements. We adopted these amendments to the Fair Value Measurements and Disclosures Topic effective January 1, 2009. The adoption did not have a material impact on the Plan’s financial statements.

In May 2009, the FASB updated the Subsequent Events Topic of the FASB ASC in order to establish standards of accounting for the disclosure of events that take place after the balance sheet date, but before the financial statements are issued. The effect of all subsequent events that existed as of the balance sheet date must be recognized in the financial statements. For those events that did not exist as of the balance sheet date, but arose after the balance sheet date and before the financial statements are issued, recognition is not required, but depending on the nature of the event, disclosure may be required in order to keep the financial statements from being misleading. We adopted these provisions, prospectively, as of December 31, 2009. The adoption of these amendments to the Subsequent Event Topic did not have a material impact on the Plan’s financial statements.

In September 2009, the FASB issued ASU No. 2009-12, “Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent)” (“ASU 2009-12”), which amends the Fair Value Measurements and Disclosures Topic of the FASB ASC to permit the use of net asset value per share, without further adjustment, to estimate the fair value of investments in investment companies that do not have readily determinable fair values. The net asset value per share must be calculated in a manner consistent with the measurement principles of the Financial Services – Investment Companies Topic of the FASB ASC and can be used by investors in investments such as hedge funds, private equity funds, venture capital funds and real estate funds. If it is probable the investment will be sold for an amount other than net asset value, the investor would be required to estimate the fair value of the investment considering all of the rights and obligations of the investment and any other market available data. In addition, the amendments require enhanced disclosure for the investments within the scope of this accounting update. The accounting guidance in ASU 2009-12 is effective for periods ending after December 15, 2009, and early adoption is permitted. We adopted these amendments effective January 1, 2009. The adoption did not have an impact on the Plan’s financial statements.

In January 2010, the FASB issued ASU No. 2010-06, “Improving Disclosures about Fair Value Measurements” (“ASU 2010-06”), which requires additional disclosure related to the three-level fair value hierarchy. Entities are required to disclose significant transfers in and out of Levels 1 and 2 of the fair value hierarchy. We adopted the amendments in ASU 2010-06 effective January 1, 2010, and have prospectively included the required disclosures in Note 5.

In January 2010, the FASB issued ASU No. 2010-25, “Plan Accounting – Defined Contribution Pension Plans” (“ASU 2010-25”), which requires disclosure and measurement changes related to participant loans. For reporting purposes, participant loans shall be classified as notes receivable from participants and are no longer subject to fair value measurement disclosure requirements. In addition, notes receivable from participants are measured at their unpaid principal balance plus any accrued but unpaid interest. We adopted the amendments in ASU 2010-25 effective January 1, 2010, and have retrospectively applied throughout the Plan’s financial statements.

Future Adoption of Accounting Standards

In January 2010, the FASB issued ASU No. 2010-06, which requires additional disclosure related to the three-level fair value hierarchy. Entities are required to separately present information related to purchases, sales, issuances and settlements in the reconciliation of fair value measurements classified as Level 3. The disclosures related to purchases, sales, issuances and settlements for Level 3 fair value measurements are effective for reporting periods beginning after December 15, 2010. We will adopt this amendment effective January 1, 2011. The new guidance only requires new disclosure; we do not expect the adoption to have a significant impact on the Plan’s financial statements.

3. Investments

The following is a summary of fair value of assets held for investment:

	As of December 31, 2010							As of December 31, 2009
	Number of		Net Asset					Number of		Net Asset
	Shares, Units		Value		Fair			Shares, Units		Value		Fair
	or Par Value		Per Unit		Value			or Par Value		Per Unit		Value
Mutual funds:
Columbia Acorn Z		408,884.266	$	30.19	$	12,344,216	*		417,820.137	$	24.68	$	10,311,801	*
Delaware Foundation®
Conservative Allocation Fund		112,110.833		9.84		1,103,171			75,686.744		9.48		717,510
Delaware Foundation®
Moderate Allocation Fund		278,779.346		10.87		3,030,331			257,807.620		9.99		2,575,498
Delaware Foundation®
Growth Allocation Fund		223,236.938		9.90		2,210,046			208,031.898		8.99		1,870,207
Delaware Mid Cap Value I		269,332.458		9.32		2,510,178			216,120.992		7.31		1,579,844
Dodge & Cox
International Stock		280,238.171		35.71		10,007,305	*		291,340.723		31.85		9,279,202	*
American Fund Growth
Fund of America R-5		423,783.248		30.39		12,878,773	*		423,271.268		27.28		11,546,840	*
Harbor International
Growth Institutional		663,556.602		12.37		8,208,195			724,883.549		11.07		8,024,461	*
Vanguard Institutional Index		94,505.708		115.01		10,869,101	*		98,671.854		101.98		10,062,556	*
Vanguard Extended Market
Index Institutional		100,356.034		41.27		4,141,694			102,153.188		32.68		3,338,366
Total mutual funds						67,303,010							59,306,285

Collective
investment trusts:
Delaware Large Cap
Value Trust		599,432.165		11.99		7,187,192			611,806.584		10.39		6,356,670
Delaware International
Equity Trust		77,191.410		8.01		618,303			74,713.483		7.44		555,868
Delaware Small Cap
Growth Trust		534,074.523		14.56		7,776,125			549,145.242		10.33		5,672,670
Delaware Diversified
Income Trust		710,455.865		14.01		9,953,487	*		771,788.691		12.93		9,979,228	*
Delaware Large Cap
Growth Trust		415,695.727		12.76		5,304,277			439,591.149		11.18		4,914,629
Total collective
investment trusts						30,839,384							27,479,065

Common stock - LNC		962,093.671		27.81		26,755,825	*		1,095,999.719		24.88		27,268,473	*

Contract Value
(approximates fair value):
Investment contracts - LNL		36,183,046		1.00		36,183,046	*		35,474,845		1.00		35,474,845	*

Wilmington Trust money
market fund		1,054,789		1.00		1,054,789			996,740		1.00		996,740

Brokerage account		2,176,011		1.00		2,176,011			-		-		-
Total investments					$	164,312,065						$	150,525,408

*	Investments that represent 5% or more of the fair value of net assets available for benefits as of the end of the year, respectively.

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

	For the Years Ended December 31,
	2010		2009			2008
Mutual funds
Proceeds from disposition of units	$	13,661,847	$	19,232,229		$	6,146,376
Cost of units disposed		12,736,163		21,824,739			8,349,771
Net realized gain (loss) on sale and distribution
of mutual funds	$	925,684	$	(2,592,510	)	$	(2,203,395	)

Collective investment trusts
Proceeds from disposition of units	$	6,644,723	$	9,479,171		$	3,682,194
Cost of units disposed		5,528,416		10,076,466			4,442,457
Net realized gain (loss) on sale and distribution
of collective investment trusts	$	1,116,307	$	(597,295	)	$	(760,263	)

Common stock - LNC
Proceeds from disposition of stock	$	9,120,522	$	14,919,052		$	4,366,742
Cost of stock disposed		7,189,195		20,788,734			7,920,645
Net realized gain (loss) on sale and distribution
of common stock - LNC	$	1,931,327	$	(5,869,682	)	$	(3,553,903	)

Brokerage account
Proceeds from disposition of units	$	290,345	$	-		$	-
Cost of units disposed		189,799		-			-
Net realized gain (loss) on sale and distribution
of brokerage account	$	100,546	$	-		$	-

Pooled separate accounts
Proceeds from disposition of units	$	-	$	-		$	135,008,487
Cost of units disposed		-		-			118,628,545
Net realized gain (loss) on sale and distribution
of pooled separate accounts	$	-	$	-		$	16,379,942

Total realized gain (loss) on sale and
distribution of investments	$	4,073,864	$	(9,059,487	)	$	9,862,381

The net change in unrealized appreciation (depreciation) of investments in total and by investment classification as determined by fair value is summarized as follows:

	For the Years Ended December 31,
	2010		2009			2008
Fair value in excess of (less than) cost:
Balance at beginning-of-year	$	12,079,684	$	(28,837,308	)	$	55,277,366
Balance at end-of-year		24,623,008		12,079,684			(28,837,308	)
Change in net unrealized appreciation
(depreciation) of investments	$	12,543,324	$	40,916,992		$	(84,114,674	)

Mutual funds	$	7,512,291	$	17,935,166		$	(14,385,805	)
Collective investment trusts		3,600,775		6,849,449			(3,110,966	)
Common stock - LNC		1,381,062		16,132,377			(24,931,330	)
Brokerage account		49,196		-			-
Pooled separate accounts - LNL		-		-			(41,686,573	)
Change in net unrealized appreciation
(depreciation) of investments	$	12,543,324	$	40,916,992		$	(84,114,674	)

The Plan holds investments in investment contracts. Since October 1, 2008, the Plan invested in the Lincoln Stable Value Fund (“Investment Contracts – LNL”), which has a credited interest rate that is based upon the three-year average of the Barclays rate plus 20 basis points and can be changed quarterly. For fourth quarter 2009, the average crediting rate was 4.70% (annualized), and for 2010 the average crediting rate was approximately 3.92%. Interest is credited at the same rate for the entire contract value. The guaranteed minimum interest rate (“GMIR”) is 3.00%. The guarantee is based on LNL’s ability to meet its financial obligations from the general assets of LNL.

