FOR RETIREMENT Lincoln Director SM Investment Options Overview 2011 2012 program The Lincoln National Life Insurance Company Not a deposit Not FDIC-insured May go down in value Not insured by any federal government agency Not guaranteed by any bank or savings association Not for use with plan participants. 2055906
Working together, sharing a goal The success of any endeavor whether raising a barn or putting on a play depends upon how well everyone works together to achieve a shared goal. Likewise, you can rely on Lincoln to bring this same spirit of collaboration to our partnership with you as we work to realize our common objective providing a retirement plan that can help your employees achieve their financial goals. Lincoln has assembled a customized lineup of over 90 investment options that you can choose from and also count on to work well together. Because the Lincoln Director SM diversified platform includes many of the best-known and most highly respected asset management firms, you and your employees can build a retirement plan compatible with your level of risk and investment philosophy. The Lincoln Funds Management team conducts rigorous research on investment options and investment managers to assist Lincoln in offering a robust selection of investment options in the Lincoln Director SM lineup. But, it doesn t end there. All of the investment options in the platform are monitored and evaluated on a regular basis to ensure that they continue to meet the highest standards.
Investment through diversification This basic investment principle has been summed up by the phrase, Don t put all of your eggs in one basket. True to this advice, the range of investment options available through the Lincoln Director SM platform provides the diversification you are looking to offer. From the security of the Guaranteed Stable Value Account 1 to the potentially high returns of the more aggressive options or the simplicity of the risk- or time-based asset allocation models Lincoln Director SM program provides a variety of ways for your employees to allocate their money. Although it is impossible to completely eliminate risk, you can offer your employees a lineup that allows for investment diversification, which can reduce the overall volatility of their portfolios. The style boxes Creating the right investment mix to help meet retirement goals takes careful planning. Fortunately, Lincoln can help. The style box icons accompanying the investment option descriptions on the following pages can help your employees create and maintain diversified portfolios. Each equity investment option is assigned a specific category in the style box based on its investment focus and portfolio composition. An option s portfolio may not always reflect the characteristics of its category, but by showing its ideal profile, you and your employees will get a better sense of its objectives for the long term. Investment managers you know and trust Investments 1 Guarantees are backed by the claims-paying ability of The Lincoln National Life Insurance Company. May not be available in all states. 3
Lincoln Director SM investment options Domestic Equity Options Value Blend Growth Large-cap Mid-cap Small-cap American Funds American Mutual (SA1D) American Funds Washington Mutual Investors (SA1U) BlackRock Equity Dividend (SALF) BlackRock Large Cap Value (SA80) Delaware VIP Value (SA61) Fidelity VIP Equity-Income (SA57) FTVIPT Mutual Shares Securities (SA2J) MFS VIT Utilities (SA67) SSgA Russell Large Cap Value Index Non-Lending Series (SAL8) Value Equity (SA28) AllianceBernstein VPS Small/Mid Cap Value (SA39) BlackRock Mid-Cap Value Equity (SA83) LVIP Delaware Special Opportunities (SAL7) LVIP Mid-Cap Value (SA38) Delaware VIP Small Cap Value (SA56) SSgA Russell Small Cap Value Index Non-Lending Series (SALB) International/Global Equity Options American Funds Fundamental Investors (SA1J) American Funds Investment Company of America (SA1N) Core Equity (SA11) Fidelity VIP Contrafund (SA35) LVIP Delaware Social Awareness (SA33) LVIP SSgA S&P 500 Index (SA27) LVIP Vanguard Domestic Equity ETF (SA19) Fidelity VIP Mid Cap (SA84) SSgA S&P MidCap Index Non-Lending Series (SALA) Delaware Small Cap Core (SA2C) LVIP SSgA Small-Cap Index (SA36) American Funds AMCAP (SA1A) American Funds Growth Fund of America (SA1K) American Funds New Economy (SA1P) BlackRock Capital Appreciation (SA81) BlackRock Large Cap Growth (SALG) Fidelity VIP Growth (SA58) Janus Aspen Series Janus (SA70) Large Capitalization Equity (SA23) LVIP T. Rowe Price Growth Stock (SA29) MFS VIT Growth (SA65) SSgA Russell Large Cap Growth Index Non-Lending Series (SAL9) BlackRock Mid-Cap Growth Equity (SA76) Medium Capitalization Equity (SA17) Janus Aspen Series Enterprise (SA64) Wells Fargo Advantage Discovery (SA63) LVIP Baron Growth Opportunities (SA1X) Small Capitalization Equity (SA24) SSgA Russell Small Cap Growth Index Non-Lending Series (SALC) Large-cap Value Blend Growth International Equity (SA22) LVIP Templeton Growth (SA62) American Funds Capital World Growth and Income (SA1H) American Funds EuroPacific Growth (SA1I) LVIP SSgA International Index (SAL5) LVIP Vanguard International Equity ETF (SA59) AllianceBernstein VPS Global Thematic Growth (SA31) American Funds New Perspective (SA1Q) American Funds New World (SA1R) Small/ BlackRock Energy & Resources (SA77) LVIP Cohen & Steers Global Real Estate (SA55) American Funds SMALLCAP World (SA1S) Mid-cap Delaware VIP Emerging Markets (SA94) Fixed Income Options (Domestic and International) Short Medium Long American Funds Intermediate Bond Fund of America (SA1M) American Century VP Inflation Protection (SA92) Guaranteed Account/Guaranteed Stable Value Account Delaware VIP Limited-Term Diversified Income (SA87) Short Term (SA14) American Funds American High-Income Trust (SA1C) American Funds Bond Fund of America (SA1E) American Funds Capital World Bond (SA1G) American Funds U.S. Government Securities (SA1T) Delaware VIP Diversified Income (SA93) FTVIPT Templeton Global Bond Securities (SA86) Government/Corporate Bond (SA12) High Yield Bond (SA20) LVIP SSgA Bond Index (SAL6) PIMCO Total Return (SALM) 4
