As filed with the Securities and Exchange Commission on September 15,1994
Registration No. 33-55379
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_____________________
AMENDMENT NO. 1 to
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
_____________________
LINCOLN NATIONAL CORPORATION
(Exact name of registrant as specified in its charter)
INDIANA 35-1140070
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
200 East Berry Street
Fort Wayne, Indiana 46802-2706
(219) 455-2000
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
JACK D. HUNTER, ESQ.
Executive Vice President and General Counsel
200 East Berry Street
Fort Wayne, Indiana 46802-2706
(219) 455-2000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
_____________________
Copy to:
ARTHUR J. SIMON
GARDNER, CARTON & DOUGLAS
321 North Clark Street, Quaker Tower
Chicago, Illinois 60610
(312) 245-8451
and
JOHN L. STEINKAMP
Vice President and Associate General Counsel
LINCOLN NATIONAL CORPORATION
1300 South Clinton Street
Fort Wayne, Indiana 46802
(219)455-3628
Approximate date of commencement of the proposed sale to the public:
From time to time after the effective date of this Registration Statement as
determined in light of market conditions.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. | |
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. |X|
__________________
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933, as amended, or until this
Registration Statement shall become effective on such date as the Commission,
acting pursuant to said Section 8(a), may determine.
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT.
A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD
NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL
OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.
Subject to Completion, Dated September 15, 1994
LINCOLN NATIONAL CORPORATION
COMMON STOCK, PREFERRED STOCK AND DEBT SECURITIES
Lincoln National Corporation (the "Company") from time to time may offer
up to $500,000,000 aggregate public offering price (or the equivalent in
foreign denominated currencies or composite currencies) of its (i) unsecured
securities consisting of notes, debentures and or other unsecured evidences of
indebtedness ("Debt Securities"), (ii) Preferred Stock (without par value)
("Preferred Stock"),or (iii) Common Stock (without par value)("Common Stock").
The Debt Securities, Preferred Stock and Common Stock (collectively, the
"Securities") may be offered either together or separately and will be offered
in amounts, at prices and on terms to be determined at the time of offering.
The Company may sell Securities directly, through agents designated from
time to time, through dealers or one or more underwriters, or through a
syndicate of underwriters managed by one or more underwriters. See "Plan of
Distribution."
Certain specific terms of the particular Securities in respect of which
this Prospectus is being delivered ("Offered Securities")are set forth in the
accompanying Prospectus Supplement ("Prospectus Supplement"),including, where
applicable, the initial public offering price of the Securities, the listing
on any securities exchange, other special terms, and (i) in the case of Debt
Securities, the specific designation, aggregate principal amount, the
denomination, maturity, premium, if any, the rate (which may be fixed or
variable), time and method of calculating payment of interest, if any, the
place or places where principal of, premium, if any, and interest, if any, on
such Debt Securities will be payable, the currency in which principal of,
premium, if any, and interest, if any, on such Debt Securities will be
payable, any terms of redemption at the option of the Company or the holder,
any sinking fund provisions and any terms for conversion or exchange into
Common Stock and (ii) in the case of Preferred Stock, the specific title and
stated value, any dividend, liquidation, redemption, voting and other rights
and any terms for exchange for Debt Securities or conversion or exchange into
Common Stock. The Prospectus Supplement sets forth the names of any
underwriters, dealers or agents involved in the distribution of the Offered
Securities and any applicable discounts, commissions or allowances. If so
specified in the applicable Prospectus Supplement, Offered Securities may be
issued in whole or in part in the form of one or more temporary or permanent
global securities.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
This Prospectus may not be used to consummate sales of Securities unless
accompanied by a Prospectus Supplement.
The date of this Prospectus is September 15, 1994
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<PAGE>
No person is authorized to give any information or to make any
representations other than those contained or incorporated by reference in
this Prospectus or any Prospectus Supplement and, if given or made, such
information or representations must not be relied upon as having been
authorized by the Company or any underwriter, dealer or agent. Neither this
Prospectus nor any Prospectus Supplement constitutes an offer to sell or a
solicitation of an offer to buy any securities other than the registered
securities to which it relates or an offer to sell or a solicitation of an
offer to buy such securities in any circumstance in which such offer or
solicitation is unlawful. Neither the delivery of this Prospectus or any
Prospectus Supplement nor any sale made hereunder or thereunder shall, under
any circumstances, create any implication that there has been no change in
the affairs of the Company since the date hereof or thereof or that the
information contained or incorporated by reference herein
or therein is correct as of any time subsequent to its date.
AVAILABLE INFORMATION
The Company is subject to the information requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports and other information with the Securities and Exchange
Commission (the "Commission"). Such reports, proxy statements and other
information filed by the Company with the Commission may be inspected and
copied at the public reference facilities maintained by the Commission at Room
1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and
are also available for inspection and copying at the regional offices of the
Commission located at 75 Park Place, New York, New York 10007 and at
Northwestern Atrium Center, 500 West Madison Street, Suite 1400 , Chicago,
Illinois 60661. Copies of such information can also be obtained by mail from
the Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549 at prescribed rates. In addition, such information
can be inspected at the offices of the New York Stock Exchange, Inc. at 20
Broad Street, New York, New York 10005, at the offices of the Chicago Stock
Exchange, Inc. at 440 South LaSalle Street, Chicago, Illinois, 60603 and at
the offices of the Pacific Stock Exchange, Inc. at 301 Pine Street,
San Francisco, California 94104.
This Prospectus constitutes a part of a registration statement filed on
Form S-3 (herein, together with all amendments and exhibits, referred to as
the "Registration Statement") by the Company with the Commission under the
Securities Act of 1933, as amended (the "Securities Act"). This Prospectus
omits certain of the information contained in the Registration Statement, and
reference is hereby made to the Registration Statement for further information
with respect to the Company. Any statements contained herein concerning the
provisions of any document are not necessarily complete and, in each
instance, reference is made to the copy of each document filed as an exhibit
to the Registration Statement or otherwise filed with the Commission. Each
such statement is qualified in its entirety by such reference. The Company
is not required to, and does not,provide annual reports to holders of its
debt securities unless specifically requested by a holder.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company's Annual Report on Form 10-K for its fiscal year ended
December 31,1993, Quarterly Reports on Form 10-Q for the quarters ended
March 31 and June 30,1994 (as amended on Form 10-Q/A) and Current Report
on Form 8-K dated March 29, 1994 filed with the Commission pursuant to
Section 13 of the Exchange Act are incorporated herein by reference.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act subsequent to the date of this Prospectus and
prior to the termination of the offerings of the Common Stock, Preferred
Stock and Debt Securities made by the prospectuses included in the
Registration Statement are deemed incorporated herein by reference and such
documents shall be deemed to be a part hereof from the date of filing of such
documents. Any statement contained herein or in a document incorporated or
deemed to be incorporated by reference herein shall be deemed
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<PAGE>
to be modified or superseded for purposes of this Prospectus to the extent
that any statement contained herein or in any subsequently filed document
which also is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a
part of this Prospectus.
The Company will provide without charge, upon written or oral request, to
each person to whom a copy of this Prospectus is delivered a copy of any of
the documents incorporated by reference herein (not including the exhibits to
such documents, unless such exhibits are specifically incorporated by
reference in such documents). Requests should be directed to C. Suzanne
Womack, Secretary, Lincoln National Corporation, 200 East Berry Street,
Fort Wayne, Indiana, 46802-2706, telephone number (219) 455-3271.
FOR NORTH CAROLINA RESIDENTS: THE COMMISSIONER OF INSURANCE OF THE STATE
OF NORTH CAROLINA HAS NOT APPROVED OR DISAPPROVED THIS OFFERING NOR HAS THE
COMMISSIONER PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
IN CONNECTION WITH ANY OFFERINGS OF COMMON STOCK, THE UNDERWRITERS MAY
OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE
OF THE COMMON STOCK AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE
OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK, CHICAGO OR
PACIFIC STOCK EXCHANGES OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE
DISCONTINUED AT ANY TIME.
[End of Second Page of Prospectus]
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<PAGE>
THE COMPANY
The Company is an insurance holding company with consolidated assets at
June 30, 1994, of approximately $47.8 billion and shareholders' equity of
approximately $3.3 billion. The Company, through its subsidiaries, provides
property-casualty insurance, life insurance and annuities and life-health
reinsurance to its customers.
The Property-Casualty segment's products are comprised substantially of
exposures that tend to produce claims that are reported and settled in the
short-term. Products are distributed nationally, with an emphasis on desirable
business environments, and target small and medium-sized commercial accounts
and preferred personal line customers.
The Life Insurance and Annuity segment provides a broad range of life
insurance and annuity contracts through a variety of distribution channels.
This segment attempts to differentiate its products through quality service
and flexibility. Universal life is the dominant life insurance product.
Both fixed and variable annuities have registered strong growth during the
past several years.
For the six months ended June 30, 1994 and for the year ended
December 31, 1993, the Company's consolidated revenue and net income were as
follows:
<TABLE>
<CAPTION>
Six Months Year Ended
Ended June 30, 1994 December 31, 1993
Revenue Net Income Revenue Net Income
(millions of dollars)
<S> <C> <C> <C> <C>
Property-Casualty....................... $1,002.8 $ 67.8 $2,240.6 $ 225.7
Insurance and Annuities.............. 1,255.6 57.1 2,858.3 234.6
Life-Health Reinsurance............... 913.5 29.2 1,930.5 17.3
Employee Life-Health Benefits <F1> 314.9 14.4 1,297.3 55.3
Other Operations <F2>.................. 64.5 29.3 (36.9) (214.0)
Total................................... $3,551.3 $197.8 $8,289.8 $ 318.9
<FN>
<F1> Data shown for the six months ended June 30, 1994 is for the January 1, 1994 through
March 21, 1994 (the date on which the Company sold to the public64% of the
outstanding shares of the subsidiary involved in this segment)
</FN>
<FN>
<F2> Net Income for "Other Operations" for the year ended December 31, 1993 consists of
$19.8 million in net realized capital gains, a loss of $98.5 million from the sale of a
subsidiary, a charge of $96.4 million for the adoption of an accounting charge (post-
retirement benefits) and $38.9 million of corporate expenses and interest on corporate
debt.
</FN>
</TABLE>
Lincoln National Corporation is an Indiana corporation with its
principal office at 200 East Berry Street, Fort Wayne, Indiana 46802-2706.
Its telephone number is (219) 455-2000.
USE OF PROCEEDS
Unless otherwise indicated in the accompanying Prospectus Supplement,
the net proceeds to the Company from the sale of Securities offered hereby will
be used for general corporate purposes and may be used for the repayment of
short-term debt, or to fund future acquisitions, capital expenditures or
working capital needs. Specific allocations of the proceeds for the various
purposes have not been made at this time, and the amount and timing of such
offerings will depend upon the Company's requirements and the availability of
other funds. All or a portion of the proceeds may be invested on a temporary
basis in short-term, interest-bearing securities. The specific allocations of
the proceeds of a particular series or issuance of Securities will be described
in the Prospectus Supplement relating thereto.
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<PAGE>
RISK FACTORS RELATING TO CURRENCIES
Debt Securities denominated or payable in foreign currencies may entail
significant risks. These risks include, without limitation,the possibility of
significant fluctuations in foreign currency exchange rates. These risks may
vary depending upon the currency or currencies involved. These risks will be
more fully described in the Prospectus Supplement relating thereto.
<TABLE>
<CAPTION>
HISTORICAL RATIO OF EARNINGS TO FIXED CHARGES
Six months
ended
June 30, Year Ended December 31,
1994 1993 1993 1992 1991 1990 1989
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges:
Excluding interest on
annuities and financial
products <f/1>...........................7.90 8.99 10.35 6.69 3.04 3.04 4.01
Including interest on
annuities and financial
products <f/2>.......................... 1.33 1.36 1.43 1.32 1.16 1.18 1.34
Ratio of earnings to combined
fixed charges and preferred
stock dividends <F/3>.................. 1.31 1.34 1.40 1.30 1.15 1.17 1.31
<FN>
<f/1> For purposes of determining this ratio, earnings consist of income before federal
income taxes and cumulative effect of accounting change adjusted for the difference
between income or losses from unconsolidated equity investments and cash distributions
from such investments, plus fixed charges. Fixed charges consist of interest expense
on debt and the portion of operating leases that are representative of the interest
factor.
<f/2> Same as the ratio of earnings to fixed charges, excluding interest on annuities
and financial products, except fixed charges and earnings include interest on
annuities and financial products.
<f/3> Same as the ratio of earnings to fixed charges, including interest on annuities
and financial products, except that fixed charges include the pre-tax earnings
required to cover preferred stock dividend requirements.
</FN>
</TABLE>
DESCRIPTION OF DEBT SECURITIES
The Debt Securities may be issued in one or more series under an
Indenture (the "Indenture"), between the Company and The Bank of New York,
as trustee (the "Trustee"), a copy of which is included as an exhibit to
the Registration Statement filed with the Commission with respect to the
Debt Securities. The following summaries of certain provisions of the
Indenture are not complete and are subject to, and are qualified in their
entirety by reference to, all provisions of the Indenture. Certain terms
defined in the Indenture are capitalized in this Prospectus.
Parenthetical references are to the Indenture.
General
The Debt Securities will be unsecured and will rank on the parity with
all other unsecured and unsubordinated indebtedness of the Company.
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<PAGE>
The Indenture does not limit the amount of Debt Securities which may be
issued thereunder and provides that Debt Securities may be issued up to the
aggregate principal amount which may be authorized from time to time by the
Company. Reference is made to the Prospectus Supplement for the following
terms of Debt Securities being offered thereby; (i) the title, aggregate
principal amount and authorized denominations of Debt Securities; (ii) the
percentage of their principal amount at which such Debt Securities will be
issued; (iii) the date or dates on which Debt Securities will mature; (iv)
the rate or rates per annum (which may be fixed or variable), if any, at
which Debt Securities will bear interest (or the method of determination or
calculation thereof); (v) the times at which any such interest will be
payable; (vi) the currency or units based on or relating to currencies in
which the Debt Securities are denominated and in which principal, premium,
if any, any interest and Additional Amounts (as defined below) will or may
be payable; (vii) the dates, if any, on which and the price or prices at
which the Debt Securities will, pursuant to any mandatory sinking fund
provisions, or may, pursuant to any optional sinking fund provisions, be
redeemed by the Company, and other terms and provisions of sinking fund;
(viii) any redemption terms or any terms for repayment of principal
amount at the option of the holder; (ix) whether and under what circumstances
the Company will pay additional amounts ("Additional Amounts") in respect of
certain taxes imposed on certain holders or as otherwise provided; (x) the
terms and conditions upon which such Debt Securities may be convertible into
shares of Common Stock or other securities of the Company, including the
conversion price, conversion period and other conversion provisions; (xi)
the defeasance provisions, if any, that are applicable to such Debt
Securities; (xii) whether the Debt Securities are to be issuable in global
form and, if so, the terms and conditions, if any, upon which interests in
such Debt Securities in global form may be exchanged, in whole or in part,
for the individual Debt Securities represented thereby and the initial
Depository with respect to such global Debt Security; (xiii) the person to
whom any interest on a Registered Security is payable, if other than the
registered holder thereof, or the manner in which any interest is payable
on a Bearer Security if other than upon presentation of the coupons
pertaining thereto, as the case may be; or (xiv) any other specific terms
of such Debt Securities.
Principal, interest and premium and Additional Amounts, if any, will be
payable in the manner, at the places and subject to the restrictions set
forth in the Indenture, the Debt Securities and the Prospectus Supplement
relating thereto.
Unless otherwise indicated in the Prospectus Supplement relating
thereto, the Debt Securities will be issued in fully registered form without
coupons. Where Debt Securities of any series are issued in bearer form, the
special restrictions and considerations, including special offering
restrictions and special Federal income tax considerations, applicable to any
such Debt Securities and to payment on and transfer and exchange of such Debt
Securities will be described in the applicable Pricing Supplement.
Some of the Debt Securities may be issued as discounted Debt Securities
(bearing no interest or at a rate which at the time of issuance is below
market rates) to be sold at the substantial discount below their stated
principal amount. Federal income tax consequences and other special
considerations applicable to any such discounted Debt Securities will be
described in the Prospectus Supplement relating thereto.
If the purchase price of any Debt Securities is payable in one or more
foreign currencies or currency units or if any Debt Securities are
denominated in one or more foreign currencies or currency units or if the
principal of, premium, if any, or interest, if any, on any Debt Securities
is payable in one or more foreign currencies or currency units, the
restrictions, elections, certain Federal income tax considerations, specific
terms and other information with respect to such issue of Debt Securities
and such foreign currency or currency units will be set forth in the
applicable Prospectus Supplement.
Debt Securities may be presented for exchange, and registered Debt
Securities may be presented for transfer, in the manner, at the places and
subject to the restrictions set forth in the Indenture, the Debt Securities
and the Prospectus Supplement relating thereto. Debt Securities in
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bearer form and the coupons, if any,appertaining thereto will be transferable
by delivery. No service charge will be made for any transfer or exchange of
Debt Securities, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
(Section 2.06)
Unless otherwise indicated in the applicable Prospectus Supplement, the
covenants contained in the Indenture and the Debt Securities would not
necessarily afford Holders of the Debt Securities protection in the event
of a highly leveraged or other transaction involving the Company that may
adversely affect Holders.
If the Debt Securities are convertible into shares of Common Stock,
the conversion price payable and the number of shares purchasable upon
conversion may be subject to adjustment in certain events as set forth in
the applicable Prospectus Supplement.
Form, Registration, Transfer and Exchange
The Debt Securities of a series may be issued solely as Registered
Securities, solely as Bearer Securities (with or without coupons attached) or
as both Registered Securities and Bearer Securities. Debt Securities of a
series may be issuable in whole or part in the form of one or more global
Debt Securities ("Global Securities"), as described below under "Book-Entry
Debt Securities."
Registered Securities of any series will be exchangeable for other
Registered Securities of the same series of any authorized denominations
and of a like aggregate principal amount and tenor. In addition, if Debt
Securities of any series are issuable as both Registered Securities and as
Bearer Securities, at the option of the holder, subject to the terms of the
Indenture, Bearer Securities (accompanied by all unmatured coupons, except
as provided below, and all matured coupons in default) of such series will
be exchangeable for Registered Securities of the same series of any
authorized denominations and of a like aggregate principal amount and tenor.
Unless otherwise indicated in the applicable Prospectus Supplement, any Bearer
Security surrendered in exchange for a Registered Security between a record
date or a special record date for defaulted interest and the relevant date
for payment of interest will be surrendered without the coupon relating to
such date for payment of interest and interest will not be payable in respect
of the Registered Security issued in exchange for such Bearer Security, but
will be payable only to the holder of such coupon when due in accordance
with the terms of the Indenture. Bearer Securities will not be issued in
exchange for Registered Securities. (Sections 2.06, 2.12 and 4.01)
Debt Securities may be presented for exchange as provided above, and
unless otherwise indicated in the applicable Prospectus Supplement, Registered
Securities may be presented for registration of transfer (duly endorsed, or
accompanied by a duly executed written instrument of transfer), at the office
of any transfer agent designated by the Company for such purpose with respect
to any series of Debt Securities and referred to in the applicable Prospectus
Supplement, without service charge and upon payment of any taxes and other
governmental charges as described in the Indenture. Such transfer or exchange
will be effected upon such transfer agent being satisfied with the documents
of title and identity of the person making the request. The Company may at
any time rescind the designation of any transfer agent,provided,however, that
no such designation or rescission shall in any manner relieve the Company
of its obligation to maintain an office or agency in each Place of Payment
for Debt Securities of such series. The Company may at any time designate
additional transfer agents with respect to any series of Debt Securities.
(Sections 2.06 and 4.02)
In the event of any redemption of Debt Securities of any series, the
Company will not be required to (i) register the transfer of or exchange Debt
Securities of that series during a period of 15 days next preceding the
selection of securities of such series to be redeemed; (ii) register the
transfer of or exchange any Registered Security, or portion thereof, called
for redemption, except the unredeemed portion of any Registered Security
being redeemed in part; or (iii) exchange any Bearer
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Security called for redemption except, to the extent provided with respect to
any series of Debt Securities and referred to in the applicable Prospectus
Supplement, to exchange such Bearer Security for a Registered
Security of that series and of like tenor and principal amount that is
immediately surrendered for redemption. (Section 2.06)
Payment and Paying Agents
Unless otherwise indicated in the applicable Prospectus Supplement,
payment of principal, interest and Additional Amounts, if any, on Registered
Securities will be made at the office of such paying agent or paying agents
as the Company may designate from time to time, except that at the option of
the Company payment of any interest and any Additional Amounts may be made by
check or draft mailed to the address of the Person entitled thereto as such
address shall appear in the Debt Security Register. Unless indicated in an
applicable Prospectus Supplement, payment of any installment of interest on
Registered Securities will be made to the Person in whose name such
Registered Security is registered at the close of business on the record
date for such interest. (Section 4.01)
Unless otherwise indicated in the applicable Prospectus Supplement,
payment of principal and interest or Additional Amounts, if any, on Bearer
Securities will be payable, subject to any applicable laws and regulations, at
the offices of such paying agents outside the United States as the Company may
designate from time to time, or by check or by transfer to an account
maintained by the payee outside the United States. Unless otherwise
indicated in the applicable Prospectus Supplement, any payment of interest
on any Bearer Securities will be made only against surrender of the coupon
relating to such interest installment. (Sections 2.06 and 4.02)
Any paying agents in or outside the United States initially designated
by the Company for the Debt Securities will be named in the applicable
Prospectus Supplement. If the Debt Securities of a series are listed on a
stock exchange located outside the United States, and such stock exchange
shall so require, the Company will maintain a paying agent with respect to
such series in London, Luxembourg or any other city so required located
outside the United States so long as the Debt Securities of such series are
listed on such exchange. The Company may at any time designate additional
paying agents or rescind the designation of any paying agent, provided,
however, that no such designation or rescission shall in any manner relieve
the Company of its obligation to maintain an office or agency in each Place
of Payment. (Section 4.02)
All monies paid by the Company to a paying agent for the payment of
principal of or interest or Additional Amounts, if any, on any Debt Security
which remain unclaimed at the end of one year after such principal, interest
or Additional Amounts shall have become due and payable will be repaid to the
Company and the holder of such Debt Security or any coupon will thereafter
look only to the Company for payment thereof. (Section 4.03)
Book-Entry Debt Securities
The Debt Securities of a series may be issued in the form of one or more
Global Securities that will be deposited with a Depository or its nominee
identified in the applicable Prospectus Supplement. In such a case, one or
more Global Securities will be issued in a denomination or aggregate
denominations equal to the portion of the aggregate principal amount of
outstanding Debt Securities of the series to be represented by such Global
Security or Global Securities. Unless and until it is exchanged in whole or
in part for Debt Securities in registered form, a Global Security may not,
subject to certain exceptions, be registered for transfer or exchange except
to the Depository for such Global Security or a nominee of such Depository.
(Section 2.06)
The specific terms of the depository arrangement with respect to any
portion of a series of Debt Securities to be represented by a Global Security
will be described in the applicable Prospectus
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Supplement. The Company expects that the provisions described below will be
applicable to depository arrangements.
Unless otherwise specified in the applicable Prospectus Supplement, Debt
Securities which are to be represented by a Global Security to be deposited
with or on behalf of a Depository will be represented by a Global Security
registered in the name of such Depository or its nominee. Upon the issuance
of such Global Security and the deposit of such Global Security with or on
behalf of the Depository for such Global Security, the Depository will credit
on its book-entry registration and transfer system the respective principal
amounts of the Debt Securities represented by such Global Security to the
accounts of institutions that have accounts with such Depository or its
nominee ("participants"). The accounts to be credited will be designated by
the underwriters or agents of such Debt Securities or by the Company if such
Debt Securities are offered and sold directly by the Company. Ownership of
beneficial interests in such Global Security will be limited to participants
or persons that may hold interests through participants. Ownership of
beneficial interest by participants in such Global Security will be shown on,
and the transfer of that ownership interest will be effected only through,
records maintained by the Depository for such Global Security. Ownership of
beneficial interests in such Global Security by persons that hold through
participants will be shown on, and the transfer of that ownership interest
within such participant will be effected only through, records maintained
by such participant. The laws of some jurisdictions require that certain
purchasers of securities take physical delivery of such securities in
certificated form. The foregoing limitations and such laws may impair the
ability to transfer beneficial interests in such Global Securities.
So long as the Depository for a Global Security or its nominee is the
registered owner of such Global Security, such Depository or such nominee,
as the case may be, will be considered the sole owner or holder of the Debt
Securities represented by such Global Security for all purposes under the
Indenture. Unless otherwise specified in the applicable Prospectus
Supplement, owners of beneficial interests in such Global Security will
not be entitled to have Debt Securities of the series represented by such
Global Security registered in their names, will not receive or be entitled
to receive physical delivery of Debt Securities of such series in
certificated form and will not be considered the holders thereof for any
purposes under the Indenture. (Sections 2.06 and 11.03) Accordingly,
each person owning a beneficial interest in such Global Security must rely
on the procedures of the Depository and, if such person is not a participant
on the procedures of the participant through which such person owns its
interest to exercise any rights of a holder under the Indenture.
The Company understands that, under existing industry practices, if the
Company requests any action of holders or an owner of a beneficial interest
in such Global Security desires to give any notice or take any action a
holder is entitled to give or take under the Indenture, the Depository
would authorize the participants to give such notice or take such action,
and participants would authorize beneficial owners owning through such
participants to give such notice or take such action or would otherwise
act upon the instructions of beneficial owners owning through them.
Principal of and any premium, interest and Additional Amounts on a
Global Security, will be payable in the manner described in the applicable
Prospectus Supplement.
Limitation on Liens on Stock of Restricted Subsidiaries
The Company will not, nor will it permit any Restricted Subsidiary to,
issue, assume or guarantee any indebtedness for borrowed money (hereinafter
referred to as "Debt") secured by a mortgage, security interest, pledge, lien
or other encumbrance upon any shares of stock of any Restricted Subsidiary
without effectively providing that the Debt Securities (together with, if the
Company shall so determine, any other indebtedness of or guarantee by the
Company ranking equally with the Debt Securities and then existing or
thereafter created) shall be secured equally and ratably with such Debt.
(Section 4.06).
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For purposes of the Indenture, "Restricted Subsidiary" means each of
American States Insurance Company and The Lincoln National Life Insurance
Company so long as it remains a subsidiary, as well as any successor to all
or a principal part of the business of any such subsidiary and any other
subsidiary which the Board of Directors designates as a Restricted
Subsidiary. (Section 1.01) The Restricted Subsidiaries accounted for
approximately 56% of the consolidated revenues of the Company during the year
ended December 31, 1993, and 85% of the consolidated assets of the Company
at December 31, 1993.
Limitation on Issuance or Disposition of Stock of Restricted Subsidiaries
The Company will not, nor will it permit any Restricted Subsidiary to,
issue, sell, assign, transfer or otherwise dispose of, directly or indirectly,
any Capital Stock (other than nonvoting preferred stock) of any Restricted
Subsidiary, except for (i) the purpose of qualifying directors; (ii) sales or
other dispositions to the Company or one or more Restricted Subsidiaries;
(iii)the disposition of all or any part of the Capital Stock of any Restricted
Subsidiary for consideration which is at least equal to the fair value of such
Capital Stock as determined by the Company's Board of Directors(acting in good
faith); or (iv) an issuance, sale, assignment, transfer or other disposition
required to comply with an order of a court or regulatory authority of
competent jurisdiction, other than an order issued at the request of the
Company or any Restricted Subsidiary.(Section 4.07)
For the purposes of the Indenture, "Capital Stock" means any and all
shares, interests, rights to purchase, warrants, options, participations or
other equivalents of or interests in (however designated) corporate stock.
(Section 1.01)
Defaults and Remedies
An Event of Default with respect to Debt Securities of any series is
defined in the Indenture as being: (a) default for 30 days in payment of any
interest or Additional Amounts on the Debt Securities of such series; (b)
default in payment of principal or premium, if any, on the Debt Securities
of such series when due either at maturity, upon redemption, by declaration
or otherwise (except a failure to make payment resulting from mistake,
oversight or transfer difficulties not continuing for more than 3 Business
Days beyond the date on which such payment is due); (c) default in payment of
any sinking fund installment when due and payable (except a failure to make
payment resulting from mistake, oversight or transfer difficulties not
continuing for more than 3 Business Days beyond the date on which such
payment is due); (d) default by the Company in the performance or breach of
any other covenant or warranty of the Company in respect of the Debt
Securities of such series for a period of 60 days after notice thereof to
the Company or Trustee; (e) certain events involving the bankruptcy or
insolvency of the Company; or (f) other Events of Default as specified in
the Supplemental Indenture or Board Resolution under which series of Debt
Securities was issued. (Section 6.01)
The Indenture provides that (1) if an Event of Default described in
clauses (a),(b),(c) or, in the event of a default with respect to less than
all Outstanding series under the Indenture, (d) above shall have occurred and be
continuing with respect to one or more series, either the Trustee or the
holders of 25 percent in principal amount of the Debt Securities of such
series then Outstanding (each such series voting as a separate class) may
declare the principal (or, in the case of original issue discount Debt
Securities, the portion thereof specified in the terms thereof) of all
Outstanding Debt Securities of such series and the interest accrued thereon
and Additional Amounts payable in respect thereof, if any, to be due and
payable immediately and (2) if an Event of Default described in clause (d)
(in the event of a default with respect to all Outstanding series) or (e)
above shall have occurred and be continuing, either the Trustee or the
holders of 25 percent in principal amount of all Debt Securities then
Outstanding (voting as one class) may declare the principal (or, in the
case of original issue discount Debt Securities, the portion of the
principal amount thereof specified in the terms thereof) of all Debt
Securities then Outstanding and the interest accrued thereon and Additional
Amounts payable in respect thereof, if any, to be due and payable immediately,
but upon certain conditions such
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declarations may be annulled and past defaults (except for defaults in the
payment of principal of, or premium, interest or Additional Amounts, if any,
on such Debt Securities) may be waived by the holders of a majority in
principal amount of the Debt Securities of such series (or of all series,
as the case may be) then Outstanding. (Sections 6.01 and 6.10)
Holders may not enforce the Indenture or the Debt Securities except as
provided in the Indenture. The Trustee may refuse to enforce the Indenture or
the Debt Securities unless it receives indemnity satisfactory to it. Subject to
certain limitations, holders of a majority in principal amount of the Debt
Securities of any series may direct the Trustee in its exercise of any trust
or power. The Company is required to deliver annually to the Trustee an
officer's statement indicating whether the signer knows of any default by the
Company in performing any of its obligations under the Indenture. The
Trustee may withhold from Holders notice of any continuing default (except
a default in payment of principal, premium, if any, interest or Additional
Amounts, if any, or any sinking or purchase fund installment) if it
determines that withholding notice is in their interest.
(Sections 4.05, 6.06, 6.09, 6.11, 7.01 and 7.05).
Defeasance
Unless otherwise described in a Prospectus Supplement with respect to
any series of Debt Securities, the Company, at its option, (a) will be
discharged from any and all obligations in respect of such Debt Securities
(except in each case for certain obligations to register the transfer or
exchange of such Debt Securities, replace stolen, lost or mutilated Debt
Securities, maintain paying agencies and hold moneys for payment in trust)
on the ninety-first day after satisfaction of all conditions thereto or (b)
effective upon the satisfaction of all conditions thereto, need not comply
with certain restrictive covenants (including any covenants or agreements
applicable with respect to a particular series of Debt Securities) under the
Indenture and will not be limited by any restrictions with respect to merger,
consolidation or sales of assets, in each case if the Company deposits with
the Trustee, in trust, (x) money or (y) Government Obligations or a
combination of (x) and (y) which, through the payment of interest thereon
and principal thereof in accordance with their terms, will in the written
opinion of independent public accountants selected by the Company
provide money in an amount sufficient to pay all the principal (including any
mandatory sinking fund payments) of, and interest and Additional Amounts,
if any, and premium, if any, on, such Debt Securities on the dates such
payments are due in accordance with the terms of such series. (Section 8.02)
In order to avail itself of either of the foregoing options, no Event or
Default shall have occurred and be continuing under the Indenture and the
Company must provide to the Trustee (i) an opinion of counsel to the effect
that holders of the Debt Securities of such series will not recognize income,
gain or loss for Federal income tax purposes as a result of the Company's
exercise of its option and will be subject to Federal income tax on the same
amount and in the same manner, and at the same time as would have been the
case if such option had not been exercised and, in the case of Debt
Securities being discharged, such opinion shall be accompanied by a private
letter ruling to that effect received from the United States Internal
Revenue Service (the "Service") or a revenue ruling pertaining to a
comparable form of transaction to that effect published by the Service,
(ii) an officers' certificate to the effect that no Event of event which
with the giving of notice or lapse of time, or both, would become an
Event of Default, with respect to such Debt Securities shall have occurred
and be continuing on the date of the deposit, and (iii) if the Debt
Securities are listed on the New York Stock Exchange, an opinion of counsel to
the effect that the exercise of such option will not cause the Debt
Securities to be delisted. (Section 8.02) "Government Obligations" means
generally direct noncallable obligations of the government which issued the
currency in which the Debt Securities of the applicable series are
denominated, noncallable obligations the payment of the principal of and
interest on which is fully guaranteed by such government, and noncallable
obligations on which the full faith and credit of such government is
pledged to the payment of the principal thereof and interest thereon.
(Section 1.01). In addition, the Company may obtain a discharge under
the Indenture with respect to all the Debt Securities of a series by
depositing with the Trustee, in trust, moneys or Government Obligations
sufficient to pay at maturity or upon redemption principal of, premium,
if any, and any interest and Additional Amounts on, all of
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the Debt Securities of such series, provided that all of the Debt Securities of
such series are by their terms to become due and payable within one year or
are to be called for redemption within one year. No opinion of counsel or
ruling relating to the tax consequences to holders is required with respect
to a discharge pursuant to the provisions described in the immediately
preceding sentence. (Section 8.01) In the event of any discharge of
Debt Securities pursuant to the terms of the Indenture described above,
the holders of such Debt Securities will thereafter be able to look solely
to such trust fund, and not to the Company, for payments of principal,
premium, if any, and interest and Additional Amounts, if any. (Sections 8.01
and 8.02)
Consolidation, Merger and Sale of Assets
The Company may not consolidate with or merge into, or sell, lease or
convey all or substantially all of its assets to, another corporation unless
(i) the successor or transferee corporation, which shall be a corporation
organized and existing under the laws of the United States or a State thereof,
assumes by supplemental indenture all the obligations of the Company under the
Debt Securities and the Indenture and (ii) the Company or successor
corporation, as the case may be, will not, immediately after such
consolidation or merger or sale, lease or conveyance, be in default in the
performance of any covenant or condition with respect to the Debt Securities
or the Indenture. The Company will deliver to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such consolidation,
merger or transfer and such supplemental indenture comply with the terms of
the Indenture. Upon any consolidation or merger, or any sale, lease or
conveyance of all or substantially all of the assets of the Company, the
successor corporation formed by such consolidation or into which the Company
is merged or to which such transfer is made shall succeed to, and be
substituted for, and may exercise every right and power of, the
Company under the Indenture. (Sections 5.01 and 5.02). Thereafter all
obligations of the predecessor corporation shall terminate. (Section 5.01)
Modification of the Indenture
The Indenture permits the Company and the Trustee to amend or supplement
the Indenture or the Debt Securities without notice to or consent of any
holder of a Debt Security for certain purposes, including without limitation,
to cure any ambiguity, defect or inconsistency, to comply with Section 5.01
(relating to when the Company may consolidate, merge or sell all or
substantially all of its assets), to provide for uncertificated Debt
Securities, to establish the form or terms of Debt Securities of any series
or to make any change that does not adversely affect the rights of any
holder of a Debt Security. (Section 9.01) Certain modifications and
amendments of the Indenture may be made by the Company and the Trustee
only with the consent of the holders of at least 50% in aggregate principal
amount of the Outstanding Debt Securities of each series issued under the
Indenture which is affected by the modification or amendment (voting as
one class). However, no such modification or amendment may, without the
consent the holder of each Debt Security affected thereby, (i) reduce the
aforesaid percentage of Debt Securities whose holders must consent to an
amendment, supplement or waiver; (ii) reduce the rate or rates or
extend the time for payment of interest or Additional Amounts, if any,
on any Debt Security; (iii) reduce the principal of or premium, if any,
on or extend the fixed maturity of any Debt Security; (iv) modify or effect
in any manner adverse to the holders of Debt Securities the terms and
conditions of the obligations of the Company in respect of its obligations
under the Indenture; (v) waive a default in payment of principal of or
premium or interest or Additional Amounts, if any, on any Debt Security;
(vi) impair the right to institute a suit for the enforcement of any
payment on or with respect to any series of Debt Securities; (vii) change
a Place of Payment; or (viii) make any Debt Security payable in currency other
than that stated in the Debt Security. (Section 9.02)
Regarding the Trustee
The Trustee is a participant in the Company's revolving credit agreement,
and the Company has maintained other banking relationships with the Trustee in
the normal course of business.
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The Trustee also acts as paying agent for the Company's 7 1/8% Notes due
July 15, 1999, and 7 5/8% Notes due July 15, 2002.
DESCRIPTION OF PREFERRED STOCK AND COMMON STOCK
General
The Company may issue, separately or together with other Securities,
shares of Common Stock or Preferred Stock, all as set forth in the Prospectus
Supplement relating to the Common Stock or Preferred Stock for which this
Prospectus is being delivered. In addition, if the Prospectus Supplement so
provides, the Debt Securities or Preferred Stock may be convertible into or
exchangeable for Common Stock.
The Company's Articles of Incorporation currently authorize the issuance
of 800,000,000 shares of Common Stock and 10,000,000 shares of Preferred Stock
("Preferred Stock"). The Company's Preferred Stock may be issued from time to
time in one or more series by resolution of the Board of Directors. At the
present time, the Company has outstanding three series of Preferred Stock,
consisting of the Company's $3.00 Cumulative Convertible Preferred Stock,
Series A (without par value) (the "Series A Preferred Stock") and its 5 1/2%
Cumulative Convertible Exchangeable Preferred Stock, Series E and F (without
par value) ("Series E Preferred Stock" and "Series F Preferred Stock"
respectively). At June 30, 1994, the Company had issued and outstanding
94,774,640 shares of Common Stock, 45,556 shares of Series A Preferred and
2,201,443 and 2,216,454 shares of Series E and F Preferred Stock,
respectively.
The following descriptions of the classes of the Company's capital stock
are summaries, do not purport to be complete, and are subject,in all respects,
to the applicable provisions of the Indiana Business Corporation Law and the
Company's Articles of Incorporation (including the Certificate of Resolution
by the Board of Directors of the Company Designating the Rights and
Preferences of the Series A Preferred Stock), Articles of Amendment
Designating the Rights and Preferences of the Series E and F Preferred Stock,
and the Rights Agreement, referred to below, with The First National Bank of
Boston, which, in each case, are included as Exhibits to the Registration
Statement of which this Prospectus forms a part.
Common Stock
Holders of the Company's Common Stock are entitled to receive dividends
when, as and if declared by the Board of Directors after all dividends
accrued on all preferred or special classes of shares entitled to
preferential dividends have been paid or declared and set apart for payment
out of funds legally available therefore. Upon liquidation, dissolution or
winding up of the affairs of the Company, whether voluntary or involuntary,
holders of Common Stock are entitled to receive pro rata any net assets of
the Company remaining after the claims of creditors and preferences of the
Series A, E, and F Preferred Stock,and any other series of Preferred Stock
at the time outstanding, have been paid in full. The Company's Articles of
Incorporation provide that holders of Common Stock and holders of any series
of Preferred Stock from time to time outstanding shall each have the right
at every meeting of shareholders to one vote for each share of Common Stock
and/or Preferred Stock so held, and holders of Common Stock and holders of
Preferred Stock shall so vote as one class. Under certain circumstances as
provided by law, the Company's Articles of Incorporation or the terms of the
Preferred Stock, certain series of Preferred Stock may vote as a separate
class or classes. The Company's Bylaws presently provide for three classes
of directors, with directors in each class serving staggered three-year
terms. The holders of Common Stock do not have any preemptive rights to
subscribe for additional shares, and the Common Stock does not have
cumulative voting rights.
The Company's Common Stock is listed on the New York, Chicago, Pacific,
London and Tokyo
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Stock Exchanges. The outstanding shares of Common Stock are,
and the Common Stock offered hereby when issued will be, validly issued, fully
paid and non-assessable. The Company will take appropriate action to list the
Common Stock offered hereby as described in the Prospectus Supplement
relating to any issuance of Common Stock.
Common Stock Purchase Rights. Under a Rights Agreement between the
Company and The First National Bank of Boston ("Common Rights Agreement"),
each outstanding share of Common Stock is coupled with a right (the "Common
Rights")entitling the holder to purchase from the Company one share of Common
Stock at a price of $75.00 per share, subject to adjustment.
Until the earlier to occur of (i) 10 days following a public
announcement that a person or group of affiliated or associated persons (other
than the Company or certain related persons or approved purchasers) (an
"Acquiring Person") acquired, or obtained the right to acquire, beneficial
ownership of 20% or more of the outstanding Common Stock or (ii) 10 days
following the commencement or announcement of an intention to make a tender
offer or exchange offer the consummation of which would result in the beneficial
ownership by a person or group of affiliated or associated persons of 30% or
more or such outstanding Common Stock (the earlier of such dated being called
the "Distribution Date"), the Common Rights will be transferred with and
only with the Common Stock. As soon as practicable following the Distribution
Date, separate certificates evidencing the Common Rights ("Common Rights
Certificate") will be mailed to holders of the Common Stock as of the close
of business on the Distribution Date and such separate Common Right
Certificates alone will evidence the Common Rights. The Common Rights are
not exercisable until the Distribution Date. The Common Rights will expire on
November 21, 1996, unless earlier redeemed by the Company as described below.
The Common Right purchase price payable, and the number of shares of
Common Stock or other Securities or property issuable, upon exercise of the
Common Rights are subject to adjustment from time to time to prevent dilution
(i)in the event of a stock dividend on, or a subdivision, combination or
reclassification of, the Common Stock, (ii) upon the grant to holders of the
Common Stock of certain rights or warrants to subscribe for the Common Stock
or convertible Securities at less then the current market price of the Common
Stock, or (iii) upon the distribution to holders of the Common Stock of
evidences of indebtedness or assets (excluding regular quarterly cash
dividends out of earnings or retained earnings theretofore paid or dividends
payable in Common Stock) or of subscription rights or warrants (other than
those referred to above).
In the event that the Company were acquired in a merger or other
business combination transaction in which more than 50% of its assets or
earning power were sold, proper provision will be made so that each holder of
a Common Right shall thereafter have the right to receive upon the exercise
thereof at the then current exercise price of the Common Right, that number
of shares of common stock of the acquiring company which at the time of such
transaction would have a market value of two times the exercise price of the
Common Right. In the event an Acquiring Person merges into the Company, the
Company is the surviving corporation and the Company's Common Stock is not
changed into or exchanged for stock or other Securities of the Company or any
other person or cash or any other property and (i) an Acquiring Person
engages in one of a number of self-dealing transactions specified in the
Common Rights Agreement or (ii) during such time as there is an Acquiring
Person, there is a reclassification of Securities, reverse stock split,
recapitalization of the Company, merger or consolidation of Company with any
of its subsidiaries or any other transaction involving the Company or its
subsidiaries which has the effect of increasing by more than 1% the
proportionate equity Securities ownership of the Company or any of its
subsidiaries by an Acquiring Person, proper provision will be made so that
each holder of a Common Right, other than Common Rights that were
beneficially owned by the Acquiring Person on the earlier of the
Distribution Date or the date of the public announcement that an Acquiring
Person acquired 20% or more of the outstanding shares of Common Stock, will
thereafter have the right to receive upon exercise that number of shares of
Common Stock having a market value of two times the exercise price of the
Common Right.
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With certain exceptions, no adjustment in the Common Right purchase
price will be required until cumulative adjustments require an adjustment of
at least 1% in such Common Right purchase price. No fractional shares will be
issued and in lieu thereof an adjustment in cash will be made based on the
market price of the Common Stock on the last trading day prior to the date of
exercise.
At any time prior to the time that any person becomes an Acquiring
Person, the Company may redeem the Common Rights in whole, but not in part,
at a price of $.01 per Right (the "Redemption Price") payable in cash.
Immediately upon the action of the Board of Directors electing to redeem the
Common Rights, the Company shall make an announcement thereof, and upon such
election, the right to exercise the Common Rights will terminate and the only
right of the holders of Common Rights will be to receive the Redemption
Price. Until a Common Right is exercised, the holder thereof, as such, will
have no rights as a shareholder of the Company, including, without limitation,
the right to vote or to receive dividends.
Certain Provisions of the Company's Articles of Incorporation. The
Company's Articles of Incorporation provide that the affirmative vote of the
holders of three-fourths of the Company's voting stock is required to amend
Article VII, which deals with the number, classification, qualifications and
removal of directors. Article VII provides that the number of directors may
be fixed in the Bylaws, that qualifications for directors may be set in the
Bylaws, and that the Bylaws may provide for classification of the Board. The
Bylaws can be amended only by action of the Board. Article VII also provides
that directors can be removed, with or without cause, at a meeting of
shareholders called expressly for that purpose upon the affirmative vote of
the holders of at least three-fourths of the Company's voting stock.
The provisions of Article VII requiring the affirmative vote of three-
fourths of the Company's voting stock to amend Article VII could make it
difficult for the shareholders to change the existing provision of that
Article, which, in turn, could discourage proxy contests and tender offers
and make it more likely that incumbent directors will maintain their
positions.
The Articles of Incorporation also contain a "fair price" provision
which requires, subject to certain exceptions, certain kinds of business
combinations involving the Company and any shareholder holding 10% or more of
the Company's voting stock (or certain affiliates of such shareholder) to be
approved by the holders of at least three-fourths of the Company's voting
stock, unless (i) the transaction is approved by a majority of the members of
the Board of Directors of the Company who are not affiliated with the 10%
shareholder making the proposal, or (ii) the transaction meets certain
minimum price and procedural requirements (in either of which cases,
only the normal shareholder and director approval requirements of the
Indiana Business Corporation Law would govern the transaction). The "fair
price" provision may be amended or repealed only upon the affirmative vote of
the holders of at least three-fourths of the Company's voting stock. The
"fair price" provision is intended to increase the likelihood that all
shareholders of the Company will be treated similarly if certain kinds of
business combinations are effected. The "fair price" provision may have the
effect of making a takeover of the Company more expensive and may therefore
discourage tender offers for less than three-fourths of the Company's stock
and acquisitions of substantial blocks of the Company's stock with
a view to acquiring control of the Company.
Certain State Law Provisions. Chapter 43 of the Indiana Business
Corporation Law also restricts business combinations with interested
shareholders. It prohibits certain business combinations, including mergers,
sales of assets, recapitalizations, and reverse stock splits, between certain
corporations having 100 or more shareholders that also have a class of voting
shares registered with the Securities and Exchange Commission under Section
12 of the Exchange Act (which includes the Company) and an interested
shareholder, defined as the beneficial owner of 10% or more of the voting
power of the outstanding voting shares of that corporation, for five years
following the date the shareholder acquired such 10% beneficial ownership,
unless the acquisition or the business combination was approved by the board
of directors in advance of such date. Moreover, the acquisition or business
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combination must meet all requirements of the corporation's articles of
incorporation, as well as the requirements specifically set out in the
Indiana Business Corporation Law. After the five-year period expires, a
business combination with an interested shareholder that did not receive
board approval prior to the interested shareholder's acquisition date may
take place only if such combination is approved by a majority vote of
shares not held by the interested shareholder or its affiliates or if the
proposed combination meets certain minimum price requirements based upon
the highest price paid by the interested shareholder. The aggregate amount
of cash and the market value of non-cash consideration to be received by
holders of all outstanding stock other than common stock is to be
determined under criteria similar to those for common stock, except that the
minimum price to be received by such shareholders cannot be less than the
highest preferential amount per share to which holders of such class of
stock are entitled in the event of voluntary dissolution, plus dividends
declared or due. The consideration to be received by holders of a particular
class must be distributed promptly and paid in cash or in the same form as
the interested shareholder used to acquire the largest number of shares it
owns in that class. Finally, the interested shareholder must not have become
the beneficial owner of any more voting shares of stock since it became an
interested shareholder, with certain exceptions.
Chapter 42 of the Indiana Business Corporation Law includes provisions
designed to protect minority shareholders in the event that a person acquires,
pursuant to a tender offer or otherwise, shares giving it more than 20%, more
than 33 1/3%, or more than 50% of the outstanding voting power ("Control
Shares") of corporations having 100 or more shareholders. Unless the
corporation's articles of incorporation or bylaws provide that Chapter 42
does not apply to control share acquisitions of shares of the corporation
before the control share acquisition, an acquirer who purchases Control
Shares without seeking and obtaining the prior approval of the board of
directors cannot vote the Control Shares until each class or series of
shares entitled to vote separately on the proposal, by a majority of all
votes entitled to be cast by that group (excluding the Control Shares and
any shares held by officers of the corporation and employees of the
corporation who are directors thereof), approve in a special or annual
meeting the rights of the acquirer to vote the Control Shares.
An Indiana corporation otherwise subject to Chapter 42 may elect not to be
covered by the statute by so providing in its articles of incorporation or
bylaws. The Company is currently subject to the statute.
Indiana insurance laws and regulations provide that no person may
acquire voting securities of the Company if after such acquisition such person
would directly or indirectly be in control of the Company, unless such person
has provided certain required information to the Indiana Insurance Commissioner
(the "Indiana Commissioner") and the Indiana Commissioner has approved the
acquisition. Control of the Company is presumed to exist if any person
beneficially owns 10% or more of the voting securities of the Company.
Furthermore, the Indiana Commissioner may determine, after notice and hearing,
that control exists notwithstanding the absence of a presumption to that
effect. Consequently, no person may acquire, directly or indirectly, 10% or
more of the voting securities of the Company to be outstanding after the
Offerings, or otherwise acquire control of the Company, unless such person
has provided such required information to the Indiana Commissioner and the
Indiana Commissioner has approved such acquisition.
Transfer Agent and Registrar. The First National Bank of Boston serves
as Transfer Agent and Registrar for shares of the Company's Common Stock.
Preferred Stock
The Company's Preferred Stock has, upon issuance, preference over the
Common Stock with respect to the payment of dividends and the distribution of
assets in the event of liquidation, dissolution or winding up of the company.
Other relative rights,preferences and limitations of each series of Preferred
Stock, including dividend, redemption, liquidation, sinking fund, conversion
and other provisions, are determined by the Board of Directors in the
resolutions establishing and designating such series and as described in the
Prospectus Supplement relating to the series of Preferred Stock. The Series
A Preferred Stock and the Series E and F Preferred Stock constitute the only
series of Preferred
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Stock currently authorized for issuance by the Board of Directors.
The Company's Articles of Incorporation provide that each holder of
Preferred Stock of any series from time to time outstanding shall be entitled
to one vote per share upon all matters submitted to vote at every meeting of
shareholders of the Company. Further, in the event that six or more quarterly
dividends, whether or not consecutive, on any series of Preferred Stock shall
be in default, the holders of any outstanding series of Preferred Stock as to
which such default exists shall be entitled, at the next annual meeting of
shareholders, to vote as a class to elect two directors of the Company. Such
right shall continue with respect to shares of cumulative Preferred Stock,
including the Series A Preferred and Series E and F Preferred Stock, until all
accumulated and unpaid dividends on all such shares, the holders of which were
entitled to vote at the previous annual meeting of shareholders, have been
paid or declared and set aside for payment and, with respect to shares of non-
cumulative Preferred Stock, if any, until any non-cumulative dividends have been
paid or declared and set apart for payment for four consecutive quarterly
dividend periods on all such shares, the holders of which were entitled to
vote at the previous annual meeting of shareholders.
The approval of the holders of record of at least two-thirds of the
outstanding shares of all series of Preferred Stock of the Company, voting as a
class, will be required to (a) amend the Company's Articles of Incorporation
to create or authorize any stock ranking prior to or on a parity with such
Preferred Stock with respect to the payment of dividends or distributions
upon dissolution, liquidation or winding up, or to create or authorize any
security convertible into shares of any such stock; (b) amend, alter, change
or repeal any of the express terms of the Preferred Stock, or any series
thereof, in any prejudicial manner (provided only holders of two-thirds of
the outstanding shares of the series prejudiced by such change or repeal need
consent to such action); (c)merge or consolidate with another corporation
whereby the Company is not the surviving entity, if thereby the rights,
preferences or powers of the Preferred Stock would be adversely affected or
Securities would thereupon be authorized or outstanding which could not
otherwise have been created without the approval of such Preferred
Stockholders; or (d) authorize, or revoke a previously authorized, voluntary
dissolution of the Company, approve any limitation of the term of the
existence of the Company or authorize the sale, lease, exchange or other
disposition of all or substantially all of the property of the Company.
In the event of voluntary or involuntary dissolution, liquidation or
winding-up of the Company, the holders of each series of the Preferred Stock
will be entitled to receive out of the assets of the Company available for
distribution to its shareholders, before distribution of assets is made to
holders of Common Stock or any other class of stock ranking junior to such
series of Preferred Stock upon liquidation, a liquidating distribution in an
amount per share as set forth in the Prospectus Supplement relating to such
series of Preferred Stock, plus accrued and unpaid dividends.
The Preferred Stock, when issued, will be fully paid and non-assessable.
Unless otherwise specified in the Prospectus Supplement relating to the
particular series of a Preferred Stock, each series of Preferred Stock will
be on a parity in all respect with other series of Preferred Stock.
Series A Preferred Stock
At June 30, 1994, the Company had issued and outstanding 45,556 shares
of Series A Preferred Stock. Cumulative dividends are payable quarterly, as
declared by the Board of Directors, on shares of Series A Preferred Stock at
the per annum rate of $3.00 per share. Upon the liquidation, dissolution or
winding up of the Company, the Series A Preferred Stock is entitled to a
liquidation preference of $80.00 per share, or approximately $3,644,480 in
the aggregate at June 30, 1994, plus accrued dividends, before any assets may
be distributed to holders of Common Stock or any other stock ranking junior to
the Series A Preferred Stock. The Series A Preferred Stock may be redeemed
at any time at the option of the Company, in whole or in part, at a
redemption price of $80.00 per share plus accrued dividends, and the Series A
Preferred Stock is convertible into Common Stock at the option of the holder
at a rate of eight shares of Common Stock (subject to adjustment) for each
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<PAGE>
share of Series A Preferred Stock. In the six months ended June 30, 1994,
1,723 shares of Series A Preferred Stock were converted into shares of the
Company's Common Stock.
Series E and F Preferred Stock
The Company issued to The Dai-ichi Mutual Life Insurance Company
("Dai-ichi"), a mutual insurance company organized under the laws of Japan,
2,201,443 shares of Series E Preferred Stock on July 6, 1990 and 2,216,454
shares of Series F Preferred Stock on May 31, 1991. The holders
of the Series E and F Preferred Stock are entitled to receive, when and as
declared by the Company's Board of Directors, cumulative cash dividends at
the annual rate of 5 1/2% of the Liquidation Preference (as defined below)
payable quarterly on the 5th day of March, June, September and December.
Each share of Series E and F Preferred Stock may, at the option of the
holder, be converted into that number of fully paid and non-assessable shares
of Common Stock obtained by dividing the Liquidation Preference of each such
share of Preferred Stock being converted by the Conversion Price. The
Liquidation Preferences of the Series E and F Preferred Stock are $68.850
and $71.604, respectively. The Conversion Prices of the Series E and F
Preferred Stock are $34.425 and $35.802, respectively, but are increased
by 4 1/6% on July 6, 1995 and 4% on July 6, 1998.
The shares of Series E and F Preferred Stock are subject to both
mandatory and optional redemption provisions. The shares are subject to
mandatory redemption on July 6, 2002 by payment in cash of the respective
Liquidation Preference plus accrued dividends, if any. In lieu of mandatory
redemption, the Company may, at its option, issue in exchange for its then
outstanding shares of Series E and F Preferred Stock shares of non-convertible
Preferred Stock or Common Stock, which in either case are freely tradable and
have a fair market value equal to the respective Liquidation Preference of the
shares of Series E and F Preferred Stock plus any accrued dividends. The
Company may, at its option, redeem in cash, in whole or in part, any of the
Series E and F Preferred Stock which is not owned by Dai-ichi or its wholly-
owned subsidiaries at a redemption price per share equal to the respective
Liquidation Preference plus accrued dividends.
In connection with its purchase of the shares of Series E and F
Preferred Stock, Dai-ichi has agreed to vote its shares of such stock,together
with any shares of Common Stock owned by Dai-ichi, in accordance with the
recommendation of the Company's Board of Directors, or under certain
circumstances, in the same proportion as all other voting Securities voting on
the particular matter. Dai-ichi may dispose of such shares only upon certain
conditions, including that the shares first be offered for sale to the Company
and that the Shares be sold in a manner that would ensure a wide distribution
of the shares.
Registration Rights. Pursuant to an Investment Agreement between the
Company and Dai-ichi, dated as of June 25, 1990 (the "Investment Agreement"),
Dai-ichi and certain subsequent holders of Dai-ichi's shares are entitled
to certain registration rights covering such Preferred Stock, all
shares of Common Stock into which such Preferred Stock is convertible and all
shares of Common Stock or other Securities distributed with respect to such
shares of Preferred Stock or Common Stock (the "Registrable Securities").
Under the Investment Agreement, Dai-ichi (or certain subsequent holders
of Registrable Securities) has the right (the "Demand Right"), exercisable up
to three times, to require the Company to use its best efforts to effect the
registration of all or part of the Registrable Securities under the Securities
Act in connection with a public offering of such Registrable Securities. The
Demand Right may be exercisable at any time unless (i) the request for
registration is made within 120 days after the most recent registration
pursuant to exercise of a Demand Right, (ii) registration of the Registrable
Securities would adversely affect a public financing contemplated by the
Company at the time the request for registration is made, in which case a
"black out" period of up to 60 days would apply, (iii)
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<PAGE>
audited financial statements necessary for registration are unavailable or
(iv) registration would require disclosure of material information which the
Company wishes to delay for a bona fide business purpose.
In addition, Dai-ichi or any subsequent holder of Registrable Securities
has the right, exercisable one time only, to include their Registrable
Securities in a registration by the Company of any of its Securities having
the ordinary power to vote in the election of the director of the Company
(including a proposed registration of Common Stock) under the Securities Act,
unless (i) in the reasonable judgment of the Company, inclusion of any
Registrable Securities in the Company's registration statement at that time
would adversely affect the Company's own financing, (ii) the Company's
registration statement is withdrawn or (iii) the Company's registration of
Securities is in connection with a merger, acquisition, exchange offer or
subscription offer, stock option or a dividend reinvestment, or other
employee benefit plan. The Company is required to bear all registration
expenses in connection with the Registration of the Registrable
Securities pursuant to the Investment Agreement.
Common Share Equivalent Purchase Rights. The Company is party to a
Rights Agreement with The First National Bank of Boston, which relates to the
Series E and F Preferred Stock (the "Preferred Rights Agreement"). In general,
the Preferred Rights are intended to provide the holders of the Series E and F
Preferred Stock with the same rights as they would have had if they had
owned the shares of Common Stock into which the shares of Series E and F
Preferred are convertible. One common share equivalent purchase right (the
"Preferred Rights") was issued for each share of Series E and F Preferred
Stock. In accordance with the Preferred Rights Agreement, the Preferred
Rights entitle the holders of such Rights to purchase that number of shares
of Common Stock into which the shares of Series E and F Preferred Stock are
convertible at a price of $75 per share, subject to the same adjustments
described with respect to the Common Rights. Upon the occurrence of the same
triggering events outlined with respect to the Common Rights, each holder of
a Preferred Right shall be entitled to receive that number of common shares
of an Acquiring Person obtained by multiplying the current purchase price of
the Preferred Rights by the total number of shares of Common Stock for which
the Preferred Rights may be exercised, and dividing the product by 50% of
the current per share market price of the common share of the other person.
Alternatively, if a person beneficially owning 20% of the Common Stock
acquires the Company by means of a reverse merger in which the Company
survives or such person engages in certain "self-dealing" transactions each
Preferred Right not owned by the 20% holder becomes exercisable for the
number of shares of Common Stock which at the time would have a market value
of two times the exercise price of the Preferred Rights. The Preferred
Rights expire on November 21, 1996 and are subject to redemption and
cancellation.
REGULATION
State Supervision. The Company's insurance affiliates are subject to
regulation and supervision by the states, territories and foreign countries in
which they are admitted to do business. These jurisdictions generally maintain
supervisory agencies with broad discretionary powers relative to granting and
revoking licenses to transact business, regulating trade practices, licensing
agents, prescribing and approving policy forms, regulating premium rates for
some lines of business, establishing premium requirements, regulating
competitive matters, prescribing the form and content of financial statements
and reports,determining the reasonableness and adequacy of capital and surplus
and regulating the type and amount of investments permitted. The Company's
insurance subsidiaries conduct business in numerous jurisdictions and,
accordingly, are subject to the laws and regulations of each of those
jurisdictions. Most of the Company's principal insurance subsidiaries,
including The Lincoln National Life Insurance Company and American States
Insurance Company, are domiciled in Indiana and are primarily
regulated by the Indiana Commissioner.
As an insurance holding company, the Company is also subject to
regulatory requirements of the states where its insurance subsidiaries are
domiciled. For example, certain transactions involving an affiliated insurance
company, such as loans, extraordinary dividends or investments, in some
cases may require the prior approval of such company's primary regulators.
Additionally, these requirements
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<PAGE>
restrict the ability of any person to acquire control of the Company or any
of its subsidiaries engaged in the insurance business without prior
regulatory approval. Control is generally deemed to exist if an entity
beneficially owns 10% or more of the voting securities of a company.
Such requirements may have the effect of preventing an acquisition
of the Company.
PLAN OF DISTRIBUTION
The Company may sell the Securities being offered hereby by any one or
more of the following methods: (i) through underwriters or dealers; (ii)
directly to one or more purchasers; (iii) through agents; or (iv) to both
investors and/or dealers through a specific bidding or auction process or
otherwise. The Prospectus Supplement with respect to the Securities sets forth
the terms of the offering of the Securities, including the name or names of
any underwriters, the purchase price of the Securities and the proceeds to
the Company from such sale, any underwriting discounts and other items
constituting underwriters' compensation, any initial public offering price
and any discounts or concessions allowed or reallowed or paid to dealers,
any bidding or auction process, any Securities exchanges on which the
Securities may be listed and any restrictions on the sale and delivery of
Securities in bearer form to U.S. persons.