Prior to October 1, 2008, the Plan invested in the LNL Guaranteed Account (“Guaranteed Account”), which earned an average interest rate of approximately 4.0% (annualized) in the first three quarters of 2008. The credited interest rates for new contributions, which approximated current market rates, were 4.0% for the first three quarters of 2008. The rate on new contributions was guaranteed through the three succeeding calendar year quarters. The credited interest rates for the remaining contract value balance, which approximated current market rates, were 4.0% (annualized) at September 30, 2008, and were determined based upon the performance of LNL’s general account. The credited interest rates could be changed quarterly for the Guaranteed Account. The GMIR was 3.5% through September 30, 2008. The guarantee was based on LNL’s ability to meet its financial obligations from the general assets of LNL.

For both the Investment Contract – LNL and the Guaranteed Account, restrictions apply to the aggregate movement of funds to other investment options. The fair value of the investment contracts approximate contract value. Participants are allocated interest on the investment contracts based on the average rate earned on all Plan investments in the investment contracts.

4. Investment Options

The detail of the net assets available for benefits by investment option as of December 31, 2010, was as follows:

			Investment Options
	Total			1.A		2.A		3.A		4.A		5.A
Assets
Investments:
Mutual funds	$	67,303,010	$	12,344,216	$	1,103,171	$	3,030,331	$	2,210,046	$	2,510,178
Collective investment trusts		30,839,384		-		-		-		-		-
Common stock - LNC		26,755,825		-		-		-		-		-
Investment contracts - LNL		36,183,046		-		-		-		-		-
Wilmington Trust money market fund		1,054,789		-		-		-		-		-
Brokerage account		2,176,011		-		-		-		-		-
Total investments		164,312,065		12,344,216		1,103,171		3,030,331		2,210,046		2,510,178

Notes receivable from participants		3,875,700		-		-		-		-		-
Accrued interest receivable		65,454		-		-		-		-		-
Contributions receivable from Sponsor company		205,463		15,860		896		6,070		4,361		3,656
Total assets		168,458,682		12,360,076		1,104,067		3,036,401		2,214,407		2,513,834

Liabilities
Due to (from) broker		238,401		8,059		1,090		6,727		4,705		1,944
Total liabilities		238,401		8,059		1,090		6,727		4,705		1,944
Net assets available for benefits	$	168,220,281	$	12,352,017	$	1,102,977	$	3,029,674	$	2,209,702	$	2,511,890
Number of participants selecting investment options				691		59		210		152		227

	Investment Options
		6.A		7.A		8.A		9.A		10.A		11.A
Assets
Investments:
Mutual funds	$	10,007,305	$	12,878,773	$	8,208,195	$	10,869,101	$	4,141,694	$	-
Collective investment trusts		-		-		-		-		-		7,187,192
Common stock - LNC		-		-		-		-		-		-
Investment contracts - LNL		-		-		-		-		-		-
Wilmington Trust money market fund		-		-		-		-		-		-
Brokerage account		-		-		-		-		-		-
Total investments		10,007,305		12,878,773		8,208,195		10,869,101		4,141,694		7,187,192

Notes receivable from participants		-		-		-		-		-		-
Accrued interest receivable		-		-		-		-		-		-
Contributions receivable from Sponsor company		17,604		25,190		16,566		16,050		5,674		13,065
Total assets		10,024,909		12,903,963		8,224,761		10,885,151		4,147,368		7,200,257

Liabilities
Due to (from) broker		13,284		17,901		13,271		11,432		4,665		8,653
Total liabilities		13,284		17,901		13,271		11,432		4,665		8,653
Net assets available for benefits	$	10,011,625	$	12,886,062	$	8,211,490	$	10,873,719	$	4,142,703	$	7,191,604
Number of participants selecting investment options		78		625		557		529		320		500

	Investment Options
		12.A		13.A		14.A		15.A		16.A		17.A
Assets
Investments:
Mutual funds	$	-	$	-	$	-	$	-	$	-	$	-
Collective investment trusts		618,303		7,776,125		9,953,487		5,304,277		-		-
Common stock - LNC		-		-		-		-		26,755,825		-
Investment contracts - LNL		-		-		-		-		-		36,183,046
Wilmington Trust money market fund		-		-		-		-		800,332		-
Brokerage account		-		-		-		-		-		-
Total investments		618,303		7,776,125		9,953,487		5,304,277		27,556,157		36,183,046

Notes receivable from participants		-		-		-		-		-		-
Accrued interest receivable		-		-		-		-		-		106,111
Contributions receivable from Sponsor company		1,403		9,462		12,925		8,626		25,880		22,175
Total assets		619,706		7,785,587		9,966,412		5,312,903		27,582,037		36,311,332

Liabilities
Due to (from) broker		3,794		6,558		10,056		8,241		-		118,021
Total liabilities		3,794		6,558		10,056		8,241		-		118,021
Net assets available for benefits	$	615,912	$	7,779,029	$	9,956,356	$	5,304,662	$	27,582,037	$	36,193,311
Number of participants selecting investment options		398		617		449		332		934		580

	Investment Options
		18.A			19.A		20.A	Loans		Short Term
Assets
Investments:
Mutual funds	$	-		$	-	$	-	$	-	$	-
Collective investment trusts		-			-		-		-		-
Common stock - LNC		-			-		-		-		-
Investment contracts - LNL		-			-		-		-		-
Wilmington Trust money market fund		-			-		-		-		254,457
Brokerage account		523,036			740,910		912,065		-		-
Total investments		523,036			740,910		912,065		-		254,457

Notes receivable from participants		-			-		-		3,875,700		-
Accrued interest receivable		(25,041	)		-		-		-		(15,616	)
Contributions receivable from Sponsor company		-			-		-		-		-
Total assets		497,995			740,910		912,065		3,875,700		238,841

Liabilities
Due to (from) broker		-			-		-		-		-
Total liabilities		-			-		-		-		-
Net assets available for benefits	$	497,995		$	740,910	$	912,065	$	3,875,700	$	238,841
Number of participants selecting investment options		4			6		7		291	NA

The detail of the net assets available for benefits by investment option as of December 31, 2009, was as follows:

			Investment Options
	Total			1.A			2.A		3.A		4.A		5.A
Assets
Investments:
Mutual funds	$	59,306,285	$	10,311,801		$	717,510	$	2,575,498	$	1,870,207	$	1,579,844
Collective investment trusts		27,479,065		-			-		-		-		-
Common stock - LNC		27,268,473		-			-		-		-		-
Investment contracts - LNL		35,474,845		-			-		-		-		-
Wilmington Trust money market fund		996,740		-			-		-		-		-
Total investments		150,525,408		10,311,801			717,510		2,575,498		1,870,207		1,579,844

Notes receivable from participants		3,706,594		-			-		-		-		-
Accrued interest receivable		122,128		-			-		-		-		-
Contributions receivable from Sponsor company		190,446		14,948			589		5,842		3,374		3,142
Total assets		154,544,576		10,326,749			718,099		2,581,340		1,873,581		1,582,986

Liabilities
Due to (from) broker		232,549		(61,608	)		341		6,312		2,766		1,766
Total liabilities		232,549		(61,608	)		341		6,312		2,766		1,766
Net assets available for benefits	$	154,312,027	$	10,388,357		$	717,758	$	2,575,028	$	1,870,815	$	1,581,220
Number of participants selecting investment options				778			35		137		146		203

	Investment Options
		6.A		7.A		8.A		9.A		10.A		11.A
Assets
Investments:
Mutual funds	$	9,279,202	$	11,546,840	$	8,024,461	$	10,062,556	$	3,338,366	$	-
Collective investment trusts		-		-		-		-		-		6,356,670
Common stock - LNC		-		-		-		-		-		-
Investment contracts - LNL		-		-		-		-		-		-
Wilmington Trust money market fund		-		-		-		-		-		-
Total investments		9,279,202		11,546,840		8,024,461		10,062,556		3,338,366		6,356,670

Notes receivable from participants		-		-		-		-		-		-
Accrued interest receivable		-		-		-		-		-		-
Contributions receivable from Sponsor company		14,053		23,067		17,114		15,993		5,280		13,608
Total assets		9,293,255		11,569,907		8,041,575		10,078,549		3,343,646		6,370,278