Other Investment Options Balanced Aggressive Balanced (SA32) American Funds American Balanced (SA1B) American Funds Capital Income Builder (SA1F) American Funds Income Fund of America (SA1L) Balanced (SA21) Lincoln VIP Asset Allocation Funds Balanced LVIP Delaware Foundation Conservative Allocation (SA95) LVIP Delaware Foundation Moderate Allocation (SA96) LVIP Delaware Foundation Aggressive Allocation (SA97) BlackRock Global Allocation (SALE) Conservative Balanced (SA30) Franklin Balanced (SA2R) FTVIPT Franklin Income Securities (SA2I) SSgA Real Asset Non-Lending Series (SALD) LVIP Protected Profile 2010 (SAL1) LVIP Protected Profile 2020 (SAL2) LVIP Protected Profile 2030 (SAL3) LVIP Protected Profile 2040 (SAL4) LVIP Protected Profile 2050 (SALL) Standard & Poor s, S&P, S&P 500, Standard & Poor s 500 and 500 are trademarks of Standard & Poor s Financial Services LLC, a subsidiary of The McGraw-Hill Companies, Inc. and have been licensed for use by Lincoln Variable Insurance Products Trust and its affiliates. The Product is not sponsored, endorsed, sold or promoted by Standard & Poor s and Standard & Poor s makes no representation regarding the advisability of purchasing the Product. Certain group variable annuity separate accounts are funded with mutual funds. The Lincoln National Life Insurance Company ( Lincoln ), Fort Wayne, IN, may receive certain fees, pursuant to either a written plan filed with the Securities and Exchange Commission Rule 12b-1, 17 C.F.R. 270.12b-1 (a 12b-1 Plan ) or an administrative services agreement with some, but not necessarily all, of the managers of these mutual funds, which are investment options in the annuity contracts. These fees reimburse some of Lincoln s acquisition expenses, printing and mailing expenses, distribution expenses, transfer agency fees, contractowner services expenses, marketing and advertising expenses, and other administrative expenses related to the maintenance of the mutual funds. The amount of the fees will vary from fund to fund, and are generally described as a percentage of assets under management with the fund. These fees are included in the total underlying fund expenses.
Lincoln Director SM investment fees Category/name Separate Account (SA) Investment advisor Investment style Underlying mutual fund fee (%) Invest. mgt. fee (%) Total SA fee (%) Domestic Equity AllianceBernstein VPS Small/Mid Cap Value 39 AllianceBernstein L.P. Small/Mid Cap Value 0.84 0.30 1.14 American Funds AMCAP 3 1A Capital Research and Management Company Large Cap Growth 0.74 0.15 0.89 American Funds American Mutual 3 1D Capital Research and Management Company Large Cap Value 0.68 0.15 0.83 American Funds Fundamental Investors 3 1J Capital Research and Management Company Large Cap Blend 0.66 0.15 0.81 American Funds Growth Fund of America 3 1K Capital Research and Management Company Large Cap Growth 0.68 0.15 0.83 American Funds Investment Company of America 3 1N Capital Research and Management Company Large Cap Blend 0.65 0.15 0.80 American Funds New Economy 3 1P Capital Research and Management Company Large Cap Growth 0.86 0.15 1.01 American Funds Washington Mutual Investors 3 1U Capital Research and Management Company Large Cap Value 0.66 0.15 0.81 BlackRock Capital Appreciation 81 BlackRock Inc. Large Cap Growth 1.15 0.05 1.20 BlackRock Equity Dividend 3 LF BlackRock Inc. Large Cap Value 1.07 0.05 1.12 BlackRock Large Cap Growth 3 LG BlackRock Inc. Large Cap Growth 1.30 0.05 1.35 BlackRock Large Cap Value 80 BlackRock Inc Large Cap Value 1.23 0.05 1.28 BlackRock Mid-Cap Equity Growth 76 BlackRock Inc. Mid Cap Growth 1.40 0.05 1.45 BlackRock Mid-Cap Value Equity 83 BlackRock Inc. Mid Cap Value 1.30 0.05 1.35 Core Equity 11 LNL/Delaware Investment Advisers Large Cap Blend 0.00 0.75 0.75 Delaware Small Cap Core 3 2C Delaware Management Company Small Cap Blend 1.65 0.00 1.65 Delaware VIP Small Cap Value 56 Delaware Management Company Small Cap Value 0.83 0.30 1.13 Delaware VIP Value 61 Delaware Management Company Large Cap Value 0.75 0.20 0.95 Fidelity VIP Contrafund 35 Fidelity Management & Research Company Large Cap Blend 0.75 0.15 0.90 Fidelity VIP Equity-Income 57 Fidelity Management & Research Company Large Cap Value 0.81 0.30 1.11 Fidelity VIP Growth 58 Fidelity Management & Research Company Large Cap Growth 0.92 0.30 1.22 Fidelity VIP Mid Cap 84 Fidelity Management & Research Company Mid Cap Blend 0.66 0.55 1.21 FTVIPT Mutual Shares Securities 3 2J Franklin Mutual Advisors, LLC Large Cap Value 0.99 0.15 1.14 Janus Aspen Series Enterprise 3 64 Janus Capital Management, LLC Mid Cap Growth 0.93 0.30 1.23 Janus Aspen Series Janus 70 Janus Capital Management, LLC Large Cap Growth 0.92 0.30 1.22 Large Capitalization Equity 23 LNL/Delaware Investment Advisers Large Cap Growth 0.00 0.75 0.75 LVIP Baron Growth Opportunities 3 1X LIA/BAMCO Inc. Small Cap Growth 1.29 0.10 1.39 LVIP Delaware Social Awareness 33 LIA/Delaware Management Company Large Cap Blend 0.47 0.30 0.77 LVIP Delaware Special Opportunities L7 LIA/Delaware Management Company Mid Cap Value 0.48 0.40 0.88 LVIP Mid-Cap Value 38 LIA/Wellington Management Company, LLP Mid Cap Value 1.04 0.00 1.04 LVIP SSgA S&P 500 Index 27 LIA/State Street Global Advisors Funds Management Large Cap Blend 0.30 0.29 0.59 LVIP SSgA Small-Cap Index 36 LIA/State Street Global Advisors Funds Management Small Cap Blend 0.44 0.15 0.59 LVIP T. Rowe Price Growth Stock 29 LIA/T. Rowe Price Associates, Inc. Large Cap Growth 0.79 0.15 0.94 LVIP Vanguard Domestic Equity ETF 19 LIA/Vanguard Group, Inc. Large Cap Blend 0.69 0.30 0.99 Medium Capitalization Equity 17 LNL/T. Rowe Price Associates, Inc. Mid Cap Growth 0.00 0.75 0.75 MFS VIT Growth 65 Massachusetts Financial Services Company Large Cap Growth 0.85 0.30 1.15 MFS VIT Utilities 67 Massachusetts Financial