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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 11-K

ANNUAL REPORT

Pursuant to Section 15(d) of the Securities Exchange Act of 1934

For the fiscal year ended December 31, 2001

THE LINCOLN NATIONAL CORPORATION
EMPLOYEES’ SAVINGS AND PROFIT-SHARING PLAN
(Full title of the Plan)

[Current Registration Number 33-52667]

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

(Name of Issuer and principal executive office)

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Report of Independent Auditors
Statements of Net Assets Available for Plan Benefits
Statements of Changes in Net Assets Available for Plan Benefits
Notes to Financial Statements
Schedule of Assets (Held At End of Year)
Schedule of Reportable Transactions
Consent of Independent Auditors

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Form 11-K
The Lincoln National Corporation
Employees’ Savings and Profit-Sharing Plan

TABLE OF CONTENTS

Facing Sheet

Financial Statements		2-10

Signature		11
Consent of Independent Auditors		Exhibit 23

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Financial Statements and Schedules

Lincoln National Corporation
Employees’ Savings and Profit-Sharing Plan

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

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Lincoln National Corporation
Employees’ Savings and Profit-Sharing Plan

Financial Statements
and Schedules

Years ended December 31, 2001 and 2000

Contents

Report of Independent Auditors			1
Audited Financial Statements
Statements of Net Assets Available for Plan Benefits			2
Statements of Changes in Net Assets Available for Plan Benefits			3
Notes to Financial Statements			4
Schedules
Schedule of Assets (Held At End of Year)			9
Schedule of Reportable Transactions			10

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Report of Independent Auditors

Lincoln National Corporation Plan Administrator
Lincoln National Corporation

We have audited the accompanying statements of net assets available for plan benefits of the Lincoln National Corporation Employees’ Savings and Profit-Sharing Plan as of December 31, 2001 and 2000, and the related statements of changes in net assets available for plan benefits for the years then ended. These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for plan benefits of the Plan at December 31, 2001 and 2000, and the changes in its net assets available for plan benefits for the years then ended, in conformity with accounting principles generally accepted in the United States.

Our audits were made for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplemental schedules of assets (held at end of year) as of December 31, 2001, and reportable transactions for the year then ended, are presented for purpose of additional analysis and are not a required part of the financial statements but are supplementary information required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. These supplemental schedules are the responsibility of the Plan’s management. The supplemental schedules have been subjected to the auditing procedures applied in our audits of the financial statements and, in our opinion, are fairly stated in all material respects in relation to the financial statements taken as a whole.

/s/ Ernst & Young LLP

May 30, 2002

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Lincoln National Corporation
Employees’ Savings and Profit-Sharing Plan

Statements of Net Assets Available for Plan Benefits

		December 31
		2001				2000
Assets
Investments		$	458,202,006			$	440,991,079
Cash and invested cash (deficit)			(2,401	)			(638,540	)
Accrued interest receivable			10,572				99,652
Contributions receivable from participating employers			8,134,145				21,367,069
Net pending trades			(258,507	)			—
Net assets available for plan benefits		$	466,085,815			$	461,819,260

See accompanying notes.

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Lincoln National Corporation
Employees’ Savings and Profit-Sharing Plan

Statements of Changes in Net Assets Available for Plan Benefits

			Year ended December 31
			2001				2000
Additions
Net realized and unrealized appreciation (depreciation) in fair value of investments			$	(24,548,688	)		$	24,408,453
Investment income:
	Cash dividends-Lincoln National Corporation			5,140,970				4,878,633
	Interest-The Lincoln National Life Insurance Company			3,078,673				2,875,447
	Other			1,265,094				1,133,593
Total investment income				9,484,737				8,887,673
Contributions:
	Participants			29,040,205				21,581,799
	Participating employers (net of forfeitures: 2001-$158,157; 2000-$40,569)			17,443,465				24,421,480
Total contributions				46,483,670				46,003,279
Transfers from affiliated plans				9,410,752				—
Total additions				40,830,471				79,299,405
Deductions
Distributions to participants				(36,294,264	)			(29,268,663	)
Administrative expenses				(269,652	)			(183,145	)
Total deductions				(36,563,916	)			(29,451,808	)
Net increase in net assets available for plan benefits				4,266,555				49,847,597
Net assets available for plan benefits at beginning of the year				461,819,260				411,971,663
Net assets available for plan benefits at end of the year			$	466,085,815			$	461,819,260

See accompanying notes.

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Lincoln National Corporation
Employees’ Savings and Profit-Sharing Plan

Notes to Financial Statements

December 31, 2001

1.     Significant Accounting Policies

Investments

The investment in Lincoln National Corporation (“LNC”) common stock is valued at the last reported sales price per the national securities exchange on the last business day of the year.