Liabilities
Due to (from) broker		47,550		7,449		24,177		143,987		2,226		14,718
Total liabilities		47,550		7,449		24,177		143,987		2,226		14,718
Net assets available for benefits	$	9,245,705	$	11,562,458	$	8,017,398	$	9,934,562	$	3,341,420	$	6,355,560
Number of participants selecting investment options		620		680		663		668		338		573

	Investment Options
		12.A		13.A		14.A		15.A		16.A		17.A
Assets
Investments:
Mutual funds	$	-	$	-	$	-	$	-	$	-	$	-
Collective investment trusts		555,868		5,672,670		9,979,228		4,914,629		-		-
Common stock - LNC		-		-		-		-		27,268,473		-
Investment contracts - LNL		-		-		-		-		-		35,474,845
Wilmington Trust money market fund		-		-		-		-		793,624		-
Total investments		555,868		5,672,670		9,979,228		4,914,629		28,062,097		35,474,845

Notes receivable from participants		-		-		-		-		-		-
Accrued interest receivable		-		-		-		-		-		131,640
Contributions receivable from Sponsor company		456		8,259		10,599		8,820		26,775		18,527
Total assets		556,324		5,680,929		9,989,827		4,923,449		28,088,872		35,625,012

Liabilities
Due to (from) broker		34,534		9,947		6,405		33,532		-		(41,553	)
Total liabilities		34,534		9,947		6,405		33,532		-		(41,553	)
Net assets available for benefits	$	521,790	$	5,670,982	$	9,983,422	$	4,889,917	$	28,088,872	$	35,666,565
Number of participants selecting investment options		45		469		480		369		791		396

	Investment Options
	Loans		Short Term
Assets
Investments:
Mutual funds	$	-	$	-
Collective investment trusts		-		-
Common stock - LNC		-		-
Investment contracts - LNL		-		-
Wilmington Trust money market fund		-		203,116
Total investments		-		203,116

Notes receivable from participants		3,706,594		-
Accrued interest receivable		-		(9,512	)
Contributions receivable from Sponsor company		-		-
Total assets		3,706,594		193,604

Liabilities
Due to (from) broker		-		-
Total liabilities		-		-
Net assets available for benefits	$	3,706,594	$	193,604
Number of participants selecting investment options		290	NA

The detail of the changes in net assets available for benefits by investment option for the year ended December 31, 2010, was as follows:

				Investment Options
	Total				1.A			2.A			3.A			4.A			5.A
Investment income:
Cash dividends	$	1,283,770		$	352,331		$	59,181		$	64,915		$	38,248		$	10,892
Interest		1,606,174			-			-			-			-			-
Total investment income		2,889,944			352,331			59,181			64,915			38,248			10,892

Net realized gain (loss) on sale and
distribution of investments:
Mutual funds		925,684			241,320			17,579			61,533			28,782			49,746
Collective investment trusts		1,116,307			-			-			-			-			-
Common stock - LNC		1,931,327			-			-			-			-			-
Brokerage account		100,546			-			-			-			-			-
Total net realized gain (loss)		4,073,864			241,320			17,579			61,533			28,782			49,746

Net change in unrealized appreciation
of investments		12,543,324			2,025,738			10,006			187,291			145,256			448,721

Contributions:
Participant		7,076,063			523,051			41,041			218,578			163,709			121,595
Sponsor company		2,007,331			154,699			8,998			59,088			43,276			35,960
Total contributions		9,083,394			677,750			50,039			277,666			206,985			157,555

Transfers from (to) affiliated plans		1,092,826			(19,633	)		333			6,687			10,716			4,701

Intra-Plan transfers		-			(484,576	)		274,612			(13,476	)		3,110			363,260

Distributions to participants		(15,772,704	)		(829,270	)		(26,531	)		(129,970	)		(94,210	)		(104,205	)
Administrative expenses		(2,394	)		-			-			-			-			-
Total distributions and expenses		(15,775,098	)		(829,270	)		(26,531	)		(129,970	)		(94,210	)		(104,205	)

Net increase (decrease) in net assets
available for benefits		13,908,254			1,963,660			385,219			454,646			338,887			930,670
Net assets available for benefits at beginning-of-year		154,312,027			10,388,357			717,758			2,575,028			1,870,815			1,581,220
Net assets available for benefits at end-of-year	$	168,220,281		$	12,352,017		$	1,102,977		$	3,029,674		$	2,209,702		$	2,511,890

	Investment Options
		6.A			7.A			8.A			9.A			10.A			11.A
Investment income:
Cash dividends	$	136,570		$	141,661		$	148,254		$	205,265		$	42,352		$	-
Interest		-			-			-			-			-			-
Total investment income		136,570			141,661			148,254			205,265			42,352			-

Net realized gain (loss) on sale and
distribution of investments:
Mutual funds		93,825			210,271			71,614			22,392			128,622			-
Collective investment trusts		-			-			-			-			-			97,559
Common stock - LNC		-			-			-			-			-			-
Brokerage account		-			-			-			-			-			-
Total net realized gain (loss)		93,825			210,271			71,614			22,392			128,622			97,559

Net change in unrealized appreciation
of investments		959,988			1,105,330			783,064			1,167,651			679,246			874,149

Contributions:
Participant		577,090			841,155			565,542			504,444			203,599			408,528
Sponsor company		174,244			246,376			160,081			155,682			55,415			126,142
Total contributions		751,334			1,087,531			725,623			660,126			259,014			534,670

Transfers from (to) affiliated plans		142,143			95,349			100,763			146,422			34,506			79,301

Intra-Plan transfers		(386,683	)		(596,041	)		(958,310	)		(420,248	)		(17,247	)		(194,449	)

Distributions to participants		(931,257	)		(720,497	)		(674,866	)		(842,451	)		(325,210	)		(555,186	)
Administrative expenses		-			-			(2,050	)		-			-			-
Total distributions and expenses		(931,257	)		(720,497	)		(676,916	)		(842,451	)		(325,210	)		(555,186	)

Net increase (decrease) in net assets
available for benefits		765,920			1,323,604			194,092			939,157			801,283			836,044
Net assets available for benefits at beginning-of-year		9,245,705			11,562,458			8,017,398			9,934,562			3,341,420			6,355,560
Net assets available for benefits at end-of-year	$	10,011,625		$	12,886,062		$	8,211,490		$	10,873,719		$	4,142,703		$	7,191,604

	Investment Options
		12.A			13.A			14.A			15.A			16.A			17.A
Investment income:
Cash dividends	$	-		$	-		$	-		$	-		$	41,448		$	-
Interest		-			-			-			-			-			1,368,954
Total investment income		-			-			-			-			41,448			1,368,954

Net realized gain (loss) on sale and
distribution of investments:
Mutual funds		-			-			-			-			-			-
Collective investment trusts		25,971			209,584			621,690			161,503			-			-
Common stock - LNC		-			-			-			-			1,931,327			-
Brokerage account		-			-			-			-			-			-
Total net realized gain (loss)		25,971			209,584			621,690			161,503			1,931,327			-

Net change in unrealized appreciation
of investments		13,270			2,027,763			221,444			464,148			1,381,062			-

Contributions:
Participant		59,941			283,685			522,112			251,386			801,210			844,025
Sponsor company		14,548			92,952			127,652			83,444			250,047			218,659
Total contributions		74,489			376,637			649,764			334,830			1,051,257			1,062,684

Transfers from (to) affiliated plans		33,832			71,955			135,100			93,556			225,243			(59,611	)

Intra-Plan transfers		80,539			174,116			(896,955	)		(104,066	)		(2,875,632	)		4,203,093

Distributions to participants		(133,979	)		(752,008	)		(758,109	)		(535,226	)		(2,261,540	)		(6,048,374	)
Administrative expenses		-			-			-			-			-			-
Total distributions and expenses		(133,979	)		(752,008	)		(758,109	)		(535,226	)		(2,261,540	)		(6,048,374	)

Net increase (decrease) in net assets
available for benefits		94,122			2,108,047			(27,066	)		414,745			(506,835	)		526,746
Net assets available for benefits at beginning-of-year		521,790			5,670,982			9,983,422			4,889,917			28,088,872			35,666,565
Net assets available for benefits at end-of-year	$	615,912		$	7,779,029		$	9,956,356		$	5,304,662		$	27,582,037		$	36,193,311

	Investment Options
		18.A			19.A		20.A		Loans			Short-term
Investment income:
Cash dividends	$	29,917		$	-	$	12,736		$	-		$	-
Interest		-			18,221		-			218,999			-
Total investment income		29,917			18,221		12,736			218,999			-