Services Company Large Cap Value 0.81 0.30 1.11 Small Capitalization Equity 24 LNL/Delaware Investment Advisers Small Cap Growth 0.00 0.75 0.75 SSgA Russell Large Cap Growth Index Non-Lending Series 3 L9 State Street Global Advisors Funds Management Large Cap Growth 0.05 0.50 0.55 SSgA Russell Large Cap Value Index Non-Lending Series 3 L8 State Street Global Advisors Funds Management Large Cap Value 0.05 0.50 0.55 SSgA Russell Small Cap Growth Index Non-Lending Series 3 LC State Street Global Advisors Funds Management Small Cap Growth 0.06 0.50 0.56 SSgA Russell Small Cap Value Index Non-Lending Series 3 LB State Street Global Advisors Funds Management Small Cap Value 0.06 0.50 0.56 SSgA S&P MidCap Index Non-Lending Series 3 LA State Street Global Advisors Funds Management Mid Cap Blend 0.06 0.50 0.56 Value Equity 28 LNL/Massachusetts Financial Services Company Large Cap Value 0.00 0.75 0.75 Wells Fargo Advantage Discovery 63 Wells Capital Management Mid Cap Growth 0.94 0.30 1.24 1 Subject to the plan fiduciary s decision, Lincoln believes that the identified investment options meet the criteria to be selected as a Qualified Default Investment Alternative. 2 The Guaranteed Stable Value Account is based on the ability of The Lincoln National Life Insurance Company to meet its financial obligations. Unlike the other separate accounts, the Guaranteed Stable Value Account does not have a stated expense ratio and is therefore excluded from the weighted average expense. 3 These investment are subaccounts of Separate Account 4K. 6
Category/name Separate Account (SA) Investment advisor Investment style Underlying mutual fund fee (%) Invest. mgt. fee (%) Total SA fee (%) International/Global Equity AllianceBernstein VPS Global Thematic Growth 31 AllianceBernstein L.P. Large Cap Growth 0.99 0.30 1.29 American Funds Capital World Growth and Income 3 1H Capital Research and Management Company Large Cap Blend 0.81 0.15 0.96 American Funds EuroPacific Growth 3 1I Capital Research and Management Company Large Cap Blend 0.85 0.15 1.00 American Funds New Perspective 3 1Q Capital Research and Management Company Large Cap Growth 0.81 0.15 0.96 American Funds New World 3 1R Capital Research and Management Company Large Cap Growth 1.03 0.15 1.18 American Funds SMALLCAP World 3 1S Capital Research and Management Company Mid Cap Growth 1.09 0.15 1.24 BlackRock Energy & Resources 77 BlackRock Inc. Small Cap Value 1.36 0.05 1.41 Delaware VIP Emerging Markets 94 Delaware Management Company Mid Cap Value 1.40 0.30 1.70 International Equity 22 LNL/Delaware Investment Advisers Large Cap Value 0.00 0.98 0.98 LVIP Cohen & Steers Global Real Estate 55 LIA/Cohen & Steers Capital Management Inc. Mid Cap Blend 0.88 0.30 1.18 LVIP SSgA International Index L5 LIA/State Street Global Advisors Funds Management Large Cap Blend 0.61 0.30 0.91 LVIP Templeton Growth 62 LIA/Templeton Investment Counsel, LLC Large Cap Value 1.08 0.20 1.28 LVIP Vanguard International Equity ETF 59 LIA/Vanguard Group Inc. Large Cap Blend 0.81 0.30 1.11 Fixed Income (Domestic and International) American Century VP Inflation Protection 92 American Century Investment Management, Inc. 0.49 0.35 0.84 American Funds American High-Income Trust 3 1C Capital Research and Management Company 0.75 0.15 0.90 American Funds Bond Fund of America 3 1E Capital Research and Management Company 0.62 0.15 0.77 American Funds Capital World Bond 3 1G Capital Research and Management Company 0.89 0.15 1.04 American Funds Intermediate Bond Fund of America 3 1M Capital Research and Management Company 0.65 0.15 0.80 American Funds U.S. Government Securities 3 1T Capital Research and Management Company 0.67 0.15 0.82 Delaware VIP Diversified Income 93 Delaware Management Company 0.70 0.35 1.05 Delaware VIP Limited-Term Diversified Income 87 Delaware Management Company 0.60 0.55 1.15 FTVIPT Templeton Global Bond Securities 86 Franklin Advisers, Inc. 0.55 0.55 1.10 Government/Corporate Bond 12 LNL/Delaware Investment Advisers 0.00 0.75 0.75 Guaranteed Account/Guaranteed Stable Value Account 2 Delaware Investment Advisers 0.00 0.00 0.00 High Yield Bond 20 LNL/Delaware Investment Advisers 0.00 0.75 0.75 LVIP SSgA Bond Index L6 LIA/State Street Global Advisors Funds Management 0.41 0.30 0.71 PIMCO Total Return LM Allianz Global Investors 0.71 0.25 0.96 Short Term 14 LNL/Delaware Investment Advisers 0.00 0.60 0.60 Other (Balanced) Aggressive Balanced 1 32 LNL/Delaware Investment Advisers Balanced 0.00 0.75 0.75 American Funds American Balanced 1,3 1B Capital Research and Management Company Balanced 0.65 0.15 0.80 American Funds Capital Income Builder 1,3 1F Capital Research and Management Company Balanced 0.67 0.15 0.82 American Funds Income Fund of America 1,3 1L Capital Research and Management Company Balanced 0.68 0.15 0.83 Balanced 1 21 LNL/Delaware Investment Advisers Balanced 0.00 0.75 0.75 BlackRock Global Allocation 1,3 LE BlackRock Inc. Balanced 1.17 0.05 1.22 Conservative Balanced 1 30 LNL/Delaware Investment Advisers Balanced 0.00 0.75 0.75 Franklin Balanced 1,3 2R Franklin Advisers, Inc. Balanced 1.02 0.05 1.07 FTVIPT Franklin Income Securities 1,3 2I Franklin Advisers, Inc. Balanced 0.72 0.15 0.87 SSgA Real Asset Non-Lending Series 3 LD State Street Global Advisors Funds Management Balanced 0.22 0.50 0.72 Lincoln VIP Profile Funds (Balanced) LVIP Delaware Foundation Aggressive Allocation 1 97 LIA/Delaware Management Company Balanced 0.76 0.20 0.96 LVIP Delaware Foundation Conservative Allocation 1 95 LIA/Delaware Management Company Balanced 0.75 0.20 0.95 LVIP Delaware Foundation Moderate Allocation 1 96 LIA/Delaware Management Company Balanced 0.76 0.20 0.96 LVIP Protected Profile 2010 1 L1 Lincoln Investment Advisors Corporation Balanced 0.78 0.20 0.98 LVIP Protected Profile 2020 1 L2 Lincoln Investment Advisors Corporation Balanced 0.79 0.20 0.99 LVIP Protected Profile 2030 1 L3 Lincoln Investment Advisors Corporation Balanced 0.81 0.20 1.01 LVIP Protected Profile 2040 1 L4 Lincoln Investment Advisors Corporation Balanced 0.83 0.20 1.03 LVIP Protected Profile 2050 1 LL Lincoln Investment Advisors Corporation Balanced 0.84 0.20 1.04 Total fees average 0.96 7
