Additional Compensation and Conflicts of Interest

The Lincoln Investment Companies strive to provide to you objective investment advice to assist you in retiring well. Inherent in any recommendation, however, the potential for conflicts of interest may exist. This conflict can come from the compensation our FAs may receive on specific investments or advisory services, or it may come from the compensation that we may receive from third party providers as a result of your purchase of products, advisory or retirement plan services. It is important for you to understand these conflicts of interest so that you may make an informed decision to allow us to serve your investment needs. Below are some of the compensation factors that may affect your FA's recommendations or our decision as to the products and services that we offer. Should you have any questions about this information, please contact your FA.

Product and Pricing Choice. Our product sponsors have been chosen based on their ability to offer products that meet the financial needs of our investors. With the ever-expanding array of products and services and the complexity associated with many of today's investment choices, it is important for investors to work with a qualified financial professional. Our FAs are dedicated to assisting you in finding the right investment product. We have limited the product choices and product sponsors available to you and our FAs so that we can better prepare our FAs with product knowledge and information to better serve you.

Products and Services Compensation to your FA. Overall compensation to your FA, as a result of your investments with us, may be in the form of commissions, concessions, advisory fees, distribution fees, persistency fees, and contest prizes, such, as cash bonuses, trips and gifts.

As a registered representative, your FA typically will share in the compensation from the product sponsors that is received by us in the form of commissions or concessions as may be described in a prospectus, for the sale of such securities as mutual funds and variable annuities to you. We also receive from some product sponsors an ongoing distribution or servicing fee (also known as 12b-1 fees) of 1% or less for as long as your money remains invested in their product(s) that may be shared with your FA.

As an Advisory Representative, your FA shares in the advisory fees paid by you for our advisory services; and he/she may also share in the ongoing 12b-1 fee of 1% or less that may be received from the product sponsor(s) in which you are invested.

As a general insurance agent, your FA shares in the compensation received by us for the sale of insurance products to you, such as, life, health, disability, long term care, and fixed annuity products.

Additional Compensation to Lincoln Investment, as broker dealer. In addition to sharing in the compensation described above, Lincoln Investment receives from certain product sponsors compensation over and above published commission schedules, advisory fees and concessions. This compensation may be paid for administrative services provided to the product sponsor or they may be paid by the product sponsor to Lincoln Investment in order to provide to us sales and marketing support. Those with whom Lincoln Investment has entered into agreements for sales and marketing support are deemed "Strategic Partners." The sales and marketing support provided by Strategic Partners includes, but is not limited to, allowing the Strategic Partner to educate our FAs about their products and services; inclusion of such products or services on Lincoln Investment's platforms (if the product meets our product approval criteria); allowing our FA's to attend Strategic Partners' due diligence conferences and educational sessions hosted by either Lincoln Investment and/or the Strategic Partner (for which attending FAs may be reimbursed for their out-of-pocket travel expenses only.) It is also typical that our Strategic Partners assists Lincoln Investment financially with conferences or events such as investor appreciation, educational or product seminars. In these cases, Lincoln Investment and the FAs maintain control of the agenda and attendees and the FA's participation is not conditional on sales targets.

This financial support is paid to Lincoln Investment in the form of flat-dollar event sponsorship fees, asset-based compensation or sales-based compensation ranging from $1.00 per $10,000 to $25 per $10,000, or reimbursement of actual expenses incurred. Other than expense reimbursements, this compensation is not shared with FAs. Additional compensation paid to Lincoln Investment is not shared directly with FAs, their managers or designated supervisors, other than reimbursement of expenses from attendance at educational meetings sponsored by the product providers.

Additional compensation may also include brokerage commissions received by Lincoln Investment resulting from the execution of portfolio transactions on behalf of an investment company. There is no written or verbal agreement or arrangement whereby a product sponsor is required to direct a certain amount or any brokerage to Lincoln Investment, based upon the assets invested in a sponsor's products. Consequently, Lincoln Investment cannot anticipate if sponsors will place trades through the broker-dealer in the future. Lincoln Investment executed no trades for product sponsors' portfolios in 2013.