Net realized gain (loss) on sale and
distribution of investments:
Mutual funds		-			-		-			-			-
Collective investment trusts		-			-		-			-			-
Common stock - LNC		-			-		-			-			-
Brokerage account		36,645			-		63,901			-			-
Total net realized gain (loss)		36,645			-		63,901			-			-

Net change in unrealized appreciation
of investments		17,930			-		31,267			-			-

Contributions:
Participant		24,068			34,095		41,972			-			45,237
Sponsor company		16			23		29			-			-
Total contributions		24,084			34,118		42,001			-			45,237

Transfers from (to) affiliated plans		(54,738	)		59,021		(12,820	)		-			-

Intra-Plan transfers		444,423			629,550		774,980			-			-

Distributions to participants		78			-		-			(49,893	)		-
Administrative expenses		(344	)		-		-			-			-
Total distributions and expenses		(266	)		-		-			(49,893	)		-

Net increase (decrease) in net assets
available for benefits		497,995			740,910		912,065			169,106			45,237
Net assets available for benefits at beginning-of-year		-			-		-			3,706,594			193,604
Net assets available for benefits at end-of-year	$	497,995		$	740,910	$	912,065		$	3,875,700		$	238,841

The detail of the changes in net assets available for benefits by investment option for the year ended December 31, 2009, was as follows:

				Investment Options
	Total				1.A			2.A			3.A			4.A			5.A
Investment income:
Cash dividends	$	1,033,993		$	20,690		$	20,778		$	61,177		$	41,484		$	11,823
Interest		1,728,784			-			-			-			-			-
Total investment income		2,762,777			20,690			20,778			61,177			41,484			11,823

Net realized gain (loss) on sale and
distribution of investments:
Mutual funds		(2,592,510	)		(490,033	)		39,682			56,628			(25,848	)		(96,507	)
Collective investment trusts		(597,295	)		-			-			-			-			-
Common stock - LNC		(5,869,682	)		-			-			-			-			-
Total net realized gain (loss)		(9,059,487	)		(490,033	)		39,682			56,628			(25,848	)		(96,507	)

Net change in unrealized appreciation
of investments		40,916,992			3,437,414			138,879			565,366			335,931			458,593

Contributions:
Participant		7,252,863			558,161			30,394			220,932			143,420			112,862
Sponsor company		1,735,437			128,695			6,219			59,703			29,751			27,585
Total contributions		8,988,300			686,856			36,613			280,635			173,171			140,447

Transfers from (to) affiliated plans		97,748			5,279			193			(2,419	)		76,852			3,217

Distributions to participants		(18,114,613	)		(680,357	)		(553,435	)		(745,880	)		(79,754	)		(177,806	)
Administrative expenses		(869	)		-			-			-			-			-
Intra-Plan transfers		-			(822,334	)		153,632			(93,952	)		(67,321	)		(169,079	)
Total distributions and expenses		(18,115,482	)		(1,502,691	)		(399,803	)		(839,832	)		(147,075	)		(346,885	)

Net increase (decrease) in net assets
available for benefits		25,590,848			2,157,515			(163,658	)		121,555			454,515			170,688
Net assets available for benefits at beginning-of-year		128,721,179			8,230,842			881,416			2,453,473			1,416,300			1,410,532
Net assets available for benefits at end-of-year	$	154,312,027		$	10,388,357		$	717,758		$	2,575,028		$	1,870,815		$	1,581,220

	Investment Options
		6.A			7.A			8.A			9.A			10.A			11.A
Investment income:
Cash dividends	$	124,050		$	121,842		$	74,820		$	239,152		$	38,965		$	-
Interest		-			-			-			-			-			-
Total investment income		124,050			121,842			74,820			239,152			38,965			-

Net realized gain (loss) on sale and
distribution of investments:
Mutual funds		(370,753	)		(453,803	)		(523,575	)		(671,376	)		(56,925	)		-
Collective investment trusts		-			-			-			-			-			(451,894	)
Common stock - LNC		-			-			-			-			-			-
Total net realized gain (loss)		(370,753	)		(453,803	)		(523,575	)		(671,376	)		(56,925	)		(451,894	)

Net change in unrealized appreciation
of investments		3,057,901			3,298,952			2,801,619			2,777,012			1,063,498			1,256,331

Contributions:
Participant		518,166			867,793			650,900			601,454			212,830			485,605
Sponsor company		124,566			220,199			109,772			150,965			44,466			122,384
Total contributions		642,732			1,087,992			760,672			752,419			257,296			607,989

Transfers from (to) affiliated plans		383			3,319			9,167			4,372			1,926			622

Distributions to participants		(846,857	)		(1,033,691	)		(1,047,051	)		(966,263	)		(221,157	)		(644,683	)
Administrative expenses		-			-			(869	)		-			-			-
Intra-Plan transfers		535,469			(238,947	)		(1,442,900	)		(2,157,357	)		2,498			(1,359,549	)
Total distributions and expenses		(311,388	)		(1,272,638	)		(2,490,820	)		(3,123,620	)		(218,659	)		(2,004,232	)

Net increase (decrease) in net assets
available for benefits		3,142,925			2,785,664			631,883			(22,041	)		1,086,101			(591,184	)
Net assets available for benefits at beginning-of-year		6,102,780			8,776,794			7,385,515			9,956,603			2,255,319			6,946,744
Net assets available for benefits at end-of-year	$	9,245,705		$	11,562,458		$	8,017,398		$	9,934,562		$	3,341,420		$	6,355,560

	Investment Options
		12.A			13.A			14.A			15.A			16.A			17.A
Investment income:
Cash dividends	$	-		$	-		$	-		$	-		$	279,212		$	-
Interest		-			-			-			-			-			1,490,438
Total investment income		-			-			-			-			279,212			1,490,438

Net realized gain (loss) on sale and
distribution of investments:
Mutual funds		-			-			-			-			-			-
Collective investment trusts		8,400			(341,312	)		428,406			(240,895	)		-			-
Common stock - LNC		-			-			-			-			(5,869,682	)		-
Total net realized gain (loss)		8,400			(341,312	)		428,406			(240,895	)		(5,869,682	)		-

Net change in unrealized appreciation
of investments		72,449			2,275,560			1,547,204			1,697,907			16,132,376			-

Contributions:
Participant		22,949			289,011			409,938			270,082			941,727			916,639
Sponsor company		5,851			75,176			109,976			79,012			226,287			214,830
Total contributions		28,800			364,187			519,914			349,094			1,168,014			1,131,469

Transfers from (to) affiliated plans		94			(1,257	)		(14,455	)		(341	)		(158,029	)		168,825

Distributions to participants		(78,037	)		(516,979	)		(2,136,649	)		(264,789	)		(2,211,312	)		(5,543,115	)
Administrative expenses		-			-			-			-			-			-
Intra-Plan transfers		432,348			(309,297	)		1,407,084			(543,077	)		(3,969,860	)		8,642,642
Total distributions and expenses		354,311			(826,276	)		(729,565	)		(807,866	)		(6,181,172	)		3,099,527

Net increase (decrease) in net assets
available for benefits		464,054			1,470,902			1,751,504			997,899			5,370,719			5,890,259
Net assets available for benefits at beginning-of-year		57,736			4,200,080			8,231,918			3,892,018			22,718,153			29,776,306
Net assets available for benefits at end-of-year	$	521,790		$	5,670,982		$	9,983,422		$	4,889,917		$	28,088,872		$	35,666,565

	Investment Options
	Loans			Short-term
Investment income:
Cash dividends	$	-		$	-
Interest		238,346			-
Total investment income		238,346			-

Net realized gain (loss) on sale and
distribution of investments:
Mutual funds		-			-
Collective investment trusts		-			-
Common stock - LNC		-			-
Total net realized gain (loss)		-			-

Net change in unrealized appreciation
of investments		-			-

Contributions:
Participant		-			-
Sponsor company		-			-
Total contributions		-			-

Transfers from (to) affiliated plans		-			-

Distributions to participants		(104,089	)		(262,709	)
Administrative expenses		-			-
Intra-Plan transfers		-			-
Total distributions and expenses		(104,089	)		(262,709	)

Net increase (decrease) in net assets
available for benefits		134,257			(262,709	)
Net assets available for benefits at beginning-of-year		3,572,337			456,313
Net assets available for benefits at end-of-year	$	3,706,594		$	193,604

The detail of the changes in net assets available for benefits by investment option for the year ended December 31, 2008, was as follows:

				Investment Options
	Total				1			2			3			4			5
Investment income:
Cash dividends	$	2,480,552		$	992,652		$	-		$	-		$	-		$	-
Interest		1,091,696			27,789			430,879			-			-			-
Total investment income		3,572,248			1,020,441			430,879			-			-			-