Overview of the investment options in the Lincoln Director SM program Domestic Equity Options Large-cap American Funds AMCAP, SA1A Seeks to provide long-term growth of capital. It seeks to make your investment grow over time by investing primarily in stocks of U.S. companies with a record of above-average long-term growth. It may also invest in non-u.s. securities to a limited extent. American Funds American Mutual, SA1D Strives to provide for the balanced accomplishment of three objectives current income, capital growth, and conservation of principal. It seeks to invest primarily in common stocks of companies that are likely to participate in the growth of the American economy and whose dividends are well protected. American Funds Fundamental Investors, SA1J Seeks to provide long-term growth of capital and income primarily through investments in common stocks of large, established companies that offer growth potential at reasonable prices. The Fund may also invest significantly in non-u.s. securities. American Funds Growth Fund of America, SA1K Seeks to provide long-term growth of capital through a diversified portfolio of common stocks. American Funds Investment Company of America, SA1N Seeks to provide long-term growth of capital and income, placing greater emphasis on future dividends than on current income. American Funds New Economy, SA1P Seeks to provide long-term growth of capital through investments in services and information industries in the United States and around the world. American Funds Washington Mutual Investors, SA1U Seeks to provide current income and the opportunity for growth of principal consistent with sound common stock investing. It invests primarily in common stocks of larger, more established companies that are listed on, or meet the financial listing requirements of, the New York Stock Exchange and have a strong record of earnings and dividends. BlackRock Capital Appreciation, SA81 The Fund seeks to provide long-term growth of capital by investing in fundamentally sound companies with strong management, superior earnings growth prospects, and attractive relative valuations. BlackRock Equity Dividend, SALF The Fund seeks its investment objective of long-term total return and current income by investing primarily in investments that fund management believes will increase in value over the long term as well as provide current income. BlackRock Large Cap Growth, SALG The Fund seeks its investment objective of long-term capital growth by investing primarily in a diversified portfolio of equity securities of large-cap companies located in the United States that fund management believes have good prospects for earnings growth. BlackRock Large Cap Value, SA80 Invests primarily in a diversified portfolio of equity securities of large-cap companies located in the U.S. that fund management believes are undervalued. Core Equity, SA11 Seeks long-term growth of capital through a broadly diversified portfolio of equity securities primarily of large-cap U.S. issuers. A small percentage of mid-size U.S. companies may be held. Delaware VIP Value, SA61 Seeks long-term capital appreciation through investments in large-capitalization companies following a value-oriented research-based approach. Fidelity VIP Contrafund, SA35 Seeks long-term capital appreciation. Fidelity VIP Equity-Income, SA57 Seeks reasonable income. The Fund will also consider the potential for capital appreciation. The Fund s goal is to achieve a yield that exceeds the composite yield on the securities composing the Standard & Poor s 500 Index (S&P 500). Fidelity VIP Growth, SA58 Seeks to achieve capital appreciation. 8
FTVIPT Mutual Shares Securities, SA2J Seeks capital appreciation with income as a secondary goal. The Fund normally invests primarily in U.S. and foreign equity securities that the manager believes are undervalued. The Fund also invests, to a lesser extent, in risk arbitrage securities and distressed companies. Janus Aspen Series Janus, SA70 Seeks long-term growth of capital in a manner consistent with the preservation of capital. Invests primarily in common stocks selected for their growth potential. Although it can invest in companies of any size, it generally invests in larger, more established issuers. Large Capitalization Equity, SA23 Seeks maximum capital, primarily appreciation, by investing in the stocks of U.S. companies with low dividend yields, strong balance sheets, and high expected earnings growth rates as compared to other companies in the same industry. LVIP Delaware Social Awareness, SA33 Seeks long-term capital appreciation by investing in stocks of large- and medium-size companies that adhere to certain specific social criteria. LVIP SSgA S&P 500 Index, SA27 Seeks to approximate as closely as practicable, before fees and expenses, the total rate of return of common stocks publicly traded in the United States, as represented by the S&P 500 Index. LVIP T. Rowe Price Growth Stock, SA29 Seeks to provide long-term growth of capital. LVIP Vanguard Domestic Equity ETF, SA19 Seeks reasonable current income and reasonable appreciation through investments primarily in dividend-paying common stocks of good quality. The Portfolio may also invest in fixed income securities and convertible securities. MFS VIT Growth, SA65 The Series seeks to provide long-term growth of capital by investing in companies that are expected to show earnings growth over time well above the growth rate of the overall economy and inflation; and have the products, technologies, management, market, and other characteristics usually necessary to become more widely recognized as growth companies. MFS VIT Utilities, SA67 Seeks capital growth and current income (income above that available from a portfolio invested entirely in equity