If underwriters are used in the sale, the Securities will be acquired by
the underwriters for their own account and may be resold from time to time in
one or more transactions, including negotiated transactions, at a fixed
public offering price or at varying prices determined at the time of sale.
The Securities may be offered to the public either through underwriting
syndicates represented by managing underwriters or directly by underwriters.
The specific underwriter or underwriters or managing underwriter or
underwriters, as the case may be, will be set forth on the cover of the
Prospectus Supplements relating to such Securities and the members of the
underwriting syndicate, if any, will be named in such Prospectus Supplement.
Unless otherwise set forth in the Prospectus Supplement, the obligations of
the underwriters to purchase the Securities will be subject to certain
conditions precedent and the underwriters will be obligated to purchase all
the Securities if any are purchased. Any initial public offering price and
any discounts or concessions allowed or reallowed or paid to dealers
may be changed from time to time.
Securities may be sold directly by the Company or through agents
designated by the Company from time to time. Any agent involved in the offer
or sale of the Securities in respect of which this Prospectus is delivered
will be named, and any commissions payable by the company to such agent will
be set forth, in the Prospectus Supplement. Unless otherwise indicated in
the Prospectus Supplement, any such agent will be acting on a best efforts
basis for the period of its appointment.
If so indicated in the Prospectus Supplement, the Company will authorize
agents, underwriters or dealers to solicit offers by certain specified
institutions to purchase Securities from the Company at the public offering
price set forth in the Prospectus Supplement pursuant to delayed delivery
contracts providing for payment and delivery on a specified date in the
future. Such contract will be subject only to those conditions set forth in
the Prospectus Supplement and the Prospectus Supplement will set forth the
commission payable for solicitation of such contracts.
Dealers, agents and underwriters may be entitled under agreements
entered into with the Company to indemnification by the Company against certain
civil liabilities, including liabilities under the Securities Acts, or to
contribution with respect to payments which the dealers, agents or underwriters
may be required to make in respect thereof. Dealers, agents and underwriters
may be customers of, engage in transactions with, or perform services for the
Company in the ordinary course of business.
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<PAGE>
LEGAL OPINIONS
The validity of the Securities offered hereby will be passed upon for
the Company by Gardner, Carton & Douglas, 321 North Clark Street, Chicago ,
Illinois 60610. Gardner, Carton & Douglas will rely on the opinion of Jack D.
Hunter, Esq., Executive Vice President and General Counsel of the Company, as to
matters of Indiana law. As of August 16, 1994, Mr. Hunter beneficially owned
57,298 shares of Common Stock of the Company, including shares held in the
Lincoln National Corporation Savings and Profit-Sharing Plan and the Lincoln
National Corporation Employees' and Agents' Stock Bonus Plan,and holds options
to acquire an additional 55,602 shares of Common Stock, which options are
currently exerciseable except for options to acquire: 8,250 shares in each
of 1995 and 1996; 5,750 shares in 1997; and 3,000 shares in 1998.
EXPERTS
The consolidated financial statements and schedules of Lincoln National
Corporation and subsidiaries appearing in the Lincoln National Corporation's
Annual Report (Form 10-K) for the year ended December 31, 1993, have been
audited by Ernst & Young LLP, independent auditors, as set forth in their
report thereon included therein and incorporated herein by reference.
Such consolidated financial statements and schedules are incorporated herein
by reference in reliance upon such report given upon the authority of such
firm as experts in accounting and auditing.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
Securities and Exchange Commission fee $172,400
Legal fees and expenses $ 50,000*
Accounting fees and expenses $ 30,000*
Blue Sky fees and expenses (including counsel fees) $ 10,000*
Printing and engraving expenses $ 30,000*
Trustee fees and expenses $ 20,000*
Miscellaneous $ 27,600*
Total $340,000
_________________
* Estimated
Item 15. Indemnification of Directors and Officers
The following discussion of the indemnification provisions of the
Indiana Business Corporation Law (Indiana Code Section 23-1-37) (the "Law"),
which applies to the Registrant, is a summary, is not meant to be complete,
and is qualified in its entirety by reference to the Law.
The Law provides indemnity for present and past directors, officers,
employees and agents of the Registrant and of other entities, including
partnerships, trusts and employee benefit plans, who serve in such capacities
at the request of the Registrant, against obligations to pay as the result of
threatened, pending or completed actions, suits or proceedings, whether
criminal, civil, administrative or investigations to which they are parties,
if it is determined by a majority of disinterested directors, a committee of
the board of directors or special counsel selected by the board of directors
that they acted in good faith and they reasonably believed their conduct in
their official capacity was in the Registrant's best interests or if such
conduct was not in their official capacity, that the same was at least not
opposed to the Registrant's best interests, and that in criminal proceedings
they had reasonable cause to believe their conduct was lawful or no
reasonable cause to believe that it was unlawful. The Law provides for
mandatory indemnification for directors and officers against reasonable
expenses incurred if they were wholly successful in the defense of such
proceeding. Also termination of a proceeding by judgment, settlement or
like disposition is not determinative that the director, officer, employee
or agent did not meet the standard of conduct set forth in the Law. The
indemnity provided by the Law may be enforced in court and provision is
made for advancement of expenses. The Law also permits the Registrant to
insure its liability on behalf of the directors, officers, employees and
agents so indemnified and the Law does not exclude any other
rights in indemnification and advancement of expenses provided in the
Registrant's Articles of Incorporation, Bylaws, or resolutions of its
board of directors or its shareholders.
The Bylaws of the Registrant provide for the indemnification of its
officers, directors and employees against reasonable expenses, including
settlements, that may be incurred by them in connection with the defense of
any action, suit or proceeding to which they are made or threatened to be
made parties so long as (i) the individual's conduct was in good faith,
(ii) he reasonably believed that the conduct was in the Company's best
interests (or for non-corporate acts, not against the best interest of
the Company), and (iii) in the case of criminal proceedings, the
individual either had reason to believe the conduct was lawful, or no
reasonable cause to believe it was unlawful. In the case of directors, a
determination as to whether indemnification or reimbursement is proper
shall be made by a majority of disinterested directors, a committee of the
board of directors or special counsel selected by the board of directors.
In the case of individuals who are not directors, such determination shall
be made by the chief executive officer of the Registrant or, if the chief
executive officer so directs, in the manner it would be made if the
individual were a director of the Registrant.
Such indemnification may apply to claims arising under the Securities
Act of 1933, as amended. Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted for directors, officers
or persons controlling the Registrant pursuant to the foregoing provisions,
the Registrant has been informed that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in that Act and therefore unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the Registrant
will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
The Registrant maintains directors' and officers' liability insurance
with an annual aggregate limit of $50,000,000 for the current policy period,
subject to a $1,000,000 deductible at the corporate level, for each
wrongful act where corporate reimbursement is available to any director or
officer.
Item 16. Exhibits
Exhibit
Number Nature of Exhibit
1 Form of Underwriting Agreement (previously filed)
3(a) Articles of Incorporation of Lincoln National Corporation, as amended
3(b) Bylaws, as amended (incorporated by reference to Exhibit No. 3(b)
to Registrant's Form 10-K for fiscal year ended December 31, 1991)
4(a) Rights Agreement, dated November 7, 1986 (incorporated by reference
to Registrant's 8-K (File No. 1-6028) filed November 18, 1986)
4(b) Rights Agreement, dated July 5, 1990 (incorporated by reference to
Exhibit No. 28 to Registrant's Registration Statement on Form S-3
(File No. 33-55652) filed December 11, 1992)
4(c) Form of Indenture between the Company and The Bank of New York
4(d) Form of Note
4(e) Form of Debenture
4(f) Form of Zero Coupon Security
5 Opinion and consent of Gardner, Carton & Douglas
(previously filed)
12 Computation of the Ratio of Earnings to Fixed Charges
(previously filed)
23(a) Consent of Ernst & Young LLP (previously filed)
23(b) Consent of Gardner, Carton & Douglas (included in Exhibit No. 5)
24 Powers of Attorney (Included on Signature Page filed electronically
with Form S-3 on September 6, 1994)
25 Form T-1, Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939 of The Bank of New York (previously filed)
28 Information from reports furnished to State Insurance Regulatory
Authorities (incorporated by reference to Exhibit 28 of REgistrant's
Form 10-K dated December 31, 1993)
Item 17. Undertakings
The undersigned Registrant hereby undertakes:
(1) to file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement: (i) to
include any prospectus required by section 10(a)(3) of the Securities Act of
1933; (ii) to reflect in the prospectus any facts or events arising after the
effective date of this Registration Statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in this
Registration Statement, and (iii) to include any material information with
respect to the plan of distribution not previously disclosed in this
Registration Statement or any material change to such information in this
Registration Statement; provided, however, that clauses (1)(i) and (1)(ii)
do not apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed by the
Registrant pursuant to section 13 or section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in this Registration
Statement; (2) that for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new Registration Statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof; (3) to remove from registration by means
of a post-effective amendment any of the securities being registered which
remain unsold at the termination of the offering; (4) for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in this
Registration Statement shall be deemed to be a new Registration Statement
relating to the securities offered herein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof; (5) insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the provisions described
above in Item 15 or otherwise, the Registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Securities Act of 1933 and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the
Registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with
the securities being registered, the Registrant will, unless in the opinion
of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act
and will be governed by the final adjudication of such issue; (6) for purposes
of determining any liability under the Securities Act of 1933, the information
omitted from the form of prospectus filed as part of this registration
statement in reliance upon Rule 430A and contained in a form of prospectus
filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under
the Securities Act of 1933 shall be deemed to be part of this registration
statement as of the time it was declared effective; (7) for the purpose of
determining any liability under the Securities Act of 1933, each
post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof; (8) to use its best
efforts to distribute prior to the opening of bids, to prospective bidders,
underwriters, and dealers, a reasonable number of copies of a prospectus
which at that time meets the requirements of section 10(a) of the
Securities Act of 1933, and relating to the securities offered at
competitive bidding, as contained in the registration statement, together
with any supplements thereto; and (9) to file an amendment to the
registration statement reflecting the results of bidding, the terms
of the reoffering and related matters to the extent required by the
applicable form, not later than the first use, authorized by the issuer
after the opening of bids, of a prospectus relating to the securities
offered at competitive bidding, unless no further public offering of such
securities by the issuer and no reoffering of such securities by
the purchasers is proposed to be made.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Amendment No. 1 to the Registration Statement to be signed on its behalf
by the undersigned, thereunto duly authorized in the City of Fort Wayne,
State of Indiana, on the 15th day of September, 1994.
LINCOLN NATIONAL CORPORATION
By: /s/ RICHARD C. VAUGHAN
Richard C. Vaughan
Title: Senior Vice President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
/s/ Ian M. Rolland*
Ian. M. Rolland Chairman, Chief Executive Officer September 15, 1994
& Director (Principal Executive
Officer)
/s/ Robert A. Anker*
Robert A. Anker President, Chief Operating Officer September 15, 1994
& Director
/s/ Richard C. Vaughan*
Richard C. Vaughan Senior Vice President September 15, 1994
(Principal Financial Officer)
/s/ Donald L. Van Wyngarden *
Donald L. Van Wyngarden Second Vice President & September 15, 1994
Controller (Principal Accounting
Officer)
/s/ J. Patrick Barrett*
J. Patrick Barrett Director September 15, 1994
/s/ Thomas D. Bell, Jr.*
Thomas D. Bell, Jr. Director September 15, 1994
/s/ Daniel R. Efroymson*
Daniel R. Efroymson Director September 15, 1994
/s/ Harry L. Kavetas*
Harry L. Kavetas Director September 15, 1994
/s/ M. Leanne Lachman*
M. Leanne Lachman Director September 15, 1994
/s/ Leo J. McKernan*
Leo J. McKernan Director September 15, 1994
/s/ Earl L. Neal*
Earl L. Neal Director September 15, 1994
/s/ John M. Pietruski*
John M. Pietruski Director September 15, 1994
/s/ Jill S. Ruckelshaus*
Jill S. Ruckelshaus Director September 15, 1994
/s/ Gordon A. Walker*
Gordon A. Walker Director September 15, 1994
/s/ Gilbert R. Whitaker, Jr.*
Gilbert R. Whitaker, Jr. Director September 15, 1994
*By:/S/ RICHARD C. VAUGHAN
Richard C. Vaughan, as Attorney-in-Fact
Pursuant to Power of Attorney included on
signature page filed electronically with Form
S-3 on September 6, 1994.
EXHIBIT 3(a)
STATE OF INDIANA
OFFICE OF THE SECRETARY OF STATE
Edgar D. Whitcomb, Secretary of State
CERTIFICATE OF INCORPORATION
OF
LINCOLN NATIONAL CORPORATION
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
I, Edgar D. Whitcomb, Secretary of State of the State of Indiana, hereby
certify that Articles of Incorporation of the above Corporation, in the form
prescribed by my office, prepared and signed in triplicate by all of the
incorporators and acknowledged and verified by at least three of them before
a Notary Public, have been presented to me at my office accompanied by the fees
prescribed by law; that I have found such Articles conform to law; that I have
endorsed my approval upon the triplicate copies of such Articles; that all fees
have been paid as required by law;that one copy of such Articles has been filed
in my office; and that two copies of such Articles bearing the endorsement of
my approval and filing have been returned by me to the incorporators or their
representatives; all as prescribed by the provisions of the Indiana General
Corporation Act, as amended.
Wherefore, I hereby issue to such Corporation this Certificate of
Incorporation, and further certify that its corporate existence has begun.
In Witness Whereof, I have hereunto set my
hand and affixed the seal of the State of
Indiana, at the City of Indianapolis,
5th
this.................................day of
[SEAL OF STATE OF INDIANA]
January 68
............................, 19..
...........................................
Edgar D. Whitcomb, Secretary of State,
By.........................................
Deputy
<PAGE>
ARTICLES OF INCORPORATION
-------------------------
OF
--
LINCOLN NATIONAL CORPORATION
----------------------------
The undersigned incorporators, desiring to form a corporation (hereinafter
referred to as the "Corporation") pursuant to the provisions of The Indiana
General Corporation Act, as amended (hereinafter referred to as the "Act"),
execute the following Articles of Incorporation.
ARTICLE I
---------
Name
----
The name of the Corporation is Lincoln National Corporation.
ARTICLE II
----------
Purposes
--------
The purposes for which the Corporation is formed are:
1. To acquire, by purchase, subscription or otherwise, own, hold,
guarantee, use, sell, assign, transfer, exchange, mortgage, pledge,
hypothecate, create security interests in, or otherwise deal with and
dispose of, except as otherwise hereinafter provided, any and all
securities, as hereinafter defined, and to possess and exercise any and
all rights, powers and privileges of ownership of any and all such
securities, including the right to vote thereon and to consent, assent
or dissent with respect thereto for any and all purposes, and to issue
or deliver its own securities in payment
<PAGE>
- 2 -
or exchange, in whole or in part, for any securities or to make payment
therefor by any other lawful means; to aid by loan, subsidy or in any other
lawful manner any corporation, firm, organization, association or other
entity in which the Corporation may be or become interested through the
direct or indirect holding of securities or in any other manner; to do any
and all acts and things for the enhancement, protection or preservation of
any securities which are in any manner, directly or indirectly, held or
guaranteed by the Corporation, and to do any and all acts and things
designed to accomplish any such purpose.
The term "securities", as used in this Article, shall mean any and all
shares, stocks, bonds, debentures, notes, acceptances, voting trust
certificates, certificates of deposit, evidences of indebtedness, other
obligations, certificates of any interest in or of the deposit of any of
the foregoing, scrip, interim or other receipts, warrants or rights to
subscribe for or purchase, or guarantees of, any of the foregoing, or any
other interests or instruments commonly known as securities.
2. To cause to be formed, organized, reorganized, consolidated, merged,
wound up or liquidated and to take charge of, any corporation, firm,
organization, association or other entity.
3. To acquire, as a going concern or otherwise, and pay for in cash,
securities, other consideration, or any combination
<PAGE>
- 3 -
thereof, the whole or any part of the business, goodwill, rights, or other
assets and to undertake or assume the whole or any part of the obligations
or liabilities of any person, corporation, firm, organization, association
or other entity.
4. To furnish services to and perform services for, and to act in any
representative capacity for, any government, corporation, firm, organization,
association, or other entity in which the Corporation may be or become
interested through the direct or indirect holding of securities or in any
other manner, whether in the development, exploitation, promotion, operation,
management, liquidation, or otherwise, of any of the business or property
thereof or of any lawful enterprise related thereto.
5. To make loans and give other forms of credit, with or without security.
6. To borrow money for its corporate purposes; to draw, make, accept,
endorse, execute, issue, deliver and negotiate bonds, debentures, promissory
notes, drafts, bills of exchange and other negotiable or transferable
instruments and, except as otherwise hereinafter provided, to secure the
payment thereof and the interest thereon by a deed or deeds of trust or by
mortgage or pledge of or upon, or by the creation of a security interest in,
all or any part of the property of the Corporation, real or personal, or any
interest therein, wherever situated, whether at
<PAGE>
- 4 -
the time owned or thereafter acquired, and to sell, pledge, create security
interests in or otherwise dispose of such bonds, debentures, notes or other
obligations.
7. To purchase, lease or otherwise acquire, take, hold, own, use, improve,
maintain, develop, complete, extend, manage, operate, mortgage or otherwise
impose a lien upon or create a security interest in, produce, sell, exchange,
lease or otherwise dispose of or convey or transfer in any manner, buildings,
storage and other facilities, real and personal property of all kinds, and any
and all rights, interests or easements therein, without limit as to amount and
wherever situated, and to engage in and conduct any enterprise not contrary to
law.
8. To enter into partnership or into any arrangement for sharing of profits,
union of interests, joint adventure, reciprocal concession or otherwise, with
any person, entity, syndicate, government, partnership, association,
corporation or others.
9. In general, to do any and all of the acts and things herein set forth to
the same extent as natural persons could do, and in any part of the world, as
principal, factor, agent, contractor, or otherwise, either alone or in company
with any person, entity, syndicate, government, partnership, association,
corporation or others; to establish and maintain offices and agencies within
and anywhere outside of the State of Indiana; and to exercise all or any
<PAGE>
- 5 -
of its corporate powers and rights in the State of Indiana and in any and
all other states, territories, districts, possessions, or dependencies of
the United States of America and in any other countries or places.
10. To do everything necessary, convenient or expedient for the
accomplishment of any of the purposes herein set forth and to do every other
act and thing incidental thereto or connected therewith, provided the same
be not forbidden herein or by law. For the accomplishment of the aforesaid
purposes and in furtherance thereof the Corporation shall have and may
exercise all of the powers conferred by the Act upon corporations formed
thereunder, provided, however, that nothing in the aforesaid purposes or
powers shall confer upon the Corporation the purpose of, or the power to
become, an investment company subject to the federal Investment Company Act
of 1940, as amended.
ARTICLE III
-----------
Term of Existence
-----------------
The period during which the Corporation shall continue is perpetual.
ARTICLE IV
----------
Principal Office and Resident Agent
-----------------------------------
The post-office address of the principal office of the Corporation is 1301
South Harrison Street, Fort Wayne, Indiana 46801; and the name and post-office
address of its Resident Agent in charge of such office is Gordon C. Reeves,
1301 South Harrison Street, Fort Wayne, Indiana 46801.
<PAGE>
- 6 -
ARTICLE V
---------
Number of Shares
----------------
The total number of shares which the Corporation shall have authority to
issue is fifteen million (15,000,000) shares with the par value of Two
Dollars and Fifty CentS ($2.50) per share, all of one class designated as
Common Stock.
ARTICLE VI
----------
Initial Stated Capital
----------------------
The Corporation will not commence business until consideration of the value
of at least One Thousand Dollars ($1,000) has been received for the issuance
of shares.
ARTICLE VII
-----------
Directors
---------
Section 1. Number. The initial Board of Directors shall be composed of
thirteen members. The number of Directors may from time to time be fixed by
the bylaws of the Corporation at any number not less than three. In the
absence of a bylaw fixing the number of Directors, the number shall be
thirteen.
Section 2. Qualifications. Directors need not be shareholders of the
Corporation, but shall have other qualifications as the bylaws of the
Corporation prescribe.
Section 3. Classification. When the Board of Directors consists of nine
or more members, the bylaws of the Corporation may provide that
<PAGE>
- 7 -
the Directors shall be divided into two or more classes whose terms of office
shall expire at different times, but no term shall continue longer than three
years.
Section 4. Removal. Any or all of the members of the Board of Directors
may be removed,with or without cause, at a meeting of shareholders called
expressly for that purpose by a vote of the holders of three-fourths of the
shares of the Corporation outstanding and then entitled to vote at an election
of Directors.
ARTICLE VIII
------------
Initial Board of Directors
--------------------------
The names and post-office addresses of the first Board of Directors
of the Corporation are as follows:
Name Number and Street City State Zip Code
---- ----------------- ---- ----- --------
Edward D. Auer The Lincoln National Life Fort Wayne Indiana 46801
Insurance Company
1301 South Harrison Street
Wallis B. Dunckel Bankers Trust Company New York New York 10015
P. O. Box 318
Robert A. Efroymson Real Silk Hosiery Indianapolis Indiana 46204
Mills, Inc.
611 North Park Avenue
William B. F. Hall 2000 Lincoln Bank Tower Fort Wayne Indiana 46801
A. J. Hettinger, Jr. Lazard Freres & Co. New York New York 10005
44 Wall Street
James F. Keenan Keenan Hotel Co., Inc. Fort Wayne Indiana 46801
1006 South Harrison Street
<PAGE>
- 8 -
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
William T. McKay 1423 East California Road Fort Wayne Indiana 46805
Walter O. Menge The Lincoln National Life Fort Wayne Indiana 46801
Insurance Company
1301 South Harrison Street
Henry W. Persons The Lincoln National Life Fort Wayne Indiana 46801
Insurance Company
1301 South Harrison Street
Henry F. Rood The Lincoln National Life Fort Wayne Indiana 46801
Insurance Company
1301 South Harrison Street
Ronald G. Stagg The Lincoln National Life Fort Wayne Indiana 46801
Insurance Company
1301 South Harrison Street
Harold A. MacKinnon 1391 Ruffner Road Schenectady New York 12309
Thomas A. Watson The Lincoln National Life Fort Wayne Indiana 46801
Insurance Company
1301 South Harrison Street
</TABLE>
ARTICLE IX
----------
Incorporators
-------------
Section 1. Names and Post-Office Addresses. The names and post-office
addresses of the incorporators of the Corporation are as follows:
<TABLE>
<CAPTION>
Name Number and Street City State Zip Code
---- ----------------- ---- ----- --------
<S> <C> <C> <C> <C>
Henry F. Rood 1301 South Harrison Street Fort Wayne Indiana 46801
Gordon C. Reeves 1301 South Harrison Street Fort Wayne Indiana 46801
Jack D. Hunter 1301 South Harrison Street Fort Wayne Indiana 46801
</TABLE>
Section 2. Age. All of such incorporators are of lawful age.
<PAGE>
- 9 -
ARTICLE X
---------
Provisions for Regulation of Business
-------------------------------------
and Conduct of Affairs of Corporation
-------------------------------------
Section 1. Disposition of Assets. To the extent permitted by law, any sale,
lease, exchange, mortgage, pledge, or other disposition of all or any part of
the assets of the Corporation may be made by authority of a resolution of the
Board of Directors; provided, that no shares of the Common Stock of The Lincoln
National Life Insurance Company owned by the Corporation shall be sold, leased,
exchanged, mortgaged, pledged, or otherwise disposed of except by the vote of
the holders of three-fourths of the shares of the Corporation outstanding and
entitled to vote thereon at an annual or special meeting of the shareholders
held upon notice which includes notice of the proposed sale, lease, exchange,
mortgage, pledge, or other disposition.
Section 2. Ownership by Corporation of Its Own Shares. The Corporation shall
have the right to purchase, take, receive or otherwise acquire, hold, own,
pledge, transfer or otherwise dispose of its own shares, and purchases of its
own shares whether direct or indirect may be made to the extent of unreserved
and unrestricted capital surplus available therefor.
Section 3. Place of Shareholders Meetings. All meetings of shareholders shall
be held at the principal office of the Corporation or at such other place,
either within or without the State of Indiana, as may be
<PAGE>
- 10 -
designated by a majority of the whole Board of Directors.
IN WITNESS WHEREOF, the undersigned, being all of the incorporators designated
in Article IX, execute these Articles of Incorporation and certify to the
truth of the facts herein stated, this 2nd day of January, 1968.
/s/ Henry F. Rood
---------------------------
Henry F. Rood
/s/ Gordon C. Reeves
---------------------------
Gordon C. Reeves
/s/ Jack D. Hunter
---------------------------
Jack D. Hunter
STATE OF INDIANA )
) SS:
COUNTY OF ALLEN )
I, the undersigned, a Notary Public duly commissioned to take acknowledgments
and administer oaths in the State of Indiana, certify that Henry F.Rood, Gordon
C. Reeves and Jack D. Hunter, being all of the incorporators referred to in
Article IX of the foregoing Articles of Incorporation, personally appeared
before me; acknowledged the execution thereof; and swore to the truth of the
facts therein stated.
WITNESS my hand and Notarial Seal this 2nd day of January, 1968.
/s/ Edith M. Harris
-----------------------------------
EDITH M. HARRIS
Notary Public in and for Allen County, Indiana
Residing in Monroeville, Indiana
My commission expires January 4, 1970
This instrument was prepared by: Gordon C. Reeves, Attorney at Law
Jack D. Hunter, Attorney at Law
White & Case, Attorneys at Law
<PAGE>
Certificate No. 4
STATE OF INDIANA
OFFICE OF THE SECRETARY OF STATE
INDIANAPOLIS, INDIANA
To Whom These Presents Come, Greeting:
Whereas, there has been presented to me at this office Articles of
Amendment in triplicate of LINCOLN NATIONAL CORPORATION
THE AMENDMENTS
--------------
The exact text of Article V and Section II(2) of ARTICLE X.
ARTICLE V. - See rider Attached.
Said Articles of Amendment having been prepared and signed in accordance with
"An Act concerning domestic and foreign corporations for profit, providing
penalties for the violation hereof, and repealing all laws or parts of laws in
conflict herewith," approved March 16, 1929, and Acts supplemental thereto.
Whereas, upon due examination, I find that they conform to law:
Now, therefore, I hereby certify that I have this day endorsed my approval
upon the triplicate copies of Articles so presented, and, having received the
fees required by law, in the sum of $30,013.00 have filed one copy of the
Articles in this office and returned two copies bearing the endorsement of my
approval to the Corporation.
In Witness Whereof, I have hereunto set my
hand and affixed the seal of the State of
Indiana, at the City of Indianapolis, this
28th day of May, 1969.
-----------------------------------------
Secretary of State.
By ______________________________________
Deputy.
<PAGE>
ARTICLES OF AMENDMENT
---------------------
OF THE
------
ARTICLES OF INCORPORATION
-------------------------
OF
--
LINCOLN NATIONAL CORPORATION
----------------------------
The undersigned officers of Lincoln National Corporation (hereinafter
referred to as the "Corporation"), existing pursuant to the provisions of The
Indiana General Corporation Act, as amended (hereinafter referred to as the
"Act"), desiring to give notice of corporate action effectuating amendment of
certain provisions of its Articles of Incorporation, certify the following
facts:
SUBDIVISION A
-------------
THE AMENDMENTS
--------------
The exact text of Article V of the Articles of Incorporation of the
Corporation, as amended, now is as follows:
ARTICLE V
---------
Number, Terms and Voting Rights of Shares
-----------------------------------------
Section 1. Number of Shares. The total number of shares which the
Corporation shall have authority to issue is thirty million (30,000,000)
shares, consisting of twenty million (20,000,000) shares with the par
value of Two Dollars and Fifty Cents ($2.50) per share, and ten
million (10,000,000) shares without par value.
<PAGE>
Section 2. Terms of Common Stock. The twenty million (20,000,000) shares
with a par value of Two Dollars and Fifty Cents ($2.50) per share which the
Corporation shall have authority to issue shall constitute a single class of
shares to be known as Common Stock. Only when all dividends accrued on all
preferred or special classes of shares entitled to preferential dividends shall
have been paid or declared and set apart for payment, but not otherwise, the
holders of Common Stock shall be entitled to receive dividends, when and as
declared by the Board of Directors. In event of any dissolution, liquidation or
winding up of the Corporation, the holders of the Common Stock shall be
entitled, after due payment or provision for payment of the debts and other
liabilities of the Corporation, and the amounts to which the holders of
preferred or special classes of shares may be entitled, to share ratably in the
remaining net assets of the Corporation.
Section 3. Voting Rights of Common Stock. Except as otherwise provided
by law, every holder of Common Stock of the Corporation shall have the right at
every shareholders' meeting to one vote for each share of Common Stock standing
in his name on the books of the
- 2 -
<PAGE>
Corporation on the date established by the Board of Directors as the record
date for determination of shareholders entitled to vote at such meeting.
Section 4. Terms of Preferred Stock, No Par Value. The ten million
(10,000,000) shares without par value which the Corporation shall have
authority to issue shall constitute a single class of shares to be known as
Preferred Stock, No Par Value. The Board of Directors shall have authority to
determine and state in the manner provided by law the rights, preferences,
qualifications, limitations and restrictions (other than voting rights) of the
Preferred Stock, No Par Value. The Preferred Stock, No Par Value, may be issued
in one or more series for such an amount of consideration as may be fixed from
time to time by the Board of Directors, and the Board of Directors shall have
authority to determine and state in the manner provided by law the designations
and the relative rights, preferences, qualifications, limitations and
restrictions (other than voting rights) of each such series.
Section 5. Voting Rights of Preferred Stock, No Par Value. Except as
otherwise provided by law, every holder of Preferred Stock, No Par Value, of the
- 3 -
<PAGE>
Corporation shall have the right at every shareholders' meeting to one vote for
each share of Preferred Stock, No Par Value, standing in his name on the books
of the Corporation on the date established by the Board of Directors as the
record date for determination of shareholders entitled to vote at such meeting.
At any time when six or more quarterly dividends, whether or not
consecutive, on the Preferred Stock, No Par Value, or on any one or more series
thereof, shall be in default, the holders of all Preferred Stock, No Par Value,
at the time or times outstanding as to which such default shall exist shall be
entitled, at the next annual meeting of shareholders, voting as a class, to
vote for and elect two Directors of the Corporation.
In the case of any vacancy in the office of a Director occurring among the
Directors elected by the holders of the shares of the Preferred Stock, No Par
Value, voting as a class pursuant to this Section, the remaining Director or
Directors elected by the holders of the shares of the Preferred Stock, No Par
Value, pursuant to this Section may elect a successor or successors to hold
office until the next annual or special meeting of the shareholders.
- 4 -
<PAGE>
At all meetings of shareholders held for the purpose of electing Directors
during such time as the holders of the shares of the Preferred Stock, No Par
Value, shall have the right, voting as a class, to elect Directors pursuant to
this Section,the presence in person or by proxy of the holders of a majority of
the outstanding shares of the Preferred Stock, No Par Value,then entitled, as a
class, to elect Directors pursuant to this Section shall be required to
constitute a quorum of such class for the election of Directors; provided, that
the absence of a quorum of the holders of Preferred Stock, No Par Value, shall
not prevent the election at any such meeting or adjournment thereof of Directors
by any other class or classes of stock if the necessary quorum of the holders
of such stock is present in person or by proxy at such meeting.
The right of the holders of Preferred Stock, No Par Value, voting as a
class, to participate in the election of Directors pursuant to this Section
shall continue in effect, in the case of all Preferred Stock, No Par Value,
entitled to receive cumulative dividends, until all accumulated and unpaid
dividends have been paid or declared and set apart for payment on all
-5-
<PAGE>
cumulative Preferred Stock, No Par Value, the holders of which shall have been
entitled to vote at the previous annual meeting of shareholders, or in the case
of all non-cumulative Preferred Stock, No Par Value, until non-cumulative
dividends have been paid or declared and set apart for payment for four
consecutive quarterly dividend periods on all non-cumulative Preferred Stock, No
Par Value, the holders of which shall have been entitled to vote at the previous
annual meeting of shareholders, and thereafter the right of the holders of
Preferred Stock, No Par Value, voting as a class, to participate in the
election of Directors pursuant to this Section shall terminate.
Upon termination of the right of the holders of Preferred Stock, No Par
Value, voting as a class, to participate in the election of Directors pursuant
to this Section, the term of office of each Director then in office elected by
the holders of the Preferred Stock, No Par Value, shall terminate, and any
vacancy so created may be filled as provided by the bylaws of the Corporation.
Any Director or Directors elected by the holders of Preferred Stock, No Par
Value, voting as a class pursuant to this Section, may be removed, with or
without
-6-
<PAGE>
cause, only by a vote of the holders of three-fourths of the outstanding shares
of Preferred Stock, No Par Value, taken at a meeting as provided by Section 4 of
Article VII of these Articles of Incorporation.
The Corporation shall not, without the approval of the holders of at least
two-thirds of the Preferred Stock, No Par Value, at the time outstanding, voting
as a class:
(a) Amend these Articles of Incorporation to create or authorize any
kind of stock ranking prior to or on a parity with the Preferred Stock, No Par
Value, with respect to payment of dividends or distribution on dissolution,
liquidation or winding up, or create or authorize any security convertible into
shares of stock of any such kind; or
(b) Amend, alter, change or repeal any of the express terms of the
Preferred Stock, No Par Value, or of any series thereof, then outstanding in a
manner prejudicial to the holders thereof; provided, that if any such amendment,
alteration, change or repeal would be prejudicial to the holders of one or more,
but not all, of the series of the Preferred Stock, No Par Value, at the time
outstanding, only such consent of
-7-
<PAGE>
the holders of two-thirds of the total number of outstanding shares of all
series so affected shall be required, unless a different or greater vote shall
be required by law; or
(c) Authorize the voluntary dissolution of the Corporation or any
revocation of dissolution proceedings theretofore approved, authorize any
Special Corporate Transaction, as defined in the Act, as amended from time to
time, or approve any limitation of the term of existence of the Corporation; or
(d) Merge or consolidate with another corporation in such manner that the
Corporation does not survive as a continuing entity, if thereby the rights,
preferences, or powers of the Preferred Stock, No Par Value, would be adversely
affected, or if there would thereupon be authorized or outstanding securities
which the Corporation, if it owned all of the properties then owned by the
resulting corporation, could not create without the approval of the holders of
the Preferred Stock, No Par Value.
Section 6. Class Voting. The holders of the outstanding shares of a class,
or of any series thereof, shall not be entitled to vote as a class except as
shall be expressly provided by this Article or by law.
- 8 -
<PAGE>
The exact text of Section 2 of Article X of the Articles of Incorporation
of the Corporation, as amended, now is as follows:
Section 2. Ownership by Corporation of Its Own Shares. The Corporation
shall have the right to purchase, take, receive or otherwise acquire, hold,
own, pledge, transfer or otherwise dispose of its own shares, and purchases
of its own shares whether direct or indirect may be made to the extent of
unreserved and unrestricted earned surplus or capital surplus available
therefor; provided, that the Corporation shall not use its funds or other
assets in effecting the retirement of its preferred shares by redemption or
purchase when such use would cause any impairment of its capital.
The exact text of Article V and Section 2 of Article X of the Articles of
Incorporation of the Corporation, as amended, are together herein referred to
as the "Amendments".
SUBDIVISION B
-------------
MANNER OF ADOPTION AND VOTE
---------------------------
1. Action by Directors
The Board of Directors of the Corporation, at a special meeting thereof,
duly called, constituted and held on April 28, 1969, at which a quorum of such
Board of Directors was present, duly
- 9 -
<PAGE>
adopted a resolution proposing to the Shareholders of the Corporation
entitled to vote in respect of the Amendments that the provisions and
terms of Article V and Section 2 of Article X of its Articles of
Incorporation be amended so as to read as set forth in the Amendments,
and directing that the Amendments be submitted to a vote of such
Shareholders at the annual meeting of Shareholders to be held May 28,
1969.
2. Action by Shareholders
The Shareholders of the Corporation entitled to vote in respect of the
Amendments, at a meeting thereof, duly called, constituted and held on May 28,
1969, at which 8,213,647 shares were present in person or by proxy, adopted
the Amendments.
The holders of the one class of issued and outstanding shares,
designated as Common Stock, were entitled to vote in respect of the Amendments.
9,685,904 shares were entitled to vote in respect of the Amendments. The
number of shares voted in favor of the adoption of the Amendments and the
number of shares voted against such adoption are as follows:
Amendment of Amendment of
Article V Section 2 of Article X
------------ ----------------------
Shares voted in favor: 7,979,573 7,996,268
Shares voted against: 148,138 152,576
3. Compliance with Legal Requirements
The manner of the adoption of the Amendments, and the vote by which they
were adopted, constitute full legal compliance with the provisions of the Act,
the Articles of Incorporation, and the Bylaws of the Corporation.
-10-
<PAGE>
SUBDIVISION C
-------------
STATEMENT OF CHANGES MADE WITH RESPECT TO THE
---------------------------------------------
SHARES HERETOFORE AUTHORIZED
----------------------------
1. Shares Heretofore Authorized
The number of shares which the Corporation had authority to issue prior to
the Amendments was fifteen million (15,000,000) shares with the par value of Two
Dollars and Fifty Cents ($2.50) per share, all of one class designated as Common
Stock.
2. Additional Shares Authorized by Amendments
The number of additional shares authorized by the Amendments is fifteen
million (15,000,000) shares, consisting of five million (5,000,000) shares with
the par value of Two Dollars and Fifty Cents ($2.50) per share designated as
Common Stock, and ten million (10,000,000) shares without par value designated
as Preferred Stock, No Par Value.
3. Aggregate Number of Shares Hereafter Authorized
The aggregate number of shares which the Corporation will have authority to
issue after giving effect to the Amendments, itemized by class, is as follows:
<TABLE>
<CAPTION>
Class Number Authorized
----- -----------------
<S> <C>
Common Stock 20,000,000
Preferred Stock, No Par Value 10,000,000
</TABLE>
IN WITNESS WHEREOF, the undersigned officers execute these Articles
of Amendment of the Articles of Incorporation of the
-11-
<PAGE>
Corporation, and certify to the truth of the facts herein stated, this
28th day of May, 1969.
/s/ Gordon C. Reeves
---------------------------------------
Gordon C. Reeves
President of
Lincoln National Corporation
/s/ Paul J. Sauerteig
---------------------------------------
Paul J. Sauerteig
Secretary of
Lincoln National Corporation
STATE OF INDIANA )
) SS:
COUNTY OF ALLEN )
I, the undersigned, a Notary Public duly commissioned to take
acknowledgments and administer oaths in the State of Indiana, certify
that Gordon C. Reeves, the President, and Paul J. Sauerteig, the
Secretary, of Lincoln National Corporation, the officers executing the
foregoing Articles of Amendment of Articles of Incorporation, personally
appeared before me; acknowledged the execution thereof; and swore to the
truth of the facts therein stated.
WITNESS my hand and Notarial Seal this 28th day of May, 1969.
/s/ Edith M. Harris
---------------------------------------
Notary Public in and for Allen
County, Indiana
Residing in Monroeville, Indiana
My Commission expires January 4, 1970
This instrument was prepared by Jack D. Hunter, Attorney at Law.
<PAGE>
STATE OF INDIANA
OFFICE OF THE SECRETARY OF STATE
SECRETARY OF STATE
To Whom These Presents Come, Greeting:
WHEREAS, there has been presented to me at this office a Certificate
of statement of the [Issurance] of Resolution by the Board of Directors,
Determining the Stating and Designations and Relative Rights, Preferences,
Qualifications, Limitations, or Restrictions of
LINCOLN NATIONAL CORPORATION
as follows: (H.I.)
NOW, THEREFORE, I hereby certify that I have this day endorsed my approval
upon the triplicate copies of the Certificates so presented and having
received the fees required by law in the sum of $13.00, have filed one copy
of the Certificate in this office and returned two copies bearing the
[encorsement] of my approval to the Corporation.
In Witness Whereof, I have hereunto set my
hand and affixed the seal of the State of
Indiana, at the City of Indianapolis, this
20th day of August, 1969.
-----------------------------------------
Secretary of State.
By ______________________________________
Deputy.
<PAGE>
CERTIFICATE OF RESOLUTION BY BOARD OF DIRECTORS
DETERMINING AND STATING THE DESIGNATION AND THE
RELATIVE RIGHTS, PREFERENCES, QUALIFICATIONS,
LIMITATIONS AND RESTRICTIONS (OTHER THAN VOTING RIGHTS)
OF A SERIES OF A CLASS OF PREFERRED SHARES
OF
LINCOLN NATIONAL CORPORATION
Pursuant to Section 6(b) of The Indiana General Corporation Act, as
amended, Paul J. Sauerteig, Secretary of Lincoln National Corporation (a
corporation existing pursuant to the provisions of The Indiana General
Corporation Act, as amended, and hereinafter referred to as the "Corporation"),
says that the Board of Directors of the Corporation at a duly called meeting of
said board on May 28, 1969, duly adopted the following resolution by a majority
vote, a quorum being present and voting:
RESOLVED that, pursuant to the authority expressly granted to and vested in
the Board of Directors of the Corporation by the provisions of the Articles of
Incorporation of the Corporation, this Board of Directors hereby creates and
authorizes the issue of, for the consideration stated, a series of the Preferred
Stock, No Par Value, of the Corporation, to consist of 2,233,421 shares of
Preferred Stock, No Par Value, of the Corporation, and this Board of Directors
hereby fixes
<PAGE>
the designation and the relative rights, preferences, qualifications,
limitations and restrictions (other than voting rights) of the shares of such
series as follows:
SECTION 1. Designation.
1.1 The designation of the series of Preferred Stock, No Par Value, created
by this resolution shall be "$3.00 Cumulative Convertible Preferred Stock,
Series A (No Par Value)" (the "Series A Preferred Stock").
SECTION 2. Dividends.
2.1 The holders of the Series A Preferred Stock shall be entitled to
receive, but only when and as declared by the Board of Directors, out of any
assets of the Corporation legally available for the purpose, cash dividends at
the rate of $3.00 per share per annum, and no more, payable $0.75 per share
quarterly on the fifth day of March, June, September, and December of each year
to such stockholders of record on the respective dates, not exceeding 50 days
preceding such dividend dates, fixed for the purpose by the Board of Directors.
2.2 Dividends shall be cumulative on shares of the Series A Preferred
Stock from and after dates determined as follows:
(a) if issued on or prior to the record date for the first dividend on such
shares, then from and after the fifth day of March, June, September or
December next preceding such record date;
-2-
<PAGE>
(b) if issued during the period immediately after a record date for a
dividend on the Series A Preferred Stock and ending on the payment date for such
dividend, then from and after such dividend payment date; and
(c) otherwise from and after the fifth day of March, June, September or
December next preceding the date of issue of such shares.
Accumulation of dividends shall not bear interest.
2.3 No dividends (other than dividends payable in Common Stock of the
Corporation) shall be paid or declared on the Common Stock of the Corporation or
on any other series of the Preferred Stock, No Par Value, or on any other class
or series of stock of the Corporation ranking as to dividends junior to or on a
parity with the Series A Preferred Stock, unless full dividends on all
outstanding shares of the Series A Preferred Stock for all past dividend periods
have been paid and unless full dividends on all such shares for the then current
dividend period shall have been paid or declared.
SECTION 3. Preference in Liquidation.
3.1 In the event of the liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, the holders of the Series A
Preferred Stock then outstanding
-3-
<PAGE>
shall be entitled to receive, after payment or provision for payment of all
creditors of the Corporation, but before any distribution or payment shall be
made in respect of the Common Stock or any other stock of the Corporation
ranking junior to the Series A Preferred Stock as to assets on liquidation,
dissolution or winding up, an amount equal to $80 per share, plus an amount
equal to all unpaid dividends thereon accrued on a daily basis to the date when
funds for payment are made available to the holders; and no payments on account
of liquidation, dissolution or winding up shall be made to the holders of any
series of Preferred Stock, No Par Value, or any other stock of the Corporation
ranking on a parity with the Series A Preferred Stock as to assets, unless there
shall likewise be paid at the same time to the holders of all shares of Series A
Preferred Stock like proportionate distributive amounts ratably, in proportion
to the full distributive amounts to which they are respectively entitled. The
holders of the Series A Preferred Stock shall have no rights in respect of the
remaining assets of the Corporation.
3.2 Neither the consolidation or merger of the Corporation with or into any
other corporation or corporations, nor the sale or transfer by the Corporation
of all or any part of its assets, shall be deemed to be a liquidation,
dissolution or winding up of the Corporation for purposes of this Section 3.
-4-
<PAGE>
SECTION 4. Redemption.
4.1 At any time or from time to time after October 31, 1974, (but not
before such time) and so long as any dividends on the Series A Preferred Stock
are not in arrears, the Corporation at the option of its Board of Directors,
shall have the right to redeem the Series A Preferred Stock, in whole or from
time to time in part, at a price equal to $80 per share plus an amount equal to
all unpaid dividends thereon accrued on a daily basis to the date of redemption.
4.2 Notice of every redemption shall be mailed at least 30 days, but not
more than 60 days, prior to the date fixed for redemption, addressed to the
holders of record of the shares to be redeemed at their respective addresses as
the same shall appear on the books of the Corporation. In the case of a
redemption of a part only of the Series A Preferred Stock the Corporation shall
select by lot the shares so to be redeemed.
4.3 If notice of redemption shall have been mailed as aforesaid, and if on
or before the redemption date specified in such notice a sum equal to the
redemption price of the shares so called for redemption shall have been set
aside by the Corporation, separate and apart from its other funds for the pro
rata benefit of the holders of the shares so called for redemption, so as to be
and continue to be available therefor, then, whether or not
- 5 -
<PAGE>
certificates for the shares so called for redemption shall have been surrendered
for cancellation, such shares, from and after the date of redemption so
designated, shall be deemed to be no longer outstanding, the right to receive
dividends thereon shall cease to accrue and all rights with respect to such
shares shall forthwith on such redemption date cease and terminate except only
the right of the holders thereof to receive the redemption price.
4.4 The Corporation may, however, at any time prior to the redemption date
specified in the notice of redemption but after such notice of redemption shall
have been mailed as aforesaid, deposit in trust, for the account of the holders
of the Series A Preferred Stock to be redeemed, with a bank or trust company in
good standing organized under the laws of the United States of America or of the
State of New York, or of the State of Illinois, doing business in the Borough of
Manhattan, City of New York, or in the City of Chicago, Illinois, having
capital, surplus and undivided profits aggregating at least $5,000,000,
designated in such notice of redemption, a sum equal to the redemption price of
such shares so called for redemption, and thereupon, whether or not certificates
for the shares so called for redemption shall have been surrendered for
cancellation (if such notice shall state that holders of the shares so called
for
- 6 -
<PAGE>
redemption may receive their redemption price at any time after such deposit),
all shares with respect to which such deposit shall have been made shall be
deemed to be no longer outstanding, the right to receive dividends thereon for
any period after the date so fixed for redemption shall cease to accrue and all
rights with respect to such shares shall forthwith upon such deposit in trust
cease and terminate except only (a) the rights of the holders thereof to
receive from such bank or trust company, at any time after the time of such
deposit, the redemption price of such shares to be redeemed, or (b) the right
to exercise, on or before the close of business on the third business day prior
to the date fixed for redemption, the privileges of conversion. Any moneys so
deposited by the Corporation which shall not be required for such redemption
because of the exercise of any such right of conversion, shall be repaid to the
Corporation forthwith. Any moneys so deposited by the Corporation and unclaimed
at the end of six years from the date fixed for such redemption shall be repaid
to the Corporation upon its request expressed in a resolution of its Board of
Directors, after which repayment the holders of the shares so called for
redemption shall look only to the Corporation for the payment thereof.
4.5 Shares of Series A Preferred Stock so redeemed shall, after the
Corporation takes appropriate steps required or permitted
- 7 -
<PAGE>
by the laws of Indiana, have the status of authorized and unissued shares of
Preferred Stock, No Par Value, and the number of shares of Preferred Stock, No
Par Value, which the Corporation shall have authority to issue shall not be
decreased by the redemption of shares of Series A Preferred Stock.
4.6 Nothing in this Section 4 shall limit any legal right of the
Corporation to purchase or otherwise acquire any shares of the Preferred Stock,
No Par Value, at not exceeding the price at which the same may be redeemed at
the option of the Corporation.
SECTION 5. Conversion Rights.
5.1 Subject to adjustment as provided in this Section 5, each share of
Series A Preferred Stock shall be convertible at the option of the respective
holder thereof, at the office of the transfer agent for the Common Stock, and at
such other place or places, if any, as the Board of Directors may determine,
into one fully paid and non-assessable share of Common Stock of the par value
of $2.50 per share (the "Common Stock") of the Corporation. In case of the
redemption of any shares of Series A Preferred Stock, such right of conversion
shall terminate, as to the shares called for redemption, at the close of
business on the third business day prior to the date fixed for redemption,
unless default shall be made in the payment of the redemption price. Upon
conversion the
-8-
<PAGE>
Corporation shall make no payment or adjustment on account of unpaid dividends
accrued on the Series A Preferred Stock surrendered for conversion.
5.2 The Common Stock issuable upon conversion of Series A Preferred Stock
shall be Common Stock as constituted at the date of this resolution, except as
otherwise provided in subdivision (b) of Section 5.5.
5.3 Before any holder of Series A Preferred Stock shall be entitled to
convert the same into Common Stock, he shall surrender the certificate or
certificates for such Series A Preferred Stock at the office of the transfer
agent for the Common Stock, which certificate or certificates, if the
Corporation shall so request, shall be duly endorsed to the Corporation or in
blank or accompanied by proper instruments of transfer to the Corporation or
in blank, and shall give written notice to the Corporation at that office that
he elects so to convert Series A Preferred Stock, and shall state in writing
therein the name or names in which he wishes the certificate or certificates
for Common Stock to be issued. Every such notice of election to convert shall
constitute a contract between the holder of such Series A Preferred Stock and
the Corporation, whereby the holder of such Series A Preferred Stock shall be
deemed to subscribe for the amount of Common Stock which he shall be entitled
to receive upon such conversion,
-9-
<PAGE>
and, in satisfaction of such subscription, to deposit the Series A Preferred
Stock to be converted and to release the Corporation from all liability
thereunder, and thereby the Corporation shall be deemed to agree that the
surrender of the certificate or certificates for the Series A Preferred Stock
and the extinguishment of liability thereon shall constitute full payment of
such subscription for Common Stock to be issued upon such conversion.
5.4 As soon as practicable after such deposit of certificates for Series A
Preferred Stock accompanied by the written notice and the statement above
prescribed, the Corporation will issue and deliver at the office of the transfer
agent to the person for whose account such Series A Preferred Stock was so
surrendered, or to his nominee or nominees, certificates for the number of full
shares of Common Stock to which he shall be entitled as aforesaid, together with
a cash adjustment of any fraction of a share as herein stated, if not evenly
convertible. Subject to the following provisions of this paragraph, such
conversion shall be deemed to have been made as of the date of such surrender of
the Series A Preferred Stock to be converted; and the person or persons entitled
to receive the Common Stock issuable upon conversion of such Series A Preferred
Stock shall be treated for all purposes as the record holder or holders of such
Common Stock on such date. The Corporation shall not be required to convert, and
no surrender of
-10-
<PAGE>
Series A Preferred Stock shall be effective for that purpose, while the stock
transfer books of the Corporation are closed for any purpose; but the surrender
of Series A Preferred Stock for conversion during any period while such books
are so closed shall become effective for conversion immediately upon the
reopening of such books, as if the conversion had been made on the date such
Series A Preferred Stock was surrendered.
5.5 The number of shares of Common Stock into which the shares of Series A
Preferred Stock shall be convertible shall be subject to adjustment from time
to time as follows:
(a) In case the Corporation shall at any time or from time to time
(1) declare a dividend payable in Common Stock,
(2) issue any shares of its Common Stock in subdivision of outstanding
shares of Common Stock, by reclassification or otherwise, or
(3) make any combination of shares of Common Stock, by reclassification or
otherwise,
the conversion rate shall be adjusted so that the holder of each share of
Series A Preferred Stock shall
-11-
<PAGE>
thereafter be entitled to receive upon the conversion of such share the
number of shares of the Corporation which he would have owned or have been
entitled to receive after the happening of any of the events described above
had such share been converted immediately prior to the happening of such
event. Further such adjustments shall be made whenever any of the events
listed above shall occur.
(b) In case of any capital reorganization or any reclassification of the
capital stock of the Corporation or in case of the consolidation or merger of
the Corporation with or into another corporation, or in case of any sale or
conveyance to another corporation of the assets of the Corporation as an
entirety or substantially as an entirety, the holder of each share of Series
A Preferred Stock then outstanding shall have the right to convert such share
into the kind and number of shares of stock and other securities and property
receivable upon such reorganization, reclassification, consolidation, merger,
sale or conveyance, as the case may be, by a holder of that number of shares
of Common Stock into which one share of Series A Preferred Stock is
convertible; and, in any such case, appropriate
-12-
<PAGE>
adjustment (as determined in good faith by a resolution of the Board of
Directors of the Corporation) shall be made in the application of the
provisions herein set forth with respect to rights and interests thereafter
of the holders of the Series A Preferred Stock, to the end that the
provisions set forth herein (including the specified adjustments) shall
thereafter be applicable, as near as reasonably may be, in relation to any
shares or other property thereafter deliverable upon the conversion of the
Series A Preferred Stock.
(c) In case the Corporation shall issue rights or warrants to the holders of
its Common Stock for the purpose of entitling them to subscribe for or
purchase shares of Common Stock at a price per share less than 95% of the
"current market price" per share of Common Stock (as defined in Section
5.9) on the date at which a record is taken of the holders of such issuance,
the number of shares of Common Stock into which each share of Series A
Preferred Stock shall thereafter be convertible shall be determined by
multiplying the number of shares of Common Stock into which such share of
Series A Preferred Stock was immediately theretofore convertible by a
fraction, of which the numerator shall
-13-
<PAGE>
be the sum of the number of shares of Common Stock outstanding at the time of
the taking of such record plus the number of additional shares of Common
Stock so offered for subscription or purchase, and of which the denominator
shall be the sum of the number of shares of Common Stock outstanding at the
time of the taking of such record plus the number of shares of Common Stock
which the aggregate offering price of the total number of shares so offered
would purchase at such current market price per share for such date. (d) No
adjustment in the number of shares of Common Stock into which any share of
Series A Preferred Stock is convertible shall be required unless such
adjustment would require an increase or decrease of at least 5% in the number
of shares of Common Stock into which a share of Series A Preferred Stock is
then convertible; provided, however, that any adjustments which by reason of
this subdivision (d) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All calculations under this
Section 5.5 shall be made to the nearest cent or to the nearest one-hundredth
of a share, as the case may be.
Whenever such an adjustment is to be made, the Corporation shall forthwith
file with the transfer agent for the Series A Preferred Stock and the Common
Stock, a statement signed by the
- 14 -
<PAGE>
President or one of the Vice Presidents of the Corporation and by its Treasurer
or an Assistant Treasurer, stating the adjustment to be made. Such statement
shall show in detail the facts requiring such adjustment. Whenever such an
adjustment is to be made, the Corporation will forthwith cause a notice stating
the adjustment to be mailed to the respective holders of record of Series A
Preferred Stock. Where appropriate, such notice may be given in
advance and included as a part of a notice required to be mailed under the
provisions of the following paragraph of this Section 5.5.
In case at any time:
(i) the Corporation shall pay any dividend payable in stock upon its Common
Stock or make any distribution (other than cash dividends) to the holders of
its Common Stock; or
(ii) the Corporation shall offer for subscription pro rata to the holders
of its Common Stock any additional shares of stock of any class or any other
rights; or
(iii) the consolidation or merger of the Corporation with or into another
corporation or the sale or conveyance of all or substantially all the assets
of the Corporation shall be proposed by the Corporation;
then in any one or more of those cases, the Corporation shall cause at
least fifteen days' prior notice to be mailed to the
- 15 -
<PAGE>
transfer agent for the Series A Preferred Stock and the Common Stock and to the
holders of record of the outstanding Series A Preferred Stock of the date on
which (x) the books of the Corporation shall close, or a record be taken for
such stock dividend, distribution or subscription rights, or (y) such
consolidation or merger or conveyance shall take place, as the case may be.
Such notice shall also specify the date as of which holders of Common Stock of
record shall participate in the dividend, distribution or subscription rights or
shall be entitled to exchange their Common Stock for securities or other
property deliverable upon such consolidation, merger, sale or conveyance, as the
case may be, and shall specify the proposed transactions in reasonable detail.
5.6 Shares of Series A Preferred Stock converted into Common Stock shall
have the status of authorized and unissued shares of Preferred Stock, No Par
Value, and the number of shares of Preferred Stock, No Par Value, which
the Corporation shall have authority to issue shall not be decreased by the
conversion of shares of Series A Preferred Stock.
5.7 The Corporation shall at all times reserve and keep available, out of
its authorized and unissued Common Stock, solely for the purpose of effecting
the conversion of the Series A Preferred Stock, such number of shares as shall
from time to time be sufficient to effect the conversion of all shares of Series
A Preferred Stock from time to time outstanding. The Corporation shall from time
to time, in accordance with the
- 16 -
<PAGE>
laws of Indiana increase the authorized amount of its Common Stock if at any
time the number of shares of Common Stock remaining unissued shall not be
sufficient to permit the conversion of all the then outstanding Series A
Preferred Stock.
5.8 No fractions of shares of Common Stock will be issued upon conversion.
In the event that because of any adjustments required to be made by Section 5.5
fractions of shares of Common Stock would be required to be issued upon
conversion, the Corporation will, in lieu of issuing such fractions of shares,
pay to the person otherwise entitled to such fractions the cash value of such
fractions based upon the current market price (as defined in Section 5.9) per
share of Common Stock on the day prior to that on which shares of Series A
Preferred Stock are surrendered by such person for conversion.
5.9 The "current market price" per share of Common Stock as to any
specified day shall be deemed to be the last reported sale price of the Common
Stock for such day (or, if there is no sale on such day, the last bid quotation
for the Common Stock) on the New York Stock Exchange (or, if the Common Stock is
not listed on the New York Stock Exchange, on a national securities exchange
designated by the Corporation) or, if the Common Stock is not listed upon any
national securities exchange, the average of the closing bid and asked
quotations for the Common Stock for such day as furnished by the trading
-17-
<PAGE>
department of any New York Stock Exchange member firm selected from time to time
by the Corporation for the purpose and deemed by it to be reliable. If an
exchange was not open, or if the Common Stock was not traded on an exchange or
elsewhere, on a day as of which the current market price is to be determined,
the determination of price or quotation shall be made as of the last business
day before such day.
5.10 The Corporation will pay any and all issue and other taxes that may
be payable in respect of any issue or delivery of shares of Common Stock on
conversion of Series A Preferred Stock pursuant hereto. The Corporation shall
not, however, be required to pay any tax which may be payable in respect of any
transfer involved in the issue and delivery of Common Stock in a name other than
that in which the Series A Preferred Stock so converted was registered, and no
such issue or delivery shall be made unless and until the person requesting such
issue has paid to the Corporation the amount of any such tax, or has
established, to the satisfaction of the Corporation, that such tax has been
paid.
5.11 The Corporation covenants that if any shares of Common Stock,
required to be reserved for purposes of conversion of the Series A Preferred
Stock hereunder, require registration with, or approval of, any governmental
authority under any federal or state law or listing on any national
-18-
<PAGE>
securities exchange, before such shares may be issued upon conversion, the
Corporation will in good faith and as expeditiously as possible take such action
as may be necessary to secure such registration or approval or listing on the
relevant national securities exchange, as the case may be.
SECTION 6. Consideration for Issue of Series A Preferred Stock.
6.1 Shares of Series A Preferred Stock shall be issued in exchange for
shares of common stock of Chicago Title and Trust Company pursuant to the terms
of the Memorandum of Understanding between this Corporation and Chicago Title
and Trust Company, which memorandum was approved by the Board of Directors of
the Corporation at its special meeting of April 28, 1969. Pursuant to Section 4
of Article V of the Articles of Incorporation, the Board of Directors hereby
fixes as the amount of consideration to be received by the Corporation for the
issue of each share of Series A Preferred Stock, one share of common stock of
Chicago Title and Trust Company.
Said Paul J. Sauerteig further says that the authority to adopt said
foregoing resolution is by the Articles of Incorporation legally vested in said
Board of Directors of the Corporation.
/s/ Paul J. Sauerteig
---------------------------
Paul J. Sauerteig
Secretary of
Lincoln National Corporation
-19-
<PAGE>
STATE OF INDIANA )
) ss:
COUNTY OF ALLEN )
Gordon C. Reeves, being duly sworn upon his oath, says that he is the
duly elected, qualified and acting President of Lincoln National Corporation
and that the foregong certificate is true in substance and in fact; and that
he verifies the same.
Witness my hand and seal this 20 day of August 1969.
/s/ Gordon C. Reeves
---------------------------------------
Gordon C. Reeves
President of
Lincoln National Corporation
STATE OF INDIANA )
) ss:
COUNTY OF ALLEN )
Subscribed and sworn to before me, a Notary Public, in and for Allen
County, State of Indiana, this 20 day of August 1969.
/s/ Bess M. Leadbetter
---------------------------------------
Notary Public in and for Allen County, Indiana
Residing in Fort Wayne, Indiana
My Commission Expires July 1, 1970
This instrument was prepared by Jack D. Hunter, Attorney at Law.
<PAGE>
STATE OF INDIANA
OFFICE OF THE SECRETARY OF STATE
SECRETARY OF STATE
To Whom These Presents Come, Greeting:
CERTIFICATE OF AMENDMENT
OF
LINCOLN NATIONAL CORPORATION
I, LARRY A. CONRAD, Secretary of State of the State of Indiana, hereby
certify that Articles of Amendment for the above Corporation, in the form
prescribed by my office, prepared and signed in duplicate in accordance
with "An Act concerning domestic and foreign corporations for profit,
providing penalties for the violation hereof, and repealing all laws or
parts of laws in conflict herewith," approved March 16, 1929, and Acts
supplemental thereto.