Net realized gain (loss) on sale and
distribution of investments:
Mutual funds		(2,203,395	)		-			-			-			-			-
Collective investment trusts		(760,263	)		-			-			-			-			-
Common stock - LNC		(3,553,903	)		(2,038,638	)		-			-			-			-
Pooled separate accounts - LNL		16,379,942			-			-			7,113,263			4,053,768			744,210
Total net realized gain (loss)		9,862,381			(2,038,638	)		-			7,113,263			4,053,768			744,210

Net change in unrealized appreciation
(depreciation) of investments		(84,114,674	)		(10,333,659	)		-			(8,978,006	)		(5,961,467	)		(525,325	)

Contributions:
Participant		7,988,435			769,366			157,742			370,605			258,035			170,287
Sponsor company		3,653,901			236,797			60,617			102,816			74,379			43,389
Total contributions		11,642,336			1,006,163			218,359			473,421			332,414			213,676

Transfers from (to) affiliated plans		2,511,221			1,131,002			6,987			39,703			121,657			305,370
Transfer from Wells Fargo to Wilmington Trust		-			(35,061,561	)		(15,463,946	)		(8,194,643	)		(6,640,307	)		(13,015,959	)

Distributions to participants		(17,704,133	)		(3,277,477	)		(1,675,195	)		(377,312	)		(576,982	)		(2,468,824	)
Administrative expenses		(88,650	)		(20,967	)		(7,071	)		(4,695	)		(4,092	)		(5,809	)
Intra-Plan transfers		-			(3,719,409	)		1,840,959			(680,818	)		(825,747	)		3,632,107
Total distributions and expenses		(17,792,783	)		(7,017,853	)		158,693			(1,062,825	)		(1,406,821	)		1,157,474

Net increase (decrease) in net assets
available for benefits		(74,319,271	)		(51,294,105	)		(14,649,028	)		(10,609,087	)		(9,500,756	)		(11,120,554	)
Net assets available for benefits at beginning-of-year		203,040,450			51,294,105			14,649,028			10,609,087			9,500,756			11,120,554
Net assets available for benefits at end-of-year	$	128,721,179		$	-		$	-		$	-		$	-		$	-

	Investment Options
		6			7			8			9			10			11
Investment income:
Cash dividends	$	-		$	-		$	-		$	-		$	-		$	-
Interest		-			-			-			-			-			-
Total investment income		-			-			-			-			-			-

Net realized gain (loss) on sale and
distribution of investments:
Mutual funds		-			-			-			-			-			-
Collective investment trusts		-			-			-			-			-			-
Common stock - LNC		-			-			-			-			-			-
Pooled separate accounts - LNL		418,130			2,283,053			107,728			214,579			864,849			725,242
Total net realized gain (loss)		418,130			2,283,053			107,728			214,579			864,849			725,242

Net change in unrealized appreciation
(depreciation) of investments		(611,969	)		(4,332,528	)		(664,197	)		(523,738	)		(2,733,998	)		(1,810,140	)

Contributions:
Participant		171,628			350,072			190,840			138,493			314,623			277,280
Sponsor company		61,374			111,167			169,658			39,382			88,078			75,704
Total contributions		233,002			461,239			360,498			177,875			402,701			352,984

Transfers from (to) affiliated plans		40,626			90,242			(6,334	)		2,305			135,018			16,608
Transfer from Wells Fargo to Wilmington Trust		(4,881,347	)		(5,550,836	)		(3,162,482	)		(3,311,855	)		(6,481,657	)		(4,935,869	)

Distributions to participants		(733,699	)		(476,163	)		(134,855	)		(179,449	)		(497,293	)		(273,905	)
Administrative expenses		(2,485	)		(3,370	)		(1,720	)		(1,754	)		(3,748	)		(2,705	)
Intra-Plan transfers		575,998			(226,856	)		(265,899	)		(168,290	)		(432,887	)		(102,334	)
Total distributions and expenses		(160,186	)		(706,389	)		(402,474	)		(349,493	)		(933,928	)		(378,944	)

Net increase (decrease) in net assets
available for benefits		(4,961,744	)		(7,755,219	)		(3,767,261	)		(3,790,327	)		(8,747,015	)		(6,030,119	)
Net assets available for benefits at beginning-of-year		4,961,744			7,755,219			3,767,261			3,790,327			8,747,015			6,030,119
Net assets available for benefits at end-of-year	$	-		$	-		$	-		$	-		$	-		$	-

	Investment Options
		12			13			14			15			16			17
Investment income:
Cash dividends	$	-		$	-		$	-		$	-		$	-		$	-
Interest		-			-			-			-			-			-
Total investment income		-			-			-			-			-			-

Net realized gain (loss) on sale and
distribution of investments:
Mutual funds		-			-			-			-			-			-
Collective investment trusts		-			-			-			-			-			-
Common stock - LNC		-			-			-			-			-			-
Pooled separate accounts - LNL		1,589,539			(6,597	)		(131,835	)		(608,123	)		(44,433	)		(16,452	)
Total net realized gain (loss)		1,589,539			(6,597	)		(131,835	)		(608,123	)		(44,433	)		(16,452	)

Net change in unrealized appreciation
(depreciation) of investments		(4,753,882	)		(114,086	)		(255,465	)		(378,654	)		(967,450	)		(3,186,406	)

Contributions:
Participant		466,763			23,460			153,926			255,751			215,050			643,901
Sponsor company		127,511			5,207			45,488			79,116			63,036			229,654
Total contributions		594,274			28,667			199,414			334,867			278,086			873,555

Transfers from (to) affiliated plans		144,734			3,263			(11,252	)		32,118			27,961			152,108
Transfer from Wells Fargo to Wilmington Trust		(8,132,281	)		(1,083,294	)		(1,849,835	)		(3,309,397	)		(4,234,028	)		(9,684,047	)

Distributions to participants		(688,884	)		(12,840	)		(64,232	)		(227,887	)		(482,087	)		(760,650	)
Administrative expenses		(4,945	)		(572	)		(891	)		(1,992	)		(2,291	)		(5,562	)
Intra-Plan transfers		(599,948	)		157,225			296,098			(293,110	)		290,449			444,704
Total distributions and expenses		(1,293,777	)		143,813			230,975			(522,989	)		(193,929	)		(321,508	)

Net increase (decrease) in net assets
available for benefits		(11,851,393	)		(1,028,234	)		(1,817,998	)		(4,452,178	)		(5,133,793	)		(12,182,750	)
Net assets available for benefits at beginning-of-year		11,851,393			1,028,234			1,817,998			4,452,178			5,133,793			12,182,750
Net assets available for benefits at end-of-year	$	-		$	-		$	-		$	-		$	-		$	-

	Investment Options
		18			19			20			21			22			23
Investment income:
Cash dividends	$	-		$	-		$	-		$	-		$	-		$	-
Interest		-			-			-			-			-			-
Total investment income		-			-			-			-			-			-

Net realized gain (loss) on sale and
distribution of investments:
Mutual funds		-			-			-			-			-			-
Collective investment trusts		-			-			-			-			-			-
Common stock - LNC		-			-			-			-			-			-
Pooled separate accounts - LNL		118,793			6,846			(136,428	)		(3,509	)		76,068			(111,706	)
Total net realized gain (loss)		118,793			6,846			(136,428	)		(3,509	)		76,068			(111,706	)

Net change in unrealized appreciation
(depreciation) of investments		(561,468	)		(275,292	)		(1,497,242	)		(1,407,719	)		(424,814	)		(75,562	)

Contributions:
Participant		117,216			57,866			368,324			290,319			196,013			40,047
Sponsor company		35,026			15,949			103,100			93,514			60,356			10,960
Total contributions		152,242			73,815			471,424			383,833			256,369			51,007

Transfers from (to) affiliated plans		5,567			11,893			79,171			26,729			6,911			4,133
Transfer from Wells Fargo to Wilmington Trust		(1,905,571	)		(1,527,681	)		(5,058,443	)		(4,577,803	)		(2,923,155	)		(915,695	)

Distributions to participants		(338,714	)		(125,226	)		(579,689	)		(352,713	)		(222,741	)		(78,689	)
Administrative expenses		(1,135	)		(797	)		(3,274	)		(2,582	)		(1,533	)		(466	)
Intra-Plan transfers		(216,254	)		46,487			(387,366	)		226,394			(89,435	)		381,176
Total distributions and expenses		(556,103	)		(79,536	)		(970,329	)		(128,901	)		(313,709	)		302,021

Net increase (decrease) in net assets
available for benefits		(2,746,540	)		(1,789,955	)		(7,111,847	)		(5,707,370	)		(3,322,330	)		(745,802	)
Net assets available for benefits at beginning-of-year		2,746,540			1,789,955			7,111,847			5,707,370			3,322,330			745,802
Net assets available for benefits at end-of-year	$	-		$	-		$	-		$	-		$	-		$	-