securities). SSgA Russell Large Cap Growth Index Non-Lending Series, SAL9 Seeks to gain exposure to medium U.S. companies by closely replicating the returns and characteristics of the Russell 1000 Growth Index, which is an unmanaged index composed of large-cap securities from the broad U.S. equity market. SSgA Russell Large Cap Value Index Non-Lending Series, SAL8 Seeks to gain exposure to medium U.S. companies by closely replicating the returns and characteristics of the Russell 1000 Value Index, which is an unmanaged index composed of largecap securities from the broad U.S. equity market. Value Equity, SA28 Invests in stocks of large, high-quality, dividend-paying, well-known companies that are bought at low prices but have strong earnings potential. Mid-cap BlackRock Mid-Cap Growth Equity, SA76 Invests primarily in mid-capitalization companies that are less mature and appear to have the potential for rapid growth. The Fund looks for companies that have good current or prospective earnings and strong management teams. BlackRock Mid-Cap Value Equity, SA83 The fund manager is seeking mid-capitalization stocks that he believes are worth more than is indicated by current market price. Fidelity VIP Mid Cap, SA84 Seeks long-term growth of capital by investing primarily in common stocks. Janus Aspen Series Enterprise, SA64 Seeks long-term growth of capital. LVIP Delaware Special Opportunities, SAL7 Seeks to maximize long-term capital appreciation over a market cycle of approximately three to five years through investments in mid-capitalized companies deemed undervalued by management at the time of purchase. 9
Overview of the investment options in the Lincoln Director SM program, cont d. LVIP Mid-Cap Value, SA38 Seeks to provide long-term capital appreciation. Medium Capitalization Equity, SA17 Includes stock of medium-size companies that have strong financial characteristics. The objective of the account is maximum long-term total return. SSgA S&P MidCap Index Non-Lending Series, SALA Seeks to gain exposure to medium U.S. companies by closely replicating the returns and characteristics of the S&P MidCap 400 Index, which is an unmanaged index composed of mid-cap securities from the broad U.S. equity market. Small/Mid-cap AllianceBernstein VPS Small/Mid Cap Value, SA39 Seeks long-term growth of capital. It invests primarily in a diversified portfolio of stocks of equity securities of small- to mid-capitalization U.S. companies. For purposes of this policy, small- to mid-capitalization companies are those that, at the time of investment, fall within the capitalization range between the smallest company in the Russell 2500 TM Value Index, and the greater of $5 billion or the market capitalization of the largest company in the Russell 2500 Value Index. Russell 2500 Value Index: Measures the performance of those Russell 2500 companies with lower price-to-book ratios and lower forecasted growth values. Wells Fargo Advantage Discovery, SA63 The Fund normally invests at least 80% of its net assets in investments of small-capitalization and mid-capitalization companies and normally invests predominantly in equity securities. Small-cap Delaware Small Cap Core, SA2C Seeks long-term capital appreciation. It invests primarily in stocks of small companies that the management believes have a combination of attractive valuations, growth prospects, and strong cash flows. Under normal conditions, at least 80% of the assets will be invested in small-cap companies. Delaware VIP Small Cap Value, SA56 Seeks capital appreciation by investing primarily in stocks of small-cap companies whose market values appear low relative to underlying value, or future earnings and growth potential. LVIP Baron Growth Opportunities, SA1X Seeks capital appreciation through long-term investments in securities of small- and medium-size companies with undervalued assets or favorable growth prospects. LVIP SSgA Small-Cap Index, SA36 Seeks to approximate as closely as practicable, before fees and expenses, the performance of the Russell 2000 Index, which emphasizes stocks of small U.S. companies. Small Capitalization Equity, SA24 Seeks long-term capital appreciation by investing primarily in stocks of small, growth-oriented or emerging companies that, in the manager s view, are responsive to changes within the marketplace and have the fundamental characteristics to support continued growth. SSgA Russell Small Cap Growth Index Non-Lending Series, SALC Seeks to gain exposure to small, growth-oriented U.S. companies by closely replicating the returns and characteristics of the Russell 2000 Growth Index, which is an unmanaged index composed of small-cap growth securities from the broad U.S. equity market. SSgA Russell Small Cap Value Index Non-Lending Series, SALB Seeks to gain exposure to small, value-oriented U.S. companies by closely replicating the returns and characteristics of the Russell 2000 Value Index, which is an unmanaged index composed of small-cap value securities from the broad U.S. equity market. 10
International/Global Equity Options Large-cap AllianceBernstein VPS Global Thematic Growth, SA31 Seeks to emphasize growth of capital and invests for capital appreciation. The Portfolio invests primarily in securities of companies expected to benefit from technological advances and improvements. American Funds Capital World Growth and Income, SA1H Seeks to provide long-term growth of capital with current income by investing in established, growing companies all over the world, including the United States. American Funds EuroPacific Growth, SA1I Seeks to provide long-term growth of capital by investing in companies based outside the United States. American Funds New Perspective, SA1Q Seeks to provide long-term growth of capital through investments all over the world, including the United States. American Funds New World, SA1R Seeks long-term growth of capital by investing in stocks and bonds with significant exposure to countries that have developing