THE AMENDMENT:
THE EXACT TEXT OF ARTICLE V SECTION 1 AND THE EXACT TEXT OF THE FIRST
SENTENCE OF SECTION 2 OF ARTICLE V:
Whereas, upon due examination, I find that the Articles of Amendment conform
to law, and have endorsed my approval upon the duplicate copies of such
Articles; that all fees have been paid as required by law; that one copy of
such Articles has been filed in my office; and that the remaining copy
of such Articles bearing the endorsement of my approval and filing has been
returned by me to the Corporation.
In Witness Whereof, I have hereunto set my hand and affixed
the seal of the State of Indiana, at the City of Indianapolis,
this 24th day of May, 1972.
-------------------------------------------------------------
LARRY A CONRAD Secretary of State.
By ___________________________________________________________
Deputy
<PAGE>
ARTICLES OF AMENDMENT
---------------------
OF THE
------
ARTICLES OF INCORPORATION
-------------------------
OF
LINCOLN NATIONAL CORPORATION
----------------------------
The undersigned officers of Lincoln National Corporation (hereinafter
referred to as the "Corporation"), existing pursuant to the provisions of The
Indiana General Corporation Act, as amended (hereinafter referred to as the
"Act"), desiring to give notice of corporate action effectuating amendment of
certain provisions of its Articles of Incorporation, certify the following
facts:
SUBDIVISION A
-------------
THE AMENDMENTS
--------------
The exact text of Section 1 of Article V of the Articles of Incorporation
of the Corporation, as amended, now is as follows:
Section 1. Number of Shares. The total number of shares which the
Corporation shall have authority to issue is fifty million (50,000,000)
shares, consisting of forty million (40,000,000) shares with the par
<PAGE>
value of Two Dollars and Fifty Cents ($2.50) per share, and ten million
(10,000,000) shares without par value.
The exact text of the first sentence of Section 2 of Article V of the
Articles of Incorporation of the Corporation, as amended (immediately following
the heading "Section 2. Terms of Common Stock."), now is as follows:
The forty million (40,000,000) shares with a par value of Two Dollars and
Fifty Cents ($2.50) per share which the Corporation shall have authority to
issue shall constitute a single class of shares to be known as Common Stock.
The heading and other sentences of Section 2 and the subsequent sections
of Article V remain in full effect as heretofore adopted.
SUBDIVISION B
-------------
MANNER OF ADOPTION AND VOTE
---------------------------
1. Action by Directors
The Board of Directors of the Corporation, at a meeting thereof, duly
called, constituted and held on March 16, 1972, at which a quorum of such Board
of Directors
-2-
<PAGE>
was present, duly adopted a resolution proposing to the Shareholders of the
Corporation entitled to vote in respect of the Amendments that the provisions
and terms of Section 1 of Article V and the first sentence of Section 2 of
Article V of its Articles of Incorporation be amended so as to read as set forth
in the Amendments, and directing that the Amendments be submitted to a vote of
such Shareholders at the annual meeting of Shareholders to be held on May 24,
1972.
2. Action by Shareholders
The Shareholders of the Corporation entitled to vote in respect of the
Amendments, at a meeting thereof, duly called, constituted and held on May 24,
1972, at which 10,302,465 shares were present in person or by proxy, adopted the
Amendments.
The holders of the following classes of shares were entitled to vote as a
class in respect of the Amendments:
(1) Common Stock
(2) Preferred Stock, No Par Value, of which the only outstanding series is
$3.00 Cumulative Convertible Preferred Stock, Series A (No Par Value)
The holders of the above classes of shares were also entitled to vote together
in respect of the Amendments.
-3-
<PAGE>
The number of shares entitled to vote in respect of the Amendments, the
number of shares voting in favor of the adoption of the Amendments, and the
number of shares voted against such adoption are as follows:
<TABLE>
All Classes of Shares Shares Voting
Voting Together as a Class
--------------------- ---------------------
Common Preferred
--------- ---------
<S> <C> <C> <C>
Shares entitled to vote: 11,911,148 9,687,925 2,223,223
---------- --------- ---------
Shares voted in favor: 10,160,478 8,449,317 1,711,161
---------- --------- ---------
Shares voted against: 141,887 40,269 101,618
---------- --------- ---------
</TABLE>
3. Compliance with Legal Requirements
The manner of the adoption of the Amendments, and the vote by which they
were adopted, constitute full legal compliance with the provisions of the Act,
the Articles of Incorporation, and the Bylaws of the Corporation.
SUBDIVISION C
-------------
STATEMENT OF CHANGES MADE WITH RESPECT TO THE
---------------------------------------------
SHARES HERETOFORE AUTHORIZED
----------------------------
1. Shares Heretofore Authorized
The number of shares which the Corporation had authority to issue prior to
the Amendments was thirty million (30,000,000) shares, consisting of twenty
million
-4-
<PAGE>
(20,000,000) shares with the par value of Two Dollars and Fifty Cents ($2.50)
per share designated as Common Stock, and ten million (10,000,000) shares
without par value designated as Preferred Stock, No Par Value.
2. Additional Shares Authorized by Amendments
The number of additional shares authorized by the Amendments is twenty
million (20,000,000) shares with the par value of Two Dollars and Fifty Cents
($2.50) per share designated as Common Stock.
3. Aggregate Number of Shares Hereafter Authorized
The aggregate number of shares which the Corporation will have authority
to issue after giving effect to the Amendments, itemized by class is as follows:
Class Number Authorized
----- -----------------
Common Stock 40,000,000
Preferred Stock, No Par Value 10,000,000
IN WITNESS WHEREOF, the undersigned officers execute these Articles of
Amendment of the Articles of Incorporation of the Corporation and certify to
the
-5-
<PAGE>
truth of the facts herein stated, this 24th day of May, 1972.
/s/ Thomas A. Watson
--------------------------------
Thomas A. Watson, President
Lincoln National Corporation
/s/ Paul J. Sauerteig
--------------------------------
Paul J. Sauerteig, Secretary
Lincoln National Corporation
STATE OF INDIANA )
) SS:
COUNTY OF ALLEN )
I, the undersigned, a Notary Public duly commissioned to take
acknowledgments and administer oaths in the State of Indiana, certify
that Thomas A. Watson, the President, and Paul J. Sauerteig, the
Secretary, of Lincoln National Corporation, the officers executing the
foregoing Articles of Amendment of Articles of Incorporation, personally
appeared before me; acknowledged the execution thereof; and swore to the
truth of the facts therein stated.
WITNESS my hand and Notarial Seal this 24th day of May, 1972.
/s/ Patricia J. Stump
--------------------------------------
Notary Public in and for Allen County, Indiana
Residing in Fort Wayne, Indiana
My Commission Expires October 30, 1974
This instrument was prepared by Jack D. Hunter, Attorney at Law.
<PAGE>
STATE OF INDIANA )
) SS:
COUNTY OF ALLEN )
I, the undersigned, a Notary Public duly commissioned to take
acknowledgments and administer oaths in the State of Indiana, certify
that Ian M. Rolland, the President, and Paul J. Sauerteig, the
Secretary, of Lincoln National Corporation, the officers executing the
foregoing Notice of Change of Principal Office and Resident Agent,
personally appeared before me; acknowledged the execution thereof; and
swore to the truth of the facts therein stated.
WITNESS my hand and Notarial Seal this twelfth day of May, 1977.
/s/ Joan L. Spreen
--------------------------------------
Notary Public in and for Allen County, Indiana
Residing in Fort Wayne, Indiana
My Commission Expires February 18, 1980
This instrument was prepared by Jack D. Hunter, Attorney at Law.
<PAGE>
STATE OF INDIANA
OFFICE OF THE SECRETARY OF STATE
To Whom These Presents Come, Greeting:
WHEREAS, there has been presented to me at this office a Statement of
Reduction of the Authorized Capital Stock of
LINCOLN NATIONAL CORPORATION
showing reduction of authorized Capital Stock from
1. Shares Hertofore Authorized
COMMON 40,000,000
PREFERRED 10,000,000
____________________________
2. Shares Reduced and Cancelled
COMMON 2,074,400
____________________________
____________________________
3. Shares Hereafter Authorized
COMMON 40,000,000
PREFERRED 10,000,000
____________________________
4. Number of Issued and Unissued (Preferred) Shares
Class Shares Issued Shares Unissued
COMMON STOCK 20,707,184 19,292,816
PREFERRED STOCK 520,256 9,497,644
_______________ _____________ _______________
5. Number Restored to the Status of Authorized by Unissued
The total number of shares hereby restored to the status of authorized
but unissued shares of the Corporation is 2,074,400.
WHEREAS, said Statement of Reduction of Authorized Capital Stock has been
prepared and signed in accordance with the Indiana General Corporation Act
(approved March 16, 1929) /The Indiana Cooperative Association Act
(approved February 23, 1925):
WHEREAS, upon due examination, I find that they conform to law:
NOW, THEREFORE, I, EDWIN J. SIMCOX, Secretary of State of the State of Indiana,
hereby certify that I have this day endorsed my approval upon all copies of
Articles so presented, and, having received the fees required by law, in the
sum of $4,154.80, have filed one copy of the Articles in this office and
returned the remaining copies bearing the endorsement of my approval to the
Corporation.
In Witness Whereof, I have hereunto set my
hand and affixed the seal of the State of
Indiana, at the City of Indianapolis, this
4th day of OCTOBER, 1979.
------------------------------------------
Secretary of State
By:_______________________________________
<PAGE>
STATEMENT OF CANCELLATION AND
-----------------------------
RESTORATION OR DEAUTHORIZATION OF
---------------------------------
SHARES
------
OF
--
LINCOLN NATIONAL CORPORATION
The undersigned officers of Lincoln National Corporation (hereinafter
referred to as the "Corporation"), existing pursuant to the provisions of The
Indiana General Corporation Act as amended (hereinafter referred to as the
"Act"), desiring to give notice of corporate action effectuating cancellation
of shares of the Corporation, which have been reacquired by it, and restored
to the status of authorized by unissued shares or deauthorized shares, certify
the following facts:
SUBDIVISION A
-------------
Shares Cancelled
1. (Check appropriate box)
[X] This statement relates to the cancellation of shares of the Corporation
other than preferred shares.
[_] This statement relates to the cancellation of preferred shares of the
Corporation only.
2. (Check appropriate box)
[X] The shares cancelled hereby shall have the status of authorized but
unissued shares.
[_] The shares cancelled hereby shall no longer be authorized shares of the
Corporation.
<PAGE>
SUBDIVISION B
-------------
ACTION BY DIRECTORS
-------------------
(Select appropriate paragraph)
[X] The Board of Directors of the Corporation at a meeting thereof, duly
called, constituted and held on October 2, 1979, at which a quorum of such
Board of Directors was present, duly adopted the following resolutions:
[_] By written consent, executed on N/A , 19 , signed by all of the members
of the Board of Directors of the Corporation, the following resolutions
were adopted:
RESOLVED, that 2,074,400 shares of the Corporation heretofore reacquired
by it, as itemized below by class, are hereby cancelled.
2,074,400 shares of Common Stock, $2.50 par value
RESOLVED, that the Corporation (shall) have authority to reissue the
shares cancelled hereby.
RESOLVED, that the Treasurer of the Corporation is authorized and
directed to reflect such cancellation upon the books of account of the
Corporation, and in connection therewith, to reduce the stated capital
of the Corporation by the aggregate par value of the shares so cancelled
having a par value, and by the aggregate consideration allocated by the
Board of Directors to stated capital in respect of the shares so
cancelled having no par value.
<PAGE>
SUBDIVISION C
-------------
STATEMENT OF CHANGES MADE WITH RESPECT TO THE
---------------------------------------------
SHARES HERETOFORE AUTHORIZED
----------------------------
(Note: If preferred shares only are cancelled by this statement, the information
required to be given in this subdivision need be given only in respect of
preferred shares of the Corporation. If shares other than preferred shares are
cancelled, strike out the word "preferred" each time it occurs.)
1. Aggregate Number of (XXXXXXXXX) Shares Heretofore Authorized
The aggregate number of XXXXXXXXX shares which the Corporation had authority
to issue prior to such cancellation, itemized by class, is as follows:
Class Shares Heretofore Authorized
Common Stock, $2.50 par value 40,000,000
Preferred Stock, no par value 10,000,000
_____________________________ __________
2. Aggregate Number of XXXXXXXXX Shares Cancelled
The number of XXXXXXXXX shares which are cancelled hereby itemized by class
is as follows:
Class Shares Cancelled
Common Stock 2,074,400
_____________________________ __________
_____________________________ __________
3. Aggregate Number of XXXXXXXXX Shares Hereafter Authorized
The aggregate number of XXXXXXXXX shares which the Corporation will have
authority to issue after giving effect to such cancellation, itemized by
class, is as follows:
Class Shares Hereafter Authorized
Common Stock 40,000,000
Preferred Stock 10,000,000
_____________________________ __________
4. Number of Issued and Unissued XXXXXXXXX Shares
The aggregate number of issued XXXXXXXXX shares and the aggregate number
of unissued XXXXXXXXX shares of the Corporation, after giving effect to
such cancellation, itemized by class, are as follows:
Class Shares Issued Shares Unissued
Common Stock 20,707,184 19,292,816
Preferred Stock 520,356 9,479,644
__________________ __________ __________
5. Number Restored to the Status of Authorized by Unissued
The total number of shares hereby restored to the status of authorized
but unissued shares of the Corporation is 2,074,400.
<PAGE>
IN WITNESS WHEREOF, the undersigned officers execute this Statement and
certify to the truth of the facts herein stated, this 2nd day of October,
1979.
/s/ Ian M. Rolland
-----------------------------------
(Written Signature)
Ian M. Rolland
----------------------------
(Printed Signature)
President of
Lincoln National Corporation
----------------------------
(Name of Corporation)
/s/ Thagrus A. Burns
-----------------------------------
(Written Signature)
Thagrus A. Burns
----------------------------
(Printed Signature)
Secretary of
Lincoln National Corporation
----------------------------
(Name of Corporation)
STATE OF INDIANA}
} SS:
COUNTY OF ALLEN }
I, the undersigned, a Notary Public duly commissioned to take
acknowledgments and administer oaths in the State of Indiana, certify that
Ian M. Rolland, the President and Thagrus A. Burns, the Secretary of
Lincoln National Corporation, the officers executing the foregoing Statement,
personally appeared before me; acknowledged the execution thereof; and swore
to the truth of the facts therein stated.
WITNESS my hand and Notarial Seal this 2nd day of October, 1979.
/s/ Joan L. Kendall
-----------------------------------
(Written Signature)
JOAN L. KENDALL
Notary Public in and for
Huntington County, Indiana
Residing at Huntington County
My Commission Expires February 18, 1980
----------------------------
(Printed Signature)
Notary Public
My commission expires
- ---------------------
This instrument was prepared by J. Michael Keefer, Esq.
1300 South Clinton St.
Fort Wayne, Indiana 46801
<PAGE>
STATE OF INDIANA
OFFICE OF THE SECRETARY OF STATE
CERTIFICATE OF AMENDMENT
OF
LINCOLN NATIONAL CORPORATION
I, EDWIN J. SIMCOX, Secretary of State of Indiana, hereby certify that
Articles of Amendment for the above Corporation have been filed in the form
prescribed by my office, prepared and signed in duplicate in accordance
with Chapter Four of the Indiana General Corporation Act (IC 23-1-4).
NOW, THEREFORE, upon due examination, I find that the Articles of Amendment
conform to law, and have endorsed my approval upon the duplicate copies of such
Articles; that all fees have been paid as required by law; that one copy of
such Articles has been filed in my office; and that the remaining copy of such
Articles bearing the endorsement of my approval and filing has been returned by
me to the Corporation.
In Witness Whereof, I have hereunto set my
hand and affixed the seal of the State of
Indiana, at the City of Indianapolis, this
29th day of December, 1983
------------------------------------------
EDWIN J. SIMCOX, Secretary of State
By________________________________________
Deputy
<PAGE>
ARTICLES OF AMENDMENT
---------------------
OF THE
------
ARTICLES OF INCORPORATION
-------------------------
OF
--
LINCOLN NATIONAL CORPORATION
----------------------------
The undersigned officers of Lincoln National Corporation (hereinafter
referred to as the "Corporation") existing pursuant to the provisions of the
Indiana General Corporation Act (Medical Professional Corporation Act/Dental
Professional Corporation Act/Professional Corporation Act of 1965), as amended
(hereinafter referred to as the "Act"), desiring to give notice of corporate
action effectuating amendment of certain provisions of its Articles of
Incorporation, certify the following facts:
ARTICLE I
---------
Text of the Amendment
---------------------
X
The exact text of Article(s) V, Sections 1 and 2 of the Articles of
Incorporation of the Corporation, as amended (hereinafter referred to as the
"Amendments"), now is as follows:
See Page 1-A
<PAGE>
Page 1-A
ARTICLE V
Number, Terms and Voting Rights of Shares
Section 1. The total number of shares which the Corporation shall have
authority to issue is one hundred thirty-five million (135,000,000) shares,
consisting of one hundred twenty-five million (125,000,000) shares with the par
value of One Dollar and Twenty-Five Cents ($1.25) per share, and ten million
(10,000,000) shares without par value.
Section 2. The one hundred twenty-five million (125,000,000) shares with
a par value of One Dollar and Twenty-Five Cents ($1.25) per share which the
Corporation shall have authority to issue shall constitute a single class of
shares to be known as Common Stock. Only when all dividends accrued on all
preferred or special classes of shares entitled to preferential dividends shall
have been paid or declared and set apart for payment, but not otherwise, the
holders of Common Stock shall be entitled to receive dividends, when and as
declared by the Board of Directors. In event of any dissolution, liquidation or
winding up of the Corporation, the holders of the Common Stock shall be
entitled, after due payment or provision for payment of the debts and other
liabilities of the Corporation, and the amounts to which the holders of
preferred or special classes of shares may be entitled, to share ratably in the
remaining net assets of the Corporation.
<PAGE>
ARTICLE II
----------
Manner of Adoption and Vote
---------------------------
Section 1. Action by Directors (select appropriate paragraph).
(a) The Board of Directors of the Corporation, at a meeting thereof, duly
called, constituted and held on November 10, 1983, at which a quorum of such
Board of Directors was present, duly adopted a resolution proposing to the
Shareholders of the Corporation entitled to vote in respect of the Amendments
that the provisions and terms of Article V of its Articles of Incorporation be
amended so as to read as set forth in the Amendments; and called a meeting of
such shareholders, to be held December 28, 1983, to adopt or reject the
Amendments, unless the same were so approved prior to such date by unanimous
written consent.
(b) By written consent executed on ___________, 19__, signed by all of the
members of the Board of Directors of the Corporation, a resolution was adopted
proposing to the Shareholders of the Corporation entitled to vote in respect of
the Amendments, that the provisions and terms of Articles of its Articles of
Incorporation be amended so as to read as set forth in the Amendments, and a
meeting of such shareholders was called to be held ___________, 19__, to adopt
or reject the Amendments, unless the same were so approved prior to such date by
unanimous written consent.
Section 2. Action by Shareholders (select appropriate paragraph).
(a) The Shareholders of the Corporation entitled to vote in respect of the
Amendments, at a meeting thereof, duly called, constituted and held on
December 28, 1983, at which a quorum of such shareholders was present, adopted
the Amendments.
The holders of the following classes of shares were entitled to vote as a
class in respect of the Amendments:
(1) Common Stock
(2)
(3)
<PAGE>
The number of shares entitled to vote in respect of the Amendments, the
number of shares voted in favor of the adoption of the Amendments, and the
number of shares voted against such adoption are as follows:
<TABLE>
<CAPTION>
Total Shares Entitled to Vote as a Class
(as listed immediately above)
-----------------------------
(1) (2) (3)
<S> <C> <C> <C> <C>
Shares entitled to vote: 21,411,628 21,116,200 __________ __________
Shares voted in favor: 15,543,632 15,372,129 __________ __________
Shares voted against: 344,807 340,500 __________ __________
</TABLE>
By written consent executed on _____________________________, 19____,
signed by the holders of ___________ shares of the Corporation, being all of
the shares of the Corporation entitled to vote in respect of the Amendments,
the Shareholders adopted the Amendments.
Section 3. Compliance with Legal Requirements.
The manner of the adoption of the Amendments, and the vote by which they
were adopted, constitute full legal compliance with the provisions of the Act,
the Articles of Incorporation, and the By-Laws of the Corporation.
ARTICLE III
-----------
Statement of Changes Made With Respect to Any Increase
------------------------------------------------------
In The Number of Shares Heretofore Authorized
---------------------------------------------
Common Stock
------------
Aggregate Number of Shares 40,000,000
Previously Authorized
Increase (indicate "O" or "N/A" if no increase) 85,000,000
Aggregate Number of Shares
To Be Authorized After Effect of This Amendment 125,000,000
No change is proposed in authorized Preferred Stock.
<PAGE>
IN WITNESS WHEREOF, the undersigned officers execute these Articles of
Amendment of the Articles of Incorporation of the Corporation, and certify
to the truth of the facts herein stated, this 28th day of December, 1983.
/s/ Ian M. Rolland /s/ Marilyn A. Vachon
- ----------------------------- ------------------------------
(Written Signature) (Written Signature)
Ian M. Rolland Marilyn A. Vachon
- ----------------------------- ------------------------------
(Printed Signature) (Printed Signature)
President Secretary
STATE OF INDIANA )
COUNTY OF ALLEN ) SS:
I, the undersigned, a Notary Public duly commissioned to take
acknowledgements and administer oaths in the State of Indiana, certify that
Ian M. Rolland, the President, and Marilyn A. Vachon, the Secretary of the
Corporation, the officers executing the foregoing Articles of Amendment of
the Articles of Incorporation, personally appeared before me, acknowledged
the execution thereof, and swore or attested to the truth of the facts
therein stated.
Witness my hand and Notarial Seal this 28th day of December, 1983.
/s/ Julie A. Romine
------------------------------
(Written Signature)
Julie A. Romine
------------------------------
(Printed Signature)
NOTARY PUBLIC
My Commission Expires: My County of Residence is:
February 15, 1986 Allen
- ----------------------------- -----------------------------
This instrument was prepared by J. Michael Keefer, Attorney at Law,
-----------------
(Name)
1300 South Clinton Street, Fort Wayne, Indiana 46801
- --------------------------------------------------------------------
(Number and Street or Building) (City) (State) (Zip Code)
<PAGE>
STATE OF INDIANA
OFFICE OF THE SECRETARY OF STATE
To Whom These Presents Come, Greeting:
I, EDWIN J. SIMCOX, Secretary of State of the State of Indiana,
do hereby certify that
LINCOLN NATIONAL CORPORATION
----------------------------
a corporation duly organized and existing under the laws of the State of
Indiana, has this day filed in the [the] Office of the Secretary of State,
a certificate in triplicate showing a statement of the relative rights,
preferences, limitations, or restrictions of shares as adopted by the Board
of Directors acting by committee (pursuant to (1) Chapter 1-2-11 (g) of The
Indiana General Corporation Act, as amended, (2) Section 1, Article IV of the
Bylaws and (3) Resolution No. 735 of the Board of Directors), at a duly
[heald] and [constitued] meeting held November 13, 1984, under the
certificate of the Secretary and verification of its President in accordance
with The Indiana General Corporation Act.
I furthe certify that said certificate is now of record and on file
in this office.
In Witness Whereof, I have hereunto set my hand and
affixed the seal of the State of Indiana, at the
City of Indianapolis, this 14th day of
--------------
November , 19 84
[SEAL OF THE -------------------- ------
STATE OF
INDIANA] ---------------------------------------------------
EDWIN J. SIMCOX Secretary of State,
By--------------------------------------------------
Deputy
<PAGE>
CERTIFICATE OF RESOLUTION BY THE BOARD OF DIRECTORS
DETERMINING AND STATING THE DESIGNATION AND THE
RELATIVE RIGHTS, PREFERENCES, QUALIFICATIONS,
LIMITATIONS AND RESTRICTIONS (OTHER THAN VOTING RIGHTS)
OF A SERIES OF A CLASS OF PREFERRED SHARES
OF
LINCOLN NATIONAL CORPORATION
Pursuant to Chapter 1-2-6(b) of The Indiana General Corporation Act, as
amended, Marilyn A. Vachon, Secretary of Lincoln National Corporation (a
corporation existing pursuant to the provisions of The Indiana General
Corporation Act, as amended, and hereinafter referred to as the "Corporation")
states that the Board of Directors of the Corporation acting by committee
pursuant to Chapter 1-2-11(g) of The Indiana General Corporation Act, as
amended, at a duly called meeting on November 13, 1984, duly adopted the
following resolution:
RESOLVED: Pursuant to the authority expressly granted to and vested in
the Board of Directors of the Corporation by the provisions of the
Articles of Incorporation of the Corporation, this Board of Directors
hereby creates and authorizes the issue of a series of the Preferred
Stock, No Par Value, of the Corporation, to consist of one thousand
(1,000) shares of Preferred Stock, No Par Value, of the Corporation,
and this Board of Directors hereby fixes the designation and the
relative rights, preferences, qualifications, limitations and
restrictions (other than voting rights) of the shares of such series as
follows:
ARTICLE ONE. SHORT TERM AUCTION RATE CUMULATIVE PREFERRED STOCK, SERIES B
(NO PAR VALUE)
Section 1. Designation.
(a) The designation of such series of Preferred Stock, No Par Value, shall
be "Short Term Auction Rate Cumulative Preferred Stock, Series B (No Par Value)"
(hereinafter referred to as "STAR Preferred").
(b) The number of authorized shares constituting STAR Preferred is 1,000.
Shares of STAR Preferred shall be issued with a liquidation value of $100,000
per share plus accrued dividends and shall be without par value.
Section 2. Definitions.
As used herein, the following terms shall have the following meanings (with
terms defined in the singular having comparable meanings when used in the plural
and vice versa), unless the context otherwise requires:
(a) "AA Composite Commercial Paper Rate", on any date, shall mean (i) the
interest equivalent of the 60-day rate on commercial paper
<PAGE>
placed on behalf of issuers whose corporate bonds are rated "AA" by Standard &
Poor's Corporation or its successor, or the equivalent of such rating by another
rating agency, as made available on a discount basis or otherwise by the Federal
Reserve Bank of New York for the immediately preceding Business Day prior to
such date, or (ii) in the event that the Federal Reserve Bank of New York does
not make available such a rate, then the arithmetic average of the interest
equivalent of the 60-day rate on commercial paper placed on behalf of such
issuers, as quoted on a discount basis or otherwise by the Commercial Paper
Dealers to the Trust Company or the Corporation, as the case may be, for the
close of business of the immediately preceding Business Day prior to such date.
If any Commercial Paper Dealer does not quote a rate required to determine the
"AA" Composite Commercial Paper Rate, the "AA" Composite Commercial Paper Rate
shall be determined on the basis of the quotation or quotations furnished by the
remaining Commercial Paper Dealer or Commercial Paper Dealers and any Substitute
Commercial Paper Dealer or Substitute Commercial Paper Dealers selected by the
Corporation to provide such rate or rates not being supplied by any Commercial
Paper Dealer or Commercial Paper Dealers, as the case may be, or, if the
Corporation does not select any such Substitute Commercial Paper Dealer or
Substitute Commercial Paper Dealers, by the remaining Commercial Paper Dealer or
Commercial Paper Dealers. If the Board of Directors of the Corporation shall
make the adjustment referred to in clause (A) of the second sentence of Section
3(b) of this ARTICLE ONE with the result that (i) the dividend period days (as
defined in such subparagraph (b)) shall be less than 70 days, such rate shall be
the interest equivalent of the 60-day rate on such commercial paper, (ii) the
dividend period days shall be 70 or more days but fewer than 85 days, such rate
shall be the arithmetic average of the interest equivalent of the 60-day and
90-day rates on such commercial paper, and (iii) the dividend period days shall
be 85 or more days but 98 or less days, such rate shall be the interest
equivalent of the 90-day rate on such commercial paper. For purposes of this
definition, the "interest equivalent" of a rate stated on a discount basis (a
"discount rate") for commercial paper of a given days' maturity shall be equal
to the quotient of (A) the discount rate divided by (B) the difference between
(x) 1.00 and (y) a fraction the numerator of which shall be the product of the
discount rate times the number of days in which such commercial paper matures
and the denominator of which shall be 360.
(b) "Applicable Rate" shall have the meaning specified in Section 3(c)(i)
of this ARTICLE ONE.
(c) "Business Day" shall mean a day on which the New York Stock Exchange
is open for trading and which is not a day on which banks in The City of New
York, New York are authorized by law to close.
(d) "Commercial Paper Dealers" shall mean The First Boston Corporation,
Salomon Brothers Inc and Merrill Lynch, Pierce, Fenner & Smith Incorporated, or,
in lieu of any thereof, their respective affiliates or successors.
-2-
<PAGE>
(e) "Common Shares" shall mean all shares now or hereafter authorized of
the class of common shares of the Corporation presently authorized and any other
shares into which such shares may hereafter be changed from time to time.
(f) "Date of Original Issue" means the date on which the corporation
initially issues shares of STAR Preferred.
(g) "Dividend Payment Date" shall have the meaning specified in Section
3(b) of this ARTICLE ONE.
(h) "Dividend Period" and "Dividend Periods" shall have the respective
meanings specified in Section 3(c)(i) of this ARTICLE ONE.
(i) "Holder" shall mean the holder of shares of STAR Preferred as the same
appears on the stock transfer books of the Corporation.
(j) "Initial Dividend Payment Date" shall have the meaning specified ln
Section 3(b) of this ARTICLE ONE.
(k) "Initial Dividend Period" shall have the meaning specified in Section
3(c)(i) of this ARTICLE ONE.
(l) "LIBOR" shall mean for any Dividend Period the average (rounded to the
nearest 1/16 of 1%) of the respective rates per annum quoted by each of the
Reference Banks at which United States dollar deposits for a two-month period in
the amount of U.S. $10,000,000 are offered by such Reference Bank in the London
interbank market at approximately 11:00 A.M. (London time) on the first day of
such Dividend Period. If any Reference Bank does not quote a rate required to
determine LIBOR, LIBOR shall be determined on the basis of the quotation or
quotations furnished by the remaining Reference Bank or Reference Banks and any
Substitute Reference Bank or Substitute Reference Banks selected by the
Corporation to provide such quotation or quotations not being supplied by any
Reference Bank or Reference Banks, as the case may be, or, if the Corporation
does not select any such Substitute Reference Bank or Substitute Reference
Banks, by the remaining Reference Bank or Reference Banks. If the Board of
Directors of the Corporation shall make the adjustment referred to in clause
(A) of the second sentence of Section 3(b) of this ARTICLE ONE with the result
that (i) the dividend period days (as defined in such subparagraph) shall be
less than 70 days, LIBOR shall be based on the rates per annum quoted for United
States dollar deposits for a two-month period, (ii) the dividend period days
shall be 70 or more days but less than 85 days, LIBOR shall be the arithmetic
average of the rates per annum quoted for United States dollar deposits for two-
and three-month periods, or (iii) the dividend period days shall be 85 or more
days but 98 or less days, such rate shall be based on the rates per annum quoted
for United States dollar deposits for a three-month period.
-3-
<PAGE>
(m) "LIBOR Event" shall mean the failure by the Corporation timely to pay
to the Trust Company, not later than 12 Noon, New York City time, (i) on the
Business Day next preceding any Dividend Payment Date the full amount of any
dividend (whether or not earned or declared) to be paid on such Dividend Payment
Date on any share of STAR Preferred or (ii) on the Business Day next preceding
any redemption date the redemption price to be paid on such redemption date of
any share of STAR Preferred after notice of redemption is given pursuant to
Section 4(b) of this ARTICLE ONE.
(n) "Reference Banks" shall mean the principal London offices of Bank of
America National Trust and Savings Association, Barclays Bank PLC, Citibank,
N.A., Lloyds Bank PLC, Midland Bank PLC and National Westminister Bank PLC, or
their respective successors.
(o) "Subsequent Dividend Period" and "Subsequent Dividend Periods" shall
have the respective meanings specified in Section 3(c)(i) of this ARTICLE ONE.
(p) "Substitute Commercial Paper Dealer" shall mean Goldman, Sachs & Co.
or Lehman Commercial Paper Incorporated, or, in lieu of any thereof, their
respective affiliates or successors.
(q) "Substitute Reference Bank" shall mean the principal London offices
of the Chase Manhattan Bank (National Association), Deutsche Bank
Aktiengesellschaft, Morgan Guaranty Trust Company of New York or Swiss Bank
Corporation, or their respective successors.
(r) "Trust Company" shall mean a bank or trust company appointed as such
by a resolution of the Board of Directors of the corporation.
Section 3. Dividends.
(a) The Holders of shares of STAR Preferred shall be entitled to receive,
when and as declared by the Board of Directors of the Corporation out of funds
legally available therefor, cumulative cash dividends at the Applicable Rate
per annum thereof, determined as set forth below, and no more, payable on the
respective dates set forth below.
(b) Dividends on shares of STAR Preferred, at the Applicable Rate per
annum, shall accrue from the Date of Original Issue and shall be payable
commencing on the 51st day after the Date of Original Issue and on each day
thereafter which is the last day of successive 49-day periods after such 51st
day after the Date of Original Issue, or if either (i) in the case of the
Initial Dividend Payment Date, such 51st day after the Date of Original Issue
or, in the case of any subsequent Dividend Payment Date, any such last day (in
either case, the "normal day") is not a Business Day or (ii) the day next
succeeding the normal day is not a Business Day, then on the first Business Day
preceding the normal day that is next succeeded by a day that is also a Business
Day, and if any particular Dividend Payment Date does not occur on the normal
day because of the exceptions in clauses (i) or (ii),
-4-
<PAGE>
the next succeeding Dividend Payment Date shall be, subject to such exceptions,
the 49th day following the normal day for the prior Dividend Period.
Notwithstanding the foregoing, (A) in the event of a change in law altering the
minimum holding period (currently found in Section 246(c) of the Internal
Revenue Code of 1954, as amended) required for taxpayers to be entitled to the
dividends received deduction on preferred stock held by non-affiliated
corporations (currently found in Section 243(a) of such Code), the Board of
Directors of the Corporation may, subject to clauses (i) and (ii) of this
subparagraph (b), adjust the period of time between Dividend Payment Dates so as
to adjust uniformly the number of days (such number of days without giving
effect to such clauses (i) and (ii) being hereinafter referred to as "dividend
period days") in Dividend Periods commencing after the date of such change in
law to equal or exceed the then current minimum holding period, provided in such
event that the number of dividend period days shall not exceed by more than nine
days the length of such then current minimum holding period and shall be evenly
divisible by seven, and the maximum number of dividend period days in no event
shall exceed 98 days; (B) if, as a result of applying the procedures set forth
in this subparagraph (b) for determining a Dividend Payment Date, the number of
days in any Dividend Period would not equal or exceed the then current minimum
holding period for a taxpayer to be entitled to the dividends received deduction
on preferred stock held by a non-affiliated corporation referred to in clause
(A) of this subparagraph, the Board of Directors of the Corporation may fix the
Dividend Payment Date for that Dividend Period on the first Business Day next
preceding the originally designated normal day, even though the day next
succeeding such Business Day is not a Business Day and (C) in the event of a
default in the payment of a dividend on shares of STAR Preferred, dividends on
shares of STAR Preferred shall thereafter become payable quarterly, commencing
on the 90th day after the Dividend Payment Date on which such default occurred
with respect to any Dividend Period ending during such 90-day period, and on
each day thereafter that is the last day of successive 90-day periods with
respect to any Dividend Period ending during each such 90-day period, in each
case subject to clauses (i) and (ii) of this subparagraph (b), until such time
as no dividend on STAR Preferred shall be in default, in which case, dividends
shall next be payable on the last day of the Dividend Period which includes the
first day on which no dividend was in default and thereafter dividends shall
become payable on the 49th day after the last day of such Dividend Period and on
each day thereafter which is the last day of successive 49-day periods after
such date, subject to clause (i) and (ii) of this subparagraph (b) (each date on
which payment of dividends is due being herein referred to as a "Dividend
Payment Date" and the first Dividend Payment Date being herein referred to as
the "Initial Dividend Payment Date"). Upon any change in the number of dividend
period days as a result of a change in law as set forth in clause (A), or upon a
change as set forth in clause (B) or (C), the Corporation shall give notice of
such change to all Holders by first-class mail, postage prepaid. Each such
dividend shall be paid to the Holders as their names appear on the books and
records of the corporation on the Business Day next preceding the Dividend
Payment Date thereof; provided, however, that if such dividend shall be
calculated based upon LIBOR, as set forth in Section 3(c)(i) of this ARTICLE
ONE, such dividend shall be paid to the Holders as their names
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appear on the books and records of the Corporation on such date, not exceeding
15 days preceding the payment date thereof, as may be fixed by the Board of
Directors of the Corporation. Dividends in arrears for any past Dividend Period
may be declared and paid at any time, without reference to any regular Dividend
Payment Date, to the Holders as their names appear on the books and records of
the Corporation on such date, not exceeding 15 days preceding the payment date
thereof, as may be fixed by the Board of Directors of the Corporation.
(c)(i) The dividend rate on shares of STAR Preferred shall be 8% per annum
during the period from and after the Date of Original Issue to the Initial
Dividend Payment Date (the "Initial Dividend Period"). Commencing the day that
is the Initial Dividend Payment Date, the dividend rate on shares of STAR
Preferred for each Subsequent Dividend Period (as hereinafter defined) shall be
equal to the rate per annum that results from implementation of the Auction
Procedures described in ARTICLE TWO hereof; provided, however, that (A) if a
LIBOR Event shall have occurred prior to the first day of such Subsequent
Dividend Period, the dividend rate for such Subsequent Dividend Period shall be
at a rate per annum equal to LIBOR plus 1/4 of 1% and (B) if there is no Trust
Company on the day prior to the first day of a Dividend Period (unless a LIBOR
event has occurred), the dividend rate for such Dividend Period shall be
at a rate per annum equal to 110% of the "AA" Composite Commercial Paper Rate,
as determined by the Corporation, on the first day of such Dividend Period. The
rate per annum at which dividends are payable on shares of STAR Preferred for
any Dividend Period (as hereinafter defined) is herein referred to as the
"Applicable Rate".
Each dividend period following the Initial Dividend Period (herein referred
to as a "Subsequent Dividend Period" and collectively as "Subsequent Dividend
Period" and the Initial Dividend Period or any Subsequent Dividend Period being
herein referred to as a "Dividend Period" and collectively as "Dividend
Periods") shall commence on the day that is the last day of the preceding
Dividend Period and shall end on the next succeeding Dividend Payment Date;
provided, however, that if the provisions of clause (C) of Section 3(b) are
applicable, each Dividend Period shall end on the date which would have been the
next succeeding Dividend Payment Date if the provisions of such clause had not
been applicable.
(ii) The amount of dividends payable on each share of STAR Preferred for
any Dividend Period shall be computed by multiplying the Applicable Rate for
such Dividend Period by a fraction the numerator of which shall be the number
of days in the Dividend Period (calculated by counting the first day thereof but
excluding the last day thereof) such share was outstanding and the denominator
of which shall be 360 and applying the rate obtained against $100,000 per share
of STAR Preferred.
(d)(i) Holders of shares of STAR Preferred shall not be entitled to any
interest, or sum of money in lieu of interest, in respect of any dividend
payment or payments on shares of STAR Preferred which may be in arrears.
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(ii) Except as otherwise provided in resolutions of the Board of Directors
of the Corporation adopted on May 28, 1969 creating the Corporation's $3.00
Cumulative Convertible Preferred Stock, Series A (No Par Value) (the "Series A
Preferred Stock"), as such resolutions relate to the payment of dividends on the
Series A Preferred Stock and except as hereinafter provided, no full dividends
shall be declared or paid or set apart for payment on any series of Preferred
Stock, No Par Value, for any period unless full cumulative dividends have been
or contemporaneously are declared and paid or declared and a sum sufficient for
payment thereof set apart for such payment on shares of STAR Preferred for the
current and all past Dividend Periods. When dividends are not paid or set apart
in full, as aforesaid, upon the shares of STAR Preferred and any other Preferred
Stock ranking on a parity as to dividends with STAR Preferred, all dividends
declared upon shares of STAR Preferred and any other Preferred Stock ranking on
a parity as to dividends with STAR Preferred shall be declared pro rata so that
the amount of dividends declared per share on STAR Preferred and such other
Preferred Stock ranking on a parity as to dividends with STAR Preferred shall in
all cases bear to each other the same ratio that accrued dividends per share on
the shares of STAR Preferred and such other Preferred Stock ranking on a parity
as to dividends with shares of STAR Preferred bear to each other.
(iii) Except with respect to dividends on the Series A Preferred Stock and
as otherwise provided in paragraph (d)(ii) above, so long as any shares of STAR
Preferred are outstanding, no dividend (other than a dividend payable in Common
Shares or payable in any other stock of the Corporation ranking junior to shares
of STAR Preferred as to dividends and upon liquidation) shall be declared or
paid or set aside for payment or other distribution declared or made upon Common
Shares or upon any other stock of the Corporation ranking junior to or on a
parity with shares of STAR Preferred as to dividends or upon liquidation, nor
shall any such Common Shares or any other stock of the Corporation ranking
junior to or on a parity with shares of STAR Preferred as to dividends or upon
liquidation be redeemed, purchased or otherwise acquired for any consideration
(or any moneys be paid to or made available for a sinking fund for the
redemption of any shares of any such stock) by the Corporation (except by
conversion into or exchange for stock of the Corporation ranking junior to
shares of STAR Preferred as to dividends and upon liquidation) unless, in each
case, the full cumulative dividends on all outstanding shares of STAR Preferred
shall have been paid or contemporaneously are declared and paid for the current
and all past Dividend Periods.
Section 4. Redemption.
(a)(i)(A) At the option of the Corporation, shares of STAR Preferred may be
redeemed, as a whole at any time or from time to time in part, on any Dividend
Payment Date at a redemption price equal to:
(I) $103,000 per share if redeemed during the twelve months
ending on the first anniversary of the Date of Original Issue;
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(II) $102,000 per share if redeemed during the twelve months
ending on the second anniversary of the Date of Original Issue;
(III) $101,000 per share if redeemed during the twelve months
ending on the third anniversary of the Date of Original Issue;
(IV) $100,000 per share thereafter;
plus, in each case, accrued and unpaid dividends thereon to the date fixed
for redemption.
(B) If fewer than all the outstanding shares of STAR Preferred are to be
redeemed pursuant to Section 4(a)(i)(A) of this ARTICLE ONE, the number of
shares to be redeemed shall be determined by the Board of Directors of the
Corporation, and such shares shall be redeemed pro rata from the Holders in
proportion to the number of such shares held by such Holders (rounding to the
nearest whole share to avoid redemption of fractional shares).
(ii) At the option of the Corporation, shares of STAR Preferred may be
redeemed, as a whole but not in part, on any Dividend Payment Date at a
redemption price of $100,000 per share, plus accrued and unpaid dividends
thereon to the date fixed for redemption, if the Applicable Rate fixed for the
Dividend Period ending on such Dividend Payment Date shall equal or exceed the
"AA" Composite Commercial Paper Rate on the date of determination of such
Applicable Rate.
(b) In the event the Corporation shall redeem shares of STAR Preferred,
notice of such redemption shall be given by first class mail, postage prepaid,
mailed not less than 30 nor more than 60 days prior to the redemption date, to
each Holder of record of the shares to be redeemed, at such Holder's address as
the same appears on the stock record books of the Corporation. Each such notice
shall state: (i) the redemption date; (ii) the number of shares of STAR
Preferred to be redeemed and, if fewer than a11 the shares held by such Holder
are to be redeemed, the number of such shares to be redeemed from such Holder;
(iii) the redemption price; (iv) the place or places where certificates for such
shares are to be surrendered for payment of the redemption price; and (v) that
dividends on the shares to be redeemed will cease to accrue on such redemption
date.
(c) Notice having been mailed as aforesaid, and if the Corporation shall
have deposited a sum sufficient to redeem the shares of STAR Preferred as to
which notice of redemption has been given with the Trust Company, with
irrevocable instructions and authority to pay the redemption price to the
Holders thereof upon surrender of certificates therefor or, if no such deposit
is made, then from and after the redemption date (unless default shall be made
by the Corporation in providing money for the payment of the redemption price of
the shares called for redemption), dividends on the shares of STAR Preferred so
called for redemption shall cease to accrue, and said shares shall no longer be
deemed to be outstanding, and all rights of
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the Holders thereof as shareholders of the Corporation (except the right to
receive from the Corporation the redemption price) shall cease and terminate.
Upon surrender in accordance with said notice of the certificates for any shares
so redeemed (properly endorsed or assigned for transfer, if the Board of
Directors of the Corporation shall so require and the notice shall so state),
such shares shall be redeemed by the Corporation at the redemption price
aforesaid but without interest. In case fewer than all the shares represented by
any such certificate are redeemed, a new certificate shall be issued
representing the unredeemed shares without cost to the Holder thereof.
(d) Any shares of STAR Preferred which shall at any time have been redeemed
or purchased by the Corporation shall, after such redemption or purchase, be
cancelled in the manner provided by the laws of the State of Indiana.
(e) Notwithstanding the foregoing provisions of this Section 4, unless the
full cumulative dividends on all outstanding shares of STAR Preferred shall have
been paid or contemporaneously are declared and paid for all past Dividend
Periods, (i) no shares of STAR Preferred shall be redeemed unless all
outstanding shares of STAR Preferred are simultaneously redeemed, and (ii) the
Corporation shall not purchase or otherwise acquire any shares of STAR Preferred
except pursuant to a purchase or exchange offer made on the same terms to
Holders of all outstanding shares of STAR Preferred.
Section 5. Conversion or Exchange.
The Holders of shares of STAR Preferred shall not have any rights to
convert such shares into or exchange such shares for shares of any other class
or classes or of any other series of any class or classes of capital stock of
the Corporation.
Section 6. Voting.
The shares of STAR Preferred shall have such voting rights as are provided
in Section 5 Article V of the Corporation's Articles of Incorporation.
Section 7. Liquidation Rights.
(a) In the event of the liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, the Holders of shares of STAR
Preferred then outstanding shall be entitled to receive, after payment or
provision for payment of all creditors of the Corporation, but before any
distribution or payment shall be made in respect of the Common Stock or any
other stock of the Corporation ranking junior to shares of STAR Preferred as to
assets on liquidation, dissolution or winding up, an amount equal to $100,000
per share, plus an amount equal to all unpaid dividends thereon accrued on a
daily basis to and including the date fixed for such distribution or payment,
but the Holders shall be entitled to no further participation in any
distribution or payment in connection with any such liquidation, dissolution or
winding-up. If, upon any voluntary or involuntary
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liquidation, dissolution or winding up of the affairs of the Corporation, the
net assets of the Corporation distributable among the holders of all outstanding
shares of STAR Preferred and of any other series of Preferred Stock, No Par
Value, or any other stock of the Corporation ranking on a parity with STAR
Preferred as to assets on liquidation shall be insufficient to permit the
payment in full to such holders of the preferential amounts to which they are
entitled, then the entire net assets of the Corporation remaining after the
distributions to holders of any stock of the Corporation ranking senior to STAR
Preferred to which they may be entitled shall be distributable among the holders
of shares of STAR Preferred and of any other series of Preferred Stock, No Par
Value, or of any other stock of the Corporation ranking on a parity with STAR
Preferred as to assets on liquidation ratably in proportion to the full amounts
to which they would otherwise respectively be entitled.
(b) Neither the consolidation or merger of the Corporation with or into any
other corporation or corporations, nor the sale or transfer by the Corporation
of all or any part of its assets, shall be deemed to be a liquidation,
dissolution or winding up of the Corporation for purposes of this Section 7. All
shares of STAR Preferred and the Corporation's outstanding Series A Preferred
Stock will rank on a parity as to assets upon liquidation.
ARTICLE TWO. AUCTION PROCEDURES
Section 1. Definitions.
Capitalized terms not defined in this Section 1 shall have the respective
meanings specified in Section 2 of ARTICLE ONE. As used in this ARTICLE TWO,
the following terms shall have the following meanings, unless the context
otherwise requires:
(a) "Affiliate" shall mean any Person known to the Trust Company to be
controlled by, in control of or under common control with the Corporation.
(b) "Agent Member" shall mean the member of the Securities Depository that
will act on behalf of a Bidder and is identified as such in such Bidder's
Purchaser's Letter.
(c) "Auction" shall mean the periodic operation of the procedures set forth
in this ARTICLE TWO.
(d) "Auction Date" shall mean the Business Day next preceding a Dividend
Payment Date.
(e) "Available STAR Preferred" shall have the meaning specified in Section
4(a) of this ARTICLE TWO.
(f) "Bid" and "Bids" shall have the respective meanings specified in Section
2(a) of this ARTICLE TWO.
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(g) "Bidder" and "Bidders" shall have the respective meanings specified in
Section 2(a) of this ARTICLE TWO.
(h) "Broker-Dealer" shall mean any broker-dealer, or other entity permitted
by law to perform the functions required of a Broker-Dealer in this ARTICLE TWO,
that has been selected by the corporation and has entered into a Broker-Dealer
Agreement with the Trust Company that remains effective.
(i) "Broker-Dealer Agreement" shall mean an agreement between the Trust
Company and a Broker-Dealer pursuant to which such BROKER-DEALER agrees to
follow the procedures specified in this ARTICLE TWO.
(j) "Existing Holder," when used with respect to shares of STAR Preferred,
shall mean a Person who has signed a Purchaser's Letter and is listed as the
beneficial owner of shares of STAR Preferred in the records of the Trust
Company.
(k) "Hold Order" and "Hold Orders" shall have the respective meanings
specified in subparagraph 2(a) of this ARTICLE TWO.
(l) "Maximum Rate", on any Auction Date, shall mean the product of (i) 1.10
and (ii) the "AA" Composite Commercial Paper Rate.
(m) "Minimum Rate", on any Auction Date, shall mean the product of (i) .58
and (ii) the "AA" Composite Commercial Paper Rate.
(n) "Order" and "Orders" shall have the respective meanings specified in
Section 2(a) of this ARTICLE TWO.
(o) "Outstanding" shall mean, as of any date, shares of STAR Preferred
theretofore issued by the Corporation except, without duplication, (i) any
shares of STAR Preferred theretofore cancelled or delivered to the Trust
Company for cancellation or redeemed by the Corporation or as to which a notice
of redemption shall have been given by the Corporation, (ii) any shares of STAR
Preferred as to which the Corporation or any Affiliate thereof (other than a
broker-dealer Affiliate) shall be an Existing Holder and (iii) any shares of
STAR Preferred represented by any certificate in lieu of which a new
certificate has been executed and delivered by the Corporation.
(p) "Person" shall mean and include an individual, a partnership, a
corporation, a trust, an unincorporated association, a joint venture or other
entity or a government or any agency or political subdivision thereof.
(q) "Potential Holder" shall mean any Person, including any Existing Holder,
(i) who shall have executed a Purchaser's Letter and (ii) who may be interested
in acquiring shares of STAR Preferred (or, in the case of an Existing Holder,
additional shares of STAR Preferred).
(r) "Purchaser's Letter" shall mean a letter addressed to the Corporation,
the Trust Company and a Broker-Dealer in which a Person agrees, among other
things, to offer to purchase, purchase, offer to sell and/or sell shares of
STAR Preferred as set forth in this ARTICLE TWO.
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(s) "Securities Depository" shall mean The Depository Trust Company and its
successors and assigns or any other securities depository selected by the
Corporation which agrees to follow the procedures required to be followed by
such securities depository in connection with shares of STAR Preferred.
(t) "Sell Order" and "Sell Orders" shall have the respective meanings
specified in Section 2(a) of this ARTICLE TWO.
(u) "Submission Deadline" shall mean 12:30 P.M., New York City time, on any
Auction Date or such other time on any Auction Date by which Broker-Dealers are
required to submit Orders to the Trust Company as specified by the Trust Company
from time to time.
(v) "Submitted Bid" and "Submitted Bids" shall have the respective meanings
specified in Section 4(a) of this ARTICLE TWO.
(w) "Submitted Hold Order" and "Submitted Hold Orders" shall have the
respective meanings specified in Section 4(a) of this ARTICLE TWO.
(x) "Submitted Order" and "Submitted Orders" shall have the respective
meanings specified in Section 4(a) of this ARTICLE TWO.
(y) "Submitted Sell Order" and "Submitted Sell Orders" shall have the
respective meanings specified in Section 4(a) of this ARTICLE TWO.
(z) "Sufficient Clearing Bids" shall have the meaning specified in Section
4(a) of this ARTICLE TWO.
(aa) "Winning Bid Rate" shall have the meaning specified in Section 4(a) of
this ARTICLE TWO.
Section 2. Orders by Existing Holders and Potential Holders.
(a) On or prior to each Auction Date and prior to the Submission Deadline:
(i) each Existing Holder may submit to a Broker-Dealer by telephone
information as to:
(A) the number of Outstanding shares, if any, of STAR Preferred
held by such Existing Holder which such Existing Holder desires to
continue to hold without regard to the Applicable Rate for the next
succeeding Dividend Period;
(B) the number of Outstanding shares, if any, of STAR Preferred
that such Existing Holder desires to continue to hold if the Applicable
Rate for the next succeeding Dividend Period shall not be less than the
rate per annum specified by such Existing Holder; and/or
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(C) the number of Outstanding shares, if any, of STAR Preferred
held by such Existing Holder which such Existing Holder offers to sell
without regard to the Applicable Rate for the next succeeding Dividend
Period;
and
(ii) each Broker-Dealer, using a list of Potential Holders that shall be
maintained by such Broker-Dealer in good faith for the purpose of conducting
a competitive Auction, shall contact Potential Holders on such list to
determine the number of shares, if any, of STAR Preferred which each such
Potential Holder offers to purchase if the Applicable Rate for the next
succeeding Dividend Period shall be not less than the rate per annum
specified by such Potential Holder.
For the purposes hereof, the communication to a Broker-Dealer of information
referred to in clause (i)(A), (i)(B), (i)(C) or (ii) of this Section 2(a) is
hereinafter referred to as an "Order" and collectively as "Orders" and each
Existing Holder and each Potential Holder placing an Order is hereinafter
referred to as a "Bidder" and collectively as "Bidders"; an Order containing
the information referred to in clause (i)(A) of this Section 2(a) is
hereinafter referred to as a "Hold Order" and collectively as "Hold Orders";
an Order containing the information referred to in clause (i)(B) or (ii) of
this Section 2(a) is hereinafter referred to as a "Bid" and collectively as
"Bids"; and an Order containing the information referred to in clause (i)(C)
of this Section 2(a) is hereinafter referred to as a "Sell Order" and
collectively as "Sell Orders."
(b)(i) A Bid by an Existing Holder shall constitute an irrevocable offer to
sell:
(A) the number of Outstanding shares of STAR Preferred specified
in such Bid if the Applicable Rate determined on such Auction Date shall
be less than such specified rate; or
(B) such number or a lesser number to be determined as set forth
in clause (iv) of Section 5(a) of this ARTICLE TWO if the Applicable Rate
determined on such Auction Date shall be equal to such specified rate; or
(C) a lesser number to be determined as set forth in clause
(iii) of Section 5(b) of this ARTICLE TWO if such specified rate shall be
higher than the Maximum Rate and Sufficient Clearing Bids do not exist.
(ii) A Sell Order by an Existing Holder shall constitute an irrevocable
offer to sell:
(A) the number of shares specified in such Sell Order; or
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(B) such number or a lesser number as set forth in clause (iii)
of Section 5(b) of this ARTICLE TWO if Sufficient Clearing Bids do not
exist.
(iii) A bid by a Potential Holder shall constitute an irrevocable offer
to Purchase:
(A) the number of shares of STAR Preferred specified in such Bid
if the Applicable Rate determined on such Auction Date shall be higher
than such specified rate; or
(B) such number or a lesser number as set forth in clause (v) of
Section 5(a) of this ARTICLE TWO if the Applicable Rate determined on
such Auction Date shall be equal to such specified rate.
Section 3. Submission of Orders by Broker-Dealers to Trust Company.
(a) Each Broker-Dealer shall submit in writing to the Trust Company prior
to the Submission Deadline on each Auction Date all Orders obtained by such
Broker-Dealer and specifying with respect to each Order:
(i) the name of the Bidder placing such Order;
(ii) the aggregate number of shares of STAR Preferred that are the
subject of such Order;
(iii) to the extent that such Bidder is an Existing Holder:
(A) the number of shares, if any, of STAR Preferred subject to
any Hold Order placed by such Existing Holder;
(B) the number of shares, if any, of STAR Preferred subject to
any Bid placed by such Existing Holder and the rate specified in
such Bid; and
(C) the number of shares, if any, of STAR Preferred subject to
any Sell Order placed by such Existing Holder;
and
(iv) to the extent that such Bidder is a Potential Holder, the rate
specified in such Potential Holder's Bid.
(b) If any rate specified in any Bid contains more than three figures to the
right of the decimal point, the Trust Company shall round such rate up to the
next highest one thousandth (.001) of 1%.
(c) If an Order or Orders covering all of the Outstanding shares of STAR
Preferred held by any Existing Holder is not submitted to the Trust Company
prior to the Submission Deadline, the Trust Company shall deem a Hold Order
to have been submitted on behalf of such Existing Holder covering
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the number of Outstanding shares of STAR Preferred held by such Existing Holder
and not subject to Orders submitted to the Trust Company.
(d) If one or more Orders covering in the aggregate more than the number of
Outstanding shares of STAR Preferred held by any Existing Holder are submitted
to the Trust Company, such Orders shall be considered valid as follows and in
the following order of priority:
(i) any Hold Order submitted on behalf of such Existing Holder shall be
considered valid up to and including the number of Outstanding shares of
STAR Preferred held by such Existing Holder; provided that if more than one
Hold Order is submitted on behalf of such Existing Holder and the number of
shares of STAR Preferred subject to such Hold Orders exceeds the number of
Outstanding shares of STAR Preferred held by such Existing Holder, the
number of shares of STAR Preferred subject to such Hold Orders shall be
reduced pro rata so that such Hold Orders shall cover the number of
Outstanding shares of STAR Preferred held by such Existing Holder;
(ii)(A) any Bid shall be considered valid up to and including the excess
of the number of Outstanding shares of STAR Preferred held by such Existing
Holder over the number of shares of STAR Preferred subject to Hold Orders
referred to in clause (i) of this Section 3(d), (B) subject to subclause
(A), if more than one Bid with the same rate is submitted on behalf of such
Existing Holder and the number of Outstanding shares of STAR Preferred
subject to such Bids is greater than such excess, the number of shares of
STAR Preferred subject to such Bids shall be reduced pro rata so that such
Bids shall cover the number of shares of STAR Preferred equal to such
excess, and (C) subject to subclause (A), if more than one Bid with
different rates is submitted on behalf of such Existing Holder, such Bids
shall be considered valid in the ascending order of their respective rates;
and in any such event, the number, if any, of such Outstanding shares
subject to Bids not valid under this clause (ii) shall be treated as the
subject of a Bid by a Potential Holder; and
(iii) any Sell Order shall be considered valid up to and including the
excess of the number of Outstanding shares of STAR Preferred held by such
Existing Holder over the sum of the shares of STAR Preferred subject to
Hold Orders referred to in clause (i) of this Section 3(d) and Bids
referred to in clause (ii) of this Section 3(d); provided that if more than
one Sell Order is submitted on behalf of any Existing Holder and the number
of shares of STAR Preferred subject to such Sell Orders is greater than
such excess, the number of Outstanding shares of STAR Preferred subject to
such Sell Orders shall be reduced pro rata so that such Sell Orders shall
cover the number of Outstanding shares of STAR Preferred equal to such
excess.
(e) If more than one Bid is submitted on behalf of any Potential Holder,
each Bid submitted shall be a separate Bid with the rate and number of shares
of STAR Preferred therein specified.
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(f) If any rate specified in any Bid is lower than the Minimum Rate for the
Dividend Period with respect to which such Bid relates, such Bid shall be
deemed to be a Bid specifying a rate equal to such Minimum Rate.
Section 4. Determination of Sufficient Clearing Bids, Winning Bid Rate and
Applicable Rate.
(a) Not earlier than the Submission Deadline on each Auction Date, the Trust
Company shall assemble all Orders submitted or deemed submitted to it by the
Broker-Dealers (each such Order as submitted or deemed submitted by a Broker-
Dealer being hereinafter referred to individually as a "Submitted Hold Order,"
a "Submitted Bid" or a "Submitted Sell Order", as the case may be, or as a
"Submitted Order" and collectively as "Submitted Hold Orders," "Submitted Bids"
or "Submitted Sell Orders," as the case may be, or as "Submitted Orders") and
shall determine:
(i) the excess of the total number of Outstanding shares of STAR
Preferred over the number of Outstanding shares of STAR Preferred that are
the subject of Submitted Hold Orders (such excess being hereinafter referred
to as the "Available STAR Preferred");
(ii) from the Submitted Orders whether:
(A) the number of Outstanding shares of STAR Preferred that are
the subject of Submitted Bids by Potential Holders specifying one or more
rates equal to or lower than the Maximum Rate;
exceeds or is equal to the sum of:
(B)(I) the number of Outstanding shares of STAR Preferred that
are the subject of Submitted Bids by Existing Holders specifying one or
more rates higher than the Maximum Rate; and
(II) the number of Outstanding shares of STAR Preferred that
are subject to Submitted Sell Orders
(in the event of such excess or such equality (other than because the number
of shares of STAR Preferred in clauses (A) and (B) are each zero because all
of the Outstanding shares of STAR Preferred are the subject of Submitted Hold
Orders), such Submitted Bids in clause (A) being hereinafter referred to
collectively as "Sufficient Clearing Bids"); and
(iii) if Sufficient Clearing Bids exist, the lowest rate specified in
the Submitted Bids (the "Winning Bid Rate") which if:
(A)(I) each Submitted Bid from Existing Holders specifying such
lowest rate and (II) all other Submitted Bids from Existing Holders
specifying lower rates were accepted, thus entitling such Existing
Holders to continue to hold the shares of STAR Preferred that are the
subject of such Submitted Bids, and
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(B)(I) each Submitted Bid from Potential Holders specifying such
lowest rate and (II) all other Submitted Bids from Potential Holders
specifying lower rates were accepted,
would result in such Existing Holders continuing to hold an aggregate number
of Outstanding shares of STAR Preferred which, when added to the number of
Outstanding shares of STAR Preferred to be purchased by such Potential
Holders, would equal not less than the Available STAR Preferred.