	Investment Options
		24			1.A			2.A			3.A			4.A			5.A
Investment income:
Cash dividends	$	-		$	55,268		$	25,018		$	62,766		$	47,588		$	9,312
Interest		-			-			-			-			-			-
Total investment income		-			55,268			25,018			62,766			47,588			9,312

Net realized gain (loss) on sale and
distribution of investments:
Mutual funds		-			(268,126	)		(18,231	)		(82,740	)		(82,213	)		(96,790	)
Collective investment trusts		-			-			-			-			-			-
Common stock - LNC		-			-			-			-			-			-
Pooled separate accounts - LNL		(877,043	)		-			-			-			-			-
Total net realized gain (loss)		(877,043	)		(268,126	)		(18,231	)		(82,740	)		(82,213	)		(96,790	)

Net change in unrealized appreciation
(depreciation) of investments		(1,647,165	)		(2,600,638	)		(60,279	)		(265,308	)		(228,061	)		(333,958	)

Contributions:
Participant		472,982			122,571			6,625			37,608			29,244			23,886
Sponsor company		153,014			132,340			3,735			39,628			28,919			27,180
Total contributions		625,996			254,911			10,360			77,236			58,163			51,066

Transfers from (to) affiliated plans		144,701			-			-			-			-			-
Transfer from Wells Fargo to Wilmington Trust		(6,685,857	)		11,218,110			1,083,294			3,162,482			1,849,835			1,905,571

Distributions to participants		(601,557	)		(122,380	)		(2,812	)		(5,087	)		(12,618	)		(9,561	)
Administrative expenses		(4,194	)		-			-			-			-			-
Intra-Plan transfers		116,756			(306,303	)		(155,934	)		(495,876	)		(216,394	)		(115,108	)
Total distributions and expenses		(488,995	)		(428,683	)		(158,746	)		(500,963	)		(229,012	)		(124,669	)

Net increase (decrease) in net assets
available for benefits		(8,928,363	)		8,230,842			881,416			2,453,473			1,416,300			1,410,532
Net assets available for benefits at beginning-of-year		8,928,363			-			-			-			-			-
Net assets available for benefits at end-of-year	$	-		$	8,230,842		$	881,416		$	2,453,473		$	1,416,300		$	1,410,532

	Investment Options
		6.A			7.A			8.A			9.A			10.A			11.A
Investment income:
Cash dividends	$	618,418		$	136,789		$	82,227		$	79,056		$	41,175		$	-
Interest		-			-			-			-			-			-
Total investment income		618,418			136,789			82,227			79,056			41,175			-

Net realized gain (loss) on sale and
distribution of investments:
Mutual funds		(162,497	)		(212,853	)		(632,974	)		(561,201	)		(85,770	)		-
Collective investment trusts		-			-			-			-			-			(246,395	)
Common stock - LNC		-			-			-			-			-			-
Pooled separate accounts - LNL		-			-			-			-			-			-
Total net realized gain (loss)		(162,497	)		(212,853	)		(632,974	)		(561,201	)		(85,770	)		(246,395	)

Net change in unrealized appreciation
(depreciation) of investments		(2,582,426	)		(2,361,832	)		(2,515,904	)		(2,716,893	)		(720,506	)		(769,543	)

Contributions:
Participant		114,896			173,185			203,532			119,234			53,570			113,548
Sponsor company		120,056			175,264			203,270			125,212			48,074			115,996
Total contributions		234,952			348,449			406,802			244,446			101,644			229,544

Transfers from (to) affiliated plans		-			-			-			-			-			-
Transfer from Wells Fargo to Wilmington Trust		8,132,281			10,599,742			11,744,300			13,956,353			2,923,155			8,245,267

Distributions to participants		(95,233	)		(65,589	)		(55,246	)		(71,142	)		(8,280	)		(24,105	)
Administrative expenses		-			-			-			-			-			-
Intra-Plan transfers		(42,715	)		332,088			(1,643,690	)		(974,016	)		3,901			(488,024	)
Total distributions and expenses		(137,948	)		266,499			(1,698,936	)		(1,045,158	)		(4,379	)		(512,129	)

Net increase (decrease) in net assets
available for benefits		6,102,780			8,776,794			7,385,515			9,956,603			2,255,319			6,946,744
Net assets available for benefits at beginning-of-year		-			-			-			-			-			-
Net assets available for benefits at end-of-year	$	6,102,780		$	8,776,794		$	7,385,515		$	9,956,603		$	2,255,319		$	6,946,744

	Investment Options
		12.A			13.A			14.A			15.A			16.A			17.A
Investment income:
Cash dividends	$	-		$	-		$	-		$	-		$	330,283		$	-
Interest		-			-			-			-			-			348,376
Total investment income		-			-			-			-			330,283			348,376

Net realized gain (loss) on sale and
distribution of investments:
Mutual funds		-			-			-			-			-			-
Collective investment trusts		-			(194,948	)		10,638			(329,558	)		-			-
Common stock - LNC		-			-			-			-			(1,515,265	)		-
Pooled separate accounts - LNL		-			-			-			-			-			-
Total net realized gain (loss)		-			(194,948	)		10,638			(329,558	)		(1,515,265	)		-

Net change in unrealized appreciation
(depreciation) of investments		(1,193	)		(1,861,251	)		424,173			(903,152	)		(14,597,671	)		-

Contributions:
Participant		2,437			62,044			71,893			64,096			224,744			94,733
Sponsor company		1,495			68,413			69,857			75,044			243,949			90,177
Total contributions		3,932			130,457			141,750			139,140			468,693			184,910

Transfers from (to) affiliated plans		-			-			-			-			-			-
Transfer from Wells Fargo to Wilmington Trust		-			6,481,658			8,193,200			5,550,835			35,061,562			28,479,904

Distributions to participants		(208	)		(21,182	)		1,354			7,505			(92,569	)		(1,667,233	)
Administrative expenses		-			-			-			-			-			-
Intra-Plan transfers		55,205			(334,654	)		(539,197	)		(572,752	)		3,063,120			2,430,349
Total distributions and expenses		54,997			(355,836	)		(537,843	)		(565,247	)		2,970,551			763,116

Net increase (decrease) in net assets
available for benefits		57,736			4,200,080			8,231,918			3,892,018			22,718,153			29,776,306
Net assets available for benefits at beginning-of-year		-			-			-			-			-			-
Net assets available for benefits at end-of-year	$	57,736		$	4,200,080		$	8,231,918		$	3,892,018		$	22,718,153		$	29,776,306

	Investment Options
	Loans			Short Term
Investment income:
Cash dividends	$	-		$	-
Interest		284,652			-
Total investment income		284,652			-

Net realized gain (loss) on sale and
distribution of investments:
Mutual funds		-			-
Collective investment trusts		-			-
Common stock - LNC		-			-
Pooled separate accounts - LNL		-			-
Total net realized gain (loss)		-			-

Net change in unrealized appreciation
(depreciation) of investments		-			-

Contributions:
Participant		-			-
Sponsor company		-			-
Total contributions		-			-

Transfers from (to) affiliated plans		-			-
Transfer from Wells Fargo to Wilmington Trust		-			-

Distributions to participants		(708,997	)		456,313
Administrative expenses		-			-
Intra-Plan transfers		-			-
Total distributions and expenses		(708,997	)		456,313

Net increase (decrease) in net assets
available for benefits		(424,345	)		456,313
Net assets available for benefits at beginning-of-year		3,996,682			-
Net assets available for benefits at end-of-year	$	3,572,337		$	456,313

The following investment options are available beginning October 1, 2008, except for the brokerage account which was available beginning January 1, 2010:

Option	Description of Investment Option
1.A	Columbia Acorn Z is a mutual fund that invests a majority of its net assets in small- and mid-sized companies with market capitalizations under $5 billion at the time of investment. The fund seeks long-term capital appreciation.
2.A	Delaware Foundation® Conservative Allocation Fund is a mutual fund that invests primarily in shares of other Delaware Investments Funds, including fixed income and equity funds. The portfolio seeks a combination of current income and preservation of capital with capital appreciation.
3.A	Delaware Foundation® Moderate Allocation Fund is a mutual fund that invests at least 25% of its net assets in equity funds and securities and at least 25% of its net assets in fixed income funds with the flexibility to invest more in equity funds and securities or more in fixed income funds and securities. It will also typically invest between 5% and 20% of its assets in international funds and securities. The portfolio seeks capital appreciation with current income as a secondary objective.
4.A	Delaware Foundation® Growth Allocation Fund is a mutual fund that invests primarily in shares of international mutual funds, including equity funds and to a lesser extent, fixed income funds. The fund seeks long-term capital growth.
5.A	Delaware Mid Cap Value I is a mutual fund that invests primarily in investments of medium-sized companies whose stock prices appear low relative to their underlying value or future potential. The fund seeks capital appreciation.
6.A	Dodge & Cox International Stock is a mutual fund that invests at least 80% of its total assets in common stocks, preferred stocks, securities convertible into common stocks and securities that carry the right to buy common stocks of non-United States companies excluding non-United States companies included in the Standard & Poor’s 500. The fund also invests in American, European and Global Depositary Receipts. The fund seeks long-term growth of principal and income.
7.A	American Fund Growth Fund R5 is a mutual fund that seeks long-term growth by investing primarily in common stocks of companies that appear to offer superior opportunities for growth of capital.
8.A	Harbor International Growth Institutional is a mutual fund that invests primarily in common stocks of foreign companies of any size throughout the world. The fund seeks long-term growth of capital.
9.A	Vanguard Institutional Index is a mutual fund that employs a “passive management” or indexing investment approach designed to track the performance of the Standard & Poor’s 500 Index, a widely recognized benchmark of U.S. stock market performance that is dominated by the stocks of large U.S. companies. The fund seeks to track the performance of a benchmark index that measures the investment return of large-capitalization stocks.
10.A	Vanguard Extended Market Index Institutional is a mutual fund that employs a “passive management” or indexing investment approach designed to track the performance of the Standard & Poor’s Completion Index. The fund seeks to track the performance of a benchmark index that measures the investment return of small- and mid-capitalization stocks.
11.A	Delaware Large Cap Value Trust is a collective investment trust fund that invests mainly in securities of large-capitalization companies. The fund seeks long term capital appreciation.
12.A	Delaware International Equity Trust is a collective investment trust fund that invests mainly in non-U.S. equity securities. The fund seeks long-term capital appreciation without undue risk to principal.
13.A	Delaware Small Cap Growth Trust is a collective investment trust fund that invests primarily in small companies. The fund seeks capital appreciation by investing primarily in securities of emerging or other growth-oriented companies.
14.A	Delaware Diversified Income Trust is a collective investment trust fund that allocates its investments principally among the U.S. Investment Grade, U.S. High Yield, International Developed Markets and Emerging Market Sectors. The fund seeks maximum long-term total return, consistent with reasonable risk.
15.A	Delaware Large Cap Growth Trust is a collective investment trust fund that invests mainly in individual large-cap companies. The fund seeks long-term capital appreciation by investing in equity securities of large capitalization companies that the advisors believe to have the potential for sustainable free cash flow growth.
16.A	LNC Stock Fund investment is a collective investment trust fund that invests exclusively in shares of LNC Common Stock. However, some funds may be invested in the Wilmington Trust Short-Term Investment Account until the LNC stock can be purchased. This option is designed to provide participants with the opportunity to invest in LNC securities.
17.A	Lincoln Stable Value Account is a fixed annuity issued by LNL. The Lincoln Stable Value option is managed to earn a competitive interest rate without risk of loss of principal.

18.A	Through TD Ameritrade, a diverse group of mutual funds on the exchange markets are available to the participant to self-direct their account value into. Each mutual fund has its own specific investments strategy that is similar to the mutual funds’ strategies discussed above.
19.A	Through TD Ameritrade, a money market account is available to the participant to self-direct their account value into. The money market account earns a minimal return and provides liquidity, which allows the participant to efficiently respond to investment opportunities in the market.
20.A	Through TD Ameritrade, a diverse group of common stocks on the exchange markets are available to the participant to self-direct their account value into. Each common stock provides the participant with a balanced level of risks and rewards.

Information with respect to investment options through September 30, 2008, was as follows:

Option	Description of Investment Option
1	LNC Stock Fund, which invests exclusively in the common stock of LNC. However, some funds may be invested in the WFB Short-Term Investment Account until the LNC stock can be purchased.
2	Guaranteed Account, which invests in investment contracts underwritten by LNL. The account’s balances are backed by the general assets of LNL.
3	Core Equity Account (SA#11), which seeks to buy large capitalization stocks of well-established companies with the objective of long-term capital appreciation.
4	Medium Capitalization Equity Account (SA#17), which invests in stocks of medium-sized companies with the objective of maximum long-term total return.
5	Short-Term Account (SA#14), which invests in high-quality money market securities with the objective of maximizing interest earnings while maintaining principal.
6	Government/Corporate Bond Account (SA#12), which invests primarily in U.S. government and high-quality corporate bonds and securities.
7	Large Capitalization Equity Account (SA#23), which invests primarily in stocks of large companies that have the potential to grow 50% within 18 months from the date of purchase.
8	Balanced Account (SA#21), which invests in stocks, bonds and money market instruments with the objective to maximize long-term total return with a moderate level of risk.
9	High Yield Bond Account (SA#20), which invests primarily in below-investment-grade bonds, providing higher rates of return to compensate for higher risk.
10	Small Capitalization Equity Account (SA#24), which invests primarily in the stock of new, rapid growth companies.
11	Value Equity Account (SA#28), which invests in large capitalization stocks of conservative companies that are industry leaders.
12	International Equity Account (SA#22), which invests primarily in stocks of non-United States companies.
13	Conservative Balanced Account (SA#30), which invests in stocks, bonds and money market instruments to maximize long-term total earnings with a conservative level of risk.
14	Aggressive Balanced Account (SA#32), which invests in stocks, bonds and money market instruments to maximize long-term total return with an aggressive level of risk.
15	Delaware Value Account (SA#61), which invests in large capitalization companies that have long-term capital appreciation potential.
16	Scudder VIT Equity 500 Index Account (SA#27), which seeks to replicate the total return of the S&P 500.
17	Fidelity VIP Contrafund (SA#35), which seeks capital appreciation by investing primarily in securities of companies whose value is not fully recognized by the market.
18	Neuberger-Berman AMT Regency Account (SA#38), which seeks capital growth by investing mainly in common stocks of mid-capitalization companies.
19	Social Awareness Account (SA#33), which seeks capital growth and social responsibility by investing in the Lincoln National Social Awareness Portfolio.
20	American Funds New Perspective Account (formerly Global Growth) (SA#34), which invests primarily in common stocks, convertibles, preferred stocks, bonds and cash to provide long-term growth through investments all over the world.

21	Neuberger-Berman AMT Mid-Cap Growth Account (SA#37), which seeks capital appreciation using a growth-oriented investment approach.
22	Scudder VIT Small Cap Index Account, which seeks to reflect Russell 2000 performance by investing in the Small Cap Index Portfolio.
23	Blackrock Legacy Account (SA #81), which seeks to provide long-term growth of capital.
24	American Funds Insurance Series International Fund Account (SA #54), which seeks capital appreciation by investing primarily in common stocks of companies outside the United States.

Investment options 3 through 24 were invested in pooled separate accounts of LNL through a group annuity contract issued by LNL.

5. Fair Value of Financial Investments, Carried at Fair Value

See Note 2 for discussions of the methodologies and assumptions used to determine the fair value of the Plan’s investments.

We did not have any assets or liabilities measured at fair value on a nonrecurring basis as of December 31, 2010, or December 31, 2009, and we noted no changes in our valuation methodologies between these periods. In addition, there were no significant transfers between Level 1 or 2 for the year ended December 31, 2010.

The tables below are the Plan’s financial instruments carried at fair value on a recurring basis by the Fair Value Measurements and Disclosures Topic of the FASB ASC hierarchy levels described in Note 2.

	As of December 31, 2010
	Quoted Prices
	in Active		Significant		Significant
	Markets for		Observable		Unobservable
	Identical Assets		Inputs		Inputs		Total
	(Level 1)		(Level 2)		(Level 3)		Fair Value
Assets:
Mutual funds:
Conservative	$	28,458,182	$	-	$	-	$	28,458,182
Moderate		3,030,331		-		-		3,030,331
Growth		17,598,997		-		-		17,598,997
International		18,215,500		-		-		18,215,500
Collective investment trusts:
Delaware Large Cap Value Trust		-		7,187,192		-		7,187,192
Delaware International Equity Trust		-		618,303		-		618,303
Delaware Small Cap Growth Trust		-		7,776,125		-		7,776,125
Delaware Diversified Income Trust		-		9,953,487		-		9,953,487
Delaware Large Cap Growth Trust		-		5,304,277		-		5,304,277
Common stock - LNC		26,755,825		-		-		26,755,825
Investment contracts - LNL		-		-		36,183,046		36,183,046
Money market fund		-		1,054,789		-		1,054,789
Brokerage account		1,435,101		740,910		-		2,176,011
Total assets	$	95,493,936	$	32,635,083	$	36,183,046	$	164,312,065