economies and/or markets. Mid-cap American Funds SMALLCAP World, SA1S Seeks to provide long-term growth of capital by investing in the stocks of smaller companies in the United States and around the world. Delaware VIP Emerging Markets, SA94 Seeks to achieve long-term capital appreciation through investments in companies in emerging or developing nations. LVIP Cohen & Steers Global Real Estate, SA55 Seeks a total return through a combination of current income and long-term capital appreciation by investing primarily in equity securities of companies in the real estate industry located throughout the world, including Real Estate Investment Trusts (REITs) and other publicly traded real estate companies. Small-cap BlackRock Energy & Resources, SA77 Invests primarily in U.S. and international companies engaged in the exploration, production, refinement, and distribution of energy and natural resources. International Equity, SA22 Comprised of holdings in non-u.s. companies and is designed for significant long-term growth. LVIP SSgA International Index, SAL5 Seeks to approximate, as closely as practicable before fees and expenses, the performance of a broad market index of non-u.s. foreign securities. LVIP Templeton Growth, SA62 Seeks long-term capital growth through a flexible pricing policy of investing primarily in stocks of companies organized in the United States or in any foreign nation. LVIP Vanguard International Equity ETF, SA59 Seeks long-term capital appreciation by investing in foreign securities of companies whose principal business activities are outside of the United States. 11
Overview of the investment options in the Lincoln Director SM program, cont d. Fixed Income Options (Domestic and International) American Century VP Inflation Protection, SA92 Seeks long-term return using a strategy that seeks to protect against U.S. inflation. American Funds American High-Income Trust, SA1C Seeks to provide a high level of current income and, secondarily, capital appreciation by investing primarily in a broad range of higheryielding and generally lower-quality debt securities that also provide an opportunity to increase in value. American Funds Bond Fund of America, SA1E Seeks to maximize your level of current income and preserve your capital by investing primarily in bonds. Normally, it invests at least 80% of its assets in bonds and other debt securities. It invests a majority of its assets in debt securities rated A and above, including securities issued and guaranteed by the U.S. and other governments, and securities backed by mortgages and other assets. American Funds Capital World Bond, SA1G Seeks to provide high, long-term total return consistent with prudent management by investing in quality fixed income securities issued by major world governments, and corporations around the world and in the United States. American Funds Intermediate Bond Fund of America, SA1M Seeks to provide current income and preservation of capital through a bond portfolio with an average effective maturity no greater than five years. American Funds U.S. Government Securities, SA1T Seeks to provide a high level of current income and preservation of capital by investing primarily in securities that are guaranteed by the U.S. government. Normally, the Fund will invest its assets in securities guaranteed or sponsored by the U.S. government, and in cash and cash equivalents. At least 65% of the Fund s assets will be invested in securities that are guaranteed by the full faith and credit pledge of the U.S. government. Delaware VIP Diversified Income, SA93 Seeks maximum long-term total return, consistent with reasonable risk. Through rigorous research, seeks to uphold stringent risk control, including continuous assessments of change: geopolitical considerations, governmental policies, currency valuations, business cycles, and interest rates. Delaware VIP Limited-Term Diversified Income, SA87 Seeks a high, stable level of current income while attempting to minimize fluctuations in principal and provide maximum liquidity. FTVIPT Templeton Global Bond Securities, SA86 The Fund normally invests at least 80% of its net assets in bonds, which include debt securities of any maturity, such as bonds, notes, bills, and debentures. The Fund normally invests at least 40% of its net assets in foreign securities, may invest a portion of its total assets in bonds rated below investment grade, and places a significant portion of its assets in emerging markets. Government/Corporate Bond, SA12 Invests primarily in investment grade fixed income securities, although a small allocation in below investment grade may be held. Long-term total return is sought with a combination of current income and capital appreciation. Guaranteed Account/Guaranteed Stable Value Account This is a conservative account because of its minimum interest guarantee. The principal is also guaranteed. Guarantees are backed by the ability of The Lincoln National Life Insurance Company to meet its financial obligations. High Yield Bond, SA20 Consists primarily of below-investment grade (junk) bonds. Belowinvestment grade bonds pay a higher rate of interest to the investor to compensate for the increased level of risk. LVIP SSgA Bond Index, SAL6 Seeks to match, as closely as practicable before fees and expenses, the performance of the Barclays Capital Aggregate Bond Index, which is an unmanaged index composed of securities from the Barclays Capital Government/Corporate Bond Index, Mortgage- Backed Securities Index, and the Asset-Backed Securities Index including securities that are of investment-grade quality or better, and have at least one year to maturity. PIMCO Total Return, SALM The Fund seeks maximum total return, consistent with preservation of capital and prudent investment management. Short Term, SA14 Includes short-term obligations issued by U.S. corporations, the U.S. government, and federally chartered banks and U.S. branches of foreign banks. 12