(b) Promptly after the Trust Company has made the determinations pursuant to
Section 4(a) of this ARTICLE TWO, the Trust Company shall advise the Company of
the Maximum Rate and the Minimum Rate and, based on such determinations, the
Applicable Rate for the next succeeding Dividend Period as follows:
(i) if Sufficient Clearing Bids exist, that the Applicable Rate for the
next succeeding Dividend Period shall be equal to the Winning Bid Rate;
(ii) if Sufficient Clearing Bids do not exist (other than because all of
the Outstanding shares of STAR Preferred are the subject of Submitted Hold
Orders), that the Applicable Rate for the next Succeeding Dividend Period
shall be equal to the Maximum Rate; or
(iii) if all of the Outstanding shares of STAR Preferred are the subject
of Submitted Hold Orders, that the Applicable Rate for the next succeeding
Dividend Period shall be equal to the Minimum Rate.
Section 5. Acceptance and Rejection of Submitted Bids and Submitted Sell Orders
and Allocation of Shares.
Based on the determinations made pursuant to Section 4(a) of this ARTICLE TWO,
the Submitted Bids and Submitted Sell Orders shall be accepted or rejected and
the Trust Company shall take such other action as set forth below:
(a) If Sufficient Clearing Bids have been made, subject to the provisions of
Sections 5(c) and 5(d) of this ARTICLE TWO, Submitted Bids and Submitted Sell
Orders shall be accepted or rejected as follows in the following order of
priority and all other Submitted Bids shall be rejected:
(i) the Submitted Sell Orders of Existing Holders shall be
accepted and the Submitted Bid of each of the Existing Holders specifying
any rate that is higher than the Winning Bid Rate shall be rejected, thus
requiring each such Existing Holder to sell the shares of STAR Preferred
that are the subject of such Submitted Bid;
(ii) the Submitted Bid of each of the Existing Holders specifying
any rate that is lower than the Winning Bid Rate shall be accepted, thus
entitling each such Existing Holder to continue to
-17-
<PAGE>
hold the shares of STAR Preferred that are the subject of such Submitted
Bid;
(iii) the Submitted Bid of each of the Potential Holders
specifying any rate that is lower than the Winning Bid Rate shall be
accepted;
(iv) the Submitted Bid of each of the Existing Holders specifying
a rate that is equal to the Winning Bid Rate shall be accepted, thus
entitling each such Existing Holder to continue to hold the shares of
STAR Preferred that are the subject of such Submitted Bid, unless the
number of Outstanding shares of STAR Preferred subject to all such
Submitted Bids shall be greater than the number of shares of STAR
Preferred ("remaining shares") equal to the excess of the Available STAR
Preferred over the number of shares of STAR Preferred subject to
Submitted Bids described in clauses (ii) and (iii) of this Section 5(a),
in which event each such Existing Holder shall be required to sell shares
of STAR Preferred, but only in an amount equal to the difference between
(A) the number of Outstanding shares of STAR Preferred then held by such
Existing Holder subject to such Submitted Bid and (B) the number of
shares of STAR Preferred obtained by multiplying the number of remaining
shares by a fraction the numerator of which shall be the number of
Outstanding shares of STAR Preferred held by such Existing Holder subject
to such Submitted Bid and the denominator of which shall be sum of the
number of Outstanding shares of STAR Preferred subject to such Submitted
Bids made by all such Existing Holders that specified a rate equal to the
Winning Bid Rate; and
(v) the Submitted Bid of each of the Potential Holders specifying
a rate that is equal to the Winning Bid Rate shall be accepted but only
in an amount equal to the number of shares of STAR Preferred obtained by
multiplying the difference between the Available STAR Preferred and the
number of shares of STAR Preferred subject to Submitted Bids described in
clauses (ii), (iii) and (iv) of this Section 5(a) by a fraction the
numerator of which shall be the number of Outstanding shares of STAR
Preferred subject to such Submitted Bid and the denominator of which
shall be the sum of the number of Outstanding shares of STAR Preferred
subject to such Submitted Bids made by all such Potential Holders that
specified rates equal to the Winning Bid Rate.
(b) If Sufficient Clearing Bids have not been made (other than because all of
the Outstanding shares of STAR Preferred are subject to Submitted Hold Orders),
subject to the provisions of Sections 5(c) and 5(d) of this ARTICLE TWO,
Submitted Orders shall be accepted or rejected as follows in the following order
of priority and all other Submitted Bids shall be rejected:
(i) the Submitted Bid of each Existing Holder specifying any rate
that is equal to or lower than the Maximum Rate shall be ac-
-18-
<PAGE>
cepted, thus entitling such Existing Holder to continue to hold the
shares of STAR Preferred that are the subject of such Submitted Bid;
(ii) the Submitted Bid of each Potential Holder specifying any
rate that is equal to or lower than the Maximum Rate shall be accepted;
and
(iii) the Submitted Bids of each Existing Holder specifying any
rate that is higher than the Maximum Rate shall be rejected, thus
requiring each such Existing Holder to sell the shares of STAR Preferred
that are the subject of such Submitted Bid, and the Submitted Sell Orders
of each Existing Holder shall be accepted, in both cases only in an
amount equal to the difference between (A) the number of Outstanding
shares of STAR Preferred then held by such Existing Holder subject to
such Submitted Bid or Submitted Sell Order and (B) the number of shares
of STAR Preferred obtained by multiplying the difference between the
Available STAR Preferred and the aggregate number of shares of STAR
Preferred subject to Submitted Bids described in clauses (i) and (ii) of
this Section 5(b) by a fraction the numerator of which shall be the
number of Outstanding shares of STAR Preferred held by such Existing
Holder subject to such Submitted Bid or Submitted Sell Order and the
denominator of which shall be the number of Outstanding shares of STAR
Preferred subject to all such Submitted Bids and Submitted Sell Orders.
(c) If as a result of the procedures described in Sections 5(a) or 5(b) of
this ARTICLE TWO, any Existing Holder would be entitled or required to sell, or
any Potential Holder would be entitled or required to purchase, a fraction of a
share of STAR Preferred on any Auction Date, the Trust Company shall, in such
manner as, in its sole discretion, it shall determine, round up or down the
number of shares of STAR Preferred to be purchased or sold by any Existing
Holder or Potential Holder on such Auction Date so that the number of shares
purchased or sold by each Existing Holder or Potential Holder on such Auction
Date shall be whole shares of STAR Preferred.
(d) If as a result of the procedures described in Section 5(a) of this ARTICLE
TWO, any Potential Holder would be entitled or required to purchase less than a
whole share of STAR Preferred on any Auction Date, the Trust Company shall, in
such manner as, in its sole discretion, it shall determine, allocate shares for
purchase among Potential Holders so that only whole shares of STAR Preferred are
purchased on such Auction Date by any Potential Holder, even if such allocation
results in one or more of such Potential Holders not purchasing shares of STAR
Preferred on such Auction Date.
(e) Based on the results of each Auction, the Trust Company shall determine
the aggregate number of shares of STAR Preferred to be purchased and the
aggregate number of shares of STAR Preferred to be sold by Potential Holders and
Existing Holders on whose behalf each Broker-Dealer submitted Bids or Sell
Orders, and, with respect to each Broker-Dealer, to the extent
-19-
<PAGE>
that such aggregate number of shares to be purchased and such aggregate number
of shares to be sold differ, determine to which other Broker-Dealer or Broker-
Dealers acting for one or more purchasers such Broker-Dealer shall deliver, or
from which other Broker-Dealer or Broker-Dealers acting for one or more sellers
such Broker-Dealer shall receive, as the case may be, shares of STAR Preferred.
Section 6. Participation in Auctions.
Neither the Company nor any Affiliate of the Company may submit a Bid in any
Auction.
Section 7. Miscellaneous.
The Board of Directors of the Corporation may interpret or adjust the
provisions of this ARTICLE TWO to resolve any inconsistency or ambiguity, remedy
any formal defect or make any other change or modification which does not
adversely affect the rights of Existing Holders of STAR Preferred. During the
Initial Dividend Period and so long as the Applicable Rate is based on the
results of an Auction, (a) shares of STAR Preferred may be sold, transferred or
otherwise disposed of only pursuant to a Bid or Sell Order in accordance with
the procedures described in this ARTICLE TWO or to or through a Broker-Dealer or
to a Person that has delivered a signed copy of a Purchaser's Letter to the
Trust Company, provided that in the case of all transfers other than pursuant to
Auctions the transferor, its Broker-Dealer or its Agent Member advises the Trust
Company of such transfer, and (b) except as otherwise provided by law or if
there is no Securities Depository, all Outstanding shares of STAR Preferred
shall be represented by a certificate or certificates registered in the name of
the nominee of the Securities Depository, and no Person acquiring shares of STAR
Preferred shall be entitled to receive a certificate representing such shares.
As long as the Applicable Rate is not based on LIBOR, the Corporation shall
be obligated to exercise its best efforts to maintain a Trust Company pursuant
to an agreement containing terms no less favorable to the Corporation than the
terms of the agreement first entered into by the Corporation pursuant to the
resolutions adopted by the Board of Directors of the Corporation on October 16.
1984.
Section 8. Headings of Subdivisions.
The headings of the various subdivisions of this ARTICLE TWO are for
convenience of reference only and shall not affect the interpretation of any of
the provisions hereof.
-20-
<PAGE>
Marilyn A. Vachon further says that the authority to adopt the foregoing
resolution is by the Articles of Incorporation legally vested in the Board of
Directors of the Corporation.
/s/ Marilyn A. Vachon
----------------------------
Marilyn A. Vachon
Secretary of
Lincoln National Corporation
-21-
<PAGE>
STATE OF INDIANA )
) ss:
COUNTY OF ALLEN )
Ian M. Rolland, being duly sworn upon his oath, says that he is the duly
elected, qualified and acting President of Lincoln National Corporation and that
the foregoing certificate is true in substance and in fact; and that he verifies
the same.
Witness my hand and seal this 14th day of November, 1984.
/s/ Ian M. Rolland
------------------------------
IAN M. ROLLAND
President of
Lincoln National Corporation
STATE OF INDIANA )
) ss:
COUNTY OF ALLEN )
Subscribed and sworn to before me, a Notary Public, in and for Allen
County, State of Indiana, this 14th day of November, 1984.
/s/ Carol Ann Johnston
[SEAL] Notary Public in and for
Allen County, Indiana
Residing in Fort Wayne,
Indiana
My Commission Expires May 15, 1988
This instrument was prepared by John L. Steinkamp, Attorney at Law
-22-
<PAGE>
STATE OF INDIANA
OFFICE OF THE SECRETARY OF STATE
CERTIFICATE OF AMENDMENT
OF
LINCOLN NATIONAL CORPORATION
I, EDWIN J. SIMCOX, Secretary of State of Indiana, hereby certify that
Articles of Amendment for the above Corporation have been filed in the form
prescribed by my office, prepared and signed in duplicate in accordance with
Chapter Four of the Indiana General Corporation Act (IC 23-1-4).
NOW, THEREFORE, upon due examination, I find that the Articles of
Amendment conform to law, and have endorsed my approval upon the duplicate
copies of such Articles; that all fees have been paid as required by law;
that one copy of such Articles has been filed in my office; and that the
remaining copy of such Articles bearing the endorsement of my approval and
filing has been returned by me to the Corporation.
In Witness Whereof, I have hereunto set my hand and affixed
the seal of the State of Indiana, at the City of Indianapolis,
this 30th day of May, 1985
-------------------------------------------------------------
EDWIN J. SIMCOX, Secretary of State
By __________________________________________________________
Deputy
<PAGE>
ARTICLES OF AMENDMENT
---------------------
OF THE
------
ARTICLES OF INCORPORATION
-------------------------
OF
--
LINCOLN NATIONAL CORPORATION
- --------------------------------------------------------------------------------
Lincoln National Corporation
The undersigned officers of_______________________________________________
(hereinafter referred to as the "Corporation") existing pursuant to the
provisions of the Indiana General Corporation Act (Medical Professional
Corporation Act/Dental Professional Corporation Act/Professional Corporation Act
of 1965), as amended (hereinafter referred to as the "Act"), desiring to give
notice of corporate action effectuating amendment of certain provisions of its
Articles of Incorporation, certify the following facts:
ARTICLE I
---------
TEXT OF THE AMENDMENT
---------------------
VII and XI
The exact text of Article(s)________________________________________________
of the Articles of Incorporation of the Corporation, as amended (hereinafter
referred to as the "Amendments"), now is as follows:
See pages 1-a through 1-f.
<PAGE>
ARTICLE VII
Directors
Section 1. Number. The initial Board of Directors shall be composed of
thirteen members. The number of Directors may from time to time be fixed by the
bylaws of the Corporation at any number not less than three. In the absence of a
bylaw fixing the number of Directors, the number shall be thirteen.
Section 2. Qualifications. Directors need not be shareholders of the
Corporation, but shall have other qualifications as the bylaws of the
Corporation prescribe.
Section 3. Classification. When the Board of Directors consists of nine or
more members, the bylaws of the Corporation may provide that the Directors
shall be divided into two or more classes whose terms of office shall expire at
different times, but no term shall continue longer than three years.
Section 4. Removal. Any or all of the members of the Board of Directors may be
removed, with or without cause, at a meeting of shareholders called expressly
for that purpose by a vote of the holders of three-fourths of the shares of the
Corporation outstanding and then entitled to vote at an election of Directors.
Section 5. Amendment, Repeal, etc. Notwithstanding anything contained in these
Articles of Incorporation to the contrary, the affirmative vote of the holders
of at least three-fourths of the shares of the Corporation outstanding and then
entitled to vote at an election of Directors, voting together and not by class,
shall be required to alter, amend, repeal, or adopt provisions inconsistent
with, this Article VII of these Articles of Incorporation.
1-a
<PAGE>
ARTICLE XI
Provisions for Certain Business Combinations
Section 1. Vote Required.
Clause (a). Higher Vote for Certain Business Combinations. In addition to any
affirmative vote required by law or these Articles of Incorporation, and except
as otherwise expressly provided in Section 2 of this Article XI:
1. any merger or consolidation of the Corporation or any Subsidiary (as
hereinafter defined) with (A) any Interested Shareholder (as hereinafter
defined), or (B) any other corporation (whether or not itself an Interested
Shareholder) which is, or after such merger or consolidation would be, an
Affiliate (as hereinafter defined) of an Interested Shareholder; or
2. any sale, lease, exchange, mortgage, pledge, transfer or other
disposition (in one transaction or a series of transactions) to or with any
Interested Shareholder or any Affiliate of any Interested Shareholder of any
assets, of the Corporation or any Subsidiary, having an aggregate Fair Market
Value of $1,000,000 or more; or
3. the issuance or transfer by the Corporation or any Subsidiary (in one
transaction or a series of transactions) of any securities of the Corporation
or any Subsidiary to any Interested Shareholder or any Affiliate of any
Interested Shareholder in exchange for cash, securities or other property (or a
combination thereof) having an aggregate Fair Market Value of $1,000,000 or
more; or
4. the adoption of any plan or proposal for the liquidation or dissolution
of the Corporation proposed by or on behalf of an Interested Shareholder or any
Affiliate of any Interested Shareholder; or
5. any reclassification of securities (including any reverse stock split),
or recapitalization of the Corporation, or any merger or consolidation of the
Corporation with any of its Subsidiaries or any other transaction (whether or
not with or into or otherwise involving an Interested Shareholder) which has
the effect, directly or indirectly, of increasing the proportionate share of
the outstanding shares of any class of equity or convertible securities of the
Corporation or any Subsidiary which is directly or indirectly owned by any
Interested Shareholder or any Affiliate of any Interested Shareholder;
shall require the affirmative vote of the holders of at least three-fourths of
the shares of the Corporation outstanding and then entitled to vote at an
election of directors (the "Voting Stock"), voting together and not by class (it
being understood that for purposes of this Article XI, each share of the Voting
Stock shall have the number of votes granted to it pursuant to Article V of
these Articles of Incorporation). Such affirmative vote shall be required
notwithstanding the fact that no vote may be required, or that a lesser
percentage may be specified, by law or in any agreement with any national
securities exchange or otherwise.
Clause (b). Definition of "Business Combination". The term "Business
Combination" as used in this Article XI shall mean any transaction which is
referred to in any one or more of paragraphs 1 through 5 of Clause (a) of this
Section 1.
Section 2. When Higher Vote is Not Required. The provisions of Section 1 of
this Article XI shall not be applicable to any particular Business Combination,
and such Business Combination shall require only such affirmative vote as is
required by law and any other provision of these Articles of Incorporation, if
all of the conditions specified in either of the following Clauses (a) and (b)
are met:
Clause (a). Approval by Continuing Directors. The Business Combination shall
have been approved by a majority of the Continuing Directors (as hereinafter
defined).
Clause (b). Price and Procedure Requirements. All of the following conditions
shall have been met:
1-b
<PAGE>
1. The aggregate amount of the cash and the Fair Market Value (as hereinafter
defined), as of the date of the consummation of the Business Combination, of
consideration other than cash to be received per share by holders of Common
Stock in such Business Combination shall be at least equal to the higher of the
following:
A. the Highest Per Share Price paid by the Interested Shareholder for any
shares of Common Stock acquired by it (i) within the two-year period
immediately prior to the first public announcement of the proposal of the
Business Combination (the "Announcement Date") or (ii) in the transaction in
which it became an Interested Shareholder, whichever is higher; and
B. the Fair Market Value per share of Common Stock on the Announcement Date
or on the date on which the Interested Shareholder became an Interested
Shareholder (such latter date is referred to in this Article XI as the
"Determination Date"), whichever is higher.
2. The aggregate amount of the cash and the Fair Market Value, as of the date
of the consummation of the Business Combination, of consideration other than
cash to be received per share by holders of shares of any other class of
outstanding Voting Stock shall be at least equal to the highest of the following
(it being intended that the requirements of this Clause (b)2 shall be required
to be met with respect to every class of outstanding Voting Stock whether or not
the Interested Shareholder has previously acquired any shares of a particular
class of Voting Stock):
A. the Highest Per Share Price paid by the Interested Shareholder for any
shares of such class of Voting Stock acquired by it (i) within the two-year
period immediately prior to the Announcement Date or (ii) in the transaction in
which it became an Interested Shareholder, whichever is higher;
B. the highest preferential amount per share to which the holders of shares
of such class of Voting Stock are entitled in the event of any voluntary or
involuntary liquidation, dissolution or winding up of the Corporation; and
C. the Fair Market Value per share of such class of Voting Stock on the
Announcement Date or on the Determination Date, whichever is higher.
3. The consideration to be received by holders of a particular class of
outstanding Voting Stock (including Common Stock) shall be in cash or in the
same form as the Interested Shareholder has previously paid for shares of such
class of Voting Stock. If the Interested Shareholder has paid for shares of any
class of Voting Stock with varying forms of consideration, the form of
consideration for such class of Voting Stock shall be either cash or the form
used to acquire the largest number of shares of such class of Voting Stock
previously acquired by it.
4. After such Interested Shareholder has become an Interested Shareholder and
prior to the consummation of such Business Combination: (A) except as approved
by a majority of the Continuing Directors, there shall have been no failure to
declare and pay at the regular date therefor any full periodic dividends
(whether or not cumulative) on the outstanding Preferred Stock, No Par Value;
(B) there shall have been (i) no reduction in the annual rate of dividends paid
on the Common Stock (except as necessary to reflect any subdivision of the
Common Stock), except as approved by a majority of the Continuing Directors, and
(ii) an increase in such annual rate of dividends as necessary to reflect any
reclassification (including any reverse stock split), recapitalization,
reorganization or any similar transaction which has the effect of reducing the
number of outstanding shares of the Common Stock, unless the failure so to
increase such annual rate is approved by a majority of the Continuing Directors;
and (C) such Interested Shareholder shall not have become the beneficial owner
of any additional shares of Voting Stock except as part of the transaction which
results in such Interested Shareholder becoming an Interested Shareholder.
1-c
<PAGE>
5. After such Interested Shareholder has become an Interested Shareholder,
such Interested Shareholder shall not have received the benefit, directly or
indirectly (except proportionately as a shareholder), of any loans, advances,
guarantees, pledges or other financial assistance or any tax credits or other
tax advantages provided by the Corporation (or any Subsidiary of the
Corporation), whether in anticipation of or in connection with such Business
Combination or otherwise.
6. A proxy or information statement describing the proposed Business
Combination and complying with the requirements of the Securities Exchange Act
of 1934 and the rules and regulations thereunder (or any subsequent provisions
replacing such Act, rules or regulations) shall have been mailed to
shareholders of the Corporation at least 30 days prior to the consummation of
such Business Combination (whether or not such proxy or information statement
was required to be mailed pursuant to such Act or subsequent provisions).
Section 3. Certain Definitions. For the purposes of this Article XI:
Clause (a). A "person" shall include any individual, firm, corporation or
other entity. When two or more persons act as a partnership, limited
partnership, syndicate, or other group for the purpose of acquiring Voting
Stock of the Corporation, such partnership, syndicate or group shall be deemed
a "person".
Clause (b). "Interested Shareholder" shall mean any person (other than the
Corporation or any Subsidiary) who or which:
1. is the beneficial owner, directly or indirectly, of more than 10% of
the voting power of the outstanding Voting Stock; or
2. is an Affiliate (as hereinafter defined) of the Corporation and at any
time within the two-year period immediately prior to the date in question was
the beneficial owner, directly or indirectly, of 10% or more of the voting
power of the then outstanding Voting Stock; or
3. is an assignee of or has otherwise succeeded to any shares of Voting
Stock which were at any time within the two-year period immediately prior to
the date in question beneficially owned by any Interested Shareholder, if such
assignment or succession shall have occurred in the course of a transaction or
series of transactions not involving a public offering within the meaning of
the Securities Act of 1933.
Clause (c). A person shall be a "beneficial owner" of any Voting Stock:
1. which such person or any of its Affiliates or Associates (as hereinafter
defined) beneficially owns, directly or indirectly; or
2. which such person or any of its Affiliates or Associates has (A) the
right to acquire (whether such right is exercisable immediately or only after
the passage of time), pursuant to any agreement, arrangement or understanding
or upon the exercise of conversion rights, exchange rights, warrants or
options, or otherwise, or (B) the right to vote pursuant to any agreement,
arrangement or understanding; or
3. which is beneficially owned, directly or indirectly, by any other person
with which such person or any of its Affiliates or Associates has any
agreement, arrangement or understanding for the purpose of acquiring, holding,
voting or disposing of any shares of Voting Stock.
Clause (d). For the purpose of determining whether a person is an Interested
Shareholder pursuant to Clause (b) of this Section 3, the number of shares of
Voting Stock deemed to be outstanding shall include shares deemed owned through
application of Clause (c) of this Section 3 but shall not include any other
shares of Voting Stock which may be issuable pursuant to any agreement,
arrangement or understanding, or upon exercise of conversion rights, warrants or
options, or otherwise.
1-d
<PAGE>
Clause (e). "Affiliate" or "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under
the Securities Exchange Act of 1934, as in effect on January 13, 1985.
Clause (f). "Subsidiary" means any corporation of which a majority of any
class of equity securities is owned, directly or indirectly, by the Corporation;
provided, however, that for the purposes of the definition of Interested
Shareholder set forth in Clause (b) of this Section 3, the term "Subsidiary"
shall mean only a corporation of which a majority of each class of equity
securities is owned, directly or indirectly, by the Corporation.
Clause (g). "Continuing Director" means any member of the Board of Directors
of the Corporation (the "Board") who is unaffiliated with the Interested
Shareholder and was a member of the Board prior to the time that the Interested
Shareholder became an Interested Shareholder, and any successor of a Continuing
Director who is unaffiliated with the Interested Shareholder and is recommended
to succeed a Continuing Director by a majority of Continuing Directors then on
the Board.
Clause (h). "Fair Market Value" means:
1. in the case of stock, the highest closing sale price during the 30-day
period immediately preceding the date in question of a share of such stock on
the Composite Tape for New York Stock Exchange-Listed Stock, or if such
stock is not quoted on the Composite Tape, on the New York Stock Exchange, or,
if such stock is not listed on such Exchange, on the principal United States
securities exchange registered under the Securities Exchange Act of 1934 on
which such stock is listed, or, if such stock is not listed on any such
exchange, the highest closing sale price, or, if none, the highest closing bid
quotation with respect to a share of such stock during the 30-day period
preceding the date in question on the National Association of Securities
Dealers, Inc. Automated Quotations System or any system then in use, or if no
such quotations are available, the fair market value of a share of such stock
as determined by a majority of the Continuing Directors in good faith, in any
case with respect to any class of stock, appropriately adjusted for any
dividend or distribution in shares of such stock or any stock split,
reclassification, recapitalization or combination of outstanding shares of such
stock into a greater or lesser number of shares of such stock; and
2. in the case of property other than cash or stock, the fair market value
of such property on the date in question as determined by a majority of the
Continuing Directors in good faith.
Clause (i). References to "Highest Per Share Price" shall in each case with
respect to any class of stock reflect an appropriate adjustment for any dividend
or distribution in shares of such stock or any stock split, reclassification,
recapitalization or combination of outstanding shares of such stock into a
greater or lesser number of shares of such stock.
Clause (j). In the event of any Business Combination in which the Corporation
survives, the phrase "consideration other than cash to be received" as used in
Clauses (b)1 and 2 of Section 2 of this Article XI shall include the shares of
Common Stock and/or the shares of any other class of outstanding Voting Stock
owned by the holders of such shares.
Section 4. Powers of the Board of Directors. A majority of the Continuing
Directors of the Corporation shall have the power and duty to determine for the
purposes of this Article XI, on the basis of information known to them after
reasonable inquiry, (a) whether a person is an Interested Shareholder, (b) the
number of shares of Voting Stock beneficially owned by any person, (c) whether a
person is an Affiliate or Associate of another, and (d) whether the assets which
are the subject of any Business Combination have, or the consideration to be
received for the issuance or transfer of securities by the Corporation or any
Subsidiary in any Business Combination has, an aggregate Fair Market Value of
$1,000,000 or more.
1-e
<PAGE>
Section 5. No Effect on Fiduciary Obligations of Interested Shareholders.
Nothing contained in this Article XI shall be construed to relieve any
Interested Shareholder from any fiduciary or other obligation imposed by law.
Section 6. Amendment, Repeal, etc. Notwithstanding any other provisions of
these Articles of Incorporation or the bylaws of the Corporation (and
notwithstanding the fact that a lesser percentage may be specified by law, in
these Articles of Incorporation or the bylaws of the Corporation), the
affirmative vote of the holders of three-fourths or more of the voting power of
the shares of the then outstanding Voting Stock, voting together and not by
class shall be required to alter, amend, repeal, or adopt provisions
inconsistent with, this Article XI of these Articles of Incorporation.
1-f
<PAGE>
Corporate Form No. 102 (Oct. 1979) - Page Two
ARTICLE II
----------
MANNER OF ADOPTION AND VOTE
---------------------------
Section 1. Action by Directors (select appropriate paragraph).
(a) The Board of Directors of the Corporation, at a meeting thereof,
duly called, constituted and held on March 14, 1985, at which a quorum of
such Board of Directors was present, duly adopted a resolution proposing
to the Shareholders of the Corporation entitled to vote in respect of the
Amendments that the provisions and terms of Article(s) VII and XI of its
Articles of Incorporation be amended so as to read as set forth in the
Amendments; and called a meeting of such shareholders, to be held May 9,
1985, to adopt or reject the Amendments, unless the same were so approved
prior to such date by unanimous written consent.
X
(b) By written consent executed on _________, 19__, signed by all of
the members of the Board of Directors of the Corporation, a resolution was
adopted proposing to the Shareholders of the Corporation entitled to vote
in respect of the Amendments, that the provisions and terms of Articles of
its Articles of Incorporation be amended so as to read as set forth in the
Amendments, and a meeting of such shareholders was called to be held
___________, 19__, to adopt or reject the Amendments, unless the same were
so approved prior to such date by unanimous written consent.
Section 2. Action by Shareholders (select appropriate paragraph).
(a) The Shareholders of the Corporation entitled to vote in respect of
the Amendments, at a meeting thereof, duly called, constituted and held on
May 9, 1985, at which a quorum of such shareholders was present, adopted the
Amendments.
The holders of the following classes of shares were entitled to vote as a
class in respect of the Amendments:
(1) N/A
(2)
(3)
<PAGE>
Corporate Form No. 102 (Oct. 1979) - Page Three
The number of shares entitled to vote in respect of the Amendments, the
number of shares voted in favor of the adoption of the Amendments, and the
number of shares voted against such adoption are as follows:
<TABLE>
<CAPTION>
Amendments: Article VII Article XI
Total Total Shares Entitled to Vote as a Class
----- ----- (as listed immeediately above)
------------------------------
(1) (2) (3)
<S> <C> <C> <C> <C> <C>
Shares entitled to vote: 41,135,279 41,135,279
Shares voted in favor: 26,030,044 25,849,267
Shares voted against: 5,928,801 6,074,106
</TABLE>
x
(b) By written consent executed on ___________, 19__, signed by the holders
of _____ shares of the Corporation, being all of the shares of the Corporation
entitled to vote in respect of the Amendments, the Shareholders adopted the
Amendments.
Section 3. Compliance with Legal Requirements.
The manner of the adoption of the Amendments, and the vote by which they
were adopted, constitute full legal compliance with the provisions of the Act,
the Articles of Incorporation, and the By-Laws of the Corporation.
ARTICLE III
------------
STATEMENT OF CHANGES MADE WITH RESPECT TO ANY INCREASE
------------------------------------------------------
IN THE NUMBER OF SHARES HERETOFORE AUTHORIZED
---------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C>
Aggregate Number of Shares N/A
Previously Authorized _________
Increase (indicate "0" or "N/A" if no increase) _________
Aggregate Number of Shares
To Be Authorized After Effect of This Amendment ________
</TABLE>
<PAGE>
Corporate Form No. 102 (Oct. 1979) - Page Four
IN WITNESS WHEREOF, the undersigned officers execute these Articles of
Amendment of the Articles of Incorporation of the Corporation, and certify
to the truth of the facts herein stated, this 23 day of May, 1985.
/s/ Ian M. Rolland /s/ Marilyn A. Vachon
- ----------------------------- --------------------------------
(Written Signature) (Written Signature)
Ian M. Rolland Marilyn A. Vachon
- ---------------------------- --------------------------------
(Printed Signature) (Printed Signature)
President Secretary
STATE OF INDIANA )
) SS:
COUNTY OF ALLEN )
I, the undersigned, a Notary Public duly commissioned to take
acknowledgements and administer oaths in the State of Indiana, certify that
Ian M. Rolland, the President, and Marilyn A. Vachon, the Secretary of the
Corporation, the officers executing the foregoing Articles of Amendment of
the Articles of Incorporation, personally appeared before me, acknowledged
the execution thereof, and swore or attested to the truth of the facts
therein stated.
Witness my hand and Notarial Seal this 23rd day of May, 1985.
/s/ Jolene K. Shatto
-----------------------------------
(Written Signature)
/s/ Jolene K. Shatto
-----------------------------------
(Printed Signature)
NOTARY PUBLIC
My Commission Expires: My County of Residence is:
January 6, 1987 Allen
- ---------------------- ---------------------------------
This instrument was prepared by J. Michael Keefer, Attorney at Law,
1300 South Clinton Street Fort Wayne Indiana 46801
- -------------------------------------------------------------------
(Number and Street or Building) (City) (State) (Zip Code)
<PAGE>
STATE OF INDIANA
OFFICE OF THE SECRETARY OF STATE
To Whom These Presents Come, Greeting:
I, EDWIN J. SIMCOX, Secretary of State of the State of Indiana, do
hereby certify that
LINCOLN NATIONAL CORPORATION
----------------------------
a corporation duly organized and existing under the laws of the State of
Indiana, has this day filed in the Office of the Secretary of State, a
certificate in triplicate showing a statement of the relative rights,
preferences, limitations, or restrictions of shares as adopted by the Board
of Directors acting by committee (pursuant to (1) Chapter 1-2-11(g) of The
Indiana General Corporation Act, as amended, (2) Section 1, Article IV of
the Bylaws and (3) Resolution No. 776 of the Board of Directors), at a duly
held and constituted meeting on March 14, 1985, under the certificate of the
Secretary and verification of its Senior Vice President in accordance with
The Indiana General Corporation Act.
I further certify that said certificate is now of record and on file
in this office.
In Witness Whereof, I have hereunto set
my hand and affixed the seal of the
State of Indiana, at the City of
Indianapolis,
this__________________27th_______day of
[SEAL OF THE STATE OF INDIANA]
_______________June_____, 1985
_______________________________________
Secretary of State,
By_____________________________________
Deputy
<PAGE>
[Series C]
CERTIFICATE OF RESOLUTION BY THE BOARD Of DIRECTORS
DETERMINING AND STATING THE DESIGNATION AND THE
RELATIVE RIGHTS, PREFERENCES, QUALIFICATIONS,
LIMITATIONS AND RESTRICTIONS (OTHER THAN VOTING RIGHTS)
OF A SERIES OF A CLASS OF PREFERRED SHARES
OF
LINCOLN NATIONAL CORPORATION
Pursuant to Chapter 1-2-6(b) of The Indiana General
Corporation Act, as amended, Marilyn A. Vachon, Secretary of Lincoln
National Corporation (a corporation existing pursuant to the provisions
of The Indiana General Corporation Act, as amended, and hereinafter
referred to as the "Corporation") states that the Board of Directors of
the Corporation acting by committee pursuant to Chapter 1-2-11(g) of
The Indiana General Corporation Act, as amended, at a duly called
meeting on June 25, 1985, duly adopted the following resolution:
RESOLVED: Pursuant to the authority expressly granted to and
vested in the Board of Directors of the Corporation by the
provisions of the Articles of Incorporation of the Corporation,
this Board of Directors hereby creates and authorizes the issue
of a series of the Preferred Stock, No Par Value, of the
Corporation, to consist of five hundred (500) shares of
Preferred Stock, No Par Value, of the Corporation, and this
Board of Directors hereby fixes the designation and the
relative rights, preferences, qualifications, limitations and
restrictions (other than voting rights) of the shares of such
series as follows:
ARTICLE ONE. SHORT TERM AUCTION RATE CUMULATIVE PREFERRED STOCK, SERIES C (NO
PAR VALUE)
Section 1. Designation.
-----------
(a) The designation of such series of Preferred Stock, No Par Value, shall
be "Short Term Auction Rate Cumulative Preferred Stock, Series C (No Par
Value)" (hereinafter referred to as "Series C STAR Preferred").
(b) The number of authorized shares constituting Series C STAR Preferred is
500. Shares of Series C STAR Preferred shall be issued with a liquidation value
of $100,000 per share plus accrued dividends and shall be without par value.
<PAGE>
Section 2. Definitions.
-----------
As used herein, the following terms shall have the following meanings (with
terms defined in the singular having comparable meanings when used in the plural
and vice versa), unless the context otherwise requires:
(a) "AA Composite Commercial Paper Rate", on any date, shall mean (i) the
interest equivalent of the 60-day rate on commercial paper placed on behalf of
issuers whose corporate bonds are rated "AA" by Standard & Poor's Corporation or
its successor, or the equivalent of such rating by another rating agency, as
made available on a discount basis or otherwise by the Federal Reserve Bank of
New York for the immediately preceding Business Day prior to such date, or (ii)
in the event that the Federal Reserve Bank of New York does not make available
such a rate, then the arithmetic average of the interest equivalent of the 60-
day rate on commercial paper placed on behalf of such issuers, as quoted on a
discount basis or otherwise by the Commercial Paper Dealers to the Trust Company
or the Corporation, as the case may be, for the close of business of the
immediately preceding Business Day prior to such date. If any Commercial Paper
Dealer does not quote a rate required to determine the "AA" Composite
Commercial Paper Rate, the "AA" Composite Commercial Paper Rate shall be
determined on the basis of the quotation or quotations furnished by the
remaining Commercial Paper Dealer or Commercial Paper Dealers and any Substitute
Commercial Paper Dealer or Substitute Commercial Paper Dealers selected by the
Corporation to provide such rate or rates not being supplied by any Commercial
Paper Dealer or Commercial Paper Dealers, as the case may be, or, if the
Corporation does not select any such Substitute Commercial Paper Dealer or
Substitute Commercial Paper Dealers, by the remaining Commercial Paper Dealer or
Commercial Paper Dealers. If the Board of Directors of the Corporation shall
make the adjustment referred to in clause (A) of the second sentence of Section
3(b) of this ARTICLE ONE with the result that (i) the dividend period days (as
defined in such subparagraph (b)) shall be less than 70 days, such rate shall be
the interest equivalent of the 60-day rate on such commercial paper, (ii) the
dividend period days shall be 70 or more days but fewer than 85 days, such rate
shall be the arithmetic average of the interest equivalent of the 60-day and
90-day rates on such commercial paper, and (iii) the dividend period days shall
be 85 or more days but 98 or less days, such rate shall be the interest
equivalent of the 90-day rate on such commercial paper. For purposes of this
definition, the "interest equivalent" of a rate stated on a discount basis (a
"discount rate") for commercial paper of a given days' maturity shall be equal
to the quotient of (A) the discount rate divided by (B) the difference between
(x) 1.00 and (y) a fraction the numerator of which shall be the product of the
discount rate times the number of days in which such commercial paper matures
and the denominator of which shall be 360.
(b) "Applicable Rate" shall have the meaning specified in Section 3(c)(i) of
this ARTICLE ONE.
-2-
<PAGE>
(c) "Business Day" shall mean a day on which the New York Stock Exchange is
open for trading and which is not a day on which banks in The City of New York,
New York are authorized by law to close.
(d) "Commercial Paper Dealers" shall mean Salomon Brothers Inc, The First
Boston Corporation, and Merrill Lynch, Pierce, Fenner & Smith Incorporated, or,
in lieu of any thereof, their respective affiliates or successors.
(e) "Common Shares" shall mean all shares now or hereafter authorized of the
class of common shares of the Corporation presently authorized and any other
shares into which such shares may hereafter be changed from time to time.
(f) "Date of Original Issue" means the date on which the Corporation initially
issues shares of Series C STAR Preferred.
(g) "Dividend Payment Date" shall have the meaning specified in Section 3(b)
of this ARTICLE ONE.
(h) "Dividend Period" and "Dividend Periods" shall have the respective
meanings specified in Section 3(c)(i) of this ARTICLE ONE.
(i) "Holder" shall mean the holder of shares of Series C STAR Preferred as the
same appears on the stock transfer books of the Corporation.
(j) "Initial Dividend Payment Date" shall have the meaning specified in
Section 3(b) of this ARTICLE ONE.
(k) "Initial Dividend Period" shall have the meaning specified in Section
3(c)(i) of this ARTICLE ONE.
(1) "LIBOR" shall mean for any Dividend Period the average (rounded to the
nearest 1/16 of 1%) of the respective rates per annum quoted by each of the
Reference Banks at which United States dollar deposits for a two-month period in
the amount of U.S. $10,000,000 are offered by such Reference Bank in the London
interbank market at approximately 11:00 A.M. (London time) on the first day of
such Dividend Period. If any Reference Bank does not quote a rate required to
determine LIBOR, LIBOR shall be determined on the basis of the quotation or
quotations furnished by the remaining Reference Bank or Reference Banks and any
Substitute Reference Bank or Substitute Reference Banks selected by the
Corporation to provide such quotation or quotations not being supplied by any
Reference Bank or Reference Banks, as the case may be, or, if the Corporation
does not select any such Substitute Reference Bank or Substitute Reference
Banks, by the remaining Reference Bank or Reference Banks. If the Board of
Directors of the Corporation shall make the adjustment referred to in clause (A)
of the second sentence of Section 3(b) of this ARTICLE ONE with the result that
(i) the dividend period days (as defined in such subparagraph)
-3-
<PAGE>
shall be less than 70 days, LIBOR shall be based on the rates per annum quoted
for United States dollar deposits for a two-month period, (ii) the dividend
period days shall be 70 or more days but less than 85 days, LIBOR shall be the
arithmetic average of the rates per annum quoted for United States dollar
deposits for two- and three-month periods, or (iii) the dividend period days
shall be 85 or more days but 98 or less days, such rate shall be based on the
rates per annum quoted for United States dollar deposits for a three-month
period.
(m) "LIBOR Event" shall mean the failure by the Corporation timely to pay to
the Trust Company, not later than 12 Noon, New York City time, (i) on the
Business Day next preceding any Dividend Payment Date the full amount of any
dividend (whether or not earned or declared) to be paid on such Dividend Payment
Date on any share of Series C STAR Preferred or (ii) on the Business Day next
preceding any redemption date the redemption price to be paid on such redemption
date of any share of Series C STAR Preferred after notice of redemption is given
pursuant to Section 4(b) of this ARTICLE ONE.
(n) "Reference Banks" shall mean the principal London offices of Bank of
America National Trust and Savings Association, Barclays Bank PLC, Citibank,
N.A., Lloyds Bank PLC, Midland Bank PLC and National Westminster Bank PLC, or
their respective successors.
(o) "Subsequent Dividend Period" and "Subsequent Dividend Periods" shall have
the respective meanings specified in Section 3(c)(i) of this ARTICLE ONE.
(p) "Substitute Commercial Paper Dealer" shall mean Goldman, Sachs & Co. or
Lehman Commercial Paper Incorporated, or, in lieu of any thereof, their
respective affiliates or successors.
(q) "Substitute Reference Bank" shall mean the principal London offices of The
Chase Manhattan Bank (National Association), Deutsche Bank Aktiengesellschaft,
Morgan Guaranty Trust Company of New York or Swiss Bank Corporation, or their
respective successors.
(r) "Trust Company" shall mean a bank or trust company appointed as such by a
resolution of the Board of Directors of the Corporation.
Section 3. Dividends.
(a) The Holders of shares of Series C STAR Preferred shall be entitled to
receive, when and as declared by the Board of Directors of the Corporation out
of funds legally available therefor, cumulative cash dividends at the Applicable
Rate per annum thereof, determined as set forth below, and no more, payable on
the respective dates set forth below.
(b) Dividends on shares of Series C STAR Preferred, at the Applicable Rate
per annum, shall accrue from the Date of Original Issue and shall be payable
commencing on the 51st day after the Date of Original Issue and on
-4-
<PAGE>
each day thereafter which is the last day of successive 49-day periods after
such 51st day after the Date of Original Issue, or if either (i) in the case of
the Initial Dividend Payment Date, such 51st day after the Date of Original
Issue or, in the case of any subsequent Dividend Payment Date, any such last day
(in either case, the "normal day") is not a Business Day or (ii) the day next
succeeding the normal day is not a Business Day, then on the first Business Day
preceding the normal day that is next succeeded by a day that is also a Business
Day, and if any particular Dividend Payment Date does not occur on the normal
day because of the exceptions in clauses (i) or (ii), the next succeeding
Dividend Payment Date shall be, subject to such exceptions, the 49th day
following the normal day for the prior Dividend Period. Notwithstanding the
foregoing, (A) in the event of a change in law altering the minimum holding
period (currently found in Section 246(c) of the Internal Revenue Code of 1954,
as amended) required for taxpayers to be entitled to the dividends received
deduction on preferred stock held by non-affiliated corporations (currently
found in Section 243(a) of such Code), the Board of Directors of the Corporation
may, subject to clauses (i) and (ii) of this subparagraph (b), adjust the period
of time between Dividend Payment Dates so as to adjust uniformly the number of
days (such number of days without giving effect to such clauses (i) and (ii)
being hereinafter referred to as "dividend period days") in Dividend Periods
commencing after the date of such change in law to equal or exceed the then
current minimum holding period, provided in such event that the number of
dividend period days shall not exceed by more than nine days the length of such
then current minimum holding period and shall be evenly divisible by seven, and
the maximum number of dividend period days in no event shall exceed 98 days; (B)
if, as a result of applying the procedures set forth in this subparagraph (b)
for determining a Dividend Payment Date, the number of days in any Dividend
Period would not equal or exceed the then current minimum holding period for a
taxpayer to be entitled to the dividends received deduction on preferred stock
held by a non-affiliated corporation referred to in clause (A) of this
subparagraph, the Board of Directors of the Corporation may fix the Dividend
Payment Date for that Dividend Period on the first Business Day next preceding
the originally designated normal day, even though the day next succeeding such
Business Day is not a Business Day and (C) in the event of a default in the
payment of a dividend on shares of Series C STAR Preferred, dividends on shares
of Series C STAR Preferred shall thereafter become payable quarterly, commencing
on the 90th day after the Dividend Payment Date on which such default occurred
with respect to any Dividend Period ending during such 90-day period, and on
each day thereafter that is the last day of successive 90-day periods with
respect to any Dividend Period ending during each such 90-day period, in each
case subject to clauses (i) and (ii) of this subparagraph (b), until such time
as no dividend on Series C STAR Preferred shall be in default, in which case,
dividends shall next be payable on the last day of the Dividend Period which
includes the first day on which no dividend was in default and thereafter
dividends shall become payable on the 49th day after the last day of such
Dividend Period and on each day thereafter which is the last day of successive
49-day periods after such date, subject to clauses (i) and (ii) of this
subparagraph (b) (each date on which payment of dividends is due being herein
referred to as a "Dividend Payment Date" and the first Dividend Payment
-5-
<PAGE>
Date being herein referred to as the "Initial Dividend Payment Date"). Upon any
change in the number of dividend period days as a result of a change in law as
set forth in clause (A), or upon a change as set forth in clause (B) or (C), the
Corporation shall give notice of such change to all Holders by first class mail,
postage prepaid. Each such dividend shall be paid to the Holders as their names
appear on the books and records of the Corporation on the Business Day next
preceding the Dividend Payment Date thereof; provided, however, that if such
dividend shall be calculated based upon LIBOR, as set forth in Section 3(c)(i)
of this ARTICLE ONE, such dividend shall be paid to the Holders as their names
appear on the books and records of the Corporation on such date, not exceeding
15 days preceding the payment date thereof, as may be fixed by the Board of
Directors of the Corporation. Dividends in arrears for any past Dividend Period
may be declared and paid at any time, without reference to any regular Dividend
Payment Date, to the Holders as their names appear on the books and records of
the Corporation on such date, not exceeding 15 days preceding the payment date
thereof, as may be fixed by the Board of Directors of the Corporation.
(c)(i) The dividend rate on shares of Series C STAR Preferred shall be 6.25%
per annum during the period from and after the Date of Original Issue to the
Initial Dividend Payment Date (the "Initial Dividend Period"). Commencing the
day that is the Initial Dividend Payment Date, the dividend rate on shares of
Series C STAR Preferred for each Subsequent Dividend Period (as hereinafter
defined) shall be equal to the rate per annum that results from implementation
of the Auction Procedures described in ARTICLE TWO hereof; provided, however,
that (A) if a LIBOR Event shall have occurred prior to the first day of such
Subsequent Dividend Period, the dividend rate for such Subsequent Dividend
Period shall be at a rate per annum equal to LIB0R plus 1/4 of 1% and (B) if
there is no Trust Company on the day prior to the first day of a Dividend Period
(unless a LIB0R Event has occurred), the dividend rate for such Dividend Period
shall be at a rate per annum equal to 110% of the "AA" Composite Commercial
Paper Rate, as determined by the Corporation, on the first day of such Dividend
Period. The rate per annum at which dividends are payable on shares of Series C
STAR Preferred for any Dividend Period (as hereinafter defined) is herein
referred to as the "Applicable Rate".
Each dividend period following the Initial Dividend Period (herein referred to
as a "Subsequent Dividend Period" and collectively as "Subsequent Dividend
Periods" and the Initial Dividend Period or any Subsequent Dividend Period being
herein referred to as a "Dividend Period" and collectively as "Dividend
Periods") shall commence on the day that is the last day of the preceding
Dividend Period and shall end on the next succeeding Dividend Payment Date;
provided, however, that if the provisions of clause (C) of Section 3(b) are
applicable, each Dividend Period shall end on the date which would have been the
next succeeding Dividend Payment Date if the provisions of such clause had not
been applicable.
(ii) The amount of dividends payable on each share of Series C STAR Preferred
for any Dividend Period shall be computed by multiplying the Applicable Rate
for such Dividend Period by a fraction the numerator of
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<PAGE>
which shall be the number of days in the Dividend Period (calculated by counting
the first day thereof but excluding the last day thereof) such share was
outstanding and the denominator of which shall be 360 and applying the rate
obtained against $100,000 per share of Series C STAR Preferred.
(d)(i) Holders of shares of Series C STAR Preferred shall not be entitled to
any interest, or sum of money in lieu of interest, in respect of any dividend
payment or payments on shares of Series C STAR Preferred which may be in
arrears.
(ii) Except as otherwise provided in resolutions of the Board of Directors of
the Corporation adopted on May 28, 1969 creating the Corporation's $3.00
Cumulative Convertible Preferred Stock, Series A (No Par Value) (the "Series A
Preferred Stock"), as such resolutions relate to the payment of dividends on the
Series A Preferred Stock and except as hereinafter provided, no full dividends
shall be declared or paid or set apart for payment on any series of Preferred
Stock, No Par Value, for any period unless full cumulative dividends have been
or contemporaneously are declared and paid or declared and a sum sufficient for
payment thereof set apart for such payment on shares of Series C STAR Preferred
for the current and all past Dividend Periods. When dividends are not paid or
set apart in full, as aforesaid, upon the shares of Series C STAR Preferred and
any other Preferred Stock ranking on a parity as to dividends with Series C STAR
Preferred, all dividends declared upon shares of Series C STAR Preferred and any
other Preferred Stock ranking on a parity as to dividends with Series C STAR
Preferred shall be declared pro rata so that the amount of dividends declared
per share on Series C STAR Preferred and such other Preferred Stock ranking on a
parity as to dividends with Series C STAR Preferred shall in all cases bear to
each other the same ratio that accrued dividends per share on the shares of
Series C STAR Preferred and such other Preferred Stock ranking on a parity as to
dividends with shares of Series C STAR Preferred bear to each other.
(iii) Except with respect to dividends on the Series A Preferred Stock and as
otherwise provided in paragraph (d)(ii) above, so long as any shares of Series C
STAR Preferred are outstanding, no dividend (other than a dividend payable in
Common Shares or payable in any other stock of the Corporation ranking junior to
shares of Series C STAR Preferred as to dividends and upon liquidation) shall be
declared or paid or set aside for payment or other distribution declared or made
upon Common Shares or upon any other stock of the Corporation ranking junior to
or on a parity with shares of Series C STAR Preferred as to dividends or upon
liquidation, nor shall any such Common Shares or any other stock of the
Corporation ranking junior to or on a parity with shares of Series C STAR
Preferred as to dividends or upon liquidation be redeemed, purchased or
otherwise acquired for any consideration (or any moneys be paid to or made
available for a sinking fund for the redemption of any shares of any such stock)
by the Corporation (except by conversion into or exchange for stock of the
Corporation ranking junior to shares of Series C STAR Preferred as to dividends
and upon liquidation) unless, in each case, the full cumulative dividends on
all outstanding shares of Series C STAR Preferred shall have been paid or
-7-
<PAGE>
contemporaneously are declared and paid for the current and all past Dividend
Periods.
Section 4. Redemption.
----------
(a)(i)(A) At the option of the Corporation, shares of Series C STAR Preferred
may be redeemed, as a whole at any time or from time to time in part, on any
Dividend Payment Date at a redemption price equal to:
(I) $103,000 per share if redeemed during the twelve months ending
on the first anniversary of the Date of Original Issue;
(II) $102,000 per share if redeemed during the twelve months ending
on the second anniversary of the Date of Original Issue;
(III) $101,000 per share if redeemed during the twelve months ending
on the third anniversary of the Date of Original Issue;
(IV) $100,000 per share thereafter;
plus, in each case, accrued and unpaid dividends thereon to the date fixed
for redemption.
(B) If fewer than all the outstanding shares of Series C STAR Preferred are
to be redeemed pursuant to Section 4(a)(i)(A) of this ARTICLE ONE, the number
of shares to be redeemed shall be determined by the Board of Directors of the
Corporation, and such shares shall be redeemed pro rata from the Holders in
proportion to the number of such shares held by such Holders (rounding to the
nearest whole share to avoid redemption of fractional shares).
(ii) At the option of the Corporation, shares of Series C STAR Preferred may
be redeemed, as a whole but not in part, on any Dividend Payment Date at a
redemption price of $100,000 per share, plus accrued and unpaid dividends
thereon to the date fixed for redemption, if the Applicable Rate fixed for the
Dividend Period ending on such Dividend Payment Date shall equal or exceed the
"AA" Composite Commercial Paper Rate on the date of determination of such
Applicable Rate.
(b) In the event the Corporation shall redeem shares of Series C STAR
Preferred, notice of such redemption shall be given by first class mail, postage
prepaid, mailed not less than 30 nor more than 60 days prior to the redemption
date, to each Holder of record of the shares to be redeemed, at such Holder's
address as the same appears on the stock record books of the Corporation. Each
such notice shall state: (i) the redemption date; (ii) the number of shares of
Series C STAR Preferred to be redeemed and, if fewer than all the shares held by
such Holder are to be redeemed, the number
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<PAGE>
of such shares to be redeemed from such Holder; (iii) the redemption price;
(iv) the place or places where certificates for such shares are to be
surrendered for payment of the redemption price; and (v) that dividends on the
shares to be redeemed will cease to accrue on such redemption date.
(c) Notice having been mailed as aforesaid, and if the Corporation shall have
deposited a sum sufficient to redeem the shares of Series C STAR Preferred as to
which notice of redemption has been given with the Trust Company, with
irrevocable instructions and authority to pay the redemption price to the
Holders thereof upon surrender of certificates therefor or, if no such deposit
is made, then from and after the redemption date (unless default shall be made
by the Corporation in providing money for the payment of the redemption price of
the shares called for redemption), dividends on the shares of Series C STAR
Preferred so called for redemption shall cease to accrue, and said shares shall
no longer be deemed to be outstanding, and all rights of the Holders thereof as
shareholders of the Corporation (except the right to receive from the
Corporation the redemption price) shall cease and terminate. Upon surrender in
accordance with said notice of the certificates for any shares so redeemed
(properly endorsed or assigned for transfer, if the Board of Directors of the
Corporation shall so require and the notice shall so state), such shares shall
be redeemed by the Corporation at the redemption price aforesaid but without
interest. In case fewer than all the shares represented by any such certificate
are redeemed, a new certificate shall be issued representing the unredeemed
shares without cost to the Holder thereof.
(D) Any shares of Series C STAR Preferred which shall at any time have been
redeemed or purchased by the Corporation shall, after such redemption or
purchase, be cancelled in the manner provided by the laws of the State of
Indiana.
(e) Notwithstanding the foregoing provisions of this Section 4, unless the
full cumulative dividends on all outstanding shares of Series C STAR Preferred
shall have been paid or contemporaneously are declared and paid for all past
Dividend Periods, (i) no shares of Series C STAR Preferred shall be redeemed
unless all outstanding shares of Series C STAR Preferred are simultaneously
redeemed, and (ii) the Corporation shall not purchase or otherwise acquire any
shares of Series C STAR Preferred except pursuant to a purchase or exchange
offer made on the same terms to Holders of all outstanding shares of Series C
STAR Preferred.
Section 5. Conversion or Exchange.
The Holders of shares of Series C STAR Preferred shall not have any rights to
convert such shares into or exchange such shares for shares of any other class
or classes or of any other series of any class or classes of capital stock of
the Corporation.
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<PAGE>
Section 6. Voting.
The shares of Series C STAR Preferred shall have such voting rights as are
provided in Section 5 Article V of the Corporation's Articles of Incorporation.
Section 7. Liquidation Rights.
(a) In the event of the liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, the Holders of shares of Series C
STAR Preferred then outstanding shall be entitled to receive, after payment or
provision for payment of all creditors of the Corporation, but before any
distribution or payment shall be made in respect of the Common Stock or any
other stock of the Corporation ranking junior to shares of Series C STAR
Preferred as to assets on liquidation, dissolution or winding up, an amount
equal to $100,000 per share, plus an amount equal to all unpaid dividends
thereon accrued on a daily basis to and including the date fixed for such
distribution or payment, but the Holders shall be entitled to no further
participation in any distribution or payment in connection with any such
liquidation, dissolution or winding up. If, upon any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the Corporation, the
net assets of the Corporation distributable among the Holders of all outstanding
shares of Series C STAR Preferred and of any other series of Preferred Stock, No
Par Value, or any other stock of the Corporation ranking on a parity with Series
C STAR Preferred as to assets on liquidation shall be insufficient to permit the
payment in full to such Holders of the preferential amounts to which they are
entitled, then the entire net assets of the Corporation remaining after the
distributions to Holders of any stock of the Corporation ranking senior to
Series C STAR Preferred to which they may be entitled shall be distributable
among the holders of shares of Series C STAR Preferred and of any other series
of Preferred Stock, No Par Value, or of any other stock of the Corporation
ranking on a parity with Series C STAR Preferred as to assets on liquidation
ratably in proportion to the full amounts to which they would otherwise
respectively be entitled.
(b) Neither the consolidation or merger of the Corporation with or into any
other corporation or corporations, nor the sale or transfer by the Corporation
of all or any part of its assets, shall be deemed to be a liquidation,
dissolution or winding up of the Corporation for purposes of this Section 7. All
shares of Series C STAR Preferred, the Corporation's outstanding Series A
Preferred Stock, the Corporation's outstanding Short Term Auction Rate
Cumulative Preferred Stock, Series B (No Par Value), and the Corporation's
authorized Short Term Auction Rate Cumulative Preferred Stock, Series D (No Par
Value) will rank on a parity as to assets upon liquidation.
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ARTICLE TWO. AUCTION PROCEDURES
Section 1. Definitions.
-----------
Capitalized terms not defined in this Section 1 shall have the respective
meanings specified in Section 2 of ARTICLE ONE. As used in this ARTICLE TWO, the
following terms shall have the following meanings, unless the context otherwise
requires:
(a) "Affiliate" shall mean any Person known to the Trust Company to be
controlled by, in control of or under common control with the Corporation.
(b) "Agent Member" shall mean the member of the Securities Depository that
will act on behalf of a Bidder and is identified as such in such Bidder's
Purchaser's Letter.
(c) "Auction" shall mean the periodic operation of the procedures set forth in
this ARTICLE TWO.
(d) "Auction Date" shall mean the Business Day next preceding a Dividend
Payment Date.
(e) "Available STAR Preferred" shall have the meaning specified in Section
4(a) of this ARTICLE TWO.
(f) "Bid" and "Bids" shall have the respective meanings specified in Section
2(a) of this ARTICLE TWO.
(g) "Bidder" and "Bidders" shall have the respective meanings specified in
Section 2(a) of this ARTICLE TWO.
(h) "Broker-Dealer" shall mean any broker-dealer, or other entity permitted by
law to perform the functions required of a Broker-Dealer in this ARTICLE TWO,
that has been selected by the corporation and has entered into a Broker-Dealer
Agreement with the Trust Company that remains effective.
(i) "Broker-Dealer Agreement" shall mean an agreement between the Trust
Company and a Broker-Dealer pursuant to which such Broker-Dealer agrees to
follow the procedures specified in this ARTICLE TWO.
(j) "Existing Holder," when used with respect to shares of Series C STAR
Preferred, shall mean a Person who has signed a Purchaser's Letter and is listed
as the beneficial owner of shares of Series C STAR Preferred in the records of
the Trust Company.
(k) "Hold Order" and "Hold Orders" shall have the respective meanings
specified in subparagraph 2(a) of this ARTICLE TWO.
(1) "Maximum Rate", on any Auction Date, shall mean the product of (i) 1.10
and (ii) the "AA" Composite Commercial Paper Rate.
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<PAGE>
(m) "Minimum Rate", on any Auction Date, shall mean the product of (i) .58 and
(ii) the "AA" Composite Commercial Paper Rate.
(n) "Order" and "Orders" shall have the respective meanings specified in
Section 2(a) of this ARTICLE TWO.
(o) "Outstanding" shall mean, as of any date, shares of Series C STAR
Preferred theretofore issued by the Corporation except, without duplication, (i)
any shares of Series C STAR Preferred theretofore cancelled or delivered to the
Trust Company for cancellation or redeemed by the Corporation or as to which a
notice of redemption shall have been given by the Corporation, (ii) any shares
of Series C STAR Preferred as to which the Corporation or any Affiliate thereof
(other than a broker-dealer Affiliate) shall be an Existing Holder and (iii) any
shares of Series C STAR Preferred represented by any certificate in lieu of
which a new certificate has been executed and delivered by the Corporation.
(p) "Person" shall mean and include an individual, a partnership, a
corporation, a trust, an unincorporated association, a joint venture or other
entity or a government or any agency or political subdivision thereof.
(q) "Potential Holder" shall mean any Person, including any Existing Holder,
(i) who shall have executed a Purchaser's Letter and (ii) who may be interested
in acquiring shares of Series C STAR Preferred (or, in the case of an Existing
Holder, additional shares of Series C STAR Preferred).
(r) "Purchaser's Letter" shall mean a letter addressed to the Corporation, the
Trust Company and a Broker-Dealer in which a Person agrees, among other things,
to offer to purchase, purchase, offer to sell and/or sell shares of Series C
STAR Preferred as set forth in this ARTICLE TWO.
(s) "Securities Depository" shall mean The Depository Trust Company and its
successors and assigns or any other securities depository selected by the
Corporation which agrees to follow the procedures required to be followed by
such securities depository in connection with shares of Series C STAR Preferred.
(t) "Sell Order" and "Sell Orders" shall have the respective meanings
specified in Section 2(a) of this ARTICLE TWO.
(u) "Submission Deadline" shall mean 12:30 P.M., New York City time, on any
Auction Date or such other time on any Auction Date by which Broker-Dealers are
required to submit Orders to the Trust Company as specified by the Trust
Company from time to time.
(v) "Submitted Bid" and "Submitted Bids" shall have the respective meanings
specified in Section 4(a) of this ARTICLE TWO.
(w) "Submitted Hold Order" and "Submitted Hold Orders" shall have the
respective meanings specified in Section 4(a) of this ARTICLE TWO.
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<PAGE>
(x) "Submitted Order" and "Submitted Orders" shall have the respective
meanings specified in Section 4(a) of this ARTICLE TWO.
(y) "Submitted Sell Order" and "Submitted Sell Orders" shall have the
respective meanings specified in Section 4(a) of this ARTICLE TWO.
(z) "Sufficient Clearing Bids" shall have the meaning specified in Section
4(a) of this ARTICLE TWO.
(aa) "Winning Bid Rate" shall have the meaning specified in Section 4(a) of
this ARTICLE TWO.
Section 2. Orders by Existing Holders and Potential Holders.