	As of December 31, 2009
	Quoted Prices
	in Active		Significant		Significant
	Markets for		Observable		Unobservable
	Identical Assets		Inputs		Inputs		Total
	(Level 1)		(Level 2)		(Level 3)		Fair Value
Assets:
Mutual funds:
Conservative	$	24,430,233	$	-	$	-	$	24,430,233
Moderate		2,575,498		-		-		2,575,498
Growth		14,996,891		-		-		14,996,891
International		17,303,663		-		-		17,303,663
Collective investment trusts:
Delaware Large Cap Value Trust		-		6,356,670		-		6,356,670
Delaware International Equity Trust		-		555,868		-		555,868
Delaware Small Cap Growth Trust		-		5,672,670		-		5,672,670
Delaware Diversified Income Trust		-		9,979,228		-		9,979,228
Delaware Large Cap Growth Trust		-		4,914,629		-		4,914,629
Common stock - LNC		27,268,473		-		-		27,268,473
Investment contracts - LNL		-		-		35,474,845		35,474,845
Money market fund		-		996,740		-		996,740
Total assets	$	86,574,758	$	28,475,805	$	35,474,845	$	150,525,408

The tables below set forth a summary of changes in the fair value of the Plan’s Level 3 investment assets:

For the Year Ended December 31, 2010

Items Included

Gains (Losses)

Sales,

in Statement of

Issuances,

Changes in Net

Net Assets

Maturities,

Transfers In

Ending

Beginning

Assets Available

Available for

Settlements,

or Out of

Fair

Fair Value

for Benefits

Benefits

Calls, Net

Level 3, Net

Value

Investment contracts - LNL

35,474,845

708,201

36,183,046

For the Year Ended December 31, 2009

Items Included

Gains (Losses)

Sales,

in Statement of

Issuances,

Changes in Net

Net Assets

Maturities,

Transfers In

Ending

Beginning

Assets Available

Available for

Settlements,

or Out of

Fair

Fair Value

for Benefits

Benefits

Calls, Net

Level 3, Net

Value

Investment contracts - LNL

29,623,868

5,850,977

35,474,845

For the Year Ended December 31, 2008

Items Included

Gains (Losses)

Sales,

in Statement of

Issuances,

Changes in Net

Net Assets

Maturities,

Transfers In

Ending

Beginning

Assets Available

Available for

Settlements,

or Out of

Fair

Fair Value

for Benefits

Benefits

Calls, Net

Level 3, Net

Value

Investment contracts - LNL

14,604,738

15,019,130

29,623,868

6. Income Tax Status

The Plan has received a determination letter from the Internal Revenue Service (“IRS”) dated April 30, 2004, stating that the Plan is qualified under section 401(a) of the Internal Revenue Code of 1986, as amended (“Code”) and, therefore, the related trust is exempt from taxation. Subsequent to this determination by the IRS, the Plan was amended and restated. Once qualified, the Plan is required to operate in conformity with the Code to maintain its qualification. The Plan’s administrator believes the Plan is being operated in compliance with the applicable requirements of the Code and, therefore, believes that the Plan, as amended and restated, is qualified and the related trust is tax exempt. Federal (and most states) income tax is deferred on participants’ contributions, the Plan Sponsor’s contributions and income earned in the Plan until actual distribution or withdrawal from the Plan.

7. Related Party Transactions

The Plan has investments in common stock of LNC and investment contracts with LNL. Starting October 1, 2008, the Plan invests in mutual funds and collective investment trusts managed by Delaware Management Holdings, Inc. (“Delaware”). Delaware was an affiliate of LNL through January 4, 2010, when it was sold to an unrelated third party. For the first nine months of 2008, the Plan was invested in pooled separate accounts with LNL. LNL charged the Plan for certain administrative expenses including trustee and audit fees. Total administrative expenses charged were $88,650 in 2008. Lincoln Alliance, an affiliate of LNL, is the recordkeeper for the Plan. Beginning October 1, 2008, all administrative expenses were paid by LNC.

8. Concentrations of Credit Risks

As of December 31, 2010, the Plan had investments in common stock of LNC and investments contracts with LNL of $26,755,825 (16% of net assets) and $36,183,046 (22% of net assets), respectively. As of December 31, 2009, the Plan had investments in common stock of LNC and investment contracts with LNL of $27,268,473 (18% of net assets) and $35,474,845 (23% of net assets), respectively. LNC and LNL operate predominately in the insurance industry in 2010 and the insurance and investment management industries in 2009 and 2008.

The Plan invests in various investment securities. Investment securities are exposed to various risks including, but not limited to, interest rate, market, and credit risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investments will occur in the near term and that such changes could materially affect participants’ account balances and the amounts reported in the financial statements.

9. Reconciliation to Form 5500

The following is a reconciliation of net assets available for benefits per the statement of net assets available for benefits to the Form 5500:

	As of December 31,
	2010			2009
Net assets available for benefits per the financial statements	$	168,220,281		$	154,312,027
Amounts allocated to withdrawn participants		(440,673	)		(4,891	)
Net assets available for benefits per the Form 5500	$	167,779,608		$	154,307,136

The following is a reconciliation of distributions to participants per the statement of changes in net assets available for benefits to the Form 5500:

	For the Years Ended December 31,
	2010			2009			2008
Distributions to participants per the financial statements	$	15,772,704		$	18,114,613		$	17,704,133
Amounts allocated to withdrawn participants at end-of-year		440,673			4,891			506,313
Amounts allocated to withdrawn participants at end-of-prior-year		(4,891	)		(506,313	)		-
Distributions to participants per the Form 5500	$	16,208,486		$	17,613,191		$	18,210,446

Amounts allocated to participants are recorded on the Form 5500 for benefit payments that have been processed and approved for payment prior to year-end but not yet paid; however, the financial statements do not reduce assets until paid.

The following is a reconciliation of the reported net appreciation (depreciation) of Common Stock – LNC per the financial statements to the Form 5500:

	For the Years Ended December 31,
	2010		2009			2008
Common Stock - LNC net realized and unrealized	$	3,312,389	$	10,262,695		$	(28,485,233	)
appreciation (depreciation) per the financial statements
Difference in realized gain (loss) basis		656,030		(38,010	)		(1,703,721	)
Common Stock - LNC net realized and unrealized
appreciation (depreciation) per the Form 5500	$	2,656,359	$	10,300,705		$	(26,781,512	)

The Form 5500 reports the realized gains and losses on common stock as the difference between the proceeds of assets sold during the year and the fair value of those assets at the beginning of the year; however, the financial statements report the realized gains and losses on common stock as the difference between historical cost and fair value.

Supplemental Schedule

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)

As of December 31, 2010

(a)

(b)

(c)

(d)

(e)

Identity of Issue,

Description of Investment,

Borrower,

including Maturity Date,

Lessor or

Rate of Interest,

Current

Similar Party

Par or Maturity Value

Cost

Value

Mutual funds:

Columbia Acorn Z

408,884.266

participation units

12,344,216

Delaware Foundation® Conservative Allocation Fund

112,110.833

participation units

1,103,171

Delaware Foundation® Moderate Allocation Fund

278,779.346

participation units

3,030,331

Delaware Foundation® Growth Allocation Fund

223,236.938

participation units

2,210,046

Delaware Mid Cap Value I

269,332.458

participation units

2,510,178

Dodge & Cox International Stock

280,238.171

participation units

10,007,305

American Fund Growth Fund of America R-5

423,783.248

participation units

12,878,773

Harbor International Growth Institutional

663,556.602

participation units

8,208,195

Vanguard Institutional Index

94,505.708

participation units

10,869,101

Vanguard Extended Market Index Institutional

100,356.034

participation units

4,141,694

Total mutual funds

67,303,010

Collective investment trusts:

Delaware Large Cap Value Trust

599,432.165

participation units

7,187,192

Delaware International Equity Trust

77,191.410

participation units

618,303

Delaware Small Cap Growth Trust

534,074.523

participation units

7,776,125

Delaware Diversified Income Trust

710,455.865

participation units

9,953,487

Delaware Large Cap Growth Trust

415,695.727

participation units

5,304,277

Total collective investment trusts

30,839,384

Common stock - LNC

962,093.671

26,755,825

Investment contracts - LNL

36,183,046

4.7% interest rate (annualized)

36,183,046

Wilmington Trust Money Market Fund W Class

1,054,789

par value

1,054,789

Brokerage account

2,176,011

par value

2,176,011

Notes receivable from participants

3,875,700

Various loans at interest rates

varying from 4.25% to 10.50%

Maturity through March 2029

3,875,700

168,187,765

*	Indicates a related party to the Plan.

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

SIGNATURE

THE PLAN: Pursuant to the requirements of the Securities and Exchange Act of 1934, the Administrator of The Lincoln National Life Insurance Company Agents’ Savings and Profit-Sharing Plan has duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.

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

	By: /s/ George A. Murphy
Date: March 31, 2011	George A. Murphy on behalf of The Lincoln National
	Corporation Benefits Committee