Other Investment Options Balanced Aggressive Balanced, SA32 Invests primarily in a mixture of common stocks, bonds, and money market investments. The objective of the account is to maximize long-term total return and will emphasize equity securities, including a small allocation in foreign stocks. American Funds American Balanced, SA1B Seeks to provide conservation of capital, current income, and longterm growth of capital and income by investing in stocks, bonds, and other fixed income securities. The Fund also invests in securities issued and guaranteed by the U.S. government. Normally, the Fund will maintain at least 50% of the value of its assets in common stocks and at least 25% of the value of its assets in debt securities, including money market securities. American Funds Capital Income Builder, SA1F Seeks to provide above-average current income, a growing stream of income, and growth of capital. Secondarily, it strives to make your investment grow over time. It invests primarily in a broad range of income-producing securities, including stocks with a history of, or potential for, increasing dividends. It may also invest significantly in non-u.s. securities. American Funds Income Fund of America, SA1L Seeks to provide current income and, secondarily, growth of capital through a flexible mix of equity and debt instruments. Balanced, SA21 Includes holdings in three different asset classes: stocks, bonds, and money market instruments. The objective of the account is to maximize long-term total return consistent with prudent investment strategy. BlackRock Global Allocation, SALE Seeks to provide high total return. Conservative Balanced, SA30 Consists of holdings in three different asset classes: stocks, bonds, and money market instruments. Bond investments are emphasized for a conservative approach. Franklin Balanced, SA2R Seeks to provide above-average income consistent with the prudent employment of capital (compared with a portfolio entirely invested in equity securities). Its secondary objective is to provide reasonable opportunity for growth of capital and income. 13
Overview of the investment options in the Lincoln Director SM program (cont d.) FTVIPT Franklin Income Securities, SA2I Seeks to maximize income while maintaining prospects for capital appreciation. The Fund normally invests in both equity and debt securities. The Fund seeks income by investing in corporate, foreign, and U.S. Treasury bonds, as well as stocks with dividend yields the manager believes are attractive. SSgA Real Asset Non-Lending Series, SALD Seeks to match the returns of a composite benchmark of the REIT Index (30%), S&P GSCI Index (25%), capitalization-weighted MSCI World Natural Resources Stocks Index (25%), and Barclays Capital Inflation Notes Index (20%). Lincoln VIP Asset Allocation Funds Balanced LVIP Delaware Foundation Aggressive Allocation, SA97 A balance between a high level of current income and growth of capital, with a greater emphasis on growth of capital. LVIP Delaware Foundation Conservative Allocation, SA95 A balance between a high level of current income with some consideration given to growth of capital. LVIP Delaware Foundation Moderate Allocation, SA96 A balance between a high level of current income and growth of capital, with an emphasis on growth of capital. LVIP Protected Profile 2010, SAL1 This Protected Profile Fund seeks the highest total return over time with an increased emphasis on capital preservation as the target date approaches. Thereafter, an emphasis will be placed on high current income with a secondary focus on capital appreciation. Invests in an asset allocation between stocks and bonds, and also employs an actively managed risk-management overlay ( protection substrategy ) that will invest in exchange-traded futures to seek to control overall fund volatility and hedge downside equity market risk. LVIP Protected Profile 2020, SAL2 This Protected Profile Fund seeks the highest total return over time with an increased emphasis on capital preservation as the target date approaches. Thereafter, an emphasis will be placed on high current income with a secondary focus on capital appreciation. Invests in an asset allocation between stocks and bonds, and also employs an actively managed risk-management overlay ( protection substrategy ) that will invest in exchange-traded futures to seek to control overall fund volatility and hedge downside equity market risk. LVIP Protected Profile 2030, SAL3 This Protected Profile Fund seeks the highest total return over time with an increased emphasis on capital preservation as the target date approaches. Thereafter, an emphasis will be placed on high current income with a secondary focus on capital appreciation. Invests in an asset allocation between stocks and bonds, and also employs an actively managed risk-management overlay ( protection substrategy ) that will invest in exchange-traded futures to seek to control overall fund volatility and hedge downside equity market risk. LVIP Protected Profile 2040, SAL4 This Protected Profile Fund seeks the highest total return over time with an increased emphasis on capital preservation as the target date approaches. Thereafter, an emphasis will be placed on high current income with a secondary focus on capital appreciation. Invests in an asset allocation between stocks and bonds, and also employs an actively managed risk-management overlay ( protection substrategy ) that will invest in exchange-traded futures to seek to control overall fund volatility and hedge downside equity market risk. LVIP Protected Profile 2050, SALL This Protected Profile Fund seeks the highest total return over time with an increased emphasis on capital preservation as the target date approaches. Thereafter, an emphasis will be placed on high current income with a secondary focus on capital appreciation. Invests in an asset allocation primarily between domestic and foreign stocks, and also employs an actively managed risk-management overlay ( protection substrategy ) that will invest in exchange-traded futures to seek to control overall fund volatility and hedge downside equity market risk. 14