------------------------------------------------
(a) On or prior to each Auction Date and prior to the Submission Deadline:
(i) each Existing Holder may submit to a Broker-Dealer by telephone
information as to:
(A) the number of Outstanding shares, if any, of Series C STAR
Preferred held by such Existing Holder which such Existing Holder
desires to continue to hold without regard to the Applicable Rate for
the next succeeding Dividend Period;
(B) the number of Outstanding shares, if any, of Series C STAR
Preferred that such Existing Holder desires to continue to hold if the
Applicable Rate for the next succeeding Dividend Period shall not be
less than the rate per annum specified by such Existing Holder; and/or
(C) the number of Outstanding shares, if any, of Series C STAR
Preferred held by such Existing Holder which such Existing Holder offers
to sell without regard to the Applicable Rate for the next succeeding
Dividend Period;
and
(ii) each Broker-Dealer, using a list of Potential Holders that shall
be maintained by such Broker-Dealer in good faith for the purpose of
conducting a competitive Auction, shall contact Potential Holders on such
1ist to determine the number of shares, if any, of Series C STAR Preferred
which each such Potential Holder offers to purchase if the Applicable Rate
for the next succeeding Dividend Period shall be not less than the rate per
annum specified by such Potential Holder.
For the purposes hereof, the communication to a Broker-Dealer of information
referred to in clause (i)(A), (i)(B), (i)(C) or (ii) of this Section 2(a) is
hereinafter referred to as an "Order" and collectively as "Orders" and each
Existing Holder and each Potential Holder placing
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<PAGE>
an Order is hereinafter referred to as a "Bidder" and collectively as
"Bidders"; an Order containing the information referred to in clause (i)(A)
of this Section 2(a) is hereinafter referred to as a "Hold Order" and
collectively as "Hold Orders"; an Order containing the information referred
to in clause (i)(B) or (ii) of this Section 2(a) is hereinafter referred to
as a "Bid" and collectively as "Bids"; and an Order containing the
information referred to in clause (i)(C) of this Section 2(a) is hereinafter
referred to as a "Sell Order" and collectively as "Sell Orders."
(b)(i) A Bid by an Existing Holder shall constitute an irrevocable
offer to sell:
(A) the number of Outstanding shares of Series C STAR Preferred
specified in such Bid if the Applicable Rate determined on such Auction
Date shall be less than such specified rate; or
(B) such number or a lesser number to be determined as set forth
in clause (iv) of Section 5(a) of this ARTICLE TWO if the Applicable Rate
determined on such Auction Date shall be equal to such specified rate; or
(C) a lesser number to be determined as set forth in clause
(iii) of Section 5(b) of this ARTICLE TWO if such specified rate shall be
higher than the Maximum Rate and Sufficient Clearing Bids do not exist.
(ii) A Sell Order by an Existing Holder shall constitute an irrevocable
offer to sell:
(A) the number of shares specified in such Sell Order; or
(B) such number or a lesser number as set forth in clause (iii)
of Section 5(b) of this ARTICLE TWO if Sufficient Clearing Bids do not
exist.
(iii) A bid by a Potential Holder shall constitute an irrevocable offer
to purchase:
(A) the number of shares of Series C STAR Preferred specified
in such Bid if the Applicable Rate determined on such Auction Date shall
be higher than such specified rate; or
(B) such number or a lesser number as set forth in clause (v)
of Section 5(a) of this ARTICLE TWO if the Applicable Rate determined on
such Auction Date shall be equal to such specified rate.
Section 3. Submission of Orders by Broker-Dealers to Trust Company.
-------------------------------------------------------
(a) Each Broker-Dealer shall submit in writing to the Trust Company prior to
the Submission Deadline on each Auction Date all Orders obtained by such Broker-
Dealer and specifying with respect to each Order:
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<PAGE>
(i) the name of the Bidder placing such Order;
(ii) the aggregate number of shares of Series C STAR Preferred that are
the subject of such Order;
(iii) to the extent that such Bidder is an Existing Holder:
(A) the number of shares, if any, of Series C STAR
Preferred subject to any Hold Order placed by such Existing Holder;
(B) the number of shares, if any, of Series C STAR
Preferred subject to any Bid placed by such Existing Holder and the
rate specified in such Bid; and
(C) the number of shares, if any, of Series C STAR
Preferred subject to any Sell Order placed by such Existing Holder;
and
(iv) to the extent that such Bidder is a Potential Holder, the rate
specified in such Potential Holder's Bid.
(b) If any rate specified in any Bid contains more than three figures to the
right of the decimal point, the Trust Company shall round such rate up to the
next highest one thousandth (.001) of 1%.
(c) If an Order or Orders covering all of the Outstanding shares of Series C
STAR Preferred held by any Existing Holder is not submitted to the Trust Company
prior to the Submission Deadline, the Trust Company shall deem a Hold Order to
have been submitted on behalf of such Existing Holder covering the number of
Outstanding shares of Series C STAR Preferred held by such Existing Holder and
not subject to Orders submitted to the Trust Company.
(d) If one or more Orders covering in the aggregate more than the number of
Outstanding shares of Series C STAR Preferred held by any Existing Holder are
submitted to the Trust Company, such Orders shall be considered valid as follows
and in the following order of priority:
(i) any Hold Order submitted on behalf of such Existing Holder shall be
considered valid up to and including the number of Outstanding shares of
Series C STAR Preferred held by such Existing Holder; provided that if more
than one Hold Order is submitted on behalf of such Existing Holder and the
number of shares of Series C STAR Preferred subject to such Hold Orders
exceeds the number of Outstanding shares of Series C STAR Preferred held by
such Existing Holder, the number of shares of Series C STAR Preferred subject
to such Hold Orders shall be reduced pro rata so that such Hold Orders shall
cover the number of Outstanding shares of Series C STAR Preferred held by
such Existing Holder;
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<PAGE>
(ii)(A) any Bid shall be considered valid up to and including the excess
of the number of Outstanding shares of Series C STAR Preferred held by such
Existing Holder over the number of shares of Series C STAR Preferred subject
to Hold Orders referred to in clause (i) of this Section 3(d), (B) subject to
subclause (A), if more than one Bid with the same rate is submitted on behalf
of such Existing Holder and the number of Outstanding shares of Series C STAR
Preferred subject to such Bids is greater than such excess, the number of
shares of Series C STAR Preferred subject to such Bids shall be reduced pro
rata so that such Bids shall cover the number of shares of Series C STAR
Preferred equal to such excess, and (C) subject to subclause (A), if more than
one Bid with different rates is submitted on behalf of such Existing Holder,
such Bids shall be considered valid in the ascending order of their respective
rates; and in any such event, the number, if any, of such Outstanding shares
subject to Bids not valid under this clause (ii) shall be treated as the
subject of a Bid by a Potential Holder: and
(iii) any Sell Order shall be considered valid up to and including the
excess of the number of Outstanding shares of Series C STAR Preferred held by
such Existing Holder over the sum of the shares of Series C STAR Preferred
subject to Hold Orders referred to in clause (i) of this Section 3(d) and
Bids referred to in clause (ii) of this Section 3(d); provided that if more
than one Sell Order is submitted on behalf of any Existing Holder and the
number of shares of Series C STAR Preferred subject to such Sell Orders is
greater than such excess, the number of Outstanding shares of Series C STAR
Preferred subject to such Sell Orders shall be reduced pro rata so that such
Sell Orders shall cover the number of Outstanding shares of Series C STAR
Preferred equal to such excess.
(e) If more than one Bid is submitted on behalf of any Potential Holder, each
Bid submitted shall be a separate Bid with the rate and number of shares of
Series C STAR Preferred therein specified.
(f) If any rate specified in any Bid is lower than the Minimum Rate for the
Dividend Period with respect to which such Bid relates, such Bid shall be deemed
to be a Bid specifying a rate equal to such Minimum Rate.
Section 4. Determination of Sufficient Clearing Bids, Winning Bid Rate and
Applicable Rate.
(a) Not earlier than the Submission Deadline on each Auction Date, the Trust
Company shall assemble all Orders submitted or deemed submitted to it by the
Broker-Dealers (each such Order as submitted or deemed submitted by a Broker-
Dealer being hereinafter referred to individually as a "Submitted Hold Order," a
"Submitted Bid" or a "Submitted Sell Order", as the case may be, or as a
"Submitted Order" and collectively as "Submitted Hold Orders," "Submitted Bids"
or "Submitted Sell Orders," as the case may be, or as "Submitted Orders") and
shall determine:
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<PAGE>
(i) the excess of the total number of Outstanding shares of Series C STAR
Preferred over the number of Outstanding shares of Series C STAR Preferred that
are the subject of Submitted Hold Orders (such excess being hereinafter referred
to as the "Available STAR Preferred");
(ii) from the Submitted Orders whether:
(A) the number of Outstanding shares of Series C STAR Preferred that
are the subject of Submitted Bids by Potential Holders specifying one or
more rates equal to or lower than the Maximum Rate;
exceeds or is equal to the sum of:
(B)(I) the number of Outstanding shares of Series C STAR Preferred that
are the subject of Submitted Bids by Existing Holders specifying one or more
rates higher than the Maximum Rate; and
(II) the number of Outstanding shares of Series C STAR Preferred that
are subject to Submitted Sell Orders
(in the event of such excess or such equality (other than because the number of
shares of Series C STAR Preferred in clauses (A) and (B) are each zero because
all of the Outstanding shares of Series C STAR Preferred are the subject of
Submitted Hold Orders), such Submitted Bids in clause (A) being hereinafter
referred to collectively as "Sufficient Clearing Bids"); and
(iii) if Sufficient Clearing Bids exist, the lowest rate specified in the
Submitted Bids (the "Winning Bid Rate") which if:
(A)(I) each Submitted Bid from Existing Holders specifying such lowest
rate and (II) all other Submitted Bids from Existing Holders specifying
lower rates were accepted, thus entitling such Existing Holders to continue
to hold the shares of Series C STAR Preferred that are the subject of such
Submitted Bids, and
(B)(I) each Submitted Bid from Potential Holders specifying such
lowest rate and (II) all other Submitted Bids from Potential Holders
specifying lower rates were accepted,
would result in such Existing Holders continuing to hold an aggregate number of
Outstanding shares of Series C STAR Preferred which, when added to the number of
Outstanding shares of Series C STAR Preferred to be purchased by such Potential
Holders, would equal not less than the Available STAR Preferred.
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<PAGE>
(b) Promptly after the Trust Company has made the determinations pursuant to
Section 4(a) of this ARTICLE TWO, the Trust Company shall advise the Company of
the Maximum Rate and the Minimum Rate and, based on such determinations, the
Applicable Rate for the next succeeding Dividend Period as follows:
(i) if Sufficient Clearing Bids exist, that the Applicable Rate for the
next succeeding Dividend Period shall be equal to the Winning Bid Rate;
(ii) if Sufficient Clearing Bids do not exist (other than because all of
the Outstanding shares of Series C STAR Preferred are the subject of
Submitted Hold Orders), that the Applicable Rate for the next Succeeding
Dividend Period shall be equal to the Maximum Rate: or
(iii) if all of the Outstanding shares of Series C STAR Preferred are the
subject of Submitted Hold Orders, that the Applicable Rate for the next
succeeding Dividend Period shall be equal to the Minimum Rate.
Section 5. Acceptance and Rejection of Submitted Bids and Submitted Sell Orders
and Allocation of Shares.
Based on the determinations made pursuant to Section 4(a) of this ARTICLE TWO,
the Submitted Bids and Submitted Sell Orders shall be accepted or rejected and
the Trust Company shall take such other action as set forth below:
(a) If Sufficient Clearing Bids have been made, subject to the provisions of
Sections 5(c) and 5(d) of this ARTICLE TWO. Submitted Bids and Submitted Sell
Orders shall be accepted or rejected as follows in the following order of
priority and all other Submitted Bids shall be rejected:
(i) the Submitted Sell Orders of Existing Holders shall be accepted and
the Submitted Bid of each of the Existing Holders specifying any rate that is
higher than the Winning Bid Rate shall be rejected, thus requiring each such
Existing Holder to sell the shares of Series C STAR Preferred that are the
subject of such Submitted Bid;
(ii) the Submitted Bid of each of the Existing Holders specifying any rate
that is lower than the Winning Bid Rate shall be accepted, thus entitling
each such Existing Holder to continue to hold the shares of Series C STAR
Preferred that are the subject of such Submitted Bid;
(iii) the Submitted Bid of each of the Potential Holders specifying any
rate that is lower than the Winning Bid Rate shall be accepted;
(iv) the Submitted Bid of each of the Existing Holders specifying a rate
that is equal to the Winning Bid Rate shall be accept-
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<PAGE>
ed, thus entitling each such Existing Holder to continue to hold the
shares of Series C STAR Preferred that are the subject of such Submitted
Bid, unless the number of Outstanding shares of Series C STAR Preferred
subject to all such Submitted Bids shall be greater than the number of
shares of Series C STAR Preferred ("remaining shares") equal to the
excess of the Available STAR Preferred over the number of shares of
Series C STAR Preferred subject to Submitted Bids described in clauses
(ii) and (iii) of this Section 5(a), in which event each such Existing
Holder shall be required to sell shares of Series C STAR Preferred, but
only in an amount equal to the difference between (A) the number of
Outstanding shares of Series C STAR Preferred then held by such Existing
Holder subject to such Submitted Bid and (B) the number of shares of
Series C STAR Preferred obtained by multiplying the number of remaining
shares by a fraction the numerator of which shall be the number of
Outstanding shares of Series C STAR Preferred held by such Existing
Holder subject to such Submitted Bid and the denominator of which shall
be sum of the number of Outstanding shares of Series C STAR Preferred
subject to such Submitted Bids made by all such Existing Holders that
specified a rate equal to the Winning Bid Rate; and
(v) the Submitted Bid of each of the Potential Holders specifying
a rate that is equal to the Winning Bid Rate shall be accepted but only
in an amount equal to the number of shares of Series C STAR Preferred
obtained by multiplying the difference between the Available STAR
Preferred and the number of shares of Series C STAR Preferred subject to
Submitted Bids described in clauses (ii), (iii) and (iv) of this Section
5(a) by a fraction the numerator of which shall be the number of
Outstanding shares of Series C STAR Preferred subject to such Submitted
Bid and the denominator of which shall be the sum of the number of
Outstanding shares of Series C STAR Preferred subject to such Submitted
Bids made by all such Potential Holders that specified rates equal to the
Winning Bid Rate.
(b) If Sufficient Clearing Bids have not been made (other than because all of
the Outstanding shares of Series C STAR Preferred are subject to Submitted Hold
Orders), subject to the provisions of Sections 5(c) and 5(d) of this ARTICLE
TWO, Submitted Orders shall be accepted or rejected as follows in the following
order of priority and all other Submitted Bids shall be rejected:
(i) the Submitted Bid of each Existing Holder specifying any
rate that is equal to or lower than the Maximum Rate shall be accepted,
thus entitling such Existing Holder to continue to hold the shares of
Series C STAR Preferred that are the subject of such Submitted Bid;
(ii) the Submitted Bid of each Potential Holder specifying any
rate that is equal to or lower than the Maximum Rate shall be accepted;
and
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<PAGE>
(iii) the Submitted Bids of each Existing Holder specifying any
rate that is higher than the Maximum Rate shall be rejected, thus
requiring each such Existing Holder to sell the shares of Series C STAR
Preferred that are the subject of such Submitted Bid, and the Submitted
Sell Orders of each Existing Holder shall be accepted, in both cases only
in an amount equal to the difference between (A) the number of
Outstanding shares of Series C STAR Preferred then held by such Existing
Holder subject to such Submitted Bid or Submitted Sell Order and (B) the
number of shares of Series C STAR Preferred obtained by multiplying the
difference between the Available STAR Preferred and the aggregate number
of shares of Series C STAR Preferred subject to Submitted Bids described
in clauses (i) and (ii) of this Section 5(b) by a fraction the numerator
of which shall be the number of Outstanding shares of Series C STAR
Preferred held by such Existing Holder subject to such Submitted Bid or
Submitted Sell Order and the denominator of which shall be the number of
Outstanding shares of Series C STAR Preferred subject to all such
Submitted Bids and Submitted Sell Orders.
(c) If as a result of the procedures described in Sections 5(a) or 5(b) of
this ARTICLE TWO, any Existing Holder would be entitled or required to sell, or
any Potential Holder would be entitled or required to purchase, a fraction of a
share of Series C STAR Preferred on any Auction Date, the Trust Company shall,
in such manner as, in its sole discretion, it shall determine, round up or down
the number of shares of Series C STAR Preferred to be purchased or sold by any
Existing Holder or Potential Holder on such Auction Date so that the number of
shares purchased or sold by each Existing Holder or Potential Holder on such
Auction Date shall be whole shares of Series C STAR Preferred.
(d) If as a result of the procedures described in Section 5(a) of this ARTICLE
TWO, any Potential Holder would be entitled or required to purchase less than a
whole share of Series C STAR Preferred on any Auction Date, the Trust Company
shall, in such manner as, in its sole discretion, it shall determine, allocate
shares for purchase among Potential Holders so that only whole shares of Series
C STAR Preferred are purchased on such Auction Date by any Potential Holder,
even if such allocation results in one or more of such Potential Holders not
purchasing shares of Series C STAR Preferred on such Auction Date.
(e) Based on the results of each Auction, the Trust Company shall determine
the aggregate number of shares of Series C STAR Preferred to be purchased and
the aggregate number of shares of Series C STAR Preferred to be sold by
Potential Holders and Existing Holders on whose behalf each Broker-Dealer
submitted Bids or Sell Orders, and, with respect to each Broker-Dealer, to the
extent that such aggregate number of shares to be purchased and such aggregate
number of shares to be sold differ, determine to which other Broker-Dealer or
Broker-Dealers acting for one or more purchasers such Broker-Dealer shall
deliver, or from which other Broker-Dealer or Broker-Dealers acting for one or
more sellers such
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<PAGE>
Broker-Dealer shall receive, as the case may be, shares of Series C STAR
Preferred.
Section 6. Participation in Auctions.
-------------------------
Neither the Company nor any Affiliate of the Company may submit a Bid in any
Auction.
Section 7. Miscellaneous.
-------------
The Board of Directors of the Corporation may interpret or adjust the
provisions of this ARTICLE TWO to resolve any inconsistency or ambiguity, remedy
any formal defect or make any other change or modification which does not
adversely affect the rights of Existing Holders of Series C STAR Preferred.
During the Initial Dividend Period and so long as the Applicable Rate is based
on the results of an Auction, (a) shares of Series C STAR Preferred may be sold,
transferred or otherwise disposed of only pursuant to a Bid or Sell Order in
accordance with the procedures described in this ARTICLE TWO or to or through a
Broker-Dealer or to a Person that has delivered a signed copy of a Purchaser's
Letter to the Trust Company, provided that in the case of all transfers other
than pursuant to Auctions the transferor, its Broker-Dealer or its Agent Member
advises the Trust Company of such transfer, and (b) except as otherwise provided
by law or if there is no Securities Depository, all Outstanding shares of Series
C STAR Preferred shall be represented by a certificate or certificates
registered in the name of the nominee of the Securities Depository, and no
Person acquiring shares of Series C STAR Preferred shall be entitled to receive
a certificate representing such shares.
As long as the Applicable Rate is not based on LIBOR, the Corporation shall be
obligated to exercise its best efforts to maintain a Trust Company pursuant to
an agreement containing terms no less favorable to the Corporation than the
terms of the agreement first entered into by the Corporation pursuant to the
resolutions adopted by the Board of Directors of the Corporation on March 14,
1985.
Section 8. Headings of Subdivisions.
------------------------
The headings of the various subdivisions of this ARTICLE TWO are for
convenience of reference only and shall not affect the interpretation of any of
the provisions hereof.
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<PAGE>
Marilyn A. Vachon further says that the authority to adopt the foregoing
resolution is by the Articles of Incorporation legally vested in the Board of
Directors of the Corporation.
/s/ Marilyn A. Vachon
----------------------------------
Marilyn A. Vachon
Secretary of
Lincoln National Corporation
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<PAGE>
STATE OF INDIANA )
) SS:
COUNTY OF ALLEN )
Jack D. Hunter, being duly sworn upon his oath, says that he is a duly
elected, qualified and acting Senior Vice President of Lincoln National
Corporation and that the foregoing certificate is true in substance and in fact;
and that he verifies the same.
Witness my hand and seal this 27th day of June, 1985.
/s/ Jack D. Hunter
---------------------------------
Jack D. Hunter
Senior Vice President
Lincoln National Corporation
STATE OF INDIANA )
) SS:
COUNTY OF ALLEN )
Subscribed and sworn to before me, a Notary Public, in and for Allen
County, State of Indiana, this 27th day of June, 1985.
/s/ Ruth A. Knafel
------------------------------
Notary Public
My Commission Expires:
January 22, 1989
- ---------------------------
This instrument was prepared by John L. Steinkamp, Attorney at Law.
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<PAGE>
STATE OF INDIANA
OFFICE OF THE SECRETARY OF STATE
To Whom These Presents Come, Greeting:
I, EDWIN J. SIMCOX, Secretary of State of the State of Indiana, do hereby
certify that
LINCOLN NATIONAL CORPORATION
----------------------------
a corporation duly organized and existing under the laws of the State of
Indiana, has this day filed in the Office of the Secretary of State, a
certificate in triplicate showing a statement of the relative rights,
preferences, limitations, or restrictions of shares as adopted by the Board of
Directors acting by committee (pursuant to (1) Chapter 1-2-11(g) of The Indiana
General Corporation Act, as amended, (2) Section 1, Article IV of the Bylaws
and (3) Resolution No. 776 of the Board of Directors), at a duly held and
constituted meeting on March 14, 1985, under the certificate of the Secretary
and verification of its Senior Vice President in accordance with The Indiana
General Corporation Act.
I further certify that said certificate is now of record and on file in this
office.
In Witness Whereof, I have hereunto set my
hand and affixed the seal of the State of
Indiana, at the City of Indianapolis,
this______________27th______________day of
_______________June__________, 1985
__________________________________________
EDWIN J. SIMCOX Secretary of State,
By________________________________________
Deputy
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[Series D]
Draft of May 23, 1985
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CERTIFICATE OF RESOLUTION BY THE B0ARD OF DIRECTORS
DETERMINING AND STATING THE DESIGNATION AND THE
RELATIVE RIGHTS, PREFERENCES, QUALIFICATIONS,
LIMITATIONS AND RESTRICTIONS (OTHER THAN VOTING RIGHTS)
OF A SERIES OF A CLASS OF PREFERRED SHARES
OF
LINCOLN NATIONAL CORPORATION
Pursuant to Chapter 1-2-6(b) of The Indiana General Corporation Act, as
amended, Marilyn A. Vachon, Secretary of Lincoln National Corporation (a
corporation existing pursuant to the provisions of The Indiana General
Corporation Act, as amended, and hereinafter referred to as the "Corporation")
states that the Board of Directors of the Corporation acting by committee
pursuant to Chapter 1-2-11(g) of The Indiana General Corporation Act, as
amended, at a duly called meeting on June 25, 1985, duly adopted the following
resolution:
RESOLVED: Pursuant to the authority expressly granted to and vested in
the Board of Directors of the Corporation by the provisions of the
Articles of Incorporation of the Corporation, this Board of Directors
hereby creates and authorizes the issue of a series of the Preferred
Stock, No Par Value, of the Corporation, to consist of five hundred (500)
shares of Preferred Stock, No Par Value, of the Corporation, and this
Board of Directors hereby fixes the designation and the relative rights,
preferences, qualifications, limitations and restrictions (other than
voting rights) of the shares of such series as follows:
ARTICLE ONE. SHORT TERM AUCTION RATE CUMULATIVE PREFERRED STOCK, SERIES D
(NO PAR VALUE)
Section 1. Designation.
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(a) The designation of such series of Preferred Stock, No Par Value, shall be
"Short Term Auction Rate Cumulative Preferred Stock, Series D (No Par Value)"
(hereinafter referred to as "Series D STAR Preferred").
(b) The number of authorized shares constituting Series D STAR Preferred is
500. Shares of Series D STAR Preferred shall be issued with a liquidation value
of $100,000 per share plus accrued dividends and shall be without par value.
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Section 2. Definitions.
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As used herein, the following terms shall have the following meanings (with
terms defined in the singular having comparable meanings when used in the plural
and vice versa), unless the context otherwise requires:
(a) "AA Composite Commercial Paper Rate", on any date, shall mean (i) the
interest equivalent of the 60-day rate on commercial paper placed on behalf
of issuers whose corporate bonds are rated "AA" by Standard & Poor's Corporation
or its successor, or the equivalent of such rating by another rating agency, as
made available on a discount basis or otherwise by the Federal Reserve Bank of
New York for the immediately preceding Business Day prior to such date, or (ii)
in the event that the Federal Reserve Bank of New York does not make available
such a rate, then the arithmetic average of the interest equivalent of the 60-
day rate on commercial paper placed on behalf of such issuers, as quoted on a
discount basis or otherwise by the Commercial Paper Dealers to the Trust Company
or the Corporation, as the case may be, for the close of business of the
immediately preceding Business Day prior to such date. If any Commercial Paper
Dealer does not quote a rate required to determine the "AA" Composite
Commercial Paper Rate, the "AA" Composite Commercial Paper Rate shall be
determined on the basis of the quotation or quotations furnished by the
remaining Commercial Paper Dealer or Commercial Paper Dealers and any Substitute
Commercial Paper Dealer or Substitute Commercial Paper Dealers selected by the
Corporation to provide such rate or rates not being supplied by any Commercial
Paper Dealer or Commercial Paper Dealers, as the case may be, or, if the
Corporation does not select any such Substitute Commercial Paper Dealer or
Substitute Commercial Paper Dealers, by the remaining Commercial Paper Dealer
or Commercial Paper Dealers. If the Board of Directors of the Corporation shall
make the adjustment referred to in clause (A) of the second sentence of Section
3(b) of this ARTICLE ONE with the result that (i) the dividend period days (as
defined in such subparagraph (b)) shall be less than 70 days, such rate shall be
the interest equivalent of the 60-day rate on such commercial paper, (ii) the
dividend period days shall be 70 or more days but fewer than 85 days, such rate
shall be the arithmetic average of the interest equivalent of the 60-day and 90-
day rates on such commercial paper, and (iii) the dividend period days shall be
85 or more days but 98 or less days, such rate shall be the interest equivalent
of the 90-day rate on such commercial paper. For purposes of this definition,
the "interest equivalent" of a rate stated on a discount basis (a "discount
rate") for commercial paper of a given days' maturity shall be equal to the
quotient of (A) the discount rate divided by (B) the difference between (x) 1.00
and (y) a fraction the numerator of which shall be the product of the discount
rate times the number of days in which such commercial paper matures and the
denominator of which shall be 360.
(b) "Applicable Rate" shall have the meaning specified in Section 3(c)(i) of
this ARTICLE ONE.
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(c) "Business Day" shall mean a day on which the New York Stock Exchange is
open for trading and which is not a day on which banks in The City of New York,
New York are authorized by law to close.
(d) "Commercial Paper Dealers" shall mean Salomon Brothers Inc, The First
Boston Corporation, and Merrill Lynch, Pierce, Fenner & Smith Incorporated, or,
in lieu of any thereof, their respective affiliates or successors.
(e) "Common Shares" shall mean all shares now or hereafter authorized of the
class of common shares of the Corporation presently authorized and any other
shares into which such shares may hereafter be changed from time to time.
(f) "Date of Original Issue" means the date on which the Corporation initially
issues shares of Series D STAR Preferred.
(g) "Dividend Payment Date" shall have the meaning specified in Section 3(b)
of this ARTICLE ONE.
(h) "Dividend Period" and "Dividend Periods" shall have the respective
meanings specified in Section 3(c)(i) of this ARTICLE ONE.
(i) "Holder" shall mean the holder of shares of Series D STAR Preferred as the
same appears on the stock transfer books of the Corporation.
(j) "Initial Dividend Payment Date" shall have the meaning specified in
Section 3(b) of this ARTICLE ONE.
(k) "Initial Dividend Period" shall have the meaning specified in Section
3(c)(1) of this ARTICLE ONE.
(l) "LIBOR" shall mean for any Dividend Period the average (rounded to the
nearest l/16 of l%) of the respective rates per annum quoted by each of the
Reference Banks at which United States dollar deposits for a two-month period in
the amount of U.S. $10,000,000 are offered by such Reference Bank in the London
interbank market at approximately 11:00 A.M. (London time) on the first day of
such Dividend Period. If any Reference Bank does not quote a rate required to
determine LIBOR, LIBOR shall be determined on the basis of the quotation or
quotations furnished by the remaining Reference Bank or Reference Banks and any
Substitute Reference Bank or Substitute Reference Banks selected by the
Corporation to provide such quotation or quotations not being supplied by any
Reference Bank or Reference Banks, as the case may be, or, if the Corporation
does not select any such Substitute Reference Bank or Substitute Reference
Banks, by the remaining Reference Bank or Reference Banks. If the Board of
Directors of the Corporation shall make the adjustment referred to in clause (A)
of the second sentence of Section 3(b) of this ARTICLE ONE with the result that
(i) the dividend period days (as defined in such subparagraph)
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shall be less than 70 days, LIBOR shall be based on the rates per annum quoted
for United States dollar deposits for a two-month period, (ii) the dividend
period days shall be 70 or more days but less than 85 days, LIBOR shall be the
arithmetic average of the rates per annum quoted for United States dollar
deposits for two- and three-month periods, or (iii) the dividend period days
shall be 85 or more days but 98 or less days, such rate shall be based on the
rates per annum quoted for United States dollar deposits for a three-month
period.
(m) "LIBOR Event" shall mean the failure by the Corporation timely to pay to
the Trust Company, not later than 12 Noon, New York City time, (i) on the
Business Day next preceding any Dividend Payment Date the full amount of any
dividend (whether or not earned or declared) to be paid on such Dividend
Payment Date on any share of Series D STAR Preferred or (ii) on the Business Day
next preceding any redemption date the redemption price to be paid on such
redemption date of any share of Series D STAR Preferred after notice of
redemption is given pursuant to Section 4(b) of this ARTICLE ONE.
(n) "Reference Banks" shall mean the principal London offices of Bank of
America National Trust and Savings Association, Barclays Bank PLC, Citibank,
N.A., Lloyds Bank PLC, Midland Bank PLC and National Westminster Bank PLC, or
their respective successors.
(o) "Subsequent Dividend Period" and "Subsequent Dividend Periods" shall have
the respective meanings specified in Section 3(c)(i) of this ARTICLE ONE.
(p) "Substitute Commercial Paper Dealer" shall mean Goldman, Sachs & Co. or
Lehman Commercial Paper Incorporated, or, in lieu of any thereof, their
respective affiliates or successors.
(q) "Substitute Reference Bank" shall mean the principal London offices of The
Chase Manhattan Bank (National Association), Deutsche Bank Aktiengesellschaft,
Morgan Guaranty Trust Company of New York or Swiss Bank Corporation, or their
respective successors.
(r) "Trust Company" shall mean a bank or trust company appointed as such by a
resolution of the Board of Directors of the Corporation.
Section 3. Dividends.
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(a) The Holders of shares of Series D STAR Preferred shall be entitled
to receive, when and as declared by the Board of Directors of the Corporation
out of funds legally available therefor, cumulative cash dividends at the
Applicable Rate per annum thereof, determined as set forth below, and no more,
payable on the respective dates set forth below.
(b) Dividends on shares of Series D STAR Preferred, at the Applicable Rate
per annum, shall accrue from the Date of Original Issue and shall be payable
commencing on the 51st day after the Date of Original Issue and on
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each day thereafter which is the last day of successive 49-day periods after
such 51st day after the Date of Original Issue, or if either (i) in the case of
the Initial Dividend Payment Date, such 51st day after the Date of Original
Issue or, in the case of any subsequent Dividend Payment Date, any such last day
(in either case, the "normal day") is not a Business Day or (ii) the day next
succeeding the normal day is not a Business Day, then on the first Business Day
preceding the normal day that is next succeeded by a day that is also a Business
Day, and if any particular Dividend Payment Date does not occur on the normal
day because of the exceptions in clauses (i) or (ii), the next succeeding
Dividend Payment Date shall be, subject to such exceptions, the 49th day
following the normal day for the prior Dividend Period. Notwithstanding the
foregoing, (A) in the event of a change in law altering the minimum holding
period (currently found in Section 246(c) of the Internal Revenue Code of 1954,
as amended) required for taxpayers to be entitled to the dividends received
deduction on preferred stock held by non-affiliated corporations (currently
found in Section 243(a) of such Code), the Board of Directors of the Corporation
may, subject to clauses (i) and (ii) of this subparagraph (b), adjust the period
of time between Dividend Payment Dates so as to adjust uniformly the number of
days (such number of days without giving effect to such clauses (i) and (ii)
being hereinafter referred to as "dividend period days") in Dividend Periods
commencing after the date of such change in law to equal or exceed the then
current minimum holding period, provided in such event that the number of
dividend period days shall not exceed by more than nine days the length of such
then current minimum holding period and shall be evenly divisible by seven, and
the maximum number of dividend period days in no event shall exceed 98 days; (B)
if, as a result of applying the procedures set forth in this subparagraph (b)
for determining a Dividend Payment Date, the number of days in any Dividend
Period would not equal or exceed the then current minimum holding period for a
taxpayer to be entitled to the dividends received deduction on preferred stock
held by a non-affiliated corporation referred to in clause (A) of this
subparagraph, the Board of Directors of the Corporation may fix the Dividend
Payment Date for that Dividend Period on the first Business Day next preceding
the originally designated normal day, even though the day next succeeding such
Business Day is not a Business Day and (C) in the event of a default in the
payment of a dividend on shares of Series D STAR Preferred, dividends on shares
of Series D STAR Preferred shall thereafter become payable quarterly, commencing
on the 90th day after the Dividend Payment Date on which such default occurred
with respect to any Dividend Period ending during such 90-day period, and on
each day thereafter that is the last day of successive 90-day periods with
respect to any Dividend Period ending during each such 90-day period, in each
case subject to clauses (i) and (ii) of this subparagraph (b), until such time
as no dividend on Series D STAR Preferred shall be in default, in which case,
dividends shall next be payable on the last day of the Dividend Period which
includes the first day on which no dividend was in default and thereafter
dividends shall become payable on the 49th day after the last day of such
Dividend Period and on each day thereafter which is the last day of successive
49-day periods after such date, subject to clauses (i) and (ii) of this
subparagraph (b) (each date on which payment of dividends is due being herein
referred to as a "Dividend Payment Date" and the first Dividend Payment
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Date being herein referred to as the "Initial Dividend Payment Date"). Upon any
change in the number of dividend period days as a result of a change in law as
set forth in clause (A), or upon a change as set forth in clause (B) or (C), the
Corporation shall give notice of such change to all Holders by first class mail,
postage prepaid. Each such dividend shall be paid to the Holders as their names
appear on the books and records of the Corporation on the Business Day next
preceding the Dividend Payment Date thereof; provided, however, that if such
dividend shall be calculated based upon LIBOR, as set forth in Section 3(c)(i)
of this ARTICLE ONE, such dividend shall be paid to the Holders as their names
appear on the books and records of the Corporation on such date, not exceeding
15 days preceding the payment date thereof, as may be fixed by the Board of
Directors of the Corporation. Dividends in arrears for any past Dividend Period
may be declared and paid at any time, without reference to any regular Dividend
Payment Date, to the holders as their names appear on the books and records of
the Corporation on such date, not exceeding 15 days preceding the payment date
thereof, as may be fixed by the Board of Directors of the Corporation.
(c)(i) The dividend rate on shares of Series D STAR Preferred shall be 6.25%
per annum during the period from and after the Date of Original Issue to the
Initial Dividend Payment Date (the "Initial Dividend Period"). Commencing the
day that is the Initial Dividend Payment Date, the dividend rate on shares of
Series D STAR Preferred for each Subsequent Dividend Period (as hereinafter
defined) shall be equal to the rate per annum that results from implementation
of the Auction Procedures described in ARTICLE TWO hereof; provided, however,
that (A) if a LIBOR Event shall have occurred prior to the first day of such
Subsequent Dividend Period, the dividend rate for such Subsequent Dividend
Period shall be at a rate per annum equal to LIBOR plus l/4 of 1% and (B) if
there is no Trust Company on the day prior to the first day of a Dividend Period
(unless a LIBOR Event has occurred), the dividend rate for such Dividend Period
shall be at a rate per annum equal to 110% of the "AA" Composite Commercial
Paper Rate, as determined by the Corporation, on the first day of such Dividend
Period. The rate per annum at which dividends are payable on shares of Series D
STAR Preferred for any Dividend Period (as hereinafter defined) is herein
referred to as the "Applicable Rate".
Each dividend period following the Initial Dividend Period (herein referred to
as a "Subsequent Dividend Period" and collectively as "Subsequent Dividend
Periods" and the Initial Dividend Period or any Subsequent Dividend Period being
herein referred to as a "Dividend Period" and collectively as "Dividend
Periods") shall commence on the day that is the last day of the preceding
Dividend Period and shall end on the next succeeding Dividend Payment Date;
provided, however, that if the provisions of clause (C) of Section 3(b) are
applicable, each Dividend Period shall end on the date which would have been the
next succeeding Dividend Payment Date if the provisions of such clause had not
been applicable.
(ii) The amount of dividends payable on each share of Series D STAR Preferred
for any Dividend Period shall be computed by multiplying the Applicable Rate for
such Dividend Period by a fraction the numerator of
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which shall be the number of days in the Dividend Period (calculated by counting
the first day thereof but excluding the last day thereof) such share was
outstanding and the denominator of which shall be 360 and applying the rate
obtained against $100,000 per share of Series D STAR Preferred.
(d)(i) Holders of shares of Series D STAR Preferred shall not be entitled
to any interest, or sum of money in lieu of interest, in respect of any dividend
payment or payments on shares of Series D STAR Preferred which may be in
arrears.
(ii) Except as otherwise provided in resolutions of the Board of Directors
of the Corporation adopted on May 28, 1969 creating the Corporation's $3.00
Cumulative Convertible Preferred Stock, Series A (No Par Value) (the "Series A
Preferred Stock"), as such resolutions relate to the payment of dividends on the
Series A Preferred Stock and except as hereinafter provided, no full dividends
shall be declared or paid or set apart for payment on any series of Preferred
Stock, No Par Value, for any period unless full cumulative dividends have been
or contemporaneously are declared and paid or declared and a sum sufficient for
payment thereof set apart for such payment on shares of Series D STAR Preferred
for the current and all past Dividend Periods. When dividends are not paid or
set apart in full, as aforesaid, upon the shares of Series D STAR Preferred and
any other Preferred Stock ranking on a parity as to dividends with Series D STAR
Preferred, all dividends declared upon shares of Series D STAR Preferred and any
other Preferred Stock ranking on a parity as to dividends with Series D STAR
Preferred shall be declared pro rata so that the amount of dividends declared
per share on Series D STAR Preferred and such other Preferred Stock ranking on a
parity as to dividends with Series D STAR Preferred shall in all cases bear to
each other the same ratio that accrued dividends per share on the shares of
Series D STAR Preferred and such other Preferred Stock ranking on a parity as to
dividends with shares of Series D STAR Preferred bear to each other.
(iii) Except with respect to dividends on the Series A Preferred Stock
and as otherwise provided in paragraph (d)(ii) above, so long as any shares of
Series D STAR Preferred are outstanding, no dividend (other than a dividend
payable in Common Shares or payable in any other stock of the Corporation
ranking junior to shares of Series D STAR Preferred as to dividends and upon
liquidation) shall be declared or paid or set aside for payment or other
distribution declared or made upon Common Shares or upon any other stock of the
Corporation ranking junior to or on a parity with shares of Series D STAR
Preferred as to dividends or upon liquidation, nor shall any such Common Shares
or any other stock of the Corporation ranking junior to or on a parity with
shares of Series D STAR Preferred as to dividends or upon liquidation be
redeemed, purchased or otherwise acquired for any consideration (or any moneys
be paid to or made available for a sinking fund for the redemption of any shares
of any such stock) by the Corporation (except by conversion into or exchange for
stock of the Corporation ranking junior to shares of Series D STAR Preferred as
to dividends and upon liquidation) unless, in each case, the full cumulative
dividends on all outstanding shares of Series D STAR Preferred shall have been
paid or
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contemporaneously are declared and paid for the current and all past Dividend
Periods.
Section 4. Redemption.
(a)(i)(A) At the option of the Corporation, shares of Series D STAR
Preferred may be redeemed, as a whole at any time or from time to time in part,
on any Dividend Payment Date at a redemption price equal to:
(I) $103,000 per share if redeemed during the twelve months ending
on the first anniversary of the Date of Original Issue;
(II) $102,000 per share if redeemed during the twelve months ending
on the second anniversary of the Date of Original Issue;
(III) $101,000 per share if redeemed during the twelve months ending
on the third anniversary of the Date of Original Issue;
(IV) $100,000 per share thereafter;
plus, in each case, accrued and unpaid dividends thereon to the date
fixed for redemption.
(B) If fewer than all the outstanding shares of Series D STAR Preferred
are to be redeemed pursuant to Section 4(a)(i)(A) of this ARTICLE ONE, the
number of shares to be redeemed shall be determined by the Board of Directors
of the Corporation, and such shares shall be redeemed pro rata from the
Holders in proportion to the number of such shares held by such Holders
(rounding to the nearest whole share to avoid redemption of fractional shares).
(ii) At the option of the Corporation, shares of Series D STAR Preferred
may be redeemed, as a whole but not in part, on any Dividend Payment Date at
a redemption price of $100,000 per share, plus accrued and unpaid dividends
thereon to the date fixed for redemption, if the Applicable Rate fixed for
the Dividend Period ending on such Dividend Payment Date shall equal or
exceed the "AA" Composite Commercial Paper Rate on the date of determination
of such Applicable Rate.
(b) In the event the Corporation shall redeem shares of Series D STAR
Preferred, notice of such redemption shall be given by first class mail, postage
prepaid, mailed not less than 30 nor more than 60 days prior to the redemption
date, to each Holder of record of the shares to be redeemed, at such Holder's
address as the same appears on the stock record books of the Corporation. Each
such notice shall state: (i) the redemption date; (ii) the number of shares of
Series D STAR Preferred to be redeemed and, if fewer than all the shares held by
such Holder are to be redeemed, the number
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of such shares to be redeemed from such Holder; (iii) the redemption price;
(iv) the place or places where certificates for such shares are to be
surrendered for payment of the redemption price; and (v) that dividends on the
shares to be redeemed will cease to accrue on such redemption date.
(c) Notice having been mailed as aforesaid, and if the Corporation
shall have deposited a sum sufficient to redeem the shares of Series D STAR
Preferred as to which notice of redemption has been given with the Trust
Company, with irrevocable instructions and authority to pay the redemption price
to the Holders thereof upon surrender of certificates therefor or, if no such
deposit is made, then from and after the redemption date (unless default shall
be made by the Corporation in providing money for the payment of the redemption
price of the shares called for redemption), dividends on the shares of Series D
STAR Preferred so called for redemption shall cease to accrue, and said shares
shall no longer be deemed to be outstanding, and all rights of the Holders
thereof as shareholders of the Corporation (except the right to receive from the
Corporation the redemption price) shall cease and terminate. Upon surrender in
accordance with said notice of the certificates for any shares so redeemed
(properly endorsed or assigned for transfer, if the Board of Directors of the
Corporation shall so require and the notice shall so state), such shares shall
be redeemed by the Corporation at the redemption price aforesaid but without
interest. In case fewer than all the shares represented by any such certificate
are redeemed, a new certificate shall be issued representing the unredeemed
shares without cost to the Holder thereof.
(d) Any shares of Series D STAR Preferred which shall at any time have been
redeemed or purchased by the Corporation shall, after such redemption or
purchase, be cancelled in the manner provided by the laws of the State of
Indiana.
(e) Notwithstanding the foregoing provisions of this Section 4, unless the
full cumulative dividends on all outstanding shares of Series D STAR Preferred
shall have been paid or contemporaneously are declared and paid for all past
Dividend Periods, (i) no shares of Series D STAR Preferred shall be redeemed
unless all outstanding shares of Series D STAR Preferred are simultaneously
redeemed, and (ii) the Corporation shall not purchase or otherwise acquire any
shares of Series D STAR Preferred except pursuant to a purchase or exchange
offer made on the same terms to Holders of all outstanding shares of Series D
STAR Preferred.
Section 5. Conversion or Exchange.
The Holders of shares of Series D STAR Preferred shall not have any rights
to convert such shares into or exchange such shares for shares of any other
class or classes or of any other series of any class or classes of capital stock
of the Corporation.
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Section 6. Voting.
The shares of Series D STAR Preferred shall have such voting rights as are
provided in Section 5 Article V of the Corporation's Articles of Incorporation.
Section 7. Liquidation Rights.
(a) In the event of the liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, the Holders of shares of Series D
STAR Preferred then outstanding shall be entitled to receive, after payment or
provision for payment of all creditors of the Corporation, but before any
distribution or payment shall be made in respect of the Common Stock or any
other stock of the Corporation ranking junior to shares of Series D STAR
Preferred as to assets on liquidation, dissolution or winding up, an amount
equal to $100,000 per share, plus an amount equal to all unpaid dividends
thereon accrued on a daily basis to and including the date fixed for such
distribution or payment; but the Holders shall be entitled to no further
participation in any distribution or payment in connection with any such
liquidation, dissolution or winding up. If, upon any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the Corporation, the
net assets of the Corporation distributable among the Holders of all outstanding
shares of Series D STAR Preferred and of any other series of Preferred Stock, No
Par Value, or any other stock of the Corporation ranking on a parity with Series
D STAR Preferred as to assets on liquidation shall be insufficient to permit the
payment in full to such Holders of the preferential amounts to which they are
entitled, then the entire net assets of the Corporation remaining after the
distributions to Holders of any stock of the Corporation ranking senior to
Series D STAR Preferred to which they may be entitled shall be distributable
among the holders of shares of Series D STAR Preferred and of any other series
of Preferred Stock, No Par Value, or of any other stock of the Corporation
ranking on a parity with Series D STAR Preferred as to assets on liquidation
ratably in proportion to the full amounts to which they would otherwise
respectively be entitled.
(b) Neither the consolidation or merger of the Corporation with or into
any other corporation or corporations, nor the sale or transfer by the
Corporation of all or any part of its assets, shall be deemed to be a
liquidation, dissolution or winding up of the Corporation for purposes of this
Section 7. All shares of Series D STAR Preferred, the Corporation's outstanding
Series A Preferred Stock, the Corporation's authorized Short Term Auction Rate
Cumulative Preferred Stock, Series B (No Par Value), and the Corporation's
outstanding Short Term Auction Rate Cumulative Preferred Stock, Series C (No Par
Value) will rank on a parity as to assets upon liquidation.
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ARTICLE TWO. AUCTION PROCEDURES
Section 1. Definitions.
Capitalized terms not defined in this Section 1 shall have the respective
meanings specified in Section 2 of ARTICLE ONE. As used in this ARTICLE TWO, the
following terms shall have the following meanings, unless the context otherwise
requires:
(a) "Affiliate" shall mean any Person known to the Trust Company to be
controlled by, in control of or under common control with the Corporation.
(b) "Agent Member" shall mean the member of the Securities Depository that
will act on behalf of a Bidder and is identified as such in such Bidder's
Purchaser's Letter.
(c) "Auction" shall mean the periodic operation of the procedures set
forth in this ARTICLE TWO.
(d) "Auction Date" shall mean the Business Day next preceding a Dividend
Payment Date.
(e) "Available STAR Preferred" shall have the meaning specified in Section
4(a) of this ARTICLE TWO.
(f) "Bid" and "Bids" shall have the respective meanings specified in
Section 2(a) of this ARTICLE TWO.
(g) "Bidder" and "Bidders" shall have the respective meanings specified in
Section 2(a) of this ARTICLE TWO.
(h) "Broker-Dealer" shall mean any broker-dealer, or other entity
permitted by law to perform the functions required of a Broker-Dealer in this
ARTICLE TWO, that has been selected by the corporation and has entered into a
Broker-Dealer Agreement with the Trust Company that remains effective.
(i) "Broker-Dealer Agreement" shall mean an agreement between the Trust
Company and a Broker-Dealer pursuant to which such Broker-Dealer agrees to
follow the procedures specified in this ARTICLE TWO.
(j) "Existing Holder," when used with respect to shares of Series D STAR
Preferred, shall mean a Person who has signed a Purchaser's Letter and is listed
as the beneficial owner of shares of Series D STAR Preferred in the records of
the Trust Company.
(k) "Hold Order" and "Hold Orders" shall have the respective meanings
specified in subparagraph 2(a) of this ARTICLE TWO.
(l) "Maximum Rate", on any Auction Date, shall mean the product of (i)
1.10 and (ii) the "AA" Composite Commercial Paper Rate.
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<PAGE>
(m) "Minimum Rate", on any Auction Date, shall mean the product of (i) .58
and (ii) the "AA" Composite Commercial Paper Rate.
(n) "Order" and "Orders" shall have the respective meanings specified in
Section 2(a) of this ARTICLE TWO.
(o) "Outstanding" shall mean, as of any date, shares of Series D STAR
Preferred theretofore issued by the Corporation except, without duplication, (i)
any shares of Series D STAR Preferred theretofore cancelled or delivered to
the Trust Company for cancellation or redeemed by the Corporation or as to which
a notice of redemption shall have been given by the Corporation, (ii) any shares
of Series D STAR Preferred as to which the Corporation or any Affiliate thereof
(other than a broker-dealer Affiliate) shall be an Existing Holder and (iii) any
shares of Series D STAR Preferred represented by any certificate in lieu of
which a new certificate has been executed and delivered by the Corporation.
(p) "Person" shall mean and include an individual, a partnership, a
corporation, a trust, an unincorporated association, a joint venture or other
entity or a government or any agency or political subdivision thereof.
(q) "Potential Holder" shall mean any Person, including any Existing
Holder, (i) who shall have executed a Purchaser's Letter and (ii) who may be
interested in acquiring shares of Series D STAR Preferred (or, in the case of an
Existing Holder, additional shares of Series D STAR Preferred).
(r) "Purchaser's Letter" shall mean a letter addressed to the Corporation,
the Trust Company and a Broker-Dealer in which a Person agrees, among other
things, to offer to purchase, purchase, offer to sell and/or sell shares of
Series D STAR Preferred as set forth in this ARTICLE TWO.
(s) "Securities Depository" shall mean The Depository Trust Company and its
successors and assigns or any other securities depository selected by the
Corporation which agrees to follow the procedures required to be followed by
such securities depository in connection with shares of Series D STAR Preferred.
(t) "Sell Order" and "Sell Orders" shall have the respective meanings
specified in Section 2(a) of this ARTICLE TWO.
(u) "Submission Deadline" shall mean 12:30 P.M., New York City time, on any
Auction Date or such other time on any Auction Date by which Broker-Dealers are
required to submit Orders to the Trust Company as specified by the Trust Company
from time to time.
(v) "Submitted Bid" and Submitted Bids" shall have the respective meanings
specified in Section 4(a) of this ARTICLE TWO.
(w) "Submitted Hold Order" and "Submitted Hold Orders" shall have the
respective meanings specified in Section 4(a) of this ARTICLE TWO.
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<PAGE>
(x) "Submitted Order and "Submitted Orders" shall have the respective
meanings specified in Section 4(a) of this ARTICLE TWO.
(y) "Submitted Sell Order" and "Submitted Sell Orders" shall have the
respective meanings specified in Section 4(a) of this ARTICLE TWO.
(z) "Sufficient Clearing Bids" shall have the meaning specified in Section
4(a) of this ARTICLE TWO.
(aa) "Winning Bid Rate" shall have the meaning specified in Section 4(a) of
this ARTICLE TWO.
Section 2. Orders by Existing Holders and Potential Holders.
(a) On or prior to each Auction Date and prior to the Submission Deadline:
(i) each Existing Holder may submit to a Broker-Dealer by telephone
information as to:
(A) the number of Outstanding shares, if any, of Series D STAR
Preferred held by such Existing Holder which such Existing Holder desires
to continue to hold without regard to the Applicable Rate for the next
succeeding Dividend Period;
(B) the number of Outstanding shares, if any, of Series D STAR
Preferred that such Existing Holder desires to continue to hold if the
Applicable Rate for the next succeeding Dividend Period shall not be less
than the rate per annum specified by such Existing Holder; and/or
(C) the number of Outstanding shares, if any, of Series D STAR
Preferred held by such Existing Holder which such Existing Holder offers
to sell without regard to the Applicable Rate for the next succeeding
Dividend Period;
and
(ii) each Broker-Dealer, using a list of Potential Holders that shall be
maintained by such Broker-Dealer in good faith for the purpose of
conducting a competitive Auction, shall contact Potential Holders on such
list to determine the number of shares, if any, of Series D STAR Preferred
which each such Potential Holder offers to purchase if the Applicable Rate
for the next succeeding Dividend Period shall be not less than the rate per
annum specified by such Potential Holder.
For the purposes hereof, the communication to a Broker-Dealer of information
referred to in clause (i)(A), (i)(B), (i)(C) or (ii) of this Section 2(a) is
hereinafter referred to as an "Order" and collectively as "Orders" and
each Existing Holder and each Potential Holder placing
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<PAGE>
an Order is hereinafter referred to as a "Bidder" and collectively as
"Bidders"; an Order containing the information referred to in clause (i)(A)
of this Section 2(a) is hereinafter referred to as a "Hold Order" and
collectively as "Hold Orders"; an Order containing the information referred
to in clause (i)(B) or (ii) of this Section 2(a) is hereinafter referred to
as a "Bid" and collectively as "Bids"; and an Order containing the
information referred to in clause (i)(C) of this Section 2(a) is hereinafter
referred to as a "Sell Order" and collectively as "Sell Orders."
(b)(i) A Bid by an Existing Holder shall constitute an irrevocable offer to
sell:
(A) the number of Outstanding shares of Series D STAR Preferred
specified in such Bid if the Applicable Rate determined on such Auction
Date shall be less than such specified rate; or
(B) such number or a lesser number to be determined as set forth in
clause (iv) of Section 5(a) of this ARTICLE TWO if the Applicable Rate
determined on such Auction Date shall be equal to such specified rate; or
(C) a lesser number to be determined as set forth in clause (iii) of
Section 5(b) of this ARTICLE TWO if such specified rate shall be higher
than the Maximum Rate and Sufficient Clearing Bids do not exist.
(ii) A Sell Order by an Existing Holder shall constitute an irrevocable
offer to sell:
(A) the number of shares specified in such Sell Order; or
(B) such number or a lesser number as set forth in clause (iii) of
Section 5(b) of this ARTICLE TWO if Sufficient Clearing Bids do not exist.
(iii) A bid by a Potential Holder shall constitute an irrevocable offer to
purchase:
(A) the number of shares of Series D STAR Preferred specified in such
Bid if the Applicable Rate determined on such Auction Date shall be higher
than such specified rate; or
(B) such number or a lesser number as set forth in clause (v) of
Section 5(a) of this ARTICLE TWO if the Applicable Rate determined on such
Auction Date shall be equal to such specified rate.
Section 3. Submission of Orders by Broker-Dealers to Trust Company.
(a) Each Broker-Dealer shall submit in writing to the Trust Company prior to
the Submission Deadline on each Auction Date all Orders obtained by such
Broker-Dealer and specifying with respect to each Order:
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<PAGE>
(i) the name of the Bidder placing such Order;
(ii) the aggregate number of shares of Series D STAR Preferred that are the
subject of such Order;
(iii) to the extent that such Bidder is an Existing Holder:
(A) the number of shares, if any, of Series D STAR Preferred subject to
any Hold Order placed by such Existing Holder;
(B) the number of shares, if any, of Series D STAR Preferred subject to
any Bid placed by such Existing Holder and the rate specified in such Bid;
and
(C) the number of shares, if any, of Series D STAR Preferred subject to
any Sell Order placed by such Existing Holder;
and
(iv) to the extent that such Bidder is a Potential Holder, the rate
specified in such Potential Holder's Bid.
(b) If any rate specified in any Bid contains more than three figures to the
right of the decimal point, the Trust Company shall round such rate up to the
next highest one thousandth (.001) of 1%.
(c) If an Order or Orders covering all of the Outstanding shares of Series D
STAR Preferred held by any Existing Holder is not submitted to the Trust Company
prior to the Submission Deadline, the Trust Company shall deem a Hold Order to
have been submitted on behalf of such Existing Holder covering the number of
Outstanding shares of Series D STAR Preferred held by such Existing Holder and
not subject to Orders submitted to the Trust Company.
(d) If one or more Orders covering in the aggregate more than the number of
Outstanding shares of Series D STAR Preferred held by any Existing Holder are
submitted to the Trust Company, such Orders shall be considered valid as follows
and in the following order of priority:
(i) any Hold Order submitted on behalf of such Existing Holder shall be
considered valid up to and including the number of Outstanding shares of
Series D STAR Preferred held by such Existing Holder; provided that if more
than one Hold Order is submitted on behalf of such Existing Holder and the
number of shares of Series D STAR Preferred subject to such Hold Orders
exceeds the number of Outstanding shares of Series D STAR Preferred held by
such Existing Holder, the number of shares of Series D STAR Preferred subject
to such Hold Orders shall be reduced pro rata so that such Hold Orders shall
cover the number of Outstanding shares of Series D STAR Preferred held by
such Existing Holder;
-15-
<PAGE>
(ii)(A) any Bid shall be considered valid up to and including the excess of
the number of Outstanding shares of Series D STAR Preferred held by such
Existing Holder over the number of shares of Series D STAR Preferred subject
to Hold Orders referred to in clause (i) of this Section 3(d), (B) subject to
subclause (A), if more than one Bid with the same rate is submitted on behalf
of such Existing Holder and the number of Outstanding shares of Series D STAR
Preferred subject to such Bids is greater than such excess, the number of
shares of Series D STAR Preferred subject to such Bids shall be reduced pro
rata so that such Bids shall cover the number of shares of Series D STAR
Preferred equal to such excess, and (C) subject to subclause (A), if more
than one Bid with different rates is submitted on behalf of such Existing
Holder, such Bids shall be considered valid in the ascending order of their
respective rates; and in such event, the number, if any, of such Outstanding
shares subject to Bids not valid under this clause (ii) shall be treated as
the subject of a Bid by a Potential Holder; and
(iii) any Sell Order shall be considered valid up to and including the
excess of the number of Outstanding shares of Series D STAR Preferred held by
such Existing Holder over the sum of the shares of Series D STAR Preferred
subject to Hold Orders referred to in clause (i) of this Section 3(d) and
Bids referred to in clause (ii) of this Section 3(d); provided that if more
than one Sell Order is submitted on behalf of any Existing Holder and the
number of shares of Series D STAR Preferred subject to such Sell Orders is
greater than such excess, the number of Outstanding shares of Series D STAR
Preferred subject to such Sell Orders shall be reduced pro rata so that such
Sell Orders shall cover the number of Outstanding shares of Series D STAR
Preferred equal to such excess.
(e) If more than one Bid is submitted on behalf of any Potential Holder, each
Bid submitted shall be a separate Bid with the rate and number of shares of
Series D STAR Preferred therein specified.
(f) If any rate specified in any Bid is lower than the Minimum Rate for the
Dividend Period with respect to which such Bid relates, such Bid shall be deemed
to be a Bid specifying a rate equal to such Minimum Rate.
Section 4. Determination of Sufficient Clearing Bids, Winning Bid Rate and
Applicable Rate.
(a) Not earlier than the Submission Deadline on each Auction Date, the Trust
Company shall assemble all Orders submitted or deemed submitted to it by the
Broker-Dealers (each such Order as submitted or deemed submitted by a
Broker-Dealer being hereinafter referred to individually as a "Submitted Hold
Order," a "Submitted Bid" or a "Submitted Sell Order", as the case may be,
or as a "Submitted Order" and collectively as "Submitted Hold Orders,"
"Submitted Bids" or "Submitted Sell Orders," as the case may be, or as
"Submitted Orders") and shall determine:
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<PAGE>
(i) the excess of the total number of Outstanding shares of Series D STAR
Preferred over the number of Outstanding shares of Series D STAR Preferred that
are the subject of Submitted Hold Orders (such excess being hereinafter referred
to as the "Available STAR Preferred");
(ii) from the Submitted Orders whether:
(A) the number of Outstanding shares of Series D STAR Preferred that
are the subject of Submitted Bids by Potential Holders specifying one or
more rates equal to or lower than the Maximum Rate;
exceeds or is equal to the sum of:
(B)(I) the number of Outstanding shares of Series D STAR Preferred
that are the subject of Submitted Bids by Existing Holders specifying one
or more rates higher than the Maximum Rate; and
(II) the number of Outstanding shares of Series D STAR Preferred
that are subject to Submitted Sell Orders
(in the event of such excess or such equality (other than because the number
of shares of Series D STAR Preferred in clauses (A) and (B) are each zero
because all of the Outstanding shares of Series D STAR Preferred are the
subject of Submitted Hold Orders), such Submitted Bids in CLAUSE (A) being
hereinafter referred to collectively as "Sufficient Clearing Bids"); and
(iii) if Sufficient Clearing Bids exist, the lowest rate specified in the
Submitted Bids (the "Winning Bid Rate") which if:
(A)(I) each Submitted Bid from Existing Holders specifying such
lowest rate and (II) all other Submitted Bids from Existing Holders
specifying lower rates were accepted, thus entitling such Existing Holders
to continue to hold the shares of Series D STAR Preferred that are the
subject of such Submitted Bids, and
(B)(I) each Submitted Bid from Potential Holders specifying such
lowest rate and (II) all other Submitted Bids from Potential Holders
specifying lower rates were accepted,
would result in such Existing Holders continuing to hold an aggregate number of
Outstanding shares of Series D STAR Preferred which, when added to the number
of Outstanding shares of Series D STAR Preferred to be purchased by such
Potential Holders, would equal not less than the Available STAR Preferred.
-17-
<PAGE>
(b) Promptly after the Trust Company has made the determinations pursuant to
Section 4(a) of this ARTICLE TWO, the Trust Company shall advise the Company of
the Maximum Rate and the Minimum Rate and, based on such determinations, the
Applicable Rate for the next succeeding Dividend Period as follows:
(i) if Sufficient Clearing Bids exist, that the Applicable Rate for
the next succeeding Dividend Period shall be equal to the Winning Bid Rate;
(ii) if Sufficient Clearing Bids do not exist (other than because all of
the Outstanding shares of Series D STAR Preferred are the subject of
Submitted Hold Orders), that the Applicable Rate for the next Succeeding
Dividend Period shall be equal to the Maximum Rate; or
(iii) if all of the Outstanding shares of Series D STAR Preferred are
the subject of Submitted Hold Orders, that the Applicable Rate for the next
succeeding Dividend Period shall be equal to the Minimum Rate.