The Wells Fargo Bank Short-Term Investment Fund is valued at cost which approximates fair value.

The fair value of participation units in pooled separate accounts is based on quoted redemption value on the last business day of the year.

The investment contracts are valued at contract value as estimated by The Lincoln National Life Insurance Company (“Lincoln Life”). Contract value represents net contributions made plus interest at the contract rate. These contracts are fully benefit responsive.

Participant loans are valued at their outstanding balances which approximate fair value.

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

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

2.     Description of the Plan

The Lincoln National Corporation Employees’ Savings and Profit Sharing Plan (“Plan”) is a contributory, defined contribution plan which covers substantially all employees of LNC and certain of its subsidiaries (“Employer”) who meet certain eligibility requirements as defined by the Plan. A participant may make pretax contributions at a rate of at least 1%, but not more than 15% of compensation (not more than 8% for highly compensated employees), up to a maximum annual amount as determined and adjusted annually by the Internal Revenue Service (“IRS”).

During 2001, Plan assets relating to employees of Lincoln Financial Distributors, a subsidiary of LNC formerly Sagemark, were transferred from another affiliated Plan of Lincoln Life, in the amount of $9,410,752.

The participants are fully vested in their contributions and direct the Plan to invest their contributions and the guaranteed employer contributions in any combination of the investment options offered under the Plan. Discretionary employer contributions are invested in the LNC Common Stock Fund. Participants can direct the discretionary employer contributions, but only after the contributions have been in the Plan for two full years following the date the last contribution for the Plan year was contributed (see note 7).

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Lincoln National Corporation
Employees’ Savings and Profit-Sharing Plan

Notes to Financial Statements (continued)

2.     Description of the Plan (continued)

Employer contributions to the Plan are based on an amount equal to a participant’s contributions, not to exceed 6% of eligible earnings, multiplied by a percentage, ranging from 50% to 150%, which is based on LNC’s increase in operating income. The Employer match on eligible participants’ contributions during their first year of employment is limited to a maximum of 50%. The Board of Directors of Lincoln Life approved a provision that provided an additional match up to 50% for the 2000 Plan year based on the Company’s achieving a certain level of earnings over the three-year period from 1998 through 2000. This contribution was received in 2001. During 2000, the Employer contribution to the Plan matched 200% (150% maximum discretionary match plus additional 50% special match) of participant contributions up to 6% of eligible earnings.

Participants’ contributions are fully vested. Employer contributions vest based upon years of service as defined in the Plan document as follows:

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

The Employer has the right in accordance with the Plan to discontinue contributions at any time and terminate the Plan. In the event of termination of the Plan, all amounts allocated to participants’ accounts shall become vested.

The Plan allows loans to participants in amounts up to 50% of the vested account value to a maximum of $50,000 but not more than the total value of the participant’s account excluding Employer contributions that have not been in the Plan for two full years, less the highest outstanding loan balance in the previous twelve-month period. A participant may have a maximum of two loans outstanding at any one time. Interest charged on new loans to participants is established monthly based upon the prime rate plus 1%. Loans may be repaid over any period selected by the participant up to a maximum repayment period of five years except that the maximum repayment period may be 20 years for the purchase of a principal residence.

Upon termination of service due to disability, retirement or death, a participant or beneficiary, in case of the participant’s death, may elect to receive either a lump-sum amount equal to the entire value of the participant’s account, or an annuity. For termination of service due to other reasons, a participant may receive the value of the vested interest in his or her account as a lump-sum distribution. Vested account balances less than $5,000 are immediately distributable under the terms of the Plan, without the Participant’s consent, unless a timely election of rollover to an IRA or another qualified plan has been made.

Each participant’s account is credited with the participant’s contributions, matching contributions from the Employer and allocations of Plan earnings, and is charged with an allocation of administrative expenses. Allocations are based on participant account balances, as defined. The benefit to which a participant is entitled is the benefit that can be provided from the participant’s vested account. Forfeited non-vested amounts are used to reduce future Employer contributions.

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Lincoln National Corporation
Employees’ Savings and Profit-Sharing Plan

Notes to Financial Statements (continued)

3.     Investments

Individual investments greater than 5% of net assets available for plan benefits at December 31, 2001 and 2000 are as follows:

		December 31, 2001								December 31, 2000
		Number of								Number of
		Shares, Units				Fair				Shares, Units				Fair
		or Par Value				Value				or Par Value				Value
Common stock-Lincoln National Corporation			4,237,931			$	205,836,309	*			4,001,519			$	189,321,868	*
Pooled separate accounts-Lincoln Life:
Core Equity Fund			2,265,243.849				28,149,279				2,273,512.771				31,970,509
Medium Capitalization Equity Fund			2,163,209.272				25,320,365				2,130,732.632				37,330,238
Short-Term Fund			7,463,738.890				26,604,497				3,391,952.115				11,604,655
Large Capitalization Equity Fund			2,806,925.680				26,022,727				2,737,463.338				32,322,765
Investment contracts-Lincoln Life			47,198,430			$	47,198,430				43,507,208			$	43,507,208

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*

Nonparticipant-directed.