Investing internationally involves risks not associated with investing solely in the United States, such as currency fluctuation, political risk, differences in accounting, and the limited availability of information. Funds that invest in small- and/or mid-size company stocks typically involve greater risk, particularly in the short term, than those investing in larger, more established companies. An index is unmanaged, and one cannot invest directly in an index. Funds that concentrate investments in one region or industry may carry greater risk than more broadly diversified funds. The return of principal in bond portfolios is not guaranteed. Bond portfolios have the same interest rate, inflation, credit, prepayment and market risks that are associated with the underlying bonds owned by the fund (or account). Asset allocation does not ensure a profit, nor protect against loss in a declining market. High yield portfolios may invest in high-yield or lower-rated fixed income securities (junk bonds), which may experience higher volatility and increased risk of nonpayment or default. REITs involve risks such as refinancing, economic conditions in the real estate industry, changes in property values, dependency on real estate management, and other risks associated with a portfolio that concentrates its investments in one sector or geographic region. Investing in emerging markets can be riskier than investing in well-established foreign markets. International investing involves special risks not found in domestic investing, including increased political, social, and economic instability. Each profile fund is operated as a fund of funds, which invests primarily in other funds rather than in individual securities. Funds of this nature may be more expensive other investment options. An investment in a separate account is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency. Although the separate account seeks to preserve capital, it is possible to lose money by investing in this separate account. When interest rates rise, the value of the fixed-income securities generally decline. Likewise, when interest rates fall, the value of fixed-income securities generally increase. There is no assurance that private guarantors or insurers will meet their obligations. Collective trusts are non-deposit investment products, which are not bank deposits or obligations, are not guaranteed by any bank, and are not insured or guaranteed by the FDIC, the Federal Reserve Board, or any other government agency. Exchange-traded funds (ETFs) in this lineup are available through collective trusts or mutual funds. Investors cannot invest directly in an ETF. The target date is the approximate date when investors plan to retire or start withdrawing their money. Some target date funds make no changes in asset allocations after the target date is reached; other target-date funds continue to make asset allocation changes following the target date (see prospectus for the fund s allocation strategy). The principal value is not guaranteed at any time, including at the target date.
HELPING PEOPLE FACE THE FUTURE WITH CONFIDENCE At Lincoln Financial Group, we ve spent more than 100 years living up to the character of our namesake: integrity, honesty, and the belief in a better tomorrow. We provide advice and solutions to help people save for tomorrow, secure and maximize their income, protect themselves and their loved ones, and prepare for the unexpected. INCOME LIFE RETIREMENT GROUP BENEFITS Not a deposit Not FDIC-insured Not insured by any federal government agency Not guaranteed by any bank or savings association May go down in value 2011 Lincoln National Corporation Lincoln Financial Group 150 N. Radnor-Chester Road Radnor, PA 19087 www.lincolnfinancial.com Login: Employer Retirement Plans Lincoln Financial Group is the marketing name for Lincoln National Corporation and its affiliates. Affiliates are separately responsible for their own financial and contractual obligations. LCN1106-2055906 POD 11/11 Z10 Order code: DIR-INV-BRC007 This material was prepared to support the promotion and marketing of investment and insurance products. Lincoln Financial Group affiliates, their distributors, and their respective employees, representatives, and/ or insurance agents do not provide tax, accounting, or legal advice. Any tax statements contained herein were not intended or written to be used, and cannot be used, for the purpose of avoiding U.S. federal, state, or local tax penalties. Please consult your own independent advisor as to any tax, accounting, or legal statements made herein. A group variable annuity is a long-term investment product designed particularly for retirement purposes. Group annuities contain both investment and insurance components and have fees and expenses, including administrative and advisory fees. Optional features may be available for an additional charge. The annuity s value fluctuates with the market value of the underlying investment options, and all assets accumulate tax-deferred. Withdrawals may carry tax consequences, including possible tax penalties. Lincoln Director SM group variable annuity (contract form 19476 and state variations) is issued by The Lincoln National Life Insurance Company, Fort Wayne, IN, and distributed by Lincoln Financial Distributors, Inc., a broker/dealer. The Lincoln National Life Insurance Company does not solicit business in the state of New York, nor is it authorized to do so. Contractual obligations are backed by the claims-paying ability of The Lincoln National Life Insurance Company. Products and features are subject to state availability. There is no additional tax-deferred benefit from an annuity contract purchased in an IRA or other tax-qualified plan. Not for use in New York. Not for use with plan participants.