Section 5. Acceptance and Rejection of Submitted Bids and Submitted Sell Orders
and Allocation of Shares.
Based on the determinations made pursuant to Section 4(a) of this ARTICLE TWO,
the Submitted Bids and Submitted Sell Orders shall be accepted or rejected and
the Trust Company shall take such other action as set forth below:
(a) If Sufficient Clearing Bids have been made, subject to the provisions of
Sections 5(c) and 5(d) of this ARTICLE TWO, Submitted Bids and Submitted Sell
Orders shall be accepted or rejected as follows in the following order of
priority and all other Submitted Bids shall be rejected:
(i) the Submitted Sell Orders of Existing Holders shall be
accepted and the Submitted Bid of each of the Existing Holders
specifying any rate that is higher than the Winning Bid Rate shall be
rejected, thus requiring each such Existing Holder to sell the shares of
Series D STAR Preferred that are the subject of such Submitted Bid:
(ii) the Submitted Bid of each of the Existing Holders
specifying any rate that is lower than the Winning Bid Rate shall be
accepted, thus entitling each such Existing Holder to continue to hold
the shares of Series D STAR Preferred that are the subject of such
Submitted Bid:
(iii) the Submitted Bid of each of the Potential Holders
specifying any rate that is lower than the Winning Bid Rate shall be
accepted;
(iv) the Submitted Bid of each of the Existing Holders
specifying a rate that is equal to the Winning Bid Rate shall be accept
-18-
<PAGE>
ed, thus entitling each such Existing Holder to continue to hold the
shares of Series D STAR Preferred that are the subject of such Submitted
Bid, unless the number of Outstanding shares of Series D STAR Preferred
subject to all such Submitted Bids shall be greater than the number of
shares of Series D STAR Preferred ("remaining shares") equal to the
excess of the Available STAR Preferred over the number of shares of
Series D STAR Preferred subject to Submitted Bids described in clauses
(ii) and (iii) of this Section 5(a), in which event each such Existing
Holder shall be required to sell shares of Series D STAR Preferred, but
only in an amount equal to the difference between (A) the number of
Outstanding shares of Series D STAR Preferred then held by such Existing
Holder subject to such Submitted Bid and (B) the number of shares of
Series D STAR Preferred obtained by multiplying the number of remaining
shares by a fraction the numerator of which shall be the number of
Outstanding shares of Series D STAR Preferred held by such Existing
Holder subject to such Submitted Bid and the denominator of which shall
be sum of the number of Outstanding shares of Series D STAR Preferred
subject to such Submitted Bids made by all such Existing Holders that
specified a rate equal to the Winning Bid Rate; and
(v) the Submitted Bid of each of the Potential Holders specifying
a rate that is equal to the Winning Bid Rate shall be accepted but only
in an amount equal to the number of shares of Series D STAR Preferred
obtained by multiplying the difference between the Available STAR
Preferred and the number of shares of Series D STAR Preferred subject to
Submitted Bids described in clauses (ii), (iii) and (iv) of this Section
5(a) by a fraction the numerator of which shall be the number of
Outstanding shares of Series D STAR Preferred subject to such Submitted
Bid and the denominator of which shall be the sum of the number of
Outstanding shares of Series D STAR Preferred subject to such Submitted
Bids made by all such Potential Holders that specified rates equal to the
Winning Bid Rate.
(b) If Sufficient Clearing Bids have not been made (other than because all of
the Outstanding shares of Series D STAR Preferred are subject to Submitted Hold
Orders), subject to the provisions of Sections 5(c) and 5(d) of this ARTICLE
TWO, Submitted Orders shall be accepted or rejected as follows in the following
order of priority and all other Submitted Bids shall be rejected:
(i) the Submitted Bid of each Existing Holder specifying any
rate that is equal to or lower than the Maximum Rate shall be accepted,
thus entitling such Existing Holder to continue to hold the shares of
Series D STAR Preferred that are the subject of such Submitted Bid;
(ii) the Submitted Bid of each Potential Holder specifying any
rate that is equal to or lower than the Maximum Rate shall be accepted;
and
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<PAGE>
(iii) the Submitted Bids of each Existing Holder specifying any
rate that is higher than the Maximum Rate shall be rejected, thus
requiring each such Existing Holder to sell the shares of Series D STAR
Preferred that are the subject of such Submitted Bid, and the Submitted
Sell Orders of each Existing Holder shall be accepted, in both cases only
in an amount equal to the difference between (A) the number of
Outstanding shares of Series D STAR Preferred then held by such Existing
Holder subject to such Submitted Bid or Submitted Sell Order and (B) the
number of shares of Series D STAR Preferred obtained by multiplying the
difference between the Available STAR Preferred and the aggregate number
of shares of Series D STAR Preferred subject to Submitted Bids described
in clauses (i) and (ii) of this Section 5(b) by a fraction the numerator
of which shall be the number of Outstanding shares of Series D STAR
Preferred held by such Existing Holder subject to such Submitted Bid or
Submitted Sell Order and the denominator of which shall be the number of
Outstanding shares of Series D STAR Preferred subject to all such
Submitted Bids and Submitted Sell Orders.
(c) If as a result of the procedures described in Sections 5(a) or 5(b) of
this ARTICLE TWO, any Existing Holder would be entitled or required to sell, or
any Potential Holder would be entitled or required to purchase, a fraction of a
share of Series D STAR Preferred on any Auction Date, the Trust Company shall,
in such manner as, in its sole discretion, it shall determine, round up or down
the number of shares of Series D STAR Preferred to be purchased or sold by any
Existing Holder or Potential Holder on such Auction Date so that the number of
shares purchased or told by each Existing Holder or Potential Holder on such
Auction Date shall be whole shares of Series D STAR Preferred.
(d) If as a result of the procedures described in Section 5(a) of this ARTICLE
TWO, any Potential Holder would be entitled or required to purchase less than a
whole share of Series D STAR Preferred on any Auction Date, the Trust Company
shall, in such manner as, in its sole discretion, it shall determine, allocate
shares for purchase among Potential Holders so that only whole shares of Series
D STAR Preferred are purchased on such Auction Date by any Potential Holder,
even if such allocation results in one or more of such Potential Holders not
purchasing shares of Series D STAR Preferred on such Auction Date.
(e) Based on the results of each Auction, the Trust Company shall determine
the aggregate number of shares of Series D STAR Preferred to be purchased and
the aggregate number of shares of Series D STAR Preferred to be sold by
Potential Holders and Existing Holders on whose behalf each Broker-Dealer
submitted Bids or Sell Orders, and, with respect to each Broker-Dealer, to the
extent that such aggregate number of shares to be purchased and such aggregate
number of shares to be sold differ, determine to which other Broker-Dealer or
Broker-Dealers acting for one or more purchasers such Broker-Dealer shall
deliver, or from which other Broker-Dealer or Broker-Dealers acting for one or
more sellers such
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<PAGE>
Broker-Dealer shall receive, as the case may be, shares of Series D STAR
Preferred.
Section 6. Participation in Auctions.
Neither the Company nor any Affiliate of the Company may submit a Bid in any
Auction.
Section 7. Miscellaneous.
The Board of Directors of the Corporation may interpret or adjust the
provisions of this ARTICLE TWO to resolve any inconsistency or ambiguity, remedy
any formal defect or make any other change or modification which does not
adversely affect the rights of Existing Holders of Series D STAR Preferred.
During the Initial Dividend Period and so long as the Applicable Rate is based
on the results of an Auction, (a) shares of Series D STAR Preferred may be sold,
transferred or otherwise disposed of only pursuant to a Bid or Sell Order in
accordance with the procedures described in this ARTICLE TWO or to or through a
Broker-Dealer or to a Person that has delivered a signed copy of a Purchaser's
Letter to the Trust Company, provided that in the case of all transfers other
than pursuant to Auctions the transferor, its Broker-Dealer or its Agent Member
advises the Trust Company of such transfer, and (b) except as otherwise provided
by law or if there is no Securities Depository, all Outstanding shares of Series
D STAR Preferred shall be represented by a certificate or certificates
registered in the name of the nominee of the Securities Depository, and no
Person acquiring shares of Series D STAR Preferred shall be entitled to receive
a certificate representing such shares.
As long as the Applicable Rate is not based on LIBOR, the Corporation shall be
obligated to exercise its best efforts to maintain a Trust Company pursuant to
an agreement containing terms no less favorable to the Corporation than the
terms of the agreement first entered into by the Corporation pursuant to the
resolutions adopted by the Board of Directors of the Corporation on March 14,
1985.
Section 8. Headings of Subdivisions.
The headings of the various subdivisions of this ARTICLE TWO are for
convenience of reference only and shall not affect the interpretation of any of
the provisions hereof.
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<PAGE>
Marilyn A. Vachon further says that the authority to adopt the foregoing
resolution is by the Articles of Incorporation legally vested in the Board of
Directors of the Corporation.
/s/ Marilyn A. Vachon
----------------------------
Marilyn A. Vachon
Secretary of
Lincoln National Corporation
-22-
<PAGE>
STATE OF INDIANA )
) SS:
COUNTY OF ALLEN )
Jack D. Hunter, being duly sworn upon his oath, says that he is a duly
elected, qualified and acting Senior Vice President of Lincoln National
Corporation and that the foregoing certificate is true in substance and in fact;
and that he verifies the same.
Witness my hand and seal this 27th day of June, 1985.
/s/ Jack D. Hunter
------------------------------
Jack D. Hunter
Senior Vice President
Lincoln National Corporation
STATE OF INDIANA )
) SS:
COUNTY OF ALLEN )
Subscribed and sworn to before me, a Notary Public, in and for Allen
County, State of Indiana, this 27th day of June, 1985.
/s/ Ruth A. Knafel
------------------------------
Notary Public
My Commission Expires:
January 22, 1989
- ----------------------
This instrument was prepared by John L. Steinkamp, Attorney at Law.
-23-
<PAGE>
STATE OF INDIANA
OFFICE OF THE SECRETARY OF STATE
To Whom These Presents Come, Greeting:
WHEREAS, there has been presented to me at this office a Resolution of the
Bureau of Directors electing to be governed by the provisions of the Indiana
Business Corporation Law prior to August 1, 1987 of LINCOLN NATIONAL
CORPORATION and said Resolution has been prepared and signed in accordance
with the provisions of the Indiana Business Corporation Law.
WHEREAS, upon due examination, I find that it satisfies the requirements of I.C.
23-1-17-3(b) and I.C. 23-1-18-1:
NOW, THEREFORE, I, EDWIN J. SIMCOX, Secretary of State of Indiana, hereby
certify that I have this day filed the Resolution of the Board of Directors in
this office.
Effective date the provisions will apply is May 9, 1986.
In Witness Whereof, I have hereunto set
my hand and affixed the seal of the
State of Indiana, at the City of
Indianapolis, this 8th day of May, 1986
_____________________________________
EDWIN J. SIMCOX Secretary of State,
By __________________________________
Deputy
<PAGE>
I, Marilyn A. Vachon, hereby certify that I am the duly elected and
qualified Secretary of Lincoln National Corporation, that the following is a
true and correct copy of a resolution adopted by the Board of Directors at their
regular meeting of May 8, 1986, and that such resolution is in full force and
effect as of the date hereof:
WHEREAS, The Indiana Business Corporation Law ("BCL") has been enacted
to replace the existing Indiana General Corporation Act; and
WHEREAS, The BCL permits a corporation through resolution of its Board
of Directors to elect to have provisions of the BCL apply to the
corporation as of a specified date after March 31, 1986; and
WHEREAS, The Board believes it to be desirable and in the best
interest of the Corporation to elect to have the BCL apply to the
Corporation;
NOW, THEREFORE, BE IT RESOLVED, That on behalf of the Corporation
this Board of Directors hereby elects, pursuant to Chapter 23-1-17-3(b) of
the Indiana Code ("IC"), to have IC 23-1-18 through IC 23-1-54 (except for
IC 23-1-18-3, IC 23-1-21 and IC 23-1-53-3) apply to the Corporation on and
after May 9, 1986; and
RESOLVED FURTHER, That the chief executive officer, a vice president
of any class or the secretary of the Corporation is hereby authorized and
directed to take any and all actions necessary or desirable in order to
implement this resolution, including filing a copy of this resolution in
the office of the Secretary of State of the State of Indiana as required by
IC 23-1-17-3(b).
/s/ Marilyn A. Vachon
May 8, 1986 ------------------------------
Marilyn A. Vachon, Secretary
<PAGE>
STATE OF INDIANA
OFFICE OF THE SECRETARY OF STATE
To Whom These Presents Come, Greeting:
WHEREAS, there has been presented to me at this office, Articles of
Amendment for
LINCOLN NATIONAL CORPORATION
and said Articles of Amendment have been prepared and signed in accordance with
the provisions of the Indiana Business Corporation Law;
WHEREAS, upon due examination, I find that it satisfies the requirements of I.C.
23-1-18-1;
NOW, THEREFORE, I, EVAN BAYH, Secretary of State of Indiana, hereby certify that
I have this day filed said Articles in this office.
Effective date the provisions will apply is MAY 28, 1987.
In Witness Whereof, I have hereunto set my hand
and affixed the seal of the State of Indiana,
at the City of Indianapolis, this 28th day
of May, 1987
-----------------------------------------------
EVAN BAYH Secretary of State,
By_____________________________________________
Deputy
<PAGE>
ARTICLES OF AMENDMENT
(APRIL, 1986)
Prescribed by Edwin J. Simcox
Secretary of State of Indiana
Present Original and One Copy
ARTICLES OF AMENDMENT
OF THE
ARTICLES OF INCORPORATION
OF
LINCOLN NATIONAL CORPORATION
----------------------------------------------------------
(Corporate Name)
The above corporation (hereinafter referred to as the "Corporation")
existing pursuant to the Indiana Business Corporation Law, desiring to
give notice of corporate action effectuating amendment of certain
provisions of its Articles of Incorporation, sets forth the following
facts:
ARTICLE I
AMENDMENT(S)
------------
SECTION 1: The name of the Corporation following this amendment is:
Lincoln National Corporation
---------------------------------------------------------------------
SECTION 2: The exact text of Article(s) II, IV, V, X and the prefatory
paragraph of the Articles of Incorporation is now as follows (Attach
additional pages if necessary):
See pages 1a through 1c.
SECTION 3: The date of each amendment's adoption is:
May 7, 1987
---------------------------------------------------------------------
1
<PAGE>
The first paragraph of the Articles of Incorporation, immediately preceding
Article I, is deleted in its entirety.
ARTICLE II
PURPOSE
THE PURPOSE OF THE CORPORATION IS TO ENGAGE IN ANY LAWFUL ACT OR ACTIVITY FOR
WHICH CORPORATIONS MAY BE ORGANIZED UNDER THE INDIANA BUSINESS CORPORATION
LAW.
ARTICLE IV
REGISTERED OFFICE AND REGISTERED AGENT
THE ADDRESS OF THE CORPORATION'S REGISTERED OFFICE IN INDIANA IS CIRCLE TOWER,
INDIANAPOLIS, INDIANA 46204, AND THE NAME OF THE CORPORATION'S REGISTERED
AGENT AT THAT OFFICE IS THE PRENTICE-HALL CORPORATION SYSTEM, INC.
ARTICLE V
NUMBER, TERMS AND VOTING RIGHTS OF SHARES
SECTION 1. NUMBER OF SHARES. THE TOTAL NUMBER OF SHARES WHICH THE CORPORATION
SHALL HAVE AUTHORITY TO ISSUE IS ONE HUNDRED THIRTY-FIVE MILLION (135,000,000)
SHARES, CONSISTING OF ONE HUNDRED TWENTY-FIVE MILLION (125,000,000) SHARES
WITH THE PAR VALUE OF ONE DOLLAR AND TWENTY-FIVE CENTS ($1.25) PER SHARE, AND
TEN MILLION (10,000,000) SHARES WITHOUT PAR VALUE.
SECTION 2. TERMS OF COMMON STOCK. THE ONE HUNDRED TWENTY-FIVE MILLION
(125,000,000) SHARES WITH A PAR VALUE OF ONE DOLLAR AND TWENTY-FIVE CENTS
($1.25) PER SHARE WHICH THE CORPORATION SHALL HAVE AUTHORITY TO ISSUE SHALL
CONSTITUTE A SINGLE CLASS OF SHARES TO BE KNOWN AS COMMON STOCK. ONLY WHEN ALL
DIVIDENDS ACCRUED ON ALL PREFERRED OR SPECIAL CLASSES OF SHARES ENTITLED TO
PREFERENTIAL DIVIDENDS SHALL HAVE BEEN PAID OR DECLARED AND SET APART FOR
PAYMENT, BUT NOT OTHERWISE, THE HOLDERS OF COMMON STOCK SHALL BE ENTITLED TO
RECEIVE DIVIDENDS, WHEN AND AS DECLARED BY THE BOARD OF DIRECTORS. IN EVENT OF
ANY DISSOLUTION, LIQUIDATION OR WINDING UP OF THE CORPORATION, THE HOLDERS OF
THE COMMON STOCK SHALL BE ENTITLED, AFTER DUE PAYMENT OR PROVISION FOR PAYMENT
OF THE DEBTS AND OTHER LIABILITIES OF THE CORPORATION, AND THE AMOUNTS TO
WHICH THE HOLDERS OF PREFERRED OR SPECIAL CLASSES OF SHARES MAY BE ENTITLED,
TO SHARE RATABLY IN THE REMAINING NET ASSETS OF THE CORPORATION.
SECTION 3. VOTING RIGHTS OF COMMON STOCK. EXCEPT AS OTHERWISE PROVIDED BY LAW,
EVERY HOLDER OF COMMON STOCK OF THE CORPORATION SHALL HAVE THE RIGHT AT EVERY
SHAREHOLDERS' MEETING TO ONE VOTE FOR EACH SHARE OF COMMON STOCK STANDING IN
HIS NAME ON THE BOOKS OF THE CORPORATION ON THE DATE ESTABLISHED BY THE BOARD
OF DIRECTORS AS THE RECORD DATE FOR DETERMINATION OF SHAREHOLDERS ENTITLED TO
VOTE AT SUCH MEETING.
1a
<PAGE>
Section 4. Terms of Preferred Stock, No Par Value. The ten million (10,000,000)
shares without par value which the Corporation shall have authority to issue
shall constitute a single class of shares to be known as Preferred Stock, No Par
Value. The Board of Directors shall have authority to determine and state in the
manner provided by law the rights, preferences, qualifications, limitations and
restrictions (other than voting rights) of the Preferred Stock, No Par Value.
The Preferred Stock, No Par Value, may be issued in one or more series for such
an amount of consideration as may be fixed from time to time by the Board of
Directors, and the Board of Directors shall have authority to determine and
state in the manner provided by law the designations and the relative rights,
preferences, qualifications, limitations and restrictions (other than voting
rights) of each series.
Section 5. Voting Rights of Preferred Stock, No Par Value. Except as otherwise
provided by law, every holder of Preferred Stock, No Par Value, of the
Corporation shall have the right at every shareholders' meeting to one vote for
each share of Preferred Stock, No Par Value, standing in his name on the books
of the Corporation on the date established by the Board of Directors as the
record date for determination of shareholders entitled to vote at such meeting.
At any time when six or more quarterly dividends, whether or not consecutive, on
the Preferred Stock, No Par Value, or on any one or more series thereof, shall
be in default, the holders of all Preferred Stock, No Par Value, at the time or
times outstanding as to which such default shall exist shall be entitled, at the
next annual meeting of shareholders, voting as a class, to vote for and elect
two Directors of the Corporation.
In the case of any vacancy in the office of a Director occurring among the
Directors elected by the holders of the shares of the Preferred Stock, No Par
Value, voting as a class pursuant to this Section, the remaining Director or
Directors elected by the holders of the shares of the Preferred Stock, No Par
Value, pursuant to this Section may elect a successor or successors to hold
office until the next annual or special meeting of the shareholders.
At all meetings of shareholders held for the purpose of electing Directors
during such time as the holders of the shares of the Preferred Stock, No Par
Value, shall have the right, voting as a class, to elect Directors pursuant to
this Section, the presence in person or by proxy of the holders of a majority of
the outstanding shares of the Preferred Stock, No Par Value, then entitled, as a
class, to elect Directors pursuant to this Section shall be required to
constitute a quorum of such class for the election of Directors; provided, that
the absence of a quorum of the holders of Preferred Stock, No Par Value, shall
not prevent the election at any such meeting or adjournment thereof of Directors
by any other class or classes of stock if the necessary quorum of the holders of
such stock is present in person or by proxy at such meeting.
The right of the holders of Preferred Stock, No Par Value, voting as a class, to
participate in the election of Directors pursuant to this Section shall continue
in effect, in the case of all Preferred Stock, No Par Value, entitled to receive
cumulative dividends, until all accumulated and unpaid dividends have been paid
or declared and set apart for payment on all cumulative Preferred Stock, No Par
Value, the holders of which shall have been entitled to vote at the previous
annual meeting of shareholders, or in the case of all non-cumulative Preferred
Stock, No Par Value, until non-cumulative dividends have been paid or declared
and set apart for payment for four consecutive quarterly dividend periods on all
non-cumulative Preferred Stock, No Par Value, the holders of which shall have
been entitled to vote at the previous annual meeting of shareholders, and
thereafter the right of the holders of Preferred Stock, No Par Value, voting as
a class, to participate in the election of Directors pursuant to the Section
shall terminate.
Upon termination of the right of the holders of Preferred Stock, No Par Value,
voting as a class, to participate in the election of Directors pursuant to this
Section, the term of office of each Director then in office elected by the
holders of the Preferred Stock, No Par Value, shall terminate, and any vacancy
so created may be filled as provided by the bylaws of the Corporation.
1b
<PAGE>
Any Director or Directors elected by the holders of Preferred Stock, No Par
Value, voting as a class pursuant to this Section, may be removed, with or
without cause, only by a vote of the holders of three-fourths of the outstanding
shares of Preferred Stock, No Par Value, taken at a meeting as provided by
Section 4 of Article VII of these Articles of Incorporation.
The Corporation shall not, without the approval of the holders of at least two-
thirds of the Preferred Stock, No Par Value, at the time outstanding, voting as
a class:
(a) Amend these Articles of Incorporation to create or authorize any kind of
stock ranking prior to or on a parity with the Preferred Stock, No Par Value,
with respect to payment of dividends or distribution on dissolution,
liquidation or winding up, or create or authorize any security convertible
into shares of stock of any such kind; or
(b) Amend, alter, change or repeal any of the express terms of the Preferred
Stock, No Par Value, or of any series thereof, then outstanding in a manner
prejudicial to the holders thereof; provided, that if any such amendment,
alteration, change or repeal would be prejudicial to the holders of one or
more, but not all, of the series of the Preferred Stock, No Par Value, at
the time outstanding, only such consent of the holders of two-thirds of the
total number of outstanding shares of all series so affected shall be
required, unless a different or greater vote shall be required by law; or
(c) Authorize the voluntary dissolution of the Corporation or any revocation
of dissolution proceedings theretofore approved, authorize the sale, lease,
exchange, or other disposition of all or substantially all of the property of
the Corporation, or approve any limitation of the term of existence of the
Corporation; or
(d) Merge or consolidate with another corporation in such manner that the
Corporation does not survive as a continuing entity, if thereby the rights,
preferences, or powers of the Preferred Stock, No Par Value, would be
adversely affected, or if there would thereupon be authorized or
outstanding securities which the Corporation, if it owned all of the
properties then owned by the resulting corporation, could not create without
the approval of the holders of the Preferred Stock, No Par Value.
Section 6. Class Voting. The holders of the outstanding shares of a class, or
of any series thereof, shall not be entitled to vote as a class except as
shall be expressly provided by this Article or by law.
ARTICLE X
Provisions for Regulation of Business and
Conduct of Affairs of Corporation
No shares of the Common Stock of the Lincoln National Life Insurance Company
owned by the Corporation shall be sold, leased, exchanged, mortgaged,
pledged, or otherwise disposed of except by the vote of the holders of three-
fourths of the shares of the Corporation outstanding and entitled to vote
thereon at an annual or special meeting of the shareholders held upon notice
which includes notice of the proposed sale, lease, exchange, mortgage,
pledge, or other disposition.
1c
<PAGE>
SECTION 4: (Complete this section only if amendment provides for an exchange,
reclassification or cancellation of issued shares and provisions for
implementing the amendment are not contained in the amendment
itself.)
Provisions for implementing the exchange, reclassification or
cancellation of issued shares are set forth below (Attach additional
pages if necessary):
N/A
ARTICLE II
MANNER OF ADOPTION AND VOTE
---------------------------
(Strike inapplicable section)
SECTION 1: XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXX
SECTION 2: Vote of Shareholders
The designation (i.e. common, preferred and any classification where
different classes of stock exists), number of outstanding shares,
number of votes entitled to be cast by each voting group entitled to
vote separately on the amendment and the number of votes of each
voting group represented at the meeting is set forth below:
TOTAL A B C
Designation of Each Voting Group Common Preferred
Number of Outstanding Shares _____ 44,332,739 112,290
Number of Votes Entitled To Be Cast _____ 44,332,739 112,290
Number of Votes Represented at Meeting _____ 32,729,673 67,868
Shares Voted In Favor _____ 30,100,193 64,760
Shares Voted Against _____ 1,217,614 805
2
<PAGE>
ARTICLE III
STATEMENT OF CHANGES MADE WITH RESPECT
--------------------------------------
TO ANY INCREASE IN THE NUMBER OF SHARES
---------------------------------------
HERETOFORE AUTHORIZED
---------------------
Aggregate Number of Shares
Previously Authorized N/A
______________________
Increase (indicate "O" or
"N/A" if no increase) ______________________
Aggregate Number of Shares
to be Authorized After Effect
of this Amendment ______________________
/s/ Ian M. Rolland
---------------------------------
(Signature)
Ian M. Rolland
---------------------------------
(Printed Name)
President
---------------------------------
(Title)
3
<PAGE>
STATE OF INDIANA
OFFICE OF THE SECRETARY OF STATE
ARTICLES OF AMENDMENT
To Whom These Presents Come, Greeting:
WHEREAS, there has been presented to me at this office, Articles of Amendment
for:
LINCOLN NATIONAL CORPORATION
and said Articles of Amendment have been prepared and signed in accordance with
the provisions of the Indiana Business Corporation Law, as amended.
NOW, THEREFORE, I, EVAN BAYH, Secretary of State of Indiana, hereby certify that
I have this day filed said articles in this office.
The effective date of these Articles of Amendment is May 10, 1988.
In Witness Whereof, I have hereunto set my
hand and affixed the seal of the State of
Indiana, at the City of Indianapolis, this
Tenth day of May, 1988
------------------------------------------
EVAN BAYH, Secretary of State
By________________________________________
Deputy
<PAGE>
[SEAL OF THE ARTICLES OF AMENDMENT OF THE Secretary of State
STATE OF ARTICLES OF INCORPORATION State House
INDIANA] State Form 4161 (R5 / 12-87) Corporations Division
Provided by Evan Bayh, Secretary Room 155
of State of Indiana Indianapolis, Indiana 46204
(317) 232-6576
Present Original and One Copy - Use 8 1/2" x 11"
paper for inserts.
FILING FEE: $30.00
Indiana Code 23-1-38-1 et. seq. Approved by State Board of Accounts, 1988
- ------------------------------------------------------------------------------
ARTICLES OF AMENDMENT
OF THE
ARTICLES OF INCORPORATION
OF
LINCOLN NATIONAL CORPORATION
- ------------------------------------------------------------------------------
(NAME OF CORPORATION)
The above corporation (hereinafter referred to as the "Corporation")
existing pursuant to the Indiana Business Corporation Law, desiring
to give notice of corporate action effectuating amendment of certain
provisions of its Articles of Incorporation, sets forth the
following facts:
- ------------------------------------------------------------------------------
ARTICLE I - AMENDMENT(S)
- ------------------------------------------------------------------------------
SECTION 1: Date of incorporation:
January 5, 1968
- ------------------------------------------------------------------------------
SECTION 2: The name of the Corporation following this amendment:
Lincoln National Corporation
- ------------------------------------------------------------------------------
SECTION 3:
The exact text of Article(x) V
of the Articles of Incorporation is now as follows (Attach
additional pages if necessary):
See pages i through iii, attached.
- ------------------------------------------------------------------------------
Date of each Amendment's Adoption:
May 5, 1988
- ------------------------------------------------------------------------------
<PAGE>
- ------------------------------------------------------------------------------
SECTION 4: (Complete this section only if amendments provides for an exchange,
reclassification or cancellation of issued shares and provisions
for implementing the amendment are not contained in the amendment
itself.)
Provisions for implementing the exchange, reclassification or
cancellation of issued shares are set forth below (Attach
additional sheets if necessary):
N/A
- ------------------------------------------------------------------------------
ARTICLE II - MANNER OF ADOPTION AND VOTE (Strike not applicable section)
- ------------------------------------------------------------------------------
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
- ------------------------------------------------------------------------------
SECTION 2: Vote of Shareholders.
The designation (i.e. common, preferred and any classification were
different classes of stock exists), number of outstanding shares,
number of votes entitled to be cast by each voting group entitled
to vote separately on the amendment and the number of votes of each
voting group represented at the meeting is set forth below:
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
TOTAL A B C
----------------------------------------------------------
<S> <C> <C> <C> <C>
DESIGNATION OF EACH VOTING GROUP: Common
- ---------------------------------------------------------------------------------------------------------
NUMBER OF OUTSTANDING SHARES: 41,909,852 41,810,554
- ---------------------------------------------------------------------------------------------------------
NUMBER OF VOTES ENTITLED TO BE CAST: 41,909,852 41,810,554
- ---------------------------------------------------------------------------------------------------------
NUMBER OF VOTES REPRESENTED AT THE MEETING: 33,549,022 33,491,845
- ---------------------------------------------------------------------------------------------------------
SHARES VOTED IN FAVOR: 29,866,624 29,813,739
- ---------------------------------------------------------------------------------------------------------
SHARES VOTED AGAINST: 3,311,986 3,309,584
- ---------------------------------------------------------------------------------------------------------
</TABLE>
In Witness Whereof, the undersigned being the President
--------------------
(title)
of said Corporation executes these Articles of Amendments of the
Articles of Incorporation and verifies, subject to penalties of
perjury that the statements contained herein are true, this 9th
day of May, 1988.
- ------------------------------------------------------------------------------
Signature Printed Name
/s/ Ian M. Rolland Ian M. Rolland
- ------------------------------------------------------------------------------
<PAGE>
ARTICLE V
Number, Terms and Voting Rights of Shares
Section 1. Number and Classes of Shares. The total number of shares which
the Corporation shall have authority to issue is four hundred ten million
(410,000,000) shares, consisting of four hundred million (400,000,000) shares
of a single class of shares to be known as Common Stock, and ten million
(10,000,000) shares of a single class of shares to be known as Preferred Stock.
Section 2. Terms of Common Stock. Only when all dividends accrued on all
preferred or special classes of shares entitled to preferential dividends shall
have been paid or declared and set apart for payment, but not otherwise, the
holders of Common Stock shall be entitled to receive dividends, when and as
declared by the Board of Directors. In event of any dissolution, liquidation or
winding up of the Corporation, the holders of the Common Stock shall be
entitled, after due payment or provision for payment of the debts and other
liabilities of the Corporation, and the amounts to which the holders of
preferred or special classes of shares may be entitled, to share ratably in the
remaining net assets of the Corporation.
Section 3. Voting Rights of Common Stock. Except as otherwise provided by
law, every holder of Common Stock of the Corporation shall have the right at
every shareholders' meeting to one vote for each share of Common Stock standing
in his name on the books of the Corporation on the date established by the Board
of Directors as the record date for determination of shareholders entitled to
vote at such meeting.
Section 4. Terms of Preferred Stock. The Board of Directors shall have
authority to determine and state in the manner provided by law the rights,
preferences, qualifications, limitations and restrictions (other than voting
rights) of the Preferred Stock. The Preferred Stock may be issued in one or more
series for such an amount of consideration as may be fixed from time to time by
the Board of Directors, and the Board of Directors shall have authority to
determine and state in the manner provided by law the designations and the
relative rights, preferences, qualifications, limitations and restrictions
(other than voting rights) of each series.
Section 5. Voting Rights of Preferred Stock. Except as otherwise provided
by law, every holder of Preferred Stock of the Corporation shall have the right
at every shareholders' meeting to one vote for each share of Preferred Stock
standing in his name on the books of the Corporation on the date established by
the Board of Directors as the record date for determination of shareholders
entitled to vote at such meeting.
i
<PAGE>
At any time when six or more quarterly dividends, whether or not
consecutive, on the Preferred Stock, or on any one or more series thereof, shall
be in default, the holders of all Preferred Stock at the time or times
outstanding as to which such default shall exist shall be entitled, at the next
annual meeting of shareholders, voting as a class, to vote for and elect two
Directors of the Corporation.
In the case of any vacancy in the office of a Director occurring among the
Directors elected by the holders of the shares of the Preferred Stock voting as
a class pursuant to this Section, the remaining Director or Directors elected by
the holders of the shares of the Preferred Stock pursuant to this Section may
elect a successor or successors to hold office until the next annual or special
meeting of the shareholders.
At all meetings of shareholders held for the purpose of electing Directors
during such time as the holders of the shares of the Preferred Stock shall have
the right, voting as a class, to elect Directors pursuant to this Section, the
presence in person or by proxy of the holders of a majority of the outstanding
shares of the Preferred Stock then entitled, as a class, to elect Directors
pursuant to this Section shall be required to constitute a quorum of such class
for the election of Directors; provided, that the absence of a quorum of the
holders of Preferred Stock shall not prevent the election at any such meeting or
adjournment thereof of Directors by any other class or classes of stock if the
necessary quorum of the holders of such stock is present in person or by proxy
at such meeting.
The right of the holders of Preferred Stock, voting as a class, to
participate in the election of Directors pursuant to this Section shall continue
in effect, in the case of all Preferred Stock entitled to receive cumulative
dividends, until a11 accumulated and unpaid dividends have been paid or declared
and set apart for payment on all cumulative Preferred Stock, the holders of
which shall have been entitled to vote at the previous annual meeting of
shareholders, or in the case of all non-cumulative Preferred Stock until non-
cumulative dividends have been paid or declared and set apart for payment for
four consecutive quarterly dividend periods on a11 non-cumulative Preferred
Stock, the holders of which shall have been entitled to vote at the previous
annual meeting of shareholders, and thereafter the right of the holders of
Preferred Stock, voting as a class, to participate in the election of Directors
pursuant to this Section shall terminate.
Upon termination of the right of the holders of Preferred Stock, voting as
a class, to participate in the election of Directors pursuant to this Section,
the term of office of each Director then in office elected by the holders of the
Preferred Stock shall terminate, and any vacancy so created may be filled as
provided by the bylaws of the Corporation.
ii
<PAGE>
Any Director or Directors elected by the holders of Preferred stock, voting
as a class pursuant to this Section, may be removed, with or without cause, only
by a vote of the holders of three-fourths of the outstanding shares of Preferred
Stock taken at a meeting as provided by Section 4 of Article VII of these
Articles of Incorporation.
The Corporation shall not, without the approval of the holders of at least
two-thirds of the Preferred Stock at the time outstanding, voting as a class:
(a) Amend these Articles of Incorporation to create or authorize any kind
of stock ranking prior to or on a parity with the Preferred Stock with
respect to payment of dividends or distribution on dissolution, liquidation
or winding up, or create or authorize any security convertible into shares
of stock of any such kind; or
(b) Amend, alter, change or repeal any of the express terms of the
Preferred Stock, or of any series thereof, then outstanding in a manner
prejudicial to the holders thereof; provided, that if any such amendment,
alteration, change or repeal would be prejudicial to the holders of one or
more, but not a11, of the series of the Preferred Stock at the time
outstanding, only such consent of the holders of two-thirds of the total
number of outstanding shares of a11 series so affected shall be required,
unless a different or greater vote shal1 be required by law; or
(c) Authorize the voluntary dissolution of the Corporation or any
revocation of dissolution proceedings theretofore approved, authorize the
sale, lease, exchange, or other disposition of all or substantially all of
the property of the Corporation, or approve any limitation of the term of
existence of the Corporation; or
(d) Merge or consolidate with another corporation in such manner that the
Corporation does not survive as a continuing entity, if thereby the rights,
preferences, or powers of the Preferred Stock would be adversely affected,
or if there would thereupon be authorized or outstanding securities which
the Corporation, if it owned all of the properties then owned by the
resulting corporation, could not create without the approval of the holders
of the Preferred Stock.
Section 6. Class Voting. The holders of the outstanding shares of a class,
or of any series thereof, shall not be entitled to vote as a class except as
shall be expressly provided by this Article or by law.
iii
<PAGE>
STATE OF INDIANA
OFFICE OF THE SECRETARY OF STATE
ARTICLES OF AMENDMENT
To Whom These Presents Come, Greeting:
WHEREAS, there has been presented to me at this office, Articles of Amendment
for:
LINCOLN NATIONAL CORPORATION
and said Articles of Amendment have been prepared and signed in accordance with
the provisions of the Indiana Business Corporation Law, as amended.
NOW, THEREFORE, I, EVAN BAYH, Secretary of State of Indiana, hereby certify that
I have this day filed said articles in this office.
The effective date of these Articles of Amendment is May 24, 1988.
In Witness Whereof, I have hereunto set
my hand and affixed the seal of the State
of Indiana, at the City of Indianapolis,
this Twenty-fourth day of May , 1988
----------------------------------------
EVAN BAYH, Secretary of State
By:_____________________________________
Deputy
<PAGE>
ARTICLES OF AMENDMENT
OF THE
ARTICLES OF INCORPORATION
OF
LINCOLN NATIONAL CORPORATION
(Name of Corporation)
The above corporation (hereinafter referred to as the "Corporation") existing
pursuant to the Indiana Business Corporation Law, desiring to give notice of
corporate action effectuating amendment of certain provisions of its Articles of
Incorporation, sets forth the following facts:
ARTICLE I - AMENDMENT(S)
SECTION 1: Date of Incorporation:
January 5, 1968
SECTION 2: The name of the Corporation following this amendment:
Lincoln National Corporation
SECTION 3:
The exact text of Note(s) _______________________________________
(Attach additional pages if necessary):
The Certificate of Resolution by the Board of Directors
Determining and Stating the Designation and the Relative Rights,
Preferences, Qualifications, Limitations and Restrictions (Other
than Voting Rights) of a Series of a Class of Preferred Shares of
the Articles of Incorporation, as filed and approved by the
Secretary of State August 20, 1969, is now as follows:
(See pages 1-a through 6-a, attached)
The Certificate of Resolution by the Board of Directors
Determining and Stating the Designation and the Relative Rights,
Preferences, Qualifications, Limitations and Restrictions (Other
than Voting Rights) of a Series of a Class of Preferred Shares of
the Articles of Incorporation, as filed and approved by the
Secretary of State November 14, 1984, is now as follows:
(See pages 1-b through 21-b, attached)
The Certificate of Resolution by the Board of Directors
Determining and Stating the Designation and the Relative Rights,
Preferences, Qualifications, Limitations and Restrictions (Other
than Voting Rights) of a Series of a Class of Preferred Shares of
the Articles of Incorporation [Series C], as filed and approved
by the Secretary of State June 27, 1985, is now as follows:
(See pages 1-c through 21-c, attached)
The Certificate of Resolution by the Board of Directors
Determining and Stating the Designation and the Relative Rights,
Preferences, Qualifications, Limitations and Restrictions (Other
than Voting Rights) of a Series of a Class of Preferred Shares of
the Articles of Incorporation [Series D], as filed and approved
by the Secretary of State June 27, 1985, is now as follows:
(See pages 1-d through 21-d, attached)
Date of each Amendment's Adoption:
May 5, 1988
<PAGE>
- ------------------------------------------------------------------------------
SECTION 4: (Complete this section only if amendments provides for an exchange,
reclassification or cancellation of issued shares and provisions
for implementing the amendment are not contained in the amendment
itself.)
Provisions for implementing the exchange, reclassification or
cancellation of issued shares are set forth below (Attach
additional sheets if necessary):
N/A
- ------------------------------------------------------------------------------
ARTICLE II - MANNER OF ADOPTION AND VOTE (Strike not applicable section)
- ------------------------------------------------------------------------------
SECTION 1: Shareholder vote not required.
The amendments was/were adopted by the XXXXXXXXX board of
directors without shareholder action and shareholder action
was not required.
- ------------------------------------------------------------------------------
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
TOTAL A B C
----------------------------------------------------------
<S> <C> <C> <C> <C>
DESIGNATION OF EACH VOTING GROUP: N/A
- ---------------------------------------------------------------------------------------------------------
NUMBER OF OUTSTANDING SHARES:
- ---------------------------------------------------------------------------------------------------------
NUMBER OF VOTES ENTITLED TO BE CAST:
- ---------------------------------------------------------------------------------------------------------
NUMBER OF VOTES REPRESENTED AT THE MEETING:
- ---------------------------------------------------------------------------------------------------------
SHARES VOTED IN FAVOR:
- ---------------------------------------------------------------------------------------------------------
SHARES VOTED AGAINST:
- ---------------------------------------------------------------------------------------------------------
</TABLE>
In Witness Whereof, the undersigned being the President
--------------------
(title)
of said Corporation executes these Articles of Amendments of the
Articles of Incorporation and verifies, subject to penalties of
perjury that the statements contained herein are true, this 17th
day of May, 1988.
- ------------------------------------------------------------------------------
Signature Printed Name
/s/ Ian M. Rolland Ian M. Rolland
- ------------------------------------------------------------------------------
<PAGE>
CERTIFICATE OF RESOLUTION BY BOARD OF DIRECTORS
DETERMINING AND STATING THE DESIGNATION AND THE
RELATIVE RIGHTS, PREFERENCES, QUALIFICATIONS,
LIMITATIONS AND RESTRICTIONS (OTHER THAN VOTING RIGHTS)
OF A SERIES OF A CLASS OF PREFERRED SHARES
OF
LINCOLN NATIONAL CORPORATION
RESOLVED that, pursuant to the authority expressly granted to and vested
in the Board of Directors of the Corporation by the provisions of the Articles
of Incorporation of the Corporation, this Board of Directors hereby creates
and authorizes the issue of, for the consideration stated, a series of the
Preferred Stock of the Corporation, to consist of 2,233,421 shares of
Preferred Stock of the Corporation, and this Board of Directors hereby fixes
the designation and the relative rights, preferences, qualifications,
limitations and restrictions (other than voting rights) of the shares of such
series as follows:
Section 1. Designation.
1.1 The designation of the series of Preferred Stock created by this
resolution shall be "$3.00 Cumulative Convertible Preferred Stock, Series A"
(the "Series A Preferred Stock").
Section 2. Dividends.
2.1 The holders of the Series A Preferred Stock shall be entitled to
receive, but only when and as declared by the Board of Directors, out of any
assets of the Corporation legally available for the purpose, cash dividends
at the rate of $3.00 per share per annum, and no more, payable $0.75 per share
quarterly on the fifth day of March, June, September, and December of each year
to such stockholders of record on the respective dates, not exceeding 50 days
preceding such dividend dates, fixed for the purpose by the Board of Directors.
2.2 Dividends shall be cumulative on shares of the Series A Preferred
Stock from and after dates determined as follows:
(a) if issued on or prior to the record date for the first dividend on such
shares, then from and after the fifth day of March, June, September or
December next preceding such record date;
(b) if issued during the period immediately after a record date for a
dividend on the Series A Preferred Stock and ending on the payment date
for such dividend, then from and after such dividend payment date; and
(c) otherwise from and after the fifth day of March, June, September, or
December next preceding the date of issue of such shares.
Accumulation of dividends shall not bear interest.
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2.3 No dividends (other than dividends payable in Common Stock of the
Corporation) shall be paid or declared on the Common Stock of the Corporation or
on any other series of the Preferred Stock or on any other class or series of
stock of the Corporation ranking as to dividends junior to or on a parity with
the Series A Preferred Stock, unless full dividends on all outstanding shares of
the Series A Preferred Stock for all past dividend periods have been paid and
unless full dividends on all such shares for the then current dividend period
shall have been paid or declared.
Section 3. Preference in Liquidation.
3.1 In the event of the liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, the holders of the Series A
Preferred Stock then outstanding shall be entitled to receive, after payment or
provision for payment of all creditors of the Corporation, but before any
distribution or payment shall be made in respect of the Common Stock or any
other stock of the Corporation ranking junior to the Series A Preferred Stock as
to assets on liquidation, dissolution or winding up, an amount equal to $80 per
share, plus an amount equal to all unpaid dividends thereon accrued on a daily
basis to the date when funds for payment are made available to the holders; and
no payment on account of liquidation, dissolution or winding up shall be made to
the holders of any series of Preferred Stock or any other stock of the
Corporation ranking on a parity with the Series A Preferred Stock as to
assets, unless there shall likewise be paid at the same time to the holders of
all shares of Series A Preferred Stock like proportionate distributive amounts
ratably, in proportion to the full distributive amounts to which they are
respectively entitled. The holders of the Series A Preferred Stock shall have no
rights in respect of the remaining assets of the Corporation.
3.2 Neither the consolidation or merger of the Corporation with or into any
other corporation or corporations, nor the sale or transfer by the Corporation
of all or any part of its assets, shall be deemed to be a liquidation,
dissolution or winding up of the Corporation for purposes of this Section 3.
Section 4. Redemption.
4.1 At any time or from time to time after October 31, 1974, (but not
before such time) and so long as any dividends on the Series A Preferred Stock
are not in arrears, the Corporation at the option of its Board of Directors,
shall have the right to redeem the Series A Preferred Stock, in whole or from
time to time in part, at a price equal to $80 per share plus an amount equal to
all unpaid dividends thereon accrued on a daily basis to the date of redemption.
4.2 Notice of every redemption shall be mailed at least 30 days, but not
more than 60 days, prior to the date fixed for redemption, addressed to the
holders of record of the shares to be redeemed at their respective addresses as
the same shall appear on the books of the Corporation. In the case of a
redemption of a part only of the Series A Preferred Stock the Corporation shall
select by lot the shares so to be redeemed.
4.3 If notice of redemption shall have been mailed as aforesaid, and if on
or before the redemption date specified in such notice a sum equal to the
redemption price of the shares so called for redemption shall have been set
aside by the Corporation, separate and apart from its other funds for the pro
rata benefit of the holders of the shares so called for redemption, so as to be
and continue to be available therefor, then, whether or not certificates for the
shares so called for redemption shall have been surrendered for cancellation,
such shares, from and after the date of redemption so designated, shall be
deemed to be no longer outstanding, the right to receive dividends thereon shall
cease to accrue and all rights with respect to such shares shall forthwith on
such redemption date cease and terminate except only the right of the holders
thereof to receive the redemption price.
4.4 The Corporation may, however, at any time prior to the redemption date
specified in the notice of redemption but after such notice of redemption shall
have been mailed as aforesaid, deposit in trust, for the account of the holders
of the Series A Preferred Stock to be redeemed, with a bank or trust company in
good standing organized under the laws of the United States of America or of the
State of New York, or of
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the State of Illinois, doing business in the Borough of Manhattan, City of New
York, or in the City of Chicago, Illinois, having capital, surplus and undivided
profits aggregating at least $5,000,000, designated in such notice of
redemption, a sum equal to the redemption price of such shares so called for
redemption, and thereupon, whether or not certificates for the shares so called
for redemption shall have been surrendered for cancellation (if such notice
shall state that holders of the shares so called for redemption may receive
their redemption price at any time after such deposit), all shares with respect
to which such deposit shall have been made shall be deemed to be no longer
outstanding, the right to receive dividends thereon for any period after the
date so fixed for redemption shall cease to accrue and all rights with respect
to such shares shall forthwith upon such deposit in trust cease and terminate
except only (a) the rights of the holders thereof to receive from such bank or
trust company, at any time after the time of such deposit, the redemption price
of such shares to be redeemed, or (b) the right to exercise, on or before the
close of business on the third business day prior to the date fixed for
redemption, the privileges of conversion. Any moneys so deposited by the
Corporation which shall not be required for such redemption because of the
exercise of any such right of conversion, shall be repaid to the Corporation
forthwith. Any moneys so deposited by the Corporation and unclaimed at the end
of six years from the date fixed for such redemption shall be repaid to the
Corporation upon its request expressed in a resolution of its Board of
Directors, after which repayment the holders of the shares so called for
redemption shall look only to the Corporation for the payment thereof.
4.5 Shares of Series A Preferred Stock so redeemed shall, after the
Corporation takes appropriate steps required or permitted by the laws of
Indiana, have the status of authorized and unissued shares of Preferred Stock,
and the number of shares of Preferred Stock which the Corporation shall have
authority to issue shall not be decreased by the redemption of shares of Series
A Preferred Stock.
4.6. Nothing in this Section 4 shall limit any legal right of the
Corporation to purchase or otherwise acquire any shares of the Preferred Stock
at not exceeding the price at which the same may be redeemed at the option of
the Corporation.
Section 5. Conversion Rights.
5.1 Subject to adjustment as provided in this Section 5, each share of
Series A Preferred Stock shall be convertible at the option of the respective
holder thereof, at the office of the transfer agent for the Common Stock, and at
such other place or places, if any, as the Board of Directors may determine,
into one fully paid and non-assessable share of Common Stock (the "Common
Stock") of the Corporation. In case of the redemption of any shares of Series A
Preferred Stock, such right of conversion shall terminate, as to the shares
called for redemption, at the close of business on the third business day prior
to the date fixed for redemption, unless default shall be made in the payment of
the redemption price. Upon conversion the Corporation shall make no payment or
adjustment on account of unpaid dividends accrued on the Series A Preferred
Stock surrendered for conversion.
5.2 The Common Stock issuable upon conversion of Series A Preferred Stock
shall be Common Stock as constituted at the date of this resolution, except as
otherwise provided in subdivision (b) of Section 5.5.
5.3 Before any holder of Series A Preferred Stock shall be entitled to
convert the same into Common Stock, he shall surrender the certificate or
certificates for such Series A Preferred Stock at the office of the transfer
agent for the Common Stock, which certificate or certificates, if the
Corporation shall so request, shall be duly endorsed to the Corporation or in
blank or accompanied by proper instruments of transfer to the Corporation or in
blank, and shall give written notice to the Corporation at that office that he
elects so to convert Series A Preferred Stock, and shall state in writing
therein the name or names in which he wishes the certificate or certificates for
Common Stock to be issued. Every such notice of election to convert shall
constitute a contract between the holder of such Series A Preferred Stock and
the Corporation, whereby the holder of such Series A Preferred Stock shall be
deemed to subscribe for the amount of Common Stock which he shall be entitled to
receive upon such conversion, and, in satisfaction of such subscription, to
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deposit the Series A Preferred Stock to be converted and to release the
Corporation from all liability thereunder, and thereby the Corporation shall be
deemed to agree that the surrender of the certificate or certificates for the
Series A Preferred Stock and the extinguishment of liability thereon shall
constitute full payment of such subscription for Common Stock to be issued upon
such conversion.
5.4 As soon as practicable after such deposit of certificates for Series A
Preferred Stock accompanied by the written notice and the statement above
prescribed, the Corporation will issue and deliver at the office of the transfer
agent to the person for whose account such Series A Preferred Stock was so
surrendered, or to his nominee or nominees, certificates for the number of full
shares of Common Stock to which he shall be entitled as aforesaid, together with
a cash adjustment of any fraction of a share as herein stated, if not evenly
convertible. Subject to the following provisions of this paragraph, such
conversion shall be deemed to have been made as of the date of such surrender of
the Series A Preferred Stock to be converted; and the person or persons entitled
to receive the Common Stock issuable upon conversion of such Series A Preferred
Stock shall be treated for all purposes as the record holder or holders of such
Common Stock on such date. The Corporation shall not be required to convert,
and no surrender of Series A Preferred Stock shall be effective for that
purpose, while the stock transfer books of the Corporation are closed for any
purpose; but the surrender of Series A Preferred Stock for conversion during any
period while such books are so closed shall become effective for conversion
immediately upon the re-opening of such books, as if the conversion had been
made on the date such Series A Preferred Stock was surrendered.
5.5 The number of shares of Common Stock into which the shares of Series A
Preferred Stock shall be convertible shall be subject to adjustment from time to
time as follows:
(a) In case the Corporation shall at any time or from time to time
(1) declare a dividend payable in Common Stock,
(2) issue any shares of its Common Stock in subdivision of outstanding
shares of Common Stock, by reclassification or otherwise, or
(3) make any combination of shares of Common Stock, by
reclassification or otherwise,
the conversion rate shall be adjusted so that the holder of each share of
Series A Preferred Stock shall thereafter be entitled to receive upon the
conversion of such share the number of shares of the Corporation which he
would have owned or have been entitled to receive after the happening of
any of the events described above had such share been converted immediately
prior to the happening of such event. Further such adjustments shall be
made whenever any of the events listed above shall occur.
(b) In case of any capital reorganization or any reclassification of the
capital stock of the Corporation or in case of the consolidation or merger
of the Corporation with or into another corporation, or in case of any sale
or conveyance to another corporation of the assets of the Corporation as an
entirety or substantially as an entirety, the holder of each share of
Series A Preferred Stock then outstanding shall have the right to convert
such share into the kind and number of shares of stock and other securities
and property receivable upon such reorganization, reclassification,
consolidation, merger, sale or conveyance, as the case may be, by a holder
of that number of shares of Common Stock into which one share of Series A
Preferred Stock is convertible; and, in any such case, appropriate
adjustment (as determined in good faith by a resolution of the Board of
Directors of the Corporation) shall be made in the application of the
provisions herein set forth with respect to rights and interests thereafter
of the holders of the Series A Preferred Stock, to the end that the
provisions set forth herein (including the specified adjustments) shall
thereafter be applicable, as near as reasonably may be, in relation to any
shares or other property thereafter deliverable upon the conversion of the
Series A Preferred Stock.
(c) In case the Corporation shall issue rights or warrants to the holders
of its Common Stock for the purpose of entitling them to subscribe for or
purchase shares of Common Stock at a price per share less than 95% of the
"current market price" per share of Common Stock (as defined in Section
5.9) on
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the date at which a record is taken of the holders of such issuance, the
number of shares of Common Stock into which each share of Series A Preferred
Stock shall thereafter be convertible shall be determined by multiplying the
number of shares of Common Stock into which such share of Series A Preferred
Stock was immediately theretofore convertible by a fraction, of which
the numerator shall be the sum of the number of shares of Common Stock
outstanding at the time of the taking of such record plus the number of
additional shares of Common Stock so offered for subscription or purchase,
and of which the denominator shall be the sum of the number of shares of
Common Stock outstanding at the time of the taking of such record plus the
number of shares of Common Stock which the aggregate offering price of the
total number of shares so offered would purchase at such current market price
per share for such date.
(d) No adjustment in the number of shares of Common Stock into which any
share of Series A Preferred Stock is convertible shall be required unless
such adjustment would require an increase or decrease of at least 5% in the
number of shares of Common Stock into which a share of Series A Preferred
Stock is then convertible; provided, however, that any adjustments which by
reason of this subdivision (d) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All calculations
under this Section 5.5 shall be made to the nearest cent or to the nearest
one-hundredth of a share, as the case may be.
Whenever such an adjustment is to be made, the Corporation shall forthwith file
with the transfer agent for the Series A Preferred Stock and the Common Stock,
a statement signed by the President or one of the Vice Presidents of the
Corporation and by its Treasurer or an Assistant Treasurer, stating the
adjustment to be made. Such statement shall show in detail the facts requiring
such adjustment. Whenever such an adjustment is to be made, the Corporation will
forthwith cause a notice stating the adjustment to be mailed to the respective
holders of record of Series A Preferred Stock. Where appropriate, such notice
may be given in advance and included as a part of a notice required to be mailed
under the provisions of the following paragraph of this Section 5.5.
In case at any time:
(i) the Corporation shall pay any dividend payable in stock upon its
Common Stock or make any distribution (other than cash dividends) to the
holders of its Common Stock; or
(ii) the Corporation shall offer for subscription pro rata to the
holders of its Common Stock any additional shares of stock of any class or
any other rights; or
(iii) the consolidation or merger of the Corporation with or into
another corporation or the sale or conveyance of all or substantially all
the assets of the Corporation shall be proposed by the Corporation;
then in any one or more of those cases, the Corporation shall cause at least
fifteen days' prior notice to be mailed to the transfer agent for the Series A
Preferred Stock and the Common Stock and to the holders of record of the
outstanding Series A Preferred Stock of the date on which (x) the books of the
Corporation shall close, or a record be taken for such stock dividend,
distribution or subscription rights, or (y) such consolidation or merger or
conveyance shall take place, as the case may be. Such notice shall also specify
the date as of which holders of Common Stock of record shall participate in the
dividend, distribution or subscription rights or shall be entitled to exchange
their Common Stock for securities or other property deliverable upon such
consolidation, merger, sale or conveyance, as the case may be, and shall specify
the proposed transactions in reasonable detail.
5.6 Shares of Series A Preferred Stock converted into Common Stock shall
have the status of authorized and unissued shares of Preferred Stock, and the
number of shares of Preferred Stock which the Corporation shall have authority
to issue shall not be decreased by the conversion of shares of Series A
Preferred Stock.
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5.7 The Corporation shall at all times reserve and keep available, out
of its authorized and unissued Common Stock, solely for the purpose of effecting
the conversion of the Series A Preferred Stock, such number of shares as shall
from time to time be sufficient to effect the conversion of all shares of Series
A Preferred Stock from time to time outstanding. The Corporation shall from time
to time, in accordance with the laws of Indiana increase the authorized amount
of its Common Stock if at any time the number of shares of Common Stock
remaining unissued shall not be sufficient to permit the conversion of all the
then outstanding Series A Preferred Stock.
5.8 No fractions of shares of Common Stock will be issued upon conversion.
In the event that because of any adjustments required to be made by Section 5.5
fractions of shares of Common Stock would be required to be issued upon
conversion, the Corporation will, in lieu of issuing such fractions of shares,
pay to the person otherwise entitled to such fractions the cash value of such
fractions based upon the current market price (as defined in Section 5.9) per
share of Common Stock on the day prior to that on which shares of Series A
Preferred Stock are surrendered by such person for conversion.
5.9 The "current market price" per share of Common Stock as to any
specified day shall be deemed to be the last reported sale price of the Common
Stock for such day (or, if there is no sale on such day, the last bid quotation
for the Common Stock) on the New York Stock Exchange (or, if the Common Stock is
not listed on the New York Stock Exchange, on a national securities exchange
designated by the Corporation) or, if the Common Stock is not listed upon any
national securities exchange, the average of the closing bid and asked
quotations for the Common Stock for such day as furnished by the trading
department of any New York Stock Exchange member firm selected from time to time
by the Corporation for the purpose and deemed by it to be reliable. If an
exchange was not open, or if the Common Stock was not traded on an exchange or
elsewhere, on a day as of which the current market price is to be determined,
the determination of price or quotation shall be made as of the last business
day before such day.
5.10 The Corporation will pay any and all issue and other taxes that may
be payable in respect of any issue or delivery of shares of Common Stock on
conversion of Series A Preferred Stock pursuant hereto. The Corporation shall
not, however, be required to pay any tax which may be payable in respect of any
transfer involved in the issue and delivery of Common Stock in a name other than
that in which the Series A Preferred Stock so converted was registered, and no
such issue or delivery shall be made unless and until the person requesting such
issue has paid to the Corporation the amount of any such tax, or has
established, to the satisfaction of the Corporation, that such tax has been
paid.
5.11 The Corporation covenants that if any shares of Common Stock,
required to be reserved for purposes of conversion of the Series A Preferred
Stock hereunder, require registration with, or approval of, any governmental
authority under any federal or state law or listing on any national securities
exchange, before such shares may be issued upon conversion, the Corporation will
in good faith and as expeditiously as possible take such action as may be
necessary to secure such registration or approval or listing on the relevant
national securities exchange, as the case may be.
Section 6. Consideration for Issue of Series A Preferred Stock.
6.1 Shares of Series A Preferred Stock shall be issued in exchange for
shares of common stock of Chicago Title and Trust Company pursuant to the terms
of the Memorandum of Understanding between this Corporation and Chicago Title
and Trust Company, which memorandum was approved by the Board of Directors of
the Corporation at its special meeting of April 28, 1969. Pursuant to Section 4
of Article V of the Articles of Incorporation, the Board of Directors hereby
fixes as the amount of consideration to be received by the Corporation for the
issue of each share of Series A Preferred Stock, one share of common stock of
Chicago Title and Trust Company.
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CERTIFICATE OF RESOLUTION BY THE BOARD OF DIRECTORS
DETERMINING AND STATING THE DESIGNATION AND THE
RELATIVE RIGHTS, PREFERENCES, QUALIFICATIONS,
LIMITATIONS AND RESTRICTIONS (OTHER THAN VOTING RIGHTS)
OF A SERIES OF A CLASS OF PREFERRED SHARES
OF
LINCOLN NATIONAL CORPORATION
RESOLVED: Pursuant to the authority expressly granted to and
vested in the Board of Directors of the Corporation by the provisions
of the Articles of Incorporation of the Corporation, this Board of
Directors hereby creates and authorizes the issue of a series of the
Preferred Stock of the Corporation, to consist of one thousand (1,000)
shares of Preferred Stock of the Corporation, and this Board of
Directors hereby fixes the designation and the relative rights,
preferences, qualifications, limitations and restrictions (other than
voting rights) of the shares of such series as follows:
ARTICLE ONE. SHORT TERM AUCTION RATE CUMULATIVE PREFERRED STOCK, SERIES B
Section 1. Designation.
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(a) The designation of such series of Preferred Stock shall be "Short
Term Auction Rate Cumulative Preferred Stock, Series B" (hereinafter referred to
as "STAR Preferred").
(b) The number of authorized shares constituting STAR Preferred is
1,000. Shares of STAR Preferred shall be issued with a liquidation value of
$100,000 per share plus accrued dividends and shall be without par value.
Section 2. Definitions.