The investment contracts earned an average interest rate of approximately 5.97% and 6.26% in 2001 and 2000, respectively. The credited interest rates for new contributions, which approximate the current market rate, were 5.50% and 6.75% at December 31, 2001 and 2000, respectively. The rate on new contributions is guaranteed through the succeeding three calendar year quarters. The credited interest rate for the remaining contract value balance at December 31, 2001 and 2000 was 5.50% and 6.25%, respectively, and was determined based upon the performance of Lincoln Life’s general account. The credited interest rates change at least quarterly. The minimum guaranteed rate is 4.5% for the first five contract years, 4% for years 6-10 and 3.5% following year 10. The guarantee is based on Lincoln Life’s ability to meet its financial obligations out of its general assets. Restrictions may apply to the aggregate movement of funds to other investment options. The fair value of the investment contracts approximates contract value. Participants are allocated interest on the investment contracts based on the average rate earned on all Plan investments in the investment contracts.

During 2001 and 2000 the Plan’s investments (including investments bought, sold, as well as held during the year) appreciated (depreciated) in fair value as follows:

			2001				2000
Fair value as determined by quoted market price:
	Common stock		$	5,673,096			$	35,200,676
	Pooled separate accounts			(30,221,784	)			(10,792,223	)
Total			$	(24,548,688	)		$	24,408,453

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Lincoln National Corporation
Employees’ Savings and Profit-Sharing Plan

Notes to Financial Statements (continued)

4.     Nonparticipant-Directed Investments

Information about the net assets and the significant components of the changes in net assets relating to the nonparticipant-directed investments is as follows:

		December 31
		2001				2000
Assets
Common stock-Lincoln National Corporation		$	205,836,309			$	189,321,868
Wells Fargo Bank Short-Term Investment Fund			4,486,334				6,166,156
Total		$	210,322,643			$	195,488,024

			Year Ended December 31
			2001				2000
Change in net assets
Net realized and unrealized appreciation in fair value of investments			$	5,673,096			$	35,200,676
Investment income:
	Cash dividends			5,140,970				4,878,633
	Interest			254,637				313,066
Total investment income				5,395,607				5,191,699
Contributions:
	Participants			3,772,565				3,126,669
	Participating employers (net of forfeitures)			22,699,276				10,833,710
	Transfers from affiliated plans			3,675,051				—
Total contributions				30,146,892				13,960,379
Distributions to participants				(14,053,943	)			(9,511,268	)
Administrative expenses				(157,133	)			(92,924	)
Net transfers to participant-directed investments				(12,169,900	)			(16,724,295	)
Total change in net assets			$	14,834,619			$	28,024,267

5.     Income Tax Status

The Plan has received a determination letter from the Internal Revenue Service dated June 20, 1997, stating that the Plan is qualified under Section 401(a) of the Internal Revenue Code (the “Code”) and, therefore, the related trust is exempt from taxation. However, subsequent to the issuance of the favorable determination letter, the Plan was amended. Once qualified, the Plan, as amended, is required to operate in conformity with the Code to maintain its qualification. The Plan Administrator believes the Plan, as amended, is being operated in compliance with the applicable requirements of the Code and, therefore, believes that the Plan is qualified and the related trust is tax exempt.

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Lincoln National Corporation
Employees’ Savings and Profit-Sharing Plan

Notes to Financial Statements (continued)

6.     Transactions With Parties-In-Interest

The Plan has investments in common stock of LNC, and in pooled separate accounts and investment contracts with Lincoln Life of $205,836,309, $187,302,114 and $47,198,430, respectively, at December 31, 2001 (44.2%, 40.2% and 10.1% of net assets, respectively). LNC and Lincoln Life operate predominately in the insurance and financial services industries.

LNC and Lincoln Life also provide certain administrative services at no charge to the Plan. Trustee fees and additional expenses incurred solely for the LNC Stock Fund are charged directly to the LNC Stock Fund. Audit fees are charged to earnings of all investment funds based upon the market value of the respective funds applicable to each investment option. These transactions are exempt.