-----------
As used herein, the following terms shall have the following meanings
(with terms defined in the singular having comparable meanings when used in the
plural and vice versa), unless the context otherwise requires:
(a) "AA Composite Commercial Paper Rate", on any date, shall mean
(i) the interest equivalent of the 60-day rate on commercial paper placed on
behalf of issuers whose corporate bonds are rated "AA" by Standard & Poor's
Corporation or its successor, or the equivalent of such rating by another rating
agency, as made available on a discount
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basis or otherwise by the Federal Reserve Bank of New York for the immediately
preceding Business Day prior to such date, or (ii) in the event that the Federal
Reserve Bank of New York does not make available such a rate, then the
arithmetic average of the interest equivalent of the 60-day rate on commercial
paper placed on behalf of such issuers, as quoted on a discount basis or
otherwise by the Commercial Paper Dealers to the Trust Company or the
Corporation, as the case may be, for the close of business of the immediately
preceding Business Day prior to such date. If any Commercial Paper Dealer does
not quote a rate required to determine the "AA" Composite Commercial Paper
Rate, the "AA" Composite Commercial Paper Rate shall be determined on the basis
of the quotation or quotations furnished by the remaining Commercial Paper
Dealer or Commercial Paper Dealers and any Substitute Commercial Paper Dealer or
Substitute Commercial Paper Dealers selected by the Corporation to provide such
rate or rates not being supplied by any Commercial Paper Dealer or Commercial
Paper Dealers, as the case may be, or, if the Corporation does not select any
such Substitute Commercial Paper Dealer or Substitute Commercial Paper Dealers,
by the remaining Commercial Paper Dealer or Commercial Paper Dealers. If the
Board of Directors of the Corporation shall make the adjustment referred to in
clause (A) of the second sentence of Section 3(b) of this ARTICLE ONE with the
result that (i) the dividend period days (as defined in such subparagraph (b))
shall be less than 70 days, such rate shall be the interest equivalent of the
60-day rate on such commercial paper, (ii) the dividend period days shall be 70
or more days but fewer than 85 days, such rate shall be the arithmetic average
of the interest equivalent of the 60-day and 90-day rates on such commercial
paper, and (iii) the dividend period days shall be 85 or more days but 98 or
less days, such rate shall be the interest equivalent of the 90-day rate on such
commercial paper. For purposes of this definition, the "interest equivalent" of
a rate stated on a discount basis (a "discount rate") for commercial paper of a
given days' maturity shall be equal to the quotient of (A) the discount rate
divided by (B) the difference between (x) 1.00 and (y) a fraction the numerator
of which shall be the product of the discount rate times the number of days in
which such commercial paper matures and the denominator of which shall be 360.
(b) "Applicable Rate" shall have the meaning specified in Section 3(c)(i)
of this ARTICLE ONE.
(c) "Business Day" shall mean a day on which the New York Stock Exchange
is open for trading and which is not a day on which banks in The City of New
York, New York are authorized by law to close.
(d) "Commercial Paper Dealers" shall mean The First Boston Corporation,
Salomon Brothers Inc and Merrill Lynch, Pierce, Fenner & Smith Incorporated, or,
in lieu of any thereof, their respective affiliates or successors.
(e) "Common Shares" shall mean all shares now or hereafter authorized of
the class of common shares of the Corporation presently
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authorized and any other shares into which such shares may hereafter be changed
from time to time.
(f) "Date of Original Issue" means the date on which the Corporation
initially issues shares of STAR Preferred.
(g) "Dividend Payment Date" shall have the meaning specified in Section
3(b) of this ARTICLE ONE.
(h) "Dividend Period" and "Dividend Periods" shall have the respective
meanings specified in Section 3(c)(i) of this ARTICLE ONE.
(i) "Holder" shall mean the holder of shares of STAR Preferred as the same
appears on the stock transfer books of the Corporation.
(j) "Initial Dividend Payment Date" shall have the meaning specified in
Section 3(b) of this ARTICLE ONE.
(k) "Initial Dividend Period" shall have the meaning specified in Section
3(c)(i) of this ARTICLE ONE.
(l) "LIBOR" shall mean for any Dividend Period the average (rounded to the
nearest 1/16 of 1%) of the respective rates per annum quoted by each of the
Reference Banks at which United States dollar deposits for a two-month period in
the amount of U.S. $10,000,000 are offered by such Reference Bank in the London
Interbank market at approximately 11:00 A.M. (London time) on the first day of
such Dividend Period. If any Reference Bank does not quote a rate required to
determine LIBOR, LIBOR shall be determined on the basis of the quotation or
quotations furnished by the remaining Reference Bank or Reference Banks and any
Substitute Reference Bank or Substitute Reference Banks selected by the
Corporation to provide such quotation or quotations not being supplied by any
Reference Bank or Reference Banks, as the case may be, or, if the Corporation
does not select any such Substitute Reference Bank or Substitute Reference
Banks, by the remaining Reference Bank or Reference Banks. If the Board of
Directors of the Corporation shall make the adjustment referred to in clause (A)
of the second sentence of Section 3(b) of this ARTICLE ONE with the result that
(i) the dividend period days (as defined in such subparagraph) shall be less
than 70 days, LIBOR shall be based on the rates per annum quoted for United
States dollar deposits for a two-month period, (ii) the dividend period days
shall be 70 or more days but less than 85 days, LIBOR shall be the arithmetic
average of the rates per annum quoted for the United States dollar deposits for
two-and three-month periods, or (iii) the dividend period days shall be 85 or
more days but 98 or less days, such rate shall be based on the rates per annum
quoted for United States dollar deposits for a three-month period.
(m) "LIBOR Event" shall mean the failure by the Corporation timely to pay
to the Trust Company, not later than 12 Noon, New York City
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time, (i) on the Business Day next preceding any Dividend Payment Date the full
amount of any dividend (whether or not earned or declared) to be paid on such
Dividend Payment Date on any share of STAR Preferred or (ii) on the Business Day
next preceding any redemption date the redemption price to be paid on such
redemption date of any share of STAR Preferred after notice of redemption is
given pursuant to Section 4(b) of this ARTICLE ONE.
(n) "Reference Banks" shall mean the principal London offices of Bank of
America National Trust and Savings Association, Barclays Bank PLC, Citibank,
N.A., Lloyds Bank PLC, Midland Bank PLC and National Westminister Bank PLC, or
their respective successors.
(o) "Subsequent Dividend Period" and "Subsequent Dividend Periods" shall
have the respective meanings specified in Section 3(c)(i) of this ARTICLE ONE.
(p) "Substitute Commercial Paper Dealer" shall mean Goldman, Sachs & Co.
or Lehman Commercial Paper Incorporated, or, in lieu of any thereof, their
respective affiliates or successors.
(q) "Substitute Reference Bank" shall mean the principal London offices of
The Chase Manhattan Bank (National Association), Deutsche Bank
Aktiengesellschaft, Morgan Guaranty Trust Company of New York or Swiss Bank
Corporation, or their respective successors.
(r) "Trust Company" shall mean a bank or trust company appointed as such
by a resolution of the Board of Directors of the Corporation.
Section 3. Dividends.
(a) The Holders of shares of STAR Preferred shall be entitled to receive,
when and as declared by the Board of Directors of the Corporation out of funds
legally available therefor, cumulative cash dividends at the Applicable Rate per
annum thereof, determined as set forth below, and no more, payable on the
respective dates set forth below.
(b) Dividends on shares of STAR Preferred, at the Applicable Rate per
annum, shall accrue from the Date of Original Issue and shall be payable
commencing on the 51st day after the Date of Original Issue and on each day
thereafter which is the last day of successive 49-day periods after such 51st
day after the Date of Original Issue, or if either (i) in the case of the
Initial Dividend Payment Date, such 51st day after the Date of Original Issue
or, in the case of any subsequent Dividend Payment Date, any such last day (in
either case, the "normal day") is not a Business Day or (ii) the day next
succeeding the normal day is not a Business Day, then on the first Business Day
preceding the normal day that is next succeeded by a day that is also a Business
Day, and if any particular Dividend Payment Date does not occur on the normal
day because of the exceptions in clauses (i) or (ii), the next succeeding
Dividend Payment Date shall be, subject to such exceptions, the 49th day
following the normal day for the prior Dividend
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Period. Notwithstanding the foregoing, (A) in the event of a change in law
altering the minimum holding period (currently found in Section 246(c) of the
Internal Revenue Code of 1954, as amended) required for taxpayers to be entitled
to the dividends received deduction on preferred stock held by non-affiliated
corporations (currently found in Section 243(a) of such Code), the Board of
Directors of the Corporation may, subject to clauses (i) and (ii) of this
subparagraph (b), adjust the period of time between Dividend Payment Dates so as
to adjust uniformly the number of days (such number of days without giving
effect to such clauses (i) and (ii) being hereinafter referred to as "dividend
period days") in Dividend Periods commencing after the date of such change in
law to equal or exceed the then current minimum holding period, provided in such
event that the number of dividend period days shall not exceed by more than nine
days the length of such then current minimum holding period and shall be evenly
divisible by seven, and the maximum number of dividend period days in no event
shall exceed 98 days; (B) if, as a result of applying the procedures set forth
in this subparagraph (b) for determining a Dividend Payment Date, the number of
days in any Dividend Period would not equal or exceed the then current minimum
holding period for a taxpayer to be entitled to the dividends received deduction
on preferred stock held by a non-affiliated corporation referred to in clause
(A) of this subparagraph, the Board of Directors of the Corporation may fix the
Dividend Payment Date for that Dividend Period on the first Business Day next
preceding the originally designated normal day, even though the day next
succeeding such Business Day is not a Business Day and (C) in the event of a
default in the payment of a dividend on shares of STAR Preferred, dividends on
shares of STAR Preferred shall thereafter become payable quarterly, commencing
on the 90th day after the Dividend Payment Date on which such default occurred
with respect to any Dividend Period ending during such 90-day period, and on
each day thereafter that is the last day of successive 90-day periods with
respect to any Dividend Period ending during each such 90-day period, in each
case subject to clauses (i) and (ii) of this subparagraph (b), until such time
as no dividend on STAR Preferred shall be in default, in which case, dividends
shall next be payable on the last day of the Dividend Period which includes the
first day on which no dividend was in default and thereafter dividends shall
become payable on the 49th day after the last day of such Dividend Period and on
each day thereafter which is the last day of successive 49-day periods after
such date, subject to clause (i) and (ii) of this subparagraph (b) (each date on
which payment of dividends is due being herein referred to as a "Dividend
Payment Date" and the first Dividend Payment Date being herein referred to as
the "Initial Dividend Payment Date"). Upon any change in the number of dividend
period days as a result of a change in law as set forth in clause (A), or upon a
change as set forth in clause (B) or (C), the Corporation shall give notice of
such change to all Holders by first-class mail, postage prepaid. Each such
dividend shall be paid to the Holders as their names appear on the books and
records of the Corporation on the Business Day next preceding the Dividend
Payment Date thereof; provided, however, that if such dividend shall be
calculated based upon LIBOR, as set forth in Section 3(c)(i) of this ARTICLE
ONE, such dividend shall be paid to the Holders as their names appear on the
books and records of the Corporation on such date, not exceeding 15 days
preceding the payment date
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thereof, as may be fixed by the Board of Directors of the Corporation. Dividends
in arrears for any past Dividend Period may be declared and paid at any time,
without reference to any regular Dividend Payment Date, to the Holders as their
names appear on the books and records of the Corporation on such date, not
exceeding 15 days preceding the payment date thereof, as may be fixed by the
Board of Directors of the Corporation.
(c)(i) The dividend rate on shares of STAR Preferred shall be 8% per annum
during the period from and after the Date of Original Issue to the Initial
Dividend Payment Date (the "Initial Dividend Period"). Commencing the day that
is the Initial Dividend Payment Date, the dividend rate on shares of STAR
Preferred for each Subsequent Dividend Period (as hereinafter defined) shall be
equal to the rate per annum that results from implementation of the Auction
Procedures described in ARTICLE TWO hereof; provided, however, that (A) if a
LIBOR Event shall have occurred prior to the first day of such Subsequent
Dividend Period, the dividend rate for such Subsequent Dividend Period shall be
at a rate per annum equal to LIBOR plus 1/4 of 1% and (B) if there is no Trust
Company on the day prior to the first day of a Dividend Period (unless a LIBOR
Event has occurred), the dividend rate for such Dividend Period shall be at a
rate per annum equal to 110% of the "AA" Composite Commercial Paper Rate, as
determined by the Corporation, on the first day of such Dividend Period. The
rate per annum at which dividends are payable on shares of STAR Preferred for
any Dividend Period (as hereinafter defined) is herein referred to as the
"Applicable Rate".
Each dividend period following the Initial Dividend Period (herein referred
to as a "Subsequent Dividend Period" and collectively as "Subsequent Dividend
Period" and the Initial Dividend Period or any Subsequent Dividend Period being
herein referred to as a "Dividend Period" and collectively as "Dividend
Periods") shall commence on the day that is the last day of the preceding
Dividend Period and shall end on the next succeeding Dividend Payment Date;
provided, however, that if the provisions of clause (C) of Section 3(b) are
applicable, each Dividend Period shall end on the date which would have been the
next succeeding Dividend Payment Date if the provisions of such clause had not
been applicable.
(ii) The amount of dividends payable on each share of STAR Preferred for
any Dividend Period shall be computed by multiplying the Applicable Rate for
such Dividend Period by a fraction the numerator of which shall be the number of
days in the Dividend Period (calculated by counting the first day thereof but
excluding the last day thereof) such share was outstanding and the denominator
of which shall be 360 and applying the rate obtained against $100,000 per share
of STAR Preferred.
(d)(i) Holders of shares of STAR Preferred shall not be entitled to any
interest, or sum of money in lieu of interest, in respect of any dividend
payment or payments on shares of STAR Preferred which may be in arrears.
(ii) Except as otherwise provided in resolutions of the Board of Directors
of the Corporation adopted on May 28, 1969 creating the
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Corporation's $3.00 Cumulative Convertible Preferred Stock, Series A (the
"Series A Preferred Stock"), as such resolutions relate to the payment of
dividends on the Series A Preferred Stock and except as hereinafter provided, no
full dividends shall be declared or paid or set apart for payment on any series
of Preferred Stock for any period unless full cumulative dividends have been or
contemporaneously are declared and paid or declared and a sum sufficient for
payment thereof set apart for such payment on shares of STAR Preferred for the
current and all past Dividend Periods. When dividends are not paid or set apart
in full, as aforesaid, upon the shares of STAR Preferred and any other Preferred
Stock ranking on a parity as to dividends with STAR Preferred, all dividends
declared upon shares of STAR Preferred and any other Preferred Stock ranking on
a parity as to dividends with STAR Preferred shall be declared pro rata so that
the amount of dividends declared per share on STAR Preferred and such other
Preferred Stock ranking on a parity as to dividends with STAR Preferred shall in
all cases bear to each other the same ratio that accrued dividends per share on
the shares of STAR Preferred and such other Preferred Stock ranking on a parity
as to dividends with shares of STAR Preferred bear to each other.
(iii) Except with respect to dividends on the Series A Preferred Stock and
as otherwise provided in paragraph (d)(ii) above, so long as any shares of STAR
Preferred are outstanding, no dividend (other than a dividend payable in Common
Shares or payable in any other stock of the Corporation ranking junior to shares
of STAR Preferred as to dividends and upon liquidation) shall be declared or
paid or set aside for payment or other distribution declared or made upon Common
Shares or upon any other stock of the Corporation ranking junior to or on a
parity with shares of STAR Preferred as to dividends or upon liquidation, nor
shall any such Common Shares or any other stock of the Corporation ranking
junior to or on a parity with shares of STAR Preferred as to dividends or upon
liquation be redeemed, purchased or otherwise acquired for any consideration (or
any moneys be paid to or made available for a sinking fund for the redemption of
any shares of any such stock) by the Corporation (except by conversion into or
exchange for stock of the Corporation ranking junior to shares of STAR Preferred
as to dividends and upon liquidation) unless, in each case, the full cumulative
dividends on all outstanding shares of STAR Preferred shall have been paid or
contemporaneously are declared and paid for the current and all past Dividend
Periods.
Section 4. Redemption.
(a)(i)(A) At the option of the Corporation, shares of STAR Preferred may
be redeemed, as a whole at any time or from time to time in part, on any
Dividend Payment Date at a redemption price equal to:
(I) $103,000 per share if redeemed during the twelve months ending
on the first anniversary of the Date of Original Issue;
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(II) $102,000 per share if redeemed during the twelve months ending
on the second anniversary of the Date of Original Issue;
(III) $101,000 per share if redeemed during the twelve months ending
on the third anniversary of the Date of Original Issue;
(IV) $100,000 per share thereafter;
plus, in each case, accrued and unpaid dividends thereon to the date
fixed for redemption.
(B) If fewer than all the outstanding shares of STAR Preferred are to be
redeemed pursuant to Section 4(a)(i)(A) of this ARTICLE ONE, the number of
shares to be redeemed shall be determined by the Board of Directors of the
Corporation, and such shares shall be redeemed pro rata from the Holders in
proportion to the number of such shares held by such Holders (rounding to the
nearest whole share to avoid redemption of fractional shares).
(ii) At the option of the Corporation, shares of STAR Preferred may be
redeemed, as a whole but not in part, on any Dividend Payment Date at a
redemption price of $100,000 per share, plus accrued and unpaid dividends
thereon to the date fixed for redemption, if the Applicable Rate fixed for the
Dividend Period ending on such Dividend Payment Date shall equal or exceed the
"AA" Composite Commercial Paper Rate on the date of determination of such
Applicable Rate.
(b) In the event the Corporation shall redeem shares of STAR Preferred,
notice of such redemption shall be given by first class mail, postage prepaid,
mailed not less than 30 nor more than 60 days prior to the redemption date, to
each Holder of record of the shares to be redeemed, at such Holder's address as
the same appears on the stock record books of the Corporation. Each such notice
shall state: (i) the redemption date; (ii) the number of shares of STAR
Preferred to be redeemed and, if fewer than all the shares held by such Holder
are to be redeemed, the number of such shares to be redeemed from such Holder;
(iii) the redemption price; (iv) the place or places where certificates for such
shares are to be surrendered for payment of the redemption price; and (v) that
dividends on the shares to be redeemed will cease to accrue on such redemption
date.
(c) Notice having been mailed as aforesaid, and if the Corporation shall
have deposited a sum sufficient to redeem the shares of STAR Preferred as to
which notice of redemption has been given with the Trust Company, with
irrevocable instructions and authority to pay the redemption price to the
Holders thereof upon surrender of certificates therefor or, if no such deposit
is made, then from and after the redemption date (unless default shall be made
by the Corporation in providing money for the payment of the redemption price of
the shares called for redemption), dividends on the shares of STAR Preferred so
called for redemption shall cease to accrue, and said shares shall no longer be
deemed to be outstanding, and all rights of
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the Holders thereof as shareholders of the Corporation (except the right to
receive from the Corporation the redemption price) shall cease and terminate.
Upon surrender in accordance with said notice of the certificates for any shares
so redeemed (properly endorsed or assigned for transfer, if the Board of
Directors of the Corporation shall so require and the notice shall so state),
such shares shall be redeemed by the Corporation at the redemption price
aforesaid but without interest. In case fewer than all the shares represented by
any such certificate are redeemed, a new certificate shall be issued
representing the unredeemed shares without cost to the Holder thereof.
(d) Any shares of STAR Preferred which shall at any time have been
redeemed or purchased by the Corporation shall, after such redemption or
purchase, be cancelled in the manner provided by the laws of the State of
Indiana.
(e) Notwithstanding the foregoing provisions of this Section 4, unless the
full cumulative dividends on all outstanding shares of STAR Preferred shall have
been paid or contemporaneously are declared and paid for all past Dividend
Periods, (i) no shares of STAR Preferred shall be redeemed unless all
outstanding shares of STAR Preferred are simultaneously redeemed, and (ii) the
Corporation shall not purchase or otherwise acquire any shares of STAR Preferred
except pursuant to a purchase or exchange offer made on the same terms to
Holders of all outstanding shares of STAR Preferred.
Section 5. Conversion or Exchange.
The Holders of shares of STAR Preferred shall not have any rights to
convert such shares into or exchange such shares for shares of any other class
or classes or of any other series of any class or classes of capital stock of
the Corporation.
Section 6. Voting.
The shares of STAR Preferred shall have such voting rights as are provided
in Section 5 Article V of the Corporation's Articles of Incorporation.
Section 7. Liquidation Rights.
(a) In the event of the liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, the Holders of shares of STAR
Preferred then outstanding shall be entitled to receive, after payment or
provision for payment of all creditors of the Corporation, but before any
distribution or payment shall be made in respect of the Common Stock or any
other stock of the Corporation ranking junior to shares of STAR Preferred as to
assets on liquidation, dissolution or winding up, an amount equal to $100,000
per share, plus an amount equal to all unpaid dividends thereon accrued on a
daily basis to and including the date fixed for such distribution or payment,
but the Holders shall be entitled to no further participation in any
distribution or payment in connection with any such
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liquidation, dissolution or winding-up. If, upon any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the Corporation, the
net assets of the Corporation distributable among the holders of all outstanding
shares of STAR Preferred and of any other series of Preferred Stock or any other
stock of the Corporation ranking on a parity with STAR Preferred as to assets on
liquidation shall be insufficient to permit the payment in full to such holders
of the preferential amounts to which they are entitled, then the entire net
assets of the Corporation remaining after the distributions to holders of any
stock of the Corporation ranking senior to STAR Preferred to which they may be
entitled shall be distributable among the holders of shares of STAR Preferred
and of any other series of Preferred Stock or of any other stock of the
Corporation ranking on a parity with STAR Preferred as to assets on liquidation
ratably in proportion to the full amounts to which they would otherwise
respectively be entitled.
(b) Neither the consolidation or merger of the Corporation with or into
any other corporation or corporations, nor the sale or transfer by the
Corporation of all or any part of its assets, shall be deemed to be a
liquidation, dissolution or winding up of the Corporation for purposes of this
Section 7. All shares of STAR Preferred and the Corporation's outstanding Series
A Preferred Stock will rank on a parity as to assets upon liquidation.
ARTICLE TWO. AUCTION PROCEDURES
Section 1. Definitions.
Capitalized terms not defined in this Section 1 shall have the respective
meanings specified in Section 2 of ARTICLE ONE. As used in this ARTICLE TWO, the
following terms shall have the following meanings, unless the context otherwise
requires:
(a) "Affiliate" shall mean any Person known to the Trust Company to be
controlled by, in control of or under common control with the Corporation.
(b) "Agent Member" shall mean the member of the Securities Depository that
will act on behalf of a Bidder and is identified as such in such Bidder's
Purchaser's Letter.
(c) "Auction" shall mean the periodic operation of the procedures set
forth in this ARTICLE TWO.
(d) "Auction Date" shall mean the Business Day next preceding a Dividend
Payment Date.
(e) "Available STAR Preferred" shall have the meaning specified in Section
4(a) of this ARTICLE TWO.
(f) "Bid" and "Bids" shall have the respective meanings specified in
Section 2(a) of this ARTICLE TWO.
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(g) "Bidder" and "Bidders" shall have the respective meanings specified in
Section 2(a) of this ARTICLE TWO.
(h) "Broker-Dealer" shall mean any broker-dealer, or other entity
permitted by law to perform the functions required of a Broker-Dealer in this
ARTICLE TWO, that has been selected by the Corporation and has entered into a
Broker-Dealer Agreement with the Trust Company that remains effective.
(i) "Broker-Dealer Agreement" shall mean an agreement between the Trust
Company and a Broker-Dealer pursuant to which such Broker-Dealer agrees to
follow the procedures specified in this ARTICLE TWO.
(j) "Existing Holder," when used with respect to shares of STAR Preferred,
shall mean a Person who has signed a Purchaser's Letter and is listed as the
beneficial owner of shares of STAR Preferred in the records of the Trust
Company.
(k) "Hold Order" and "Hold Orders" shall have the respective meanings
specified in subparagraph 2(a) of this ARTICLE TWO.
(l) "Maximum Rate", on any Auction Date, shall mean the product of (i)
1.10 and (ii) the "AA" Composite Commercial Paper Rate.
(m) "Minimum Rate", on any Auction Date, shall mean the product of (i)
.58 and (ii) the "AA" Composite Commercial Paper Rate.
(n) "Order" and "Orders" shall have the respective meanings specified in
Section 2(a) of this ARTICLE TWO.
(o) "Outstanding" shall mean, as of any date, shares of STAR Preferred
theretofore issued by the Corporation except, without duplication, (i) any
shares of STAR Preferred theretofore cancelled or delivered to the Trust Company
for cancellation or redeemed by the Corporation or as to which a notice of
redemption shall have been given by the Corporation, (ii) any shares of STAR
Preferred as to which the Corporation or any Affiliate thereof (other than a
broker-dealer Affiliate) shall be an Existing Holder and (iii) any shares of
STAR Preferred represented by any certificate in lieu of which a new certificate
has been executed and delivered by the Corporation.
(p) "Person" shall mean and include an individual, a partnership, a
corporation, a trust, an unincorporated association, a joint venture or other
entity or a government or any agency or political subdivision thereof.
(q) "Potential Holder" shall mean any Person, including any Existing
Holder, (i) who shall have executed a Purchaser's Letter and (ii) who may be
interested in acquiring shares of STAR Preferred (or, in the case of an Existing
Holder, additional shares of STAR Preferred).
(r) "Purchaser's Letter" shall mean a letter addressed to the Corporation,
the Trust Company and a Broker-Dealer in which a Person agrees,
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among other things, to offer to purchase, purchase, offer to sell and/or sell
shares of STAR Preferred as set forth in this ARTICLE TWO.
(s) ""Securities Depository'' shall mean The Depository Trust Company and
its successors and assigns or any other securities depository selected by the
Corporation which agrees to follow the procedures required to be followed by
such securities depository in connection with shares of STAR Preferred.
(t) ""Sell Order'' and ""Sell Orders'' shall have the respective meanings
specified in Section 2(a) of this ARTICLE TWO.
(u) ""Submission Deadline'' shall mean 12:30 P.M., New York City time, on
any Auction Date or such other time on any Auction Date by which Broker-Dealers
are required to submit Orders to the Trust Company as specified by the Trust
Company from time to time.
(v) ""Submitted Bid'' and ""Submitted Bids'' shall have the respective
meanings specified in Section 4(a) of this ARTICLE TWO.
(w) ""Submitted Hold Order'' and ""Submitted Hold Orders'' shall have the
respective meanings specified in Section 4(a) of this ARTICLE TWO.
(x) ""Submitted Order'' and ""Submitted Orders'' shall have the respective
meanings specified in Section 4(a) of this ARTICLE TWO.
(y) ""Submitted Sell Order'' and ""Submitted Sell Orders'' shall have the
respective meanings specified in Section 4(a) of this ARTICLE TWO.
(z) ""Sufficient Clearing Bids'' shall have the meaning specified in Section
4(a) of this ARTICLE TWO.
(aa) ""Winning Bid Rate'' shall have the meaning specified in Section 4(a)
of this ARTICLE TWO.
Section 2. Orders by Existing Holders and Potential Holders.
(a) On or prior to each Auction Date and prior to the Submission Deadline:
(i) each Existing Holder may submit to a Broker-Dealer by telephone
information as to:
(A) the number of Outstanding shares, if any, of STAR Preferred held
by such Existing Holder which such Existing Holder desires to continue to
hold without regard to the Applicable Rate for the next succeeding
Dividend Period;
(B) the number of Outstanding shares, if any, of STAR Preferred that
such Existing Holder desires to continue to hold if the Applicable Rate
for the next succeeding Dividend Period shall
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not be less than the rate per annum specified by such Existing Holder;
and/or
(C) the number of Outstanding shares, if any, of STAR Preferred held by
such Existing Holder which such Existing Holder offers to sell without
regard to the Applicable Rate for the next succeeding Dividend Period;
and
(ii) each Broker-Dealer, using a list of Potential Holders that shall be
maintained by such Broker-Dealer in good faith for the purpose of conducting a
competitive Auction, shall contact Potential Holders on such list to determine
the number of shares, if any, of STAR Preferred which each such Potential
Holder offers to purchase if the Applicable Rate for the next succeeding
Dividend Period shall be not less than the rate per annum specified by such
Potential Holder.
For the purposes hereof, the communication to a Broker-Dealer of information
referred to in clause (i)(A), (i)(B), (i)(C) or (ii) of this Section 2(a) is
hereinafter referred to as an "Order" and collectively as "Orders" and each
Existing Holder and each Potential Holder placing an Order is hereinafter
referred to as a "Bidder" and collectively as "Bidders"; an Order containing
the information referred to in clause (i)(A) of this Section 2(a) is
hereinafter referred to as a "Hold Order" and collectively as "Hold Orders";
an Order containing the information referred to in clause (i)(B) or (ii) of
this Section 2(a) is hereinafter referred to as a "Bid" and collectively as
"Bids"; and an Order containing the information referred to in clause (i)(C)
of this Section 2(a) is hereinafter referred to as a "Sell Order" and
collectively as "Sell Orders"
(b)(i) A Bid by an Existing Holder shall constitute an irrevocable offer to
sell:
(A) the number of Outstanding shares of STAR Preferred specified in such
Bid if the Applicable Rate determined on such Auction Date shall be less
than such specified rate; or
(B) such number or a lesser number to be determined as set forth in
clause (iv) of Section 5(a) of this ARTICLE TWO if the Applicable Rate
determined on such Auction Date shall be equal to such specified rate: or
(C) a lesser number to be determined as set forth in clause (iii) of
Section 5(b) of this ARTICLE TWO if such specified rate shall be higher than
the Maximum Rate and Sufficient Clearing Bids do not exist.
(ii) A Sell Order by an Existing Holder shall constitute an irrevocable
offer to sell:
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(A) the number of shares specified in such Sell Order; or
(B) such number or a lesser number as set forth in clause (iii) of
Section 5(b) of this ARTICLE TWO if Sufficient Clearing Bids do not
exist.
(iii) A bid by a Potential Holder shall constitute an irrevocable offer
to purchase:
(A) the number of shares of STAR Preferred specified in such Bid if
the Applicable Rate determined on such Auction Date shall be higher
than such specified rate; or
(B) such number or a lesser number as set forth in clause (v) of
Section 5(a) of this ARTICLE TWO if the Applicable Rate determined on
such Auction Date shall be equal to such specified rate.
Section 3. Submission of Orders by Broker-Dealers to Trust Company.
-------------------------------------------------------
(a) Each Broker-Dealer shall submit in writing to the Trust Company prior to
the Submission Deadline on each Auction Date all Orders obtained by such Broker-
Dealer and specifying with respect to each Order:
(i) the name of the Bidder placing such Order;
(ii) the aggregate number of shares of STAR Preferred that are the subject
of such Order:
(iii) to the extent that such Bidder is an Existing Holder:
(A) the number of shares, if any, of STAR Preferred subject to any
Hold Order placed by such Existing Holder;
(B) the number of shares, if any, of STAR Preferred subject to any
Bid placed by such Existing Holder and the rate specified in such
Bid; and
(C) the number of shares, if any, of STAR Preferred subject to any
Sell Order placed by such Existing Holder;
and
(iv) to the extent that such Bidder is a Potential Holder, the rate
specified in such Potential Holder's Bid.
(b) If any rate specified in any Bid contains more than three figures to the
right of the decimal point, the Trust Company shall round such rate up to the
next highest one thousandth (.OOl) of 1%.
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(c) If an Order or Orders covering all of the Outstanding shares of STAR
Preferred held by any Existing Holder is not submitted to the Trust Company
prior to the Submission Deadline, the Trust Company shall deem a Hold Order to
have been submitted on behalf of such Existing Holder covering the number of
Outstanding shares of STAR Preferred held by such Existing Holder and not
subject to Orders submitted to the Trust Company.
(d) If one or more Orders covering in the aggregate more than the number of
Outstanding shares of STAR Preferred held by any Existing Holder are submitted
to the Trust Company, such Orders shall be considered valid as follows and in
the following order of priority:
(i) any Hold Order submitted on behalf of such Existing Holder shall be
considered valid up to and including the number of Outstanding shares of STAR
Preferred held by such Existing Holder; provided that if more than one Hold
Order is submitted on behalf of such Existing Holder and the number of shares
of STAR Preferred subject to such Hold Orders exceeds the number of
Outstanding shares of STAR Preferred held by such Existing Holder, the number
of shares of STAR Preferred subject to such Hold Orders shall be reduced pro
rata so that such Hold Orders shall cover the number of Outstanding shares of
STAR Preferred held by such Existing Holder;
(ii)(A) any Bid shall be considered valid up to and including the excess of
the number of Outstanding shares of STAR Preferred held by such Existing
Holder over the number of shares of STAR Preferred subject to Hold Orders
referred to in clause (i) of this Section 3(d), (B) subject to subclause (A),
if more than one Bid with the same rate is submitted on behalf of such
Existing Holder and the number of Outstanding shares of STAR Preferred
subject to such Bids is greater than such excess, the number of shares of
STAR Preferred subject to such Bids shall be reduced pro rata so that such
Bids shall cover the number of shares of STAR Preferred equal to such excess,
and (C) subject to subclause (A), if more than one Bid with different rates
is submitted on behalf of such Existing Holder, such Bids shall be considered
valid in the ascending order of their respective rates; and in any such
event, the number, if any, of such Outstanding shares subject to Bids not
valid under this clause (ii) shall be treated as the subject of a Bid by a
Potential Holder; and
(iii) any Sell Order shall be considered valid up to and including the
excess of the number of Outstanding shares of STAR Preferred held by such
Existing Holder over the sum of the shares of STAR Preferred subject to Hold
Orders referred to in clause (i) of this Section 3(d) and Bids referred to in
clause (ii) of this Section 3(d); provided that if more than one Sell Order
is submitted on behalf of any Existing Holder and the number of shares of
STAR Preferred subject to such Sell Orders is greater than such excess, the
number of Outstanding shares of STAR Preferred subject to such Sell Orders
shall be reduced pro rata so that such Sell Orders shall cover the number of
Outstanding shares of STAR Preferred equal to such excess.
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(e) If more than one Bid is submitted on behalf of any Potential Holder, each
Bid submitted shall be a separate Bid with the rate and number of shares of STAR
Preferred therein specified.
(f) If any rate specified in any Bid is lower than the Minimum Rate for the
Dividend Period with respect to which such Bid relates, such Bid shall be
deemed to be a Bid specifying a rate equal to such Minimum Rate.
Section 4. Determination of Sufficient Clearing Bids, Winning Bid Rate and
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Applicable Rate.
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(a) Not earlier than the Submission Deadline on each Auction Date, the Trust
Company shall assemble all Orders submitted or deemed submitted to it by the
Broker-Dealers (each such Order as submitted or deemed submitted by a Broker-
Dealer being hereinafter referred to individually as a "Submitted Hold Order," a
"Submitted Bid" or a "Submitted Sell Order", as the case may be, or as a
"Submitted Order" and collectively as "Submitted Hold Orders," "Submitted Bids"
or "Submitted Sell Orders," as the case may be, or as "Submitted Orders") and
shall determine:
(i) the excess of the total number of Outstanding shares of STAR Preferred
over the number of Outstanding shares of STAR Preferred that are the subject
of Submitted Hold Orders (such excess being hereinafter referred to as the
"Available STAR Preferred");
(ii) from the Submitted Orders whether:
(A) the number of Outstanding shares of STAR Preferred that are
the subject of Submitted Bids by Potential Holders specifying one or
more rates equal to or lower than the Maximum Rate;
exceeds or is equal to the sum of:
(B)(I) the number of Outstanding shares of STAR Preferred that are
the subject of Submitted Bids by Existing Holders specifying one or
more rates higher than the Maximum Rate; and
(II) the number of Outstanding shares of STAR Preferred that are
subject to Submitted Sell Orders
(in the event of such excess or such equality (other than because the number of
shares of STAR Preferred in clauses (A) and (B) are each zero because all of the
Outstanding shares of STAR Preferred are the subject of Submitted Hold Orders),
such Submitted Bids in clause (A) being hereinafter referred to collectively as
"Sufficient Clearing Bids"); and
(iii) if Sufficient Clearing Bids exist, the lowest rate specified in the
Submitted Bids (the "Winning Bid Rate") which if:
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(A)(I) each Submitted Bid from Existing Holders specifying such lowest
rate and (II) all other Submitted Bids from Existing Holders specifying
lower rates were accepted, thus entitling such Existing Holders to continue
to hold the shares of STAR Preferred that are the subject of such Submitted
Bids, and
(B)(I) each Submitted Bid from Potential Holders specifying such lowest
rate and (II) all other Submitted Bids from Potential Holders specifying
lower rates were accepted,
would result in such Existing Holders continuing to hold an aggregate number
of Outstanding shares of STAR Preferred which, when added to the number of
Outstanding shares of STAR Preferred to be purchased by such Potential
Holders, would equal not less than the Available STAR Preferred.
(b) Promptly after the Trust Company has made the determinations pursuant to
Section 4(a) of this ARTICLE TWO, the Trust Company shall advise the Company of
the Maximum Rate and the Minimum Rate and, based on such determinations, the
Applicable Rate for the next succeeding Dividend Period as follows:
(i) if Sufficient Clearing Bids exist, that the Applicable Rate for the
next succeeding Dividend Period shall be equal to the Winning Bid Rate;
(ii) if Sufficient Clearing Bids do not exist (other than because all of
the Outstanding shares of STAR Preferred are the subject of Submitted Hold
Orders), that the Applicable Rate for the next Succeeding Dividend Period
shall be equal to the Maximum Rate; or
(iii) if all of the Outstanding shares of STAR Preferred are the subject
of Submitted Hold Orders, that the Applicable Rate for the next succeeding
Dividend Period shall be equal to the Minimum Rate.
Section 5. Acceptance and Rejection of Submitted Bids and Submitted Sell Orders
--------------------------------------------------------------------
and Allocation of Shares.
- ------------------------
Based on the determinations made pursuant to Section 4(a) of this ARTICLE TWO,
the Submitted Bids and Submitted Sell Orders shall be accepted or rejected and
the Trust Company shall take such other action as set forth below:
(a) If Sufficient Clearing Bids have been made, subject to the provisions of
Sections 5(c) and 5(d) of this ARTICLE TWO, Submitted Bids and Submitted Sell
Orders shall be accepted or rejected as follows in the following order of
priority and all other Submitted Bids shall be rejected:
(i) the Submitted Sell Orders of Existing Holders shall be accepted and
the Submitted Bid of each of the Existing Holders
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specifying any rate that is higher than the Winning Bid Rate shall be rejected,
thus requiring each such Existing Holder to sell the shares of STAR Preferred
that are the subject of such Submitted Bid;
(ii) the Submitted Bid of each of the Existing Holders specifying any rate
that is lower than the Winning Bid Rate shall be accepted, thus entitling each
such Existing Holder to continue to hold the shares of STAR Preferred that are
the subject of such Submitted Bid;
(iii) the Submitted Bid of each of the Potential Holders specifying any rate
that is lower than the Winning Bid Rate shall be accepted;
(iv) the Submitted Bid of each of the Existing Holders specifying a rate that
is equal to the Winning Bid Rate shall be accepted, thus entitling each such
Existing Holder to continue to hold the shares of STAR Preferred that are the
subject of such Submitted Bid, unless the number of Outstanding shares of STAR
Preferred subject to all such Submitted Bids shall be greater than the number of
shares of STAR Preferred ("remaining shares") equal to the excess of the
Available STAR Preferred over the number of shares of STAR Preferred subject to
Submitted Bids described in clauses (ii) and (iii) of this Section 5(a), in
which event each such Existing Holder shall be required to sell shares of Star
Preferred, but only in an amount equal to the difference between (A) the number
of Outstanding shares of STAR Preferred then held by such Existing Holder
subject to such Submitted Bid and (B) the number of shares of STAR Preferred
obtained by multiplying the number of remaining shares by a fraction the
numerator of which shall be the number of Outstanding shares of STAR Preferred
held by such Existing Holder subject to such Submitted Bid and the denominator
of which shall be the sum of the number of Outstanding shares of STAR Preferred
subject to such Submitted Bids made by all such Existing Holders that specified
a rate equal to the Winning Bid Rate; and
(v) the Submitted Bid of each of the Potential Holders specifying a rate
that is equal to the Winning Bid Rate shall be accepted but only in an amount
equal to the number of shares of STAR Preferred obtained by multiplying the
difference between the Available STAR Preferred and the number of shares of STAR
Preferred subject to Submitted Bids described in clauses (ii), (iii) and (iv) of
this Section 5(a) by a fraction the numerator of which shall be the number of
Outstanding shares of STAR Preferred subject to such Submitted Bid and the
denominator of which shall be the sum of the number of Outstanding shares of
STAR Preferred subject to such Submitted Bids made by all such Potential Holders
that specified rates equal to the Winning Bid Rate.
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(b) If Sufficient Clearing Bids have not been made (other than because all of
the Outstanding shares of STAR Preferred are subject to Submitted Hold Orders),
subject to the provisions of Sections 5(c) and 5(d) of this ARTICLE TWO,
Submitted Orders shall be accepted or rejected as follows in the following order
of priority and all other Submitted Bids shall be rejected:
(i) the Submitted Bid of each Existing Holder specifying any rate
that is equal to or lower than the Maximum Rate shall be accepted, thus
entitling such Existing Holder to continue to hold the shares of STAR
Preferred that are the subject of such Submitted Bid;
(ii) the Submitted Bid of each Potential Holder specifying any rate
that is equal to or lower than the Maximum Rate shall be accepted; and
(iii) the Submitted B1ds of each Existing Holder specifying any rate
that is higher than the Maximum Rate shall be rejected, thus requiring each
such Existing Holder to sell the shares of STAR Preferred that are the
subject of such Submitted Bid, and the Submitted Sell Orders of each
Existing Holder shall be accepted, in both cases only in an amount equal to
the difference between (A) the number of Outstanding shares of STAR
Preferred then held by such Existing Holder subject to such Submitted Bid
or Submitted Sell Order and (B) the number of shares of STAR Preferred
obtained by multiplying the difference between the Available STAR Preferred
and the aggregate number of shares of STAR Preferred subject to Submitted
Bids described in clauses (i) and (ii) of this Section 5(b) by a fraction
the numerator of which shall be the number of Outstanding shares of STAR
Preferred held by such Existing Holder subject to such Submitted Bid or
Submitted Sell Order and the denominator of which shall be the number of
Outstanding shares of STAR Preferred subject to all such Submitted Bids and
Submitted Sell Orders.
(c) If as a result of the procedures described in Sections 5(a) or 5(b) of
this ARTICLE TWO, any Existing Holder would be entitled or required to sell, or
any Potential Holder would be entitled or required to purchase, a fraction of a
share of STAR Preferred on any Auction Date, the Trust Company shall, in such
manner as, in its sole discretion, it shall determine, round up or down the
number of shares of STAR Preferred to be purchased or sold by any Existing
Holder or Potential Holder on such Auction Date so that the number of shares
purchased or sold by each Existing Holder or Potential Holder on such Auction
Date shall be whole shares of STAR Preferred.
(d) If as a result of the procedures described in Section 5(a) of this ARTICLE
TWO, any Potential Holder would be entitled or required to purchase less than a
whole share of STAR Preferred on any Auction Date, the Trust Company shall, in
such manner as, in its sole discretion, it shall determine, allocate shares for
purchase among Potential Holders so that only
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whole shares of STAR Preferred are purchased on such Auction Date by any
Potential Holder, even if such allocation results in one or more of such
Potential Holders not purchasing shares of STAR Preferred on such Auction Date.
(e) Based on the results of each Auction, the Trust Company shall determine
the aggregate number of shares of STAR Preferred to be purchased and the
aggregate number of shares of STAR Preferred to be sold by Potential Holders and
Existing Holders on whose behalf each Broker-Dealer submitted Bids or Sell
Orders, and, with respect to each Broker-Dealer, to the extent that such
aggregate number of shares to be purchased and such aggregate number of shares
to be sold differ, determine to which other Broker-Dealer or Broker-Dealers
acting for one or more purchasers such Broker-Dealer shall deliver, or from
which other Broker-Dealer or Broker-Dealers acting for one or more sellers such
Broker-Dealer shall receive, as the case may be, shares of STAR Preferred.
Section 6. Participation in Auctions.
-------------------------
Neither the Company nor any Affiliate of the Company may submit a Bid in any
Auction.
Section 7. Miscellaneous.
-------------
The Board of Directors of the Corporation may interpret or adjust the
provisions of this ARTICLE TWO to resolve any inconsistency or ambiguity, remedy
any formal defect or make any other change or modification which does not
adversely affect the rights of Existing Holders of STAR Preferred. During the
Initial Dividend Period and so long as the Applicable Rate is based on the
results of an Auction, (a) shares of STAR Preferred may be sold, transferred or
otherwise disposed of only pursuant to a Bid or Sell Order in accordance with
the procedures described in this ARTICLE TWO or to or through a Broker-Dealer or
to a Person that has delivered a signed copy of a Purchaser's Letter to the
Trust Company, provided that in the case of all transfers other than pursuant to
Auctions the transferor, its Broker-Dealer or its Agent Member advises the Trust
Company of such transfer, and (b) except as otherwise provided by law or if
there is no Securities Depository, all Outstanding shares of STAR Preferred
shall be represented by a certificate or certificates registered in the name of
the nominee of the Securities Depository, and no Person acquiring shares of STAR
Preferred shall be entitled to receive a certificate representing such shares.
As long as the Applicable Rate is not based on LIBOR, the Corporation shall be
obligated to exercise its best efforts to maintain a Trust Company pursuant to
an agreement containing terms no less favorable to the Corporation than the
terms of the agreement first entered into by the Corporation pursuant to the
resolutions adopted by the Board of Directors of the Corporation on October 16,
1984.
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Section 8. Headings of Subdivisions.
------------------------
The headings of the various subdivisions of this ARTICLE TWO are for
convenience of reference only and shall not affect the interpretation of any of
the provisions hereof.
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[Series C]
CERTIFICATE OF RESOLUTION BY THE BOARD OF DIRECTORS
DETERMINING AND STATING THE DESIGNATION AND THE
RELATIVE RIGHTS, PREFERENCES, QUALIFICATIONS,
LIMITATIONS AND RESTRICTIONS (OTHER THAN VOTING RIGHTS)
OF A SERIES OF A CLASS OF PREFERRED SHARES
OF
LINCOLN NATIONAL CORPORATION
RESOLVED: Pursuant to the authority expressly granted to
and vested in the Board of Directors of the Corporation
by the provisions of the Articles of Incorporation of the
Corporation, this Board of Directors hereby creates and
authorizes the issue of a series of the Preferred Stock
of the Corporation, to consist of five hundred (500)
shares of Preferred Stock of the Corporation, and this
Board of Directors hereby fixes the designation and the
relative rights, preferences, qualifications,
limitations and restrictions (other than voting rights)
of the shares of such series as follows:
ARTICLE ONE. SHORT TERM AUCTION RATE CUMULATIVE PREFERRED STOCK, SERIES C
Section 1. Designation.
-----------
(a) The designation of such series of Preferred Stock shall be "Short Term
Auction Rate Cumulative Preferred Stock, Series C" (hereinafter referred to as
"Series C STAR Preferred").
(b) The number of authorized shares constituting Series C STAR Preferred is
500. Shares of Series C STAR Preferred shall be issued with a liquidation value
of $100,000 per share plus accrued dividends and shall be without par value.
Section 2. Definitions.
-----------
As used herein, the following terms shall have the following meanings (with
terms defined in the singular having comparable meanings when used in the plural
and vice versa), unless the context otherwise requires:
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(a) "AA Composite Commercial Paper Rate", on any date, shall mean (i) the
interest equivalent of the 60-day rate on commercial paper placed on behalf of
issuers whose corporate bonds are rated "AA" by Standard & Poor's Corporation
or its successor, or the equivalent of such rating by another rating agency, as
made available on a discount basis or otherwise by the Federal Reserve Bank of
New York for the immediately preceding Business Day prior to such date, or (ii)
in the event that the Federal Reserve Bank of New York does not make available
such a rate, then the arithmetic average of the interest equivalent of the
60-day rate on commercial paper placed on behalf of such issuers, as quoted on a
discount basis or otherwise by the Commercial Paper Dealers to the Trust Company
or the Corporation, as the case may be, for the close of business of the
immediately preceding Business Day prior to such date. If any Commercial Paper
Dealer does not quote a rate required to determine the "AA" Composite
Commercial Paper Rate, the "AA" Composite Commercial Paper Rate shall be
determined on the basis of the quotation or quotations furnished by the
remaining Commercial Paper Dealer or Commercial Paper Dealers and any Substitute
Commercial Paper Dealer or Substitute Commercial Paper Dealers selected by the
Corporation to provide such rate or rates not being supplied by any Commercial
Paper Dealer or Commercial Paper Dealers, as the case may be, or, if the
Corporation does not select any such Substitute Commercial Paper Dealer or
Substitute Commercial Paper Dealers, by the remaining Commercial Paper Dealer or
Commercial Paper Dealers. If the Board of Directors of the Corporation shall
make the adjustment referred to in clause (A) of the second sentence of Section
3(b) of this ARTICLE ONE with the result that (i) the dividend period days (as
defined in such subparagraph (b)) shall be less than 70 days, such rate shall be
the interest equivalent of the 60-day rate on such commercial paper, (ii) the
dividend period days shall be 70 or more days but fewer than 85 days, such rate
shall be the arithmetic average of the interest equivalent of the 60-day and
90-day rates on such commercial paper, and (iii) the dividend period days shall
be 85 or more days but 98 or less days, such rate shall be the interest
equivalent of the 90-day rate on such commercial paper. For purposes of this
definition, the "interest equivalent" of a rate stated on a discount basis (a
"discount rate") for commercial paper of a given days' maturity shall be equal
to the quotient of (A) the discount rate divided by (B) the difference between
(x) 1.00 and (y) a fraction the numerator of which shall be the product of
the discount rate times the number of days in which such commercial paper
matures and the denominator of which shall be 360.
(b) "Applicable Rate" shall have the meaning specified in Section 3(c)(i)
of this ARTICLE ONE.
(c) "Business Day" shall mean a day on which the New York Stock Exchange
is open for trading and which is not a day on which banks in The City of New
York, New York are authorized by law to close.
(d) "Commercial Paper Dealers" shall mean Salomon Brothers Inc, The First
Boston Corporation, and Merrill Lynch, Pierce, Fenner & Smith
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<PAGE>
Incorporated, or, in lieu of any thereof, their respective affiliates or
successors.
(e) "Common Shares" shall mean all shares now or hereafter authorized
of the class of common shares of the Corporation presently authorized and
any other shares into which such shares may hereafter be changed from time
to time.
(f) "Date of Original Issue" means the date on which the Corporation
initially issues shares of Series C STAR Preferred.
(g) "Dividend Payment Date" shall have the meaning specified in Section
3(b) of this ARTICLE ONE.
(h) "Dividend Period" and "Dividend Periods" shall have the respective
meanings specified in Section 3(c)(i) of this ARTICLE ONE.
(i) "Holder" shall mean the holder of shares of Series C STAR Preferred
as the same appears on the stock transfer books of the Corporation.
(j) "Initial Dividend Payment Date" shall have the meaning specified in
Section 3(b) of this ARTICLE ONE.
(k) "Initial Dividend Period" shall have the meaning specified in Section
3(c)(i) of this ARTICLE ONE.
(l) "LIBOR" shall mean for any Dividend Period the average (rounded to
the nearest 1/16 of 1%) of the respective rates per annum quoted by each of the
Reference Banks at which United States dollar deposits for a two-month period in
the amount of U.S. $10,000,000 are offered by such Reference Bank in the London
interbank market at approximately 11:00 A.M. (London time) on the first day of
such Dividend Period. If any Reference Bank does not quote a rate required to
determine LIBOR, LIBOR shall be determined on the basis of the quotation or
quotations furnished by the remaining Reference Bank or Reference Banks and any
Substitute Reference Bank or Substitute Reference Banks selected by the
Corporation to provide such quotation or quotations not being supplied by any
Reference Bank or Reference Banks, as the case may be, or, if the Corporation
does not select any such Substitute Reference Bank or Substitute Reference
Banks, by the remaining Reference Bank or Reference Banks. If the Board of
Directors of the Corporation shall make the adjustment referred to in clause (A)
of the second sentence of Section 3(b) of this ARTICLE ONE with the result that
(i) the dividend period days (as defined in such subparagraph) shall be less
than 70 days, LIBOR shall be based on the rates per annum quoted for United
States dollar deposits for a two-month period, (ii) the dividend period days
shall be 70 or more days but less than 85 days, LIBOR shall be the arithmetic
average of the rates per annum quoted for United States dollar deposits for
two- and three-month periods, or (iii) the dividend period days shall be 85
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or more days but 98 or less days, such rate shall be based on the rates per
annum quoted for United States dollar deposits for a three-month period.
(m) "LIBOR Event" shall mean the failure by the Corporation timely to pay to
the Trust Company, not later than 12 Noon, New York City time, (i) on the
Business Day next preceding any Dividend Payment Date the full amount of any
dividend (whether or not earned or declared) to be paid on such Dividend Payment
Date on any share of Series C STAR Preferred or (ii) on the Business Day next
preceding any redemption date the redemption price to be paid on such redemption
date of any share of Series C STAR Preferred after notice of redemption is given
pursuant to Section 4(b) of this ARTICLE ONE.
(n) "Reference Banks" shall mean the principal London offices of Bank of
America National Trust and Savings Association, Barclays Bank PLC, Citibank,
N.A., Lloyds Bank PLC, Midland Bank PLC and National Westminster Bank PLC, or
their respective successors.
(o) "Subsequent Dividend Period" and "Subsequent Dividend Periods" shall
have the respective meanings specified in Section 3(c)(i) of this ARTICLE ONE.
(p) "Substitute Commercial Paper Dealer" shall mean Goldman, Sachs & Co. or
Lehman Commercial Paper Incorporated, or, in lieu of any thereof, their
respective affiliates or successors.
(q) "Substitute Reference Bank" shall mean the principal London offices of
The Chase Manhattan Bank (National Association), Deutsche Bank
Aktiengesellschaft, Morgan Guaranty Trust Company of New York or Swiss Bank
Corporation, or their respective successors.
(r) "Trust Company" shall mean a bank or trust company appointed as such by
a resolution of the Board of Directors of the Corporation.
Section 3. Dividends.
---------
(a) The Holders of shares of Series C STAR Preferred shall be entitled to
receive, when and as declared by the Board of Directors of the Corporation out
of funds legally available therefor, cumulative cash dividends at the Applicable
Rate per annum thereof, determined as set forth below, and no more, payable on
the respective dates set forth below.
(b) Dividends on shares of Series C STAR Preferred, at the Applicable Rate
per annum, shall accrue from the Date of Original Issue and shall be payable
commencing on the 51st day after the Date of Original Issue and on each day
thereafter which is the last day of successive 49-day periods after such 51st
day after the Date of Original Issue, or if either (i) in the case of the
Initial Dividend Payment Date, such 51st day after the Date of Original Issue
or, in the case of any subsequent Dividend Payment Date, any such last day (in
either case, the "normal day") is not a Business Day or
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(ii) the day next succeeding the normal day is not a Business Day, then on the
first Business Day preceding the normal day that is next succeeded by a day that
is also a Business Day, and if any particular Dividend Payment Date does not
occur on the normal day because of the exceptions in clauses (i) or (ii), the
next succeeding Dividend Payment Date shall be, subject to such exceptions, the
49th day following the normal day for the prior Dividend Period. Notwithstanding
the foregoing, (A) in the event of a change in law altering the minimum holding
period (currently found in Section 246(c) of the Internal Revenue Code of 1954,
as amended) required for taxpayers to be entitled to the dividends received
deduction on preferred stock held by non-affiliated corporations (currently
found in Section 243(a) of such Code), the Board of Directors of the Corporation
may, subject to clauses (i) and (ii) of this subparagraph (b), adjust the period
of time between Dividend Payment Dates so as to adjust uniformly the number of
days (such number of days without giving effect to such clauses (i) and (ii)
being hereinafter referred to as "dividend period days") in Dividend Periods
commencing after the date of such change in law to equal or exceed the then
current minimum holding period, provided in such event that the number of
dividend period days shall not exceed by more than nine days the length of such
then current minimum holding period and shall be evenly divisible by seven, and
the maximum number of dividend period days in no event shall exceed 98 days; (B)
if, as a result of applying the procedures set forth in this subparagraph (b)
for determining a Dividend Payment Date, the number of days in any Dividend
Period would not equal or exceed the then current minimum holding period for a
taxpayer to be entitled to the dividends received deduction on preferred stock
held by a non-affiliated corporation referred to in clause (A) of this
subparagraph, the Board of Directors of the Corporation may fix the Dividend
Payment Date for that Dividend Period on the first Business Day next preceding
the originally designated normal day, even though the day next succeeding such
Business Day is not a Business Day and (C) in the event of a default in the
payment of a dividend on shares of Series C STAR Preferred, dividends on shares
of Series C STAR Preferred shall thereafter become payable quarterly, commencing
on the 90th day after the Dividend Payment Date on which such default occurred
with respect to any Dividend Period ending during such 90-day period, and on
each day thereafter that is the last day of successive 90-day periods with
respect to any Dividend Period ending during each such 90-day period, in each
case subject to clauses (i) and (ii) of this subparagraph (b), until such time
as no dividend on Series C STAR Preferred shall be in default, in which case,
dividends shall next be payable on the last day of the Dividend Period which
includes the first day on which no dividend was in default and thereafter
dividends shall become payable on the 49th day after the last day of such
Dividend Period and on each day thereafter which is the last day of successive
49-day periods after such date, subject to clauses (i) and (ii) of this
subparagraph (b) (each date on which payment of dividends is due being herein
referred to as a "Dividend Payment Date" and the first Dividend Payment Date
being herein referred to as the "Initial Dividend Payment Date"). Upon any
change in the number of dividend period days as a result of a change in law as
set forth in clause (A), or upon a change as set forth in clause (B) or (C), the
Corporation shall give notice of such change to all Holders by first class mail,
postage prepaid. Each such dividend shall
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be paid to the Holders as their names appear on the books and records of the
Corporation on the Business Day next preceding the Dividend Payment Date
thereof; provided, however, that if such dividend shall be calculated based upon
LIBOR, as set forth in Section 3(c)(i) of this ARTICLE ONE, such dividend shall
be paid to the Holders as their names appear on the books and records of the
Corporation on such date, not exceeding 15 days preceding the payment date
thereof, as may be fixed by the Board of Directors of the Corporation. Dividends
in arrears for any past Dividend Period may be declared and paid at any time,
without reference to any regular Dividend Payment Date, to the Holders as their
names appear on the books and records of the Corporation on such date, not
exceeding 15 days preceding the payment date thereof, as may be fixed by the
Board of Directors of the Corporation.
(c)(i) The dividend rate on shares of Series C STAR Preferred shall be
6.25% per annum during the period from and after the Date of Original Issue to
the Initial Dividend Payment Date (the "Initial Dividend Period"). Commencing
the day that is the Initial Dividend Payment Date, the dividend rate on shares
of Series C STAR Preferred for each Subsequent Dividend Period (as hereinafter
defined) shall be equal to the rate per annum that results from implementation
of the Auction Procedures described in ARTICLE TWO hereof; provided, however,
that (A) if a LIBOR Event shall have occurred prior to the first day of such
Subsequent Dividend Period, the dividend rate for such Subsequent Dividend
Period shall be at a rate per annum equal to LIBOR plus 1/4 of 1% and (B) if
there is no Trust Company on the day prior to the first day of a Dividend Period
(unless a LIBOR Event has occurred), the dividend rate for such Dividend Period
shall be at a rate per annum equal to 110% of the "AA" Composite Commercial
Paper Rate, as determined by the Corporation, on the first day of such Dividend
Period. The rate per annum at which dividends are payable on shares of Series C
STAR Preferred for any Dividend Period (as hereinafter defined) is herein
referred to as the "Applicable Rate".
Each dividend period following the Initial Dividend Period (herein referred
to as a "Subsequent Dividend Period" and collectively as "Subsequent Dividend
Periods" and the Initial Dividend Period or any Subsequent Dividend Period being
herein referred to as a "Dividend Period" and collectively as "Dividend
Periods") shall commence on the day that is the last day of the preceding
Dividend Period and shall end on the next succeeding Dividend Payment Date;
provided, however, that if the provisions of clause (C) of Section 3(b) are
applicable, each Dividend Period shall end on the date which would have been the
next succeeding Dividend Payment Date if the provisions of such clause had not
been applicable.
(ii) The amount of dividends payable on each share of Series C STAR
Preferred for any Dividend Period shall be computed by multiplying the
Applicable Rate for such Dividend Period by a fraction the numerator of which
shall be the number of days in the Dividend Period (calculated by counting the
first day thereof but excluding the last day thereof) such share was outstanding
and the denominator of which shall be 360 and applying the rate obtained against
$100,000 per share of Series C STAR Preferred.
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(d)(i) Holders of shares of Series C STAR Preferred shall not be entitled
to any interest, or sum of money in lieu of interest, in respect of any dividend
payment or payments on shares of Series C STAR Preferred which may be in
arrears.
(ii) Except as otherwise provided in resolutions of the Board of Directors
of the Corporation adopted on May 28, 1969 creating the Corporation's $3.00
Cumulative Convertible Preferred Stock, Series A (the "Series A Preferred
Stock"), as such resolutions relate to the payment of dividends on the Series A
Preferred Stock and except as hereinafter provided, no full dividends shall be
declared or paid or set apart for payment on any series of Preferred Stock for
any period unless full cumulative dividends have been or contemporaneously are
declared and paid or declared and a sum sufficient for payment thereof set apart
for such payment on shares of Series C STAR Preferred for the current and all
past Dividend Periods. When dividends are not paid or set apart in full, as
aforesaid, upon the shares of Series C STAR Preferred and any other Preferred
Stock ranking on a parity as to dividends with Series C STAR Preferred, all
dividends declared upon shares of Series C STAR Preferred and any other
Preferred Stock ranking on a parity as to dividends with Series C STAR Preferred
shall be declared pro rata so that the amount of dividends declared per share on
Series C STAR Preferred and such other Preferred Stock ranking on a parity as to
dividends with Series C STAR Preferred shall in all cases bear to each other the
same ratio that accrued dividends per share on the shares of Series C STAR
Preferred and such other Preferred Stock ranking on a parity as to dividends
with shares of Series C STAR Preferred bear to each other.