7.     Subsequent Event

In January of 2002, the board of directors of LNC adopted an amendment to the Plan effective January 1, 2002. This amendment now permits participants to direct discretionary employer contributions to any investment option without regard to when such contributions were made to the Plan. In addition, the amendment established an Employee Stock Ownership Plan as part of the Lincoln National Employees’ Savings and Profit-Sharing Plan. Participants will be allowed to take payment of LNC Common Stock dividends instead of having them reinvested in their participant accounts.

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SCHEDULES

 

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

Plan Number: 006
EIN: 35-0472300

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

December 31, 2001

			(c)
			Description of Investment
(b)			Including Maturity												(e)
Identity of Issuer, Borrower,			Date, Rate of Interest,								(d)				Current
Lessor or Similar Party			Par or Maturity Value								Cost				Value
*Common stock fund:
	Lincoln National Corporation Common Stock			4,237,931				shares			$	122,244,891			$	205,836,309
	Wells Fargo Bank Short-Term Investment Fund			4,486,333.52				par value				4,486,334				4,486,334
												126,731,225				210,322,643
*Pooled separate accounts-The Lincoln National Life Insurance Company:
	Core Equity Fund			2,265,243.849			participation units**									28,149,279
	Medium Capitalization Equity Fund			2,163,209.272			participation units**									25,320,365
	Short-Term Fund			7,463,738.890			participation units**									26,604,497
	Government/Corporate Bond Fund			2,041,970.572			participation units**									14,149,222
	Large Capitalization Equity Fund			2,806,925.680			participation units**									26,022,727
	Balanced Fund			1,267,473.995			participation units**									8,283,830
	High Yield Bond Fund			1,663,948.065			participation units**									4,220,438
	Small Capitalization Equity Fund			2,650,441.140			participation units**									16,910,080
	Value Equity Fund			3,974,490.127			participation units**									8,452,946
	International Equity Fund			1,483,435.266			participation units**									8,255,020
	Conservative Balanced Fund			499,101.210			participation units**									877,869
	Aggressive Balanced Fund			544,182.898			participation units**									1,069,646
	Delaware Growth and Income Fund			737,684.645			participation units**									1,170,189
	Deutsche VIT Equity 500 Index Fund			6,427,498.838			participation units**									5,904,300
	Fidelity VIP Contrafund			2,511,241.148			participation units**									2,351,275
	Neuberger Berman AMT Regency Fund			1,619,393.084			participation units**									1,560,933
	Social Awareness Fund			445,403.910			participation units**									411,642
	Janus Aspen Series Worldwide Growth Fund			3,457,157.962			participation units**									3,246,963
	Neuberger Berman Mid-Cap Growth Fund			2,711,870.821			participation units**									2,768,820
	Deutsche VIT Small Cap Index Fund			1,174,707.349			participation units**									1,341,516
	Janus Aspen Growth			20,419.641			participation units**									193,772
	Fidelity VIP Overseas			3,845.221			participation units**									36,785
																187,302,114
*Investment contracts-The Lincoln National Life Insurance Company (Guaranteed Fund)							5.52% interest rate									47,198,430
Participant loans			Various loans at interest rates varying from 6% to 10.5% due from 2002 to 2022													13,378,819
																458,202,006

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*		Indicates party-in-interest to the Plan.
**		Indicates a participant-directed fund. The cost disclosure is not applicable.

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Employees’ Savings and Profit-Sharing Plan

Plan Number: 006
EIN: 35-0472300

Schedule H, Line 4j-Schedule of Reportable Transactions

Year ended December 31, 2001

(h)

Current Value

(i)

(a)

(c)

(d)

(g)

of Assets on

Net

Identity of

(b)

Purchase

Selling

Cost of

Transaction

Gain

Party Involved

Description of Assets

Price

Price

Assets

Date

(Loss)

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

Wells Fargo Bank

Lincoln National Corporation

shares of common stock:

Purchases

$

23,697,701

$

23,697,701

$

23,697,701

Sales

$

9,695,398

4,973,114

9,695,398

$

4,722,284

Wells Fargo Bank

Lincoln National Life Insurance

Company Separate Accounts:

Short-Term Fund

Purchases

26,270,845

26,270,845

26,270,845

Sales

11,947,011

11,559,491

11,947,011

387,520

Wells Fargo Bank

Wells Fargo Bank Short-Term

Investment Fund:

Purchases

47,825,012

47,825,012

47,825,012

Sales

49,504,835

49,504,835

49,504,835

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

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SIGNATURE

THE PLAN. Pursuant to the requirements of the Securities Exchange Act of 1934, the Administrator of the Plan has duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.

June 14, 2002		By		/s/ George E. Davis George E. Davis Administrator

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