(iii) Except with respect to dividends on the Series A Preferred Stock and
as otherwise provided in paragraph (d)(ii) above, so long as any shares of
Series C STAR Preferred are outstanding, no dividend (other than a dividend
payable in Common Shares or payable in any other stock of the Corporation
ranking junior to shares of Series C STAR Preferred as to dividends and upon
liquidation) shall be declared or paid or set aside for payment or other
distribution declared or made upon Common Shares or upon any other stock of the
Corporation ranking junior to or on a parity with shares of Series C STAR
Preferred as to dividends or upon liquidation, nor shall any such Common Shares
or any other stock of the Corporation ranking junior to or on a parity with
shares of Series C STAR Preferred as to dividends or upon liquidation be
redeemed, purchased or otherwise acquired for any consideration (or any moneys
be paid to or made available for a sinking fund for the redemption of any shares
of any such stock) by the Corporation (except by conversion into or exchange for
stock of the Corporation ranking junior to shares of Series C STAR Preferred as
to dividends and upon liquidation) unless, in each case, the full cumulative
dividends on all outstanding shares of Series C STAR Preferred shall have been
paid or contemporaneously are declared and paid for the current and all past
Dividend Periods.
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Section 4. Redemption.
----------
(a)(i)(A) At the option of the Corporation, shares of Series C STAR
Preferred may be redeemed, as a whole at any time or from time to time in part,
on any Dividend Payment Date at a redemption price equal to:
(I) $103,000 per share if redeemed during the twelve months ending on
the first anniversary of the Date of Original Issue;
(II) $102,000 per share if redeemed during the twelve months ending on
the second anniversary of the Date of Original Issue;
(III) $101,000 per share if redeemed during the twelve months ending on
the third anniversary of the Date of Original Issue;
(IV) $100,000 per share thereafter;
plus, in each case, accrued and unpaid dividends thereon to the date fixed for
redemption.
(B) If fewer than all the outstanding shares of Series C STAR Preferred are
to be redeemed pursuant to Section 4(a)(i)(A) of this ARTICLE ONE, the number of
shares to be redeemed shall be determined by the Board of Directors of the
Corporation, and such shares shall be redeemed pro rata from the Holders in
proportion to the number of such shares held by such Holders (rounding to the
nearest whole share to avoid redemption of fractional shares).
(ii) At the option of the Corporation, shares of Series C STAR Preferred may
be redeemed, as a whole but not in part, on any Dividend Payment Date at a
redemption price of $100,000 per share, plus accrued and unpaid dividends
thereon to the date fixed for redemption, if the Applicable Rate fixed for the
Dividend Period ending on such Dividend Payment Date shall equal or exceed the
"AA" Composite Commercial Paper Rate on the date of determination of such
Applicable Rate.
(b) In the event the Corporation shall redeem shares of Series C STAR
Preferred, notice of such redemption shall be given by first class mail, postage
prepaid, mailed not less than 30 nor more than 60 days prior to the redemption
date, to each Holder of record of the shares to be redeemed, at such Holder's
address as the same appears on the stock record books of the Corporation. Each
such notice shall state: (i) the redemption date; (ii) the number of shares of
Series C STAR Preferred to be redeemed and, if fewer than all the shares held by
such Holder are to be redeemed, the number of such shares to be redeemed from
such Holder; (iii) the redemption price; (iv) the place or places where
certificates for such shares are to be surrendered for payment of the redemption
price; and (v) that dividends on the shares to be redeemed will cease to accrue
on such redemption date.
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(c) Notice having been mailed as aforesaid, and if the Corporation shall have
deposited a sum sufficient to redeem the shares of Series C STAR Preferred as to
which notice of redemption has been given with the Trust Company, with
irrevocable instructions and authority to pay the redemption price to the
Holders thereof upon surrender of certificates therefor or, if no such deposit
is made, then from and after the redemption date (unless default shall be made
by the Corporation in providing money for the payment of the redemption price of
the shares called for redemption), dividends on the shares of Series C STAR
Preferred so called for redemption shall cease to accrue, and said shares shall
no longer be deemed to be outstanding, and all rights of the Holders thereof as
shareholders of the Corporation (except the right to receive from the
Corporation the redemption price) shall cease and terminate. Upon surrender in
accordance with said notice of the certificates for any shares so redeemed
(properly endorsed or assigned for transfer, if the Board of Directors of the
Corporation shall so require and the notice shall so state), such shares shall
be redeemed by the Corporation at the redemption price aforesaid but without
interest. In case fewer than all the shares represented by any such certificate
are redeemed, a new certificate shall be issued representing the unredeemed
shares without cost to the Holder thereof.
(d) Any shares of Series C STAR Preferred which shall at any time have been
redeemed or purchased by the Corporation shall, after such redemption or
purchase, be cancelled in the manner provided by the laws of the State of
Indiana.
(e) Notwithstanding the foregoing provisions of this Section 4, unless the
full cumulative dividends on all outstanding shares of Series C STAR Preferred
shall have been paid or contemporaneously are declared and paid for all past
Dividend Periods, (i) no shares of Series C STAR Preferred shall be redeemed
unless all outstanding shares of Series C STAR Preferred are simultaneously
redeemed, and (ii) the Corporation shall not purchase or otherwise acquire any
shares of Series C STAR Preferred except pursuant to a purchase or exchange
offer made on the same terms to Holders of all outstanding shares of Series C
STAR Preferred.
Section 5. Conversion or Exchange.
----------------------
The Holders of shares of Series C STAR Preferred shall not have any rights to
convert such shares into or exchange such shares for shares of any other class
or classes or of any other series of any class or classes of capital stock of
the Corporation.
Section 6. Voting.
------
The shares of Series C STAR Preferred shall have such voting rights as are
provided in Section 5 Article V of the Corporation's Articles of Incorporation.
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Section 7. Liquidation Rights.
------------------
(a) In the event of the liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, the Holders of shares of Series C
STAR Preferred then outstanding shall be entitled to receive, after payment or
provision for payment of all creditors of the Corporation, but before any
distribution or payment shall be made in respect of the Common Stock or any
other stock of the Corporation ranking junior to shares of Series C STAR
Preferred as to assets on liquidation, dissolution or winding up, an amount
equal to $100,000 per share, plus an amount equal to all unpaid dividends
thereon accrued on a daily basis to and including the date fixed for such
distribution or payment, but the Holders shall be entitled to no further
participation in any distribution or payment in connection with any such
liquidation, dissolution or winding up. If, upon any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the Corporation, the
net assets of the Corporation distributable among the Holders of all outstanding
shares of Series C STAR Preferred and of any other series of Preferred Stock or
any other stock of the Corporation ranking on a parity with Series C STAR
Preferred as to assets on liquidation shall be insufficient to permit the
payment in full to such Holders of the preferential amounts to which they are
entitled, then the entire net assets of the Corporation remaining after the
distribution to Holders of any stock of the Corporation ranking senior to Series
C STAR Preferred to which they may be entitled shall be distributable among the
holders of shares of Series C STAR Preferred and of any other series of
Preferred Stock or of any other stock of the Corporation ranking on a parity
with Series C STAR Preferred as to assets on liquidation ratably in proportion
to the full amounts to which they would otherwise respectively be entitled.
(b) Neither the consolidation or merger of the Corporation with or into any
other corporation or corporations, nor the sale or transfer by the Corporation
of all or any part of its assets, shall be deemed to be a liquidation,
dissolution or winding up of the Corporation for purposes of this Section 7.
All shares of Series C STAR Preferred, the Corporation's outstanding Series A
Preferred Stock, the Corporation's outstanding Short Term Auction Rate
Cumulative Preferred Stock, Series B and the Corporation's authorized Short Term
Auction Rate Cumulative Preferred Stock, Series D will rank on a parity as to
assets upon liquidation.
ARTICLE TWO. AUCTION PROCEDURES
Section 1. Definitions.
-----------
Capitalized terms not defined in this Section 1 shall have the respective
meanings specified in Section 2 of ARTICLE ONE. As used in this ARTICLE TWO, the
following terms shall have the following meanings, unless the context otherwise
requires:
(a) "Affiliate" shall mean any Person known to the Trust Company to be
controlled by, in control of or under common control with the Corporation.
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(b) "Agent Member" shall mean the member of the Securities Depository that
will act on behalf of a Bidder and is identified as such in such Bidder's
Purchaser's Letter.
(c) "Auction" shall mean the periodic operation of the procedures set forth
in this ARTICLE TWO.
(d) "Auction Date" shall mean the Business Day next preceding a Dividend
Payment Date.
(e) "Available STAR Preferred" shall have the meaning specified in Section
4(a) of this ARTICLE TWO.
(f) "Bid" and "Bids" shall have the respective meanings specified in Section
2(a) of this ARTICLE TWO.
(g) "Bidder" and "Bidders" shall have the respective meanings specified in
Section 2(a) of this ARTICLE TWO.
(h) "Broker-Dealer" shall mean any broker-dealer, or other entity permitted
by law to perform the functions required of a Broker-Dealer in this ARTICLE TWO,
that has been selected by the Corporation and has entered into a Broker-Dealer
Agreement with the Trust Company that remains effective.
(i) "Broker-Dealer Agreement" shall mean an agreement between the Trust
Company and a Broker-Dealer pursuant to which such Broker-Dealer agrees to
follow the procedures specified in this ARTICLE TWO.
(j) "Existing Holder," when used with respect to shares of Series C STAR
Preferred, shall mean a Person who has signed a Purchaser's Letter and is listed
as the beneficial owner of shares of Series C STAR Preferred in the records of
the Trust Company.
(k) "Hold Order" and "Hold Orders" shall have the respective meanings
specified in subparagraph 2(a) of this ARTICLE TWO.
(l) "Maximum Rate", on any Auction Date, shall mean the product of (i) 1.10
and (ii) the "AA" Composite Commercial Paper Rate.
(m) "Minimum Rate", on any Auction Date, shall mean the product of (i) .58
and (ii) the "AA" Composite Commercial Paper Rate.
(n) "Order" and "Orders" shall have the respective meanings specified in
Section 2(a) of this ARTICLE TWO.
(o) "Outstanding" shall mean, as of any date, shares of Series C STAR
Preferred theretofore issued by the Corporation except, without duplication, (i)
any shares of Series C STAR Preferred theretofore cancelled or delivered to the
Trust Company for cancellation or redeemed by the Corporation or as to which a
notice of redemption shall have been given by the Corporation, (ii) any shares
of Series C STAR Preferred as to which the Corporation or
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any Affiliate thereof (other than a broker-dealer Affiliate) shall be an
Existing Holder and (iii) any shares of Series C STAR Preferred represented by
any certificate in lieu of which a new certificate has been executed and
delivered by the Corporation.
(p) "Person" shall mean and include an individual, a partnership, a
corporation, a trust, an unincorporated association, a joint venture or other
entity or a government or any agency or political subdivision thereof.
(q) "Potential Holder" shall mean any Person, including any Existing Holder,
(i) who shall have executed a Purchaser's Letter and (ii) who may be interested
in acquiring shares of Series C STAR Preferred (or, in the case of an Existing
Holder, additional shares of Series C STAR Preferred).
(r) "Purchaser's Letter" shall mean a letter addressed to the Corporation, the
Trust Company and a Broker-Dealer in which a Person agrees, among other things,
to offer to purchase, purchase, offer to sell and/or sell shares of Series C
STAR Preferred as set forth in this ARTICLE TWO.
(s) "Securities Depository" shall mean The Depository Trust Company and its
successors and assigns or any other securities depository selected by the
Corporation which agrees to follow the procedures required to be followed by
such securities depository in connection with shares of Series C STAR Preferred.
(t) "Sell Order" and "Sell Orders" shall have the respective meanings
specified in Section 2(a) of this ARTICLE TWO.
(u) "Submission Deadline" shall mean 12:30 P.M., New York City time, on any
Auction Date or such other time on any Auction Date by which Broker-Dealers are
required to submit Orders to the Trust Company as specified by the Trust Company
from time to time.
(v) "Submitted Bid" and "Submitted Bids" shall have the respective meanings
specified in Section 4(a) of this ARTICLE TWO.
(w) "Submitted Hold Order" and "Submitted Hold Orders" shall have the
respective meanings specified in Section 4(a) of this ARTICLE TWO.
(x) "Submitted Order" and "Submitted Orders" shall have the respective
meanings specified in Section 4(a) of this ARTICLE TWO.
(y) "Submitted Sell Order" and "Submitted Sell Orders" shall have the
respective meanings specified in Section 4(a) of this ARTICLE TWO.
(z) "Sufficient Clearing Bids" shall have the meaning specified in Section
4(a) of this ARTICLE TWO.
(aa) "Winning Bid Rate" shall have the meaning specified in Section 4(a) of
this ARTICLE TWO.
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Section 2. Orders by Existing Holders and Potential Holders.
------------------------------------------------
(a) On or prior to each Auction Date and prior to the Submission Deadline:
(i) each Existing Holder may submit to a Broker-Dealer by telephone
information as to:
(A) the number of Outstanding shares, if any, of Series C STAR
Preferred held by such Existing Holder which such Existing Holder
desires to continue to hold without regard to the Applicable Rate for
the next succeeding Dividend Period;
(B) the number of Outstanding shares, if any, of Series C STAR
Preferred that such Existing Holder desires to continue to hold if the
Applicable Rate for the next succeeding Dividend Period shall not be
less than the rate per annum specified by such Existing Holder; and/or
(C) the number of Outstanding shares, if any, of Series C STAR
Preferred held by such Existing Holder which such Existing Holder offers
to sell without regard to the Applicable Rate for the next succeeding
Dividend Period;
and
(ii) each Broker-Dealer, using a list of Potential Holders that shall be
maintained by such Broker-Dealer in good faith for the purpose of conducting
a competitive Auction, shall contact Potential Holders on such list to
determine the number of shares, if any, of Series C STAR Preferred which
each such Potential Holder offers to purchase if the Applicable Rate for the
next succeeding Dividend Period shall be not less than the rate per annum
specified by such Potential Holder.
For the purposes hereof, the communication to a Broker-Dealer of information
referred to in clause (i)(A), (i)(B), (i)(C) or (ii) of this Section 2(a) is
hereinafter referred to as an "Order" and collectively as "Orders" and each
Existing Holder and each Potential Holder placing an Order is hereinafter
referred to as a "Bidder" and collectively as "Bidders"; an Order containing
the information referred to in clause (i)(A) of this Section 2(a) is
hereinafter referred to as a "Hold Order" and collectively as "Hold Orders";
an Order containing the information referred to in clause (i)(B) or (ii) of
this Section 2(a) is hereinafter referred to as a "Bid" and collectively as
"Bids"; and an Order containing the information referred to in clause (i)(C)
of this Section 2(a) is hereinafter referred to as a "Sell Order" and
collectively as "Sell Orders."
(b)(i) A Bid by an Existing Holder shall constitute an irrevocable offer to
sell:
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(A) the number of Outstanding shares of Series C STAR
Preferred specified in such Bid if the Applicable Rate determined on
such Auction Date shall be less than such specified rate; or
(B) such number or a lesser number to be determined as set forth
in clause (iv) of Section 5(a) of this ARTICLE TWO if the Applicable
Rate determined on such Auction Date shall be equal to such specified
rate; or
(C) a lesser number to be determined as set forth in clause
(iii) of Section 5(b) of this ARTICLE TWO if such specified rate
shall be higher than the Maximum Rate and Sufficient Clearing Bids do
not exist.
(ii) A Sell Order by an Existing Holder shall constitute an
irrevocable offer to sell:
(A) the number of shares specified in such Sell Order; or
(B) such number or a lesser number as set forth in clause (iii)
of Section 5(b) of this ARTICLE TWO if Sufficient Clearing Bids do
not exist.
(iii) A bid by a Potential Holder shall constitute an irrevocable
offer to purchase:
(A) the number of shares of Series C STAR Preferred specified in
such Bid if the Applicable Rate determined on such Auction Date shall
be higher than such specified rate; or
(B) such number or a lesser number as set forth in clause (v) of
Section 5(a) of this ARTICLE TWO if the Applicable Rate determined on
such Auction Date shall be equal to such specified rate.
Section 3. Submission of Orders by Broker-Dealers to Trust Company.
-------------------------------------------------------
(a) Each Broker-Dealer shall submit in writing to the Trust Company prior to
the Submission Deadline on each Auction Date all Orders obtained by such Broker-
Dealer and specifying with respect to each Order:
(i) the name of the Bidder placing such Order;
(ii) the aggregate number of shares of Series C STAR Preferred that are
the subject of such Order;
(iii) to the extent that such Bidder is an Existing Holder:
(A) the number of shares, if any, of Series C STAR Preferred
subject to any Hold Order placed by such Existing Holder;
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(B) the number of shares, if any, of Series C STAR Preferred
subject to any Bid placed by such Existing Holder and the rate
specified in such Bid; and
(C) the number of shares, if any, of Series C STAR Preferred
subject to any Sell Order placed by such Existing Holder;
and
(iv) to the extent that such Bidder is a Potential Holder, the rate
specified in such Potential Holder's Bid.
(b) If any rate specified in any Bid contains more than three figures to the
right of the decimal point, the Trust Company shall round such rate up to the
next highest one thousandth (.001) of 1%.
(c) If an Order or Orders covering all of the Outstanding shares of Series C
STAR Preferred held by any Existing Holder is not submitted to the Trust Company
prior to the Submission Deadline, the Trust Company shall deem a Hold Order to
have been submitted on behalf of such Existing Holder covering the number of
Outstanding shares of Series C STAR Preferred held by such Existing Holder
and not subject to Orders submitted to the Trust Company.
(d) If one or more Orders covering in the aggregate more than the number of
Outstanding shares of Series C STAR Preferred held by any Existing Holder are
submitted to the Trust Company, such Orders shall be considered valid as follows
and in the following order of priority:
(i) any Hold Order submitted on behalf of such Existing Holder shall be
considered valid up to and including the number of Outstanding shares of
Series C STAR Preferred held by such Existing Holder; provided that if more
than one Hold Order is submitted on behalf of such Existing Holder and the
number of shares of Series C STAR Preferred subject to such Hold Orders
exceeds the number of Outstanding shares of Series C STAR Preferred held by
such Existing Holder, the number of shares of Series C STAR Preferred subject
to such Hold Orders shall be reduced pro rata so that such Hold Orders shall
cover the number of Outstanding shares of Series C STAR Preferred held by such
Existing Holder;
(ii)(A) any Bid shall be considered valid up to and including the excess
of the number of Outstanding shares of Series C STAR Preferred held by such
Existing Holder over the number of shares of Series C STAR Preferred subject
to Hold Orders referred to in clause (i) of this Section 3(d), (B) subject to
subclause (A), if more than one Bid with the same rate is submitted on behalf
of such Existing Holder and the number of Outstanding shares of Series C STAR
Preferred subject to such Bids is greater than such excess, the number of
shares of Series C STAR Preferred subject to such Bids shall be reduced pro
rata so that such Bids shall cover the number of shares of Series C STAR
Preferred equal
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to such excess, and (C) subject to subclause (A), if more than one Bid with
different rates is submitted on behalf of such Existing Holder, such Bids
shall be considered valid in the ascending order of their respective rates;
and in any such event, the number, if any, of such Outstanding shares subject
to Bids not valid under this clause (ii) shall be treated as the subject of a
Bid by a Potential Holder; and
(iii) any Sell Order shall be considered valid up to and including the excess
of the number of Outstanding shares of Series C STAR Preferred held by such
Existing Holder over the sum of the shares of Series C STAR Preferred subject
to Hold Orders referred to in clause (i) of this Section 3(d) and Bids
referred to in clause (ii) of this Section 3(d); provided that if more than
one Sell Order is submitted on behalf of any Existing Holder and the number
of shares of Series C STAR Preferred subject to such Sell Orders is greater
than such excess, the number of Outstanding shares of Series C STAR Preferred
subject to such Sell Orders shall be reduced pro rata so that such Sell
Orders shall cover the number of Outstanding shares of Series C STAR
Preferred equal to such excess.
(e) If more than one Bid is submitted on behalf of any Potential Holder, each
Bid submitted shall be a separate Bid with the rate and number of shares of
Series C STAR Preferred therein specified.
(f) If any rate specified in any Bid is lower than the Minimum Rate for the
Dividend Period with respect to which such Bid relates, such Bid shall be deemed
to be a Bid specifying a rate equal to such Minimum Rate.
Section 4. Determination of Sufficient Clearing Bids, Winning Bid Rate and
---------------------------------------------------------------
Applicable Rate.
- ---------------
(a) Not earlier than the Submission Deadline on each Auction Date, the Trust
Company shall assemble all Orders submitted or deemed submitted to it by the
Broker-Dealers (each such Order as submitted or deemed submitted by a Broker-
Dealer being hereinafter referred to individually as a "Submitted Hold Order," a
"Submitted Bid" or a "Submitted Sell Order", as the case may be, or as a
"Submitted Order" and collectively as "Submitted Hold Orders," "Submitted Bids"
or "Submitted Sell Orders," as the case may be, or as "Submitted Orders") and
shall determine:
(i) the excess of the total number of Outstanding shares of Series C STAR
Preferred over the number of Outstanding shares of Series C STAR Preferred
that are the subject of Submitted Hold Orders (such excess being hereinafter
referred to as the "Available STAR Preferred");
(ii) from the Submitted Orders whether:
(A) the number of Outstanding shares of Series C STAR Preferred
that are the subject of Submitted Bids by Potential Holders
specifying one or more rates equal to or lower than the Maximum Rate;
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exceeds or is equal to the sum of:
(B)(I) the number of Outstanding shares of Series C STAR
Preferred that are the subject of Submitted Bids by Existing Holders
specifying one or more rates higher than the Maximum Rate; and
(II) the number of Outstanding shares of Series C STAR Preferred
that are subject to Submitted Sell Orders
(in the event of such excess or such equality (other than because the number
of shares of Series C STAR Preferred in clauses (A) and (B) are each zero
because all of the Outstanding shares of Series C STAR Preferred are the
subject of Submitted Hold Orders), such Submitted Bids in clause (A) being
hereinafter referred to collectively as "Sufficient Clearing Bids"); and
(iii) if Sufficient Clearing Bids exist, the lowest rate specified in the
Submitted Bids (the "Winning Bid Rate") which if:
(A)(I) each Submitted Bid from Existing Holders specifying such
lowest rate and (II) all other Submitted Bids from Existing Holders
specifying lower rates were accepted, thus entitling such Existing
Holders to continue to hold the shares of Series C STAR Preferred that
are the subject of such Submitted Bids, and
(B)(I) each Submitted Bid from Potential Holders specifying such
lowest rate and (II) all other Submitted Bids from Potential Holders
specifying lower rates were accepted,
would result in such Existing Holders continuing to hold an aggregate number
of Outstanding shares of Series C STAR Preferred which, when added to the
number of Outstanding shares of Series C STAR Preferred to be purchased by
such Potential Holders, would equal not less than the Available STAR
Preferred.
(b) Promptly after the Trust Company has made the determinations pursuant to
Section 4(a) of this ARTICLE TWO, the Trust Company shall advise the Company of
the Maximum Rate and the Minimum Rate and, based on such determinations, the
Applicable Rate for the next succeeding Dividend Period as follows:
(i) if Sufficient Clearing Bids exist, that the Applicable Rate for the
next succeeding Dividend Period shall be equal to the Winning Bid Rate;
(ii) if Sufficient Clearing Bids do not exist (other than because all of
the Outstanding shares of Series C STAR Preferred are the subject of
Submitted Hold Orders), that the Applicable Rate for the next Succeeding
Dividend Period shall be equal to the Maximum Rate; or
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(iii) if all of the Outstanding shares of Series C STAR Preferred are the
subject of Submitted Hold Orders, that the Applicable Rate for the next
succeeding Dividend Period shall be equal to the Minimum Rate.
Section 5. Acceptance and Rejection of Submitted Bids and Submitted Sell
---------------------------------------------------------------
Orders and Allocation of Shares.
- --------------------------------
Based on the determinations made pursuant to Section 4(a) of this ARTICLE TWO,
the Submitted Bids and Submitted Sel1 Orders shall be accepted or rejected and
the Trust Company shall take such other action as set forth below:
(a) If Sufficient Clearing Bids have been made, subject to the provisions of
Sections 5(c) and 5(d) of this ARTICLE TWO, Submitted Bids and Submitted Sell
Orders shall be accepted or rejected as follows in the following order of
priority and all other Submitted Bids shall be rejected:
(i) the Submitted Sell Orders of Existing Holders shall be accepted
and the Submitted Bid of each of the Existing Holders specifying any rate
that is higher than the Winning Bid Rate shall be rejected, thus requiring
each such Existing Holder to sell the shares of Series C STAR Preferred
that are the subject of such Submitted Bid;
(ii) the Submitted Bid of each of the Existing Holders specifying any
rate that is lower than the Winning Bid Rate shall be accepted, thus
entitling each such Existing Holder to continue to hold the shares of
Series C STAR Preferred that are the subject of such Submitted Bid;
(iii) the Submitted Bid of each of the Potential Holders
specifying any rate that is lower than the Winning Bid Rate shall be
accepted;
(iv) the Submitted Bid of each of the Existing Holders
specifying a rate that is equal to the Winning Bid Rate shall be accepted,
thus entitling each such Existing Holder to continue to hold the shares of
Series C STAR Preferred that are the subject of such Submitted Bid, unless
the number of Outstanding shares of Series C STAR Preferred subject to all
such Submitted Bids shall be greater than the number of shares of Series C
STAR Preferred ("remaining shares") equal to the excess of the Available
STAR Preferred over the number of shares of Series C STAR Preferred
subject to Submitted Bids described in clauses (ii) and (iii) of this
Section 5(a), in which event each such Existing Holder shall be required
to sell shares of Series C STAR Preferred, but only in an amount equal to
the difference between (A) the number of Outstanding shares of Series C
STAR Preferred then held by such Existing Holder subject to such Submitted
Bid and (B) the number of shares of Series C STAR Preferred obtained by
multiplying the number of remaining shares by a fraction the numerator of
which
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shall be the number of Outstanding shares of Series C STAR Preferred held
by such Existing Holder subject to such Submitted Bid and the denominator
of which shall be the sum of the number of Outstanding shares of Series C
STAR Preferred subject to such Submitted Bids made by all such Existing
Holders that specified a rate equal to the Winning Bid Rate; and
(v) the Submitted Bid of each of the Potential Holders specifying a rate
that is equal to the Winning Bid Rate shall be accepted but only in an
amount equal to the number of shares of Series C STAR Preferred obtained
by multiplying the difference between the Available STAR Preferred and the
number of shares of Series C STAR Preferred subject to Submitted Bids
described in clauses (ii), (iii) and (iv) of this Section 5(a) by a
fraction the numerator of which shall be the number of Outstanding shares
of Series C STAR Preferred subject to such Submitted Bid and the
denominator of which shall be the sum of the number of Outstanding shares
of Series C STAR Preferred subject to such Submitted Bids made by all such
Potential Holders that specified rates equal to the Winning Bid Rate.
(b) If Sufficient Clearing Bids have not been made (other than because all of
the Outstanding shares of Series C STAR Preferred are subject to Submitted Hold
Orders), subject to the provisions of Sections 5(c) and 5(d) of this ARTICLE
TWO, Submitted Orders shall be accepted or rejected as follows in the following
order of priority and all other Submitted Bids shall be rejected:
(i) the Submitted Bid of each Existing Holder specifying any
rate that is equal to or lower than the Maximum Rate shall be accepted,
thus entitling such Existing Holder to continue to hold the shares of
Series C STAR Preferred that are the subject of such Submitted Bid;
(ii) the Submitted Bid of each Potential Holder specifying any rate
that is equal to or lower than the Maximum Rate shall be accepted; and
(iii) the Submitted Bids of each Existing Holder specifying any rate
that is higher than the Maximum Rate shall be rejected, thus requiring
each such Existing Holder to sell the shares of Series C STAR Preferred
that are the subject of such Submitted Bid, and the Submitted Sell Orders
of each Existing Holder shall be accepted, in both cases only in an amount
equal to the difference between (A) the number of Outstanding shares of
Series C STAR Preferred then held by such Existing Holder subject to such
Submitted Bid or Submitted Sell Order and (B) the number of shares of
Series C STAR Preferred obtained by multiplying the difference between the
Available STAR Preferred and the aggregate number of shares of Series C
STAR Preferred subject to Submitted Bids described in clauses (i) and (ii)
of this Section 5(b) by a fraction the
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numerator of which shall be the number of Outstanding shares of Series C
STAR Preferred held by such Existing Holder subject to such Submitted Bid
or Submitted Sell Order and the denominator of which shall be the number
of Outstanding shares of Series C STAR Preferred subject to all such
Submitted Bids and Submitted Sell Orders.
(c) If as a result of the procedures described in Sections 5(a) or 5(b) of
this ARTICLE TWO, any Existing Holder would be entitled or required to sell, or
any Potential Holder would be entitled or required to purchase, a fraction of a
share of Series C STAR Preferred on any Auction Date, the Trust Company shall,
in such manner as, in its sole discretion, it shall determine, round up or down
the number of shares of Series C STAR Preferred to be purchased or sold by any
Existing Holder or Potential Holder on such Auction Date so that the number of
shares purchased or sold by each Existing Holder or Potential Holder on such
Auction Date shall be whole shares of Series C STAR Preferred.
(d) If as a result of the procedures described in Section 5(a) of this ARTICLE
TWO, any Potential Holder would be entitled or required to purchase less than a
whole share of Series C STAR Preferred on any Auction Date, the Trust Company
shall, in such manner as, in its sole discretion, it shall determine, allocate
shares for purchase among Potential Holders so that only whole shares of Series
C STAR Preferred are purchased on such Auction Date by any Potential Holder,
even if such allocation results in one or more of such Potential Holders not
purchasing shares of Series C STAR Preferred on such Auction Date.
(e) Based on the results of each Auction, the Trust Company shall determine
the aggregate number of shares of Series C STAR Preferred to be purchased and
the aggregate number of shares of Series C STAR Preferred to be sold by
Potential Holders and Existing Holders on whose behalf each Broker-Dealer
submitted Bids or Sell Orders, and, with respect to each Broker-Dealer, to the
extent that such aggregate number of shares to be purchased and such aggregate
number of shares to be sold differ, determine to which other Broker-Dealer or
Broker-Dealers acting for one or more purchasers such Broker-Dealer shall
deliver, or from which other Broker-Dealer or Broker-Dealers acting for one or
more sellers such Broker-Dealer shall receive, as the case may be, shares of
Series C STAR Preferred.
Section 6. Participation in Auctions.
-------------------------
Neither the Company nor any Affiliate of the Company may submit a Bid in any
Auction.
Section 7. Miscellaneous.
-------------
The Board of Directors of the Corporation may interpret or adjust the
provisions of this ARTICLE TWO to resolve any inconsistency or ambiguity, remedy
any formal defect or make any other change or modification which does
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not adversely affect the rights of Existing Holders of Series C STAR Preferred.
During the Initial Dividend Period and so long as the Applicable Rate is based
on the results of an Auction, (a) shares of Series C STAR Preferred may be sold,
transferred or otherwise disposed of only pursuant to a Bid or Sell Order in
accordance with the procedures described in this ARTICLE TWO or to or through a
Broker-Dealer or to a Person that has delivered a signed copy of a Purchaser's
Letter to the Trust Company, provided that in the case of all transfers other
than pursuant to Auctions the transferor, its Broker-Dealer or its Agent Member
advises the Trust Company of such transfer, and (b) except as otherwise provided
by law or if there is no Securities Depository, all Outstanding shares of Series
C STAR Preferred shall be represented by a certificate or certificates
registered in the name of the nominee of the Securities Depository, and no
Person acquiring shares of Series C STAR Preferred shall be entitled to receive
a certificate representing such shares.
As long as the Applicable Rate is not based on LIBOR, the Corporation shall be
obligated to exercise its best efforts to maintain a Trust Company pursuant to
an agreement containing terms no less favorable to the Corporation than the
terms of the agreement first entered into by the Corporation pursuant to the
resolutions adopted by the Board of Directors of the Corporation on March 14,
1985.
Section 8. Headings of Subdivisions.
------------------------
The headings of the various subdivisions of this ARTICLE TWO are for
convenience of reference only and shall not affect the interpretation of any of
the provisions hereof.
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[Series D]
CERTIFICATE OF RESOLUTION BY THE BOARD OF DIRECTORS
DETERMINING AND STATING THE DESIGNATION AND THE
RELATIVE RIGHTS, PREFERENCES, QUALIFICATIONS,
LIMITATIONS AND RESTRICTIONS (OTHER THAN VOTING RIGHTS)
OF A SERIES OF A CLASS OF PREFERRED SHARES
OF
LINCOLN NATIONAL CORPORATION
RESOLVED: Pursuant to the authority expressly granted to and
vested in the Board of Directors of the Corporation by the
provisions of the Articles of Incorporation of the
Corporation, this Board of Directors hereby creates and
authorizes the issue of a series of the Preferred Stock of
the Corporation, to consist of five hundred (500) shares of
Preferred Stock of the Corporation, and this Board of
Directors hereby fixes the designation and the relative
rights, preferences, qualifications, limitations and
restrictions (other than voting rights) of the shares of such
series as follows:
ARTICLE ONE. SHORT TERM AUCTION RATE CUMULATIVE PREFERRED STOCK, SERIES D
Section 1. Designation.
-----------
(a) The designation of such series of Preferred Stock shall be "Short Term
Auction Rate Cumulative Preferred Stock, Series D" (hereinafter referred to as
"Series D STAR Preferred").
(b) The number of authorized shares constituting Series D STAR Preferred is
500. Shares of Series D STAR Preferred shall be issued with a liquidation value
of $100,000 per share plus accrued dividends and shall be without par value.
Section 2. Definitions.
-----------
As used herein, the following terms shall have the following meanings (with
terms defined in the singular having comparable meanings when used in the plural
and vice versa), unless the context otherwise requires:
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(a) "AA Composite Commercial Paper Rate", on any date, shall mean (i) the
interest equivalent of the 60-day rate on commercial paper placed on behalf of
issuers whose corporate bonds are rated "AA" by Standard & Poor's Corporation or
its successor, or the equivalent of such rating by another rating agency, as
made available on a discount basis or otherwise by the Federal Reserve Bank of
New York for the immediately preceding Business Day prior to such date, or (ii)
in the event that the Federal Reserve Bank of New York does not make available
such a rate, then the arithmetic average of the interest equivalent of the 60-
day rate on commercial paper placed on behalf of such issuers, as quoted on a
discount basis or otherwise by the Commercial Paper Dealers to the Trust Company
or the Corporation, as the case may be, for the close of business of the
immediately preceding Business Day prior to such date. If any Commercial Paper
Dealer does not quote a rate required to determine the "AA" Composite Commercial
Paper Rate, the "AA" Composite Commercial Paper Rate shall be determined on the
basis of the quotation or quotations furnished by the remaining Commercial Paper
Dealer or Commercial Paper Dealers and any Substitute Commercial Paper Dealer or
Substitute Commercial Paper Dealers selected by the Corporation to provide such
rate or rates not being supplied by any Commercial Paper Dealer or Commercial
Paper Dealers, as the case may be, or, if the Corporation does not select any
such Substitute Commercial Paper Dealer or Substitute Commercial Paper Dealers,
by the remaining Commercial Paper Dealer or Commercial Paper Dealers. If the
Board of Directors of the Corporation shall make the adjustment referred to in
clause (A) of the second sentence of Section 3(b) of this ARTICLE ONE with the
result that (i) the dividend period days (as defined in such subparagraph (b))
shall be less than 70 days, such rate shall be the interest equivalent
of the 60-day rate on such commerc1al paper, (ii) the dividend period
days shall be 70 or more days but fewer than 85 days, such rate shall be
the arithmetic average of the interest equivalent of the 60-day and 90-day
rates on such commercial paper, and (iii) the dividend period days shall be
85 or more days but 98 or less days, such rate shall be the interest
equivalent of the 90-day rate on such commercial paper. For purposes of this
definition, the "interest equivalent" of a rate stated on a discount basis
(a "discount rate") for commercial paper of a given days' maturity shall
be equal to the quotient of (A) the discount rate divided by (B) the
difference between (x) 1.00 and (y) a fraction the numerator of which
shall be the product of the discount rate times the number of days in which
such commercial paper matures and the denominator of which shall be 360.
(b) "Applicable Rate" shall have the meaning specified in Section 3(c)(i) of
this ARTICLE ONE.
(c) "Business Day" shall mean a day on which the New York Stock Exchange is
open for trading and which is not a day on which banks in The City of New York,
New York are authorized by law to close.
(d) "Commercial Paper Dealers" shall mean Salomon Brothers Inc, The First
Boston Corporation, and Merrill Lynch, Pierce, Fenner & Smith
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<PAGE>
Incorporated, or, in lieu of any thereof, their respective affiliates or
successors.
(e) "Common Shares" shall mean all shares now or hereafter authorized of the
class of common shares of the Corporation presently authorized and any other
shares into which such shares may hereafter be changed from time to time.
(f) "Date of Original Issue" means the date on which the Corporation initially
issues shares of Series D STAR Preferred.
(g) "Dividend Payment Date" shall have the meaning specified in Section 3(b)
of this ARTICLE ONE.
(h) "Dividend Period" and "Dividend Periods" shall have the respective
meanings specified in Section 3(c)(i) of this ARTICLE ONE.
(i) "Holder" shall mean the holder of shares of Series D STAR Preferred as
the same appears on the stock transfer books of the Corporation.
(j) "Initial Dividend Payment Date" shall have the meaning specified in
Section 3(b) of this ARTICLE ONE.
(k) "Initial Dividend Period" shall have the meaning specified in Section
3(c)(i) of this ARTICLE ONE.
(l) "LIBOR" shall mean for any Dividend Period the average (rounded to the
nearest l/16 of l%) of the respective rates per annum quoted by each of the
Reference Banks at which United States dollar deposits for a two-month period in
the amount of U.S. $10,000,000 are offered by such Reference Bank in the London
Interbank market at approximately 11:OO A.M. (London time) on the first day of
such Dividend Period. If any Reference Bank does not quote a rate required to
determine LIBOR, LIBOR shall be determined on the basis of the quotation or
quotations furnished by the remaining Reference Bank or Reference Banks and any
Substitute Reference Bank or Substitute Reference Banks selected by the
Corporation to provide such quotation or quotations not being supplied by any
Reference Bank or Reference Banks, as the case may be, or, if the Corporation
does not select any such Substitute Reference Bank or Substitute Reference
Banks, by the remaining Reference Bank or Reference Banks. If the Board of
Directors of the Corporation shall make the adjustment referred to in clause (A)
of the second sentence of Section 3(b) of this ARTICLE ONE with the result that
(i) the dividend period days (as defined in such subparagraph) shall be less
than 70 days, LIBOR shall be based on the rates per annum quoted for United
States dollar deposits for a two-month period, (ii) the dividend period days
shall be 70 or more days but less than 85 days, LIBOR shall be the arithmetic
average of the rates per annum quoted for United States dollar deposits for
two- and three-month periods, or (iii) the dividend period days shall be 85
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<PAGE>
or more days but 98 or less days, such rate shall be based on the rates per
annum quoted for United States dollar deposits for a three-month period.
(m) "LIBOR Event" shall mean the fai1ure by the Corporation timely to pay to
the Trust Company, not later than 12 Noon, New York City time, (i) on the
Business Day next preceding any Dividend Payment Date the full amount of any
dividend (whether or not earned or declared) to be paid on such Dividend
Payment Date on any share of Series D STAR Preferred or (ii) on the Business Day
next preceding any redemption date the redemption price to be paid on such
redemption date of any share of Series D STAR Preferred after notice of
redemption is given pursuant to Section 4(b) of this ARTICLE ONE.
(n) "Reference Banks" shall mean the principal London offices of Bank of
America National Trust and Savings Association, Barclays Bank PLC, Citibank,
N.A., Lloyds Bank PLC, Midland Bank PLC and National Westminster Bank PLC, or
their respective successors.
(o) "Subsequent Dividend Period" and "Subsequent Dividend Periods" shall have
the respective meanings specified in Section 3(c)(i) of this ARTICLE ONE.
(p) "Substitute Commercial Paper Dealer" shall mean Goldman, Sachs & Co. or
Lehman Commercial Paper Incorporated, or, in lieu of any thereof, their
respective affiliates or successors.
(q) "Substitute Reference Bank" shall mean the principal London offices of The
Chase Manhattan Bank (National Association), Deutsche Bank Aktiengesellschaft,
Morgan Guaranty Trust Company of New York or Swiss Bank Corporation, or their
respective successors.
(r) "Trust Company" shall mean a bank or trust company appointed as such by a
resolution of the Board of Directors of the Corporation.
Section 3. Dividends.
---------
(a) The Holders of shares of Series D STAR Preferred shall be entitled to
receive, when and as declared by the Board of Directors of the Corporation out
of funds legally available therefor, cumulative cash dividends at the Applicable
Rate per annum thereof, determined as set forth below, and no more, payable on
the respective dates set forth below.
(b) Dividends on shares of Series D STAR Preferred, at the Applicable Rate per
annum, shall accrue from the Date of Original Issue and shall be payable
commencing on the 51st day after the Date of Original Issue and on each day
thereafter which is the last day of successive 49-day periods after such 51st
day after the Date of Original Issue, or if either (i) in the case of the
Initial Dividend Payment Date, such 51st day after the Date of Original Issue
or, in the case of any subsequent Dividend Payment Date, any such last day (in
either case, the "normal day") is not a Business Day or
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<PAGE>
(ii) the day next succeeding the normal day is not a Business Day, then on the
first Business Day preceding the normal day that is next succeeded by a day that
is also a Business Day, and if any particular Dividend Payment Date does not
occur on the normal day because of the exceptions in clauses (i) or (ii), the
next succeeding Dividend Payment Date shall be, subject to such exceptions, the
49th day following the normal day for the prior Dividend Period. Notwithstanding
the foregoing, (A) in the event of a change in law altering the minimum holding
period (currently found in Section 246(c) of the Internal Revenue Code of 1954,
as amended) required for taxpayers to be entitled to the dividends received
deduction on preferred stock held by non-affiliated corporations (currently
found in Section 243(a) of such Code), the Board of Directors of the Corporation
may, subject to clauses (i) and (ii) of this subparagraph (b), adjust the period
of time between Dividend Payment Dates so as to adjust uniformly the number of
days (such number of days without giving effect to such clauses (i) and (ii)
being hereinafter referred to as "dividend period days") in Dividend Periods
commencing after the date of such change in law to equal or exceed the then
current minimum holding period, provided in such event that the number of
dividend period days shall not exceed by more than nine days the length of such
then current minimum holding period and shall be evenly divisible by seven, and
the maximum number of dividend period days in no event shall exceed 98 days; (B)
if, as a result of applying the procedures set forth in this subparagraph (b)
for determining a Dividend Payment Date, the number of days in any Dividend
Period would not equal or exceed the then current minimum holding period for a
taxpayer to be entitled to the dividends received deduction on preferred stock
held by a non-affiliated corporation referred to in clause (A) of this
subparagraph, the Board of Directors of the Corporation may fix the Dividend
Payment Date for that Dividend Period on the first Business Day next preceding
the originally designated normal day, even though the day next succeeding such
Business Day is not a Business Day and (C) in the event of a default in the
payment of a dividend on shares of Series D STAR Preferred, dividends on shares
of Series D STAR Preferred shall thereafter become payable quarterly, commencing
on the 90th day after the Dividend Payment Date on which such default occurred
with respect to any Dividend Period ending during such 90-day period, and on
each day thereafter that is the last day of successive 90-day periods with
respect to any Dividend Period ending during each such 90-day period, in each
case subject to clauses (i) and (ii) of this subparagraph (b), until such time
as no dividend on Series D STAR Preferred shall be in default, in which case,
dividends shall next be payable on the last day of the Dividend Period which
includes the first day on which no dividend was in default and thereafter
dividends shall become payable on the 49th day after the last day of such
Dividend Period and on each day thereafter which is the last day of successive
49-day periods after such date, subject to clauses (i) and (ii) of this
subparagraph (b) (each date on which payment of dividends is due being herein
referred to as a "Dividend Payment Date" and the first Dividend Payment Date
being herein referred to as the "Initial Dividend Payment Date"). Upon any
change in the number of dividend period days as a result of a change in law as
set forth in clause (A), or upon a change as set forth in clause (B) or (C), the
Corporation shall give notice of such change to all Holders by first class mail,
postage prepaid. Each such dividend shall
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<PAGE>
be paid to the Holders as their names appear on the books and records of the
Corporation on the Business Day next preceding the Dividend Payment Date
thereof; provided, however, that if such dividend shall be calculated based upon
LIBOR, as set forth in Section 3(c)(i) of this ARTICLE ONE, such dividend shall
be paid to the Holders as their names appear on the books and records of the
Corporation on such date, not exceeding 15 days preceding the payment date
thereof, as may be fixed by the Board of Directors of the Corporation. Dividends
in arrears for any past Dividend Period may be declared and paid at any time,
without reference to any regular Dividend Payment Date, to the Holders as their
names appear on the books and records of the Corporation on such date, not
exceeding 15 days preceding the payment date thereof, as may be fixed by the
Board of Directors of the Corporation.
(c)(i) The dividend rate on shares of Series D STAR Preferred shall be 6.25%
per annum during the period from and after the Date of Original Issue to the
Initial Dividend Payment Date (the "Initial Dividend Period"). Commencing the
day that is the Initial Dividend Payment Date, the dividend rate on shares of
Series D STAR Preferred for each Subsequent Dividend Period (as hereinafter
defined) shall be equal to the rate per annum that results from implementation
of the Auction Procedures described in ARTICLE TWO hereof; provided, however,
that (A) if a LIBOR Event shall have occurred prior to the first day of such
Subsequent Dividend Period, the dividend rate for such Subsequent Dividend
Period shall be at a rate per annum equal to LIBOR plus 1/4 of 1% and (B) if
there is no Trust Company on the day prior to the first day of a Dividend Period
(unless a LIBOR Event has occurred), the dividend rate for such Dividend Period
shall be at a rate per annum equal to 110% of the "AA" Composite Commercial
Paper Rate, as determined by the Corporation, on the first day of such Dividend
Period. The rate per annum at which dividends are payable on shares of Series D
STAR Preferred for any Dividend Period (as hereinafter defined) is herein
referred to as the "Applicable Rate".
Each dividend period following the Initial Dividend Period (herein referred to
as a "Subsequent Dividend Period" and collectively as "Subsequent Dividend
Periods" and the Initial Dividend Period or any Subsequent Dividend Period being
herein referred to as a "Dividend Period" and collectively as "Dividend
Periods") shall commence on the day that is the last day of the preceding
Dividend Period and shall end on the next succeeding Dividend Payment Date;
provided, however, that if the provisions of clause (C) of Section 3(b) are
applicable, each Dividend Period shall end on the date which would have been the
next succeeding Dividend Payment Date if the provisions of such clause had not
been applicable.
(ii) The amount of dividends payable on each share of Series D STAR Preferred
for any Dividend Period shall be computed by multiplyinq the Applicable Rate for
such Dividend Period by a fraction the numerator of which shall be the number of
days in the Dividend Period (calculated by counting the first day thereof but
excluding the last day thereof) such share was outstanding and the denominator
of which shall be 360 and applying the rate obtained against $100,000 per share
of Series D STAR Preferred.
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(d)(i) Holders of shares of Series D STAR Preferred shall not be entitled to
any interest, or sum of money in lieu of interest, in respect of any dividend
payment or payments on shares of Series D STAR Preferred which may be in
arrears.
(ii) Except as otherwise provided in resolutions of the Board of Directors of
the Corporation adopted on May 28, 1969 creating the Corporation's $3.00
Cumulative Convertible Preferred Stock, Series A (the "Series A Preferred
Stock"), as such resolutions relate to the payment of dividends on the Series A
Preferred Stock and except as hereinafter provided, no full dividends shall be
declared or paid or set apart for payment on any series of Preferred Stock for
any period unless full cumulative dividends have been or contemporaneously are
declared and paid or declared and a sum sufficient for payment thereof set apart
for such payment on shares of Series D STAR Preferred for the current and all
past Dividend Periods. When dividends are not paid or set apart in full, as
aforesaid, upon the shares of Series D STAR Preferred and any other Preferred
Stock ranking on a parity as to dividends with Series D STAR Preferred, all
dividends declared upon shares of Series D STAR Preferred and any other
Preferred Stock ranking on a parity as to dividends with Series D STAR Preferred
shall be declared pro rata so that the amount of dividends declared per share on
Series D STAR Preferred and such other Preferred Stock ranking on a parity as to
dividends with Series D STAR Preferred shall in all cases bear to each other the
same ratio that accrued dividends per share on the shares of Series D STAR
Preferred and such other Preferred Stock ranking on a parity as to dividends
with shares of Series D STAR Preferred bear to each other.
(iii) Except with respect to dividends on the Series A Preferred Stock and as
otherwise provided in paragraph (d)(ii) above, so long as any shares of Series D
STAR Preferred are outstanding, no dividend (other than a dividend payable in
Common Shares or payable in any other stock of the Corporation ranking junior to
shares of Series D STAR Preferred as to dividends and upon liquidation) shall be
declared or paid or set aside for payment or other distribution declared or made
upon Common Shares or upon any other stock of the Corporation ranking junior to
or on a parity with shares of Series D STAR Preferred as to dividends or upon
liquidation, nor shall any such Common Shares or any other stock of the
Corporation ranking junior to or on a parity with shares of Series D STAR
Preferred as to dividends or upon liquidation be redeemed, purchased or
otherwise acquired for any consideration (or any moneys be paid to or made
available for a sinking fund for the redemption of any shares of any such stock)
by the Corporation (except by conversion into or exchange for stock of the
Corporation ranking junior to shares of Series D STAR Preferred as to dividends
and upon liquidation) unless, in each case, the full cumulative dividends on all
outstanding shares of Series D STAR Preferred shall have been paid or
contemporaneously are declared and paid for the current and all past Dividend
Periods.
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Section 4. Redemption.
----------
(a)(i)(A) At the option of the Corporation, shares of Series D STAR Preferred
may be redeemed, as a whole at any time or from time to time in part, on any
Dividend Payment Date at a redemption price equal to:
(I) $103,000 per share if redeemed during the twelve months ending on the
first anniversary of the Date of Original Issue;
(II) $102,000 per share if redeemed during the twelve months ending on
the second anniversary of the Date of Original Issue;
(III) $101,000 per share if redeemed during the twelve months ending
on the third anniversary of the Date of Original Issue;
(IV) $100,000 per share thereafter;
plus, in each case, accrued and unpaid dividends thereon to the date fixed
for redemption.
(B) If fewer than all the outstanding shares of Series D STAR Preferred are to
be redeemed pursuant to Section 4(a)(i)(A) of this ARTICLE ONE, the number of
shares to be redeemed shall be determined by the Board of Directors of the
Corporation, and such shares shall be redeemed pro rata from the Holders in
proportion to the number of such shares held by such Holders (rounding to the
nearest whole share to avoid redemption of fractional shares).
(ii) At the option of the Corporation, shares of Series D STAR Preferred may
be redeemed, as a whole but not in part, on any Dividend Payment Date at a
redemption price of $100,000 per share, plus accrued and unpaid dividends
thereon to the date fixed for redemption, if the Applicable Rate fixed for the
Dividend Period ending on such Dividend Payment Date shall equal or exceed the
"AA" Composite Commercial Paper Rate on the date of determination of such
Applicable Rate.
(b) In the event the Corporation shall redeem shares of Series D STAR
Preferred, notice of such redemption shall be given by first class mail,
postage prepaid, mailed not less than 30 nor more than 60 days prior to the
redemption date, to each Holder of record of the shares to be redeemed, at such
Holder's address as the same appears on the stock record books of the
Corporation. Each such notice shall state: (i) the redemption date; (ii) the
number of shares of Series D STAR Preferred to be redeemed and, if fewer than
all the shares held by such Holder are to be redeemed, the number of such shares
to be redeemed from such Holder; (iii) the redemption price; (iv) the place or
places where certificates for such shares are to be surrendered for payment of
the redemption price; and (v) that dividends on the shares to be redeemed will
cease to accrue on such redemption date.
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(c) Notice having been mailed as aforesaid, and if the Corporation shall have
deposited a sum sufficient to redeem the shares of Series D STAR Preferred as to
which notice of redemption has been given with the Trust Company, with
irrevocable instructions and authority to pay the redemption price to the
Holders thereof upon surrender of certificates therefor or, if no such deposit
is made, then from and after the redemption date (unless default shall be made
by the Corporation in providing money for the payment of the redemption price of
the shares called for redemption), dividends on the shares of Series D STAR
Preferred so called for redemption shall cease to accrue, and said shares shall
no longer be deemed to be outstanding, and all rights of the Holders thereof as
shareholders of the Corporation (except the right to receive from the
Corporation the redemption price) shall cease and terminate. Upon surrender in
accordance with said notice of the certificates for any shares so redeemed
(properly endorsed or assigned for transfer, if the Board of Directors of the
Corporation shall so require and the notice shall so state), such shares shall
be redeemed by the Corporation at the redemption price aforesaid but without
interest. In case fewer than all the shares represented by any such certificate
are redeemed, a new certificate shall be issued representing the unredeemed
shares without cost to the Holder thereof.
(d) Any shares of Series D STAR Preferred which shall at any time have been
redeemed or purchased by the Corporation shall, after such redemption or
purchase, be cancelled in the manner provided by the laws of the State of
Indiana.
(e) Notwithstanding the foregoing provisions of this Section 4, unless the
full cumulative dividends on all outstanding shares of Series D STAR Preferred
shall have been paid or contemporaneously are declared and paid for all past
Dividend Periods, (i) no shares of Series D STAR Preferred shall be redeemed
unless all outstanding shares of Series D STAR Preferred are simultaneously
redeemed, and (ii) the Corporation shall not purchase or otherwise acquire any
shares of Series D STAR Preferred except pursuant to a purchase or exchange
offer made on the same terms to Holders of all outstanding shares of Series D
STAR Preferred.
Section 5. Conversion or Exchange.
----------------------
The Holders of shares of Series D STAR Preferred shall not have any rights to
convert such shares into or exchange such shares for shares of any other class
or classes or of any other series of any class or classes of capital stock of
the Corporation.
Section 6. Voting.
------
The shares of Series D STAR Preferred shall have such voting rights as are
provided in Section 5 Article V of the Corporation's Articles of Incorporation.
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Section 7. Liquidation Rights.
------------------
(a) In the event of the liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, the Holders of shares of Series D
STAR Preferred then outstanding shall be entitled to receive, after payment or
provision for payment of all creditors of the Corporation, but before any
distribution or payment shall be made in respect of the Common Stock or any
other stock of the Corporation ranking junior to shares of Series D STAR
Preferred as to assets on liquidation, dissolution or winding up, an amount
equal to $100,000 per share, plus an amount equal to all unpaid dividends
thereon accrued on a daily basis to and including the date fixed for such
distribution or payment, but the Holders shall be entitled to no further
participation in any distribution or payment in connection with any such
liquidation, dissolution or winding up. If, upon any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the Corporation, the
net assets of the Corporation distributable among the Holders of all outstanding
shares of Series D STAR Preferred and of any other series of Preferred Stock or
any other stock of the Corporation ranking on a parity with Series D STAR
Preferred as to assets on liquidation shall be insufficient to permit the
payment in full to such Holders of the preferential amounts to which they are
entitled, then the entire net assets of the Corporation remaining after the
distributions to Holders of any stock of the Corporation ranking senior to
Series D STAR Preferred to which they may be entitled shall be distributable
among the holders of shares of Series D STAR Preferred and of any other series
of Preferred Stock or of any other stock of the Corporation ranking on a parity
with Series D STAR Preferred as to assets on liquidation ratably in proportion
to the full amounts to which they would otherwise respectively be entitled.
(b) Neither the consolidation or merger of the Corporation with or into any
other corporation or corporations, nor the sale or transfer by the Corporation
of all or any part of its assets, shall be deemed to be a liquidation,
dissolution or winding up of the Corporation for purposes of this Section 7. All
shares of Series D STAR Preferred, the Corporation's outstanding Series A
Preferred Stock, the Corporation's authorized Short Term Auction Rate Cumulative
Preferred Stock, Series B and the Corporation's outstanding Short Term Auction
Rate Cumulative Preferred Stock, Series C will rank on a parity as to assets
upon liquidation.
ARTICLE TWO. AUCTION PROCEDURES
Section l. Definitions.
-----------
Capitalized terms not defined in this Section l shall have the respective
meanings specified in Section 2 of ARTICLE ONE. As used in this ARTICLE TWO, the
following terms shall have the following meanings, unless the context otherwise
requires:
(a) "Affiliate" shall mean any Person known to the Trust Company to be
controlled by, in control of or under common control with the Corporation.
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(b) "Agent Member" shall mean the member of the Securities Depository that
will act on behalf of a Bidder and is identified as such in such Bidder's
Purchaser's Letter.
(c) "Auction" shall mean the periodic operation of the procedures set forth in
this ARTICLE TWO.
(d) "Auction Date" shall mean the Business Day next preceding a Dividend
Payment Date.
(e) "Available STAR Preferred" shall have the meaning specified in Section
4(a) of this ARTICLE TWO.
(f) "Bid" and "Bids" shall have the respective meanings specified in Section
2(a) of this ARTICLE TWO.
(g) "Bidder" and "Bidders" shall have the respective meanings specified in
Section 2(a) of this ARTICLE TWO.
(h) "Broker-Dealer" shall mean any broker-dealer, or other entity permitted by
law to perform the functions required of a Broker-Dealer in this ARTICLE TWO,
that has been selected by the Corporation and has entered into a Broker-Dealer
Agreement with the Trust Company that remains effective.
(i) "Broker-Dealer Agreement" shall mean an agreement between the Trust
Company and a Broker-Dealer pursuant to which such Broker-Dealer agrees to
follow the procedures specified in this ARTICLE TWO.
(j) "Existing Holder," when used with respect to shares of Series D STAR
Preferred, shall mean a Person who has signed a Purchaser's Letter and is listed
as the beneficial owner of shares of Series D STAR Preferred in the records of
the Trust Company.
(k) "Hold Order" and "Hold Orders" shall have the respective meanings
specified in subparagraph 2(a) of this ARTICLE TWO.
(1) "Maximum Rate", on any Auction Date, shall mean the product of (i) 1.10
and (ii) the "AA" Composite Commercial Paper Rate.
(m) "Minimum Rate", on any Auction Date, shall mean the product of (i) .58
and (ii) the "AA" Composite Commercial Paper Rate.
(n) "Order" and "Orders" shall have the respective meanings specified in
Section 2(a) of this ARTICLE TWO.
(o) "Outstanding" shall mean, as of any date, shares of Series D STAR
Preferred theretofore issued by the Corporation except, without duplication,
(i) any shares of Series D STAR Preferred theretofore cancelled or delivered
to the Trust Company for cancellation or redeemed by the Corporation or as to
which a notice of redemption shall have been given by the Corporation, (ii)
any shares of Series D STAR Preferred as to which the Corporation or
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any Affiliate thereof (other than a broker-dealer Affiliate) shall be an
Existing Holder and (iii) any shares of Series D STAR Preferred represented
by any certificate in 1ieu of which a new certificate has been executed and
delivered by the Corporation.
(p) "Person" shall mean and include an individual, a partnership, a
corporation, a trust, an unincorporated association, a joint venture or other
entity or a government or any agency or political subdivision thereof.
(q) "Potential Holder" shall mean any Person, including any Existing Holder,
(i) who shall have executed a Purchaser's Letter and (ii) who may be interested
in acquiring shares of Series D STAR Preferred (or, in the case of an Existing
Holder, additional shares of Series D STAR Preferred).
(r) "Purchaser's Letter" shall mean a letter addressed to the Corporation,
the Trust Company and a Broker-Dealer in which a Person agrees, among other
things, to offer to purchase, purchase, offer to sell and/or sell shares of
Series D STAR Preferred as set forth in this ARTICLE TWO.
(s) "Securities Depository" shall mean The Depository Trust Company and its
successors and assigns or any other securities depository selected by the
Corporation which agrees to follow the procedures required to be followed by
such securities depository in connection with shares of Series D STAR Preferred.
(t) "Sell Order" and "Sell Orders" shall have the respective meanings
specified in Section 2(a) of this ARTICLE TWO.
(u) "Submission Deadline" shall mean 12:30 P.M., New York City time, on any
Auction Date or such other time on any Auction Date by which Broker-Dealers are
required to submit Orders to the Trust Company as specified by the Trust Company
from time to time.
(v) "Submitted Bid" and "Submitted Bids" shall have the respective meanings
specified in Section 4(a) of this ARTICLE TWO.
(w) "Submitted Hold Order" and "Submitted Hold Orders" shall have the
respective meanings specified in Section 4(a) of this ARTICLE TWO.
(x) "Submitted Order" and "Submitted Orders" shall have the respective
meanings specified in Section 4(a) of this ARTICLE TWO.
(y) "Submitted Sell Order" and "Submitted Sell Orders" shall have the
respective meanings specified in Section 4(a) of this ARTICLE TWO.
(z) "Sufficient Clearing Bids" shall have the meaning specified in Section
4(a) of this ARTICLE TWO.
(aa) "Winning Bid Rate" shall have the meaning specified in Section 4(a) of
this ARTICLE TWO.
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Section 2. Orders by Existing Holders and Potential Holders.
------------------------------------------------
(a) On or prior to each Auction Date and prior to the Submission Deadline:
(i) each Existing Holder may submit to a Broker-Dealer by
telephone information as to:
(A) the number of Outstanding shares, if any, of Series D STAR
Preferred held by such Existing Holder which such Existing Holder desires
to continue to hold without regard to the Applicable Rate for the next
succeeding Dividend Period;
(B) the number of Outstanding shares, if any, of Series D STAR
Preferred that such Existing Holder desires to continue to hold if the
Applicable Rate for the next succeeding Dividend Period shall not be less
than the rate per annum specified by such Existing Holder; and/or
(C) the number of Outstanding shares, if any, of Series D STAR
Preferred held by such Existing Holder which such Existing Holder offers
to sell without regard to the Applicable Rate for the next succeeding
Dividend Period;
and
(ii) each Broker-Dealer, using a list of Potential Holders that shall be
maintained by such Broker-Dealer in good faith for the purpose of conducting
a competitive Auction, shall contact Potential Holders on such list to
determine the number of shares, if any, of Series D STAR Preferred which each
such Potential Holder offers to purchase if the Applicable Rate for the next
succeeding Dividend Period shall be not less than the rate per annum
specified by such Potential Holder.
For the purposes hereof, the communication to a Broker-Dealer of information
referred to in clause (i)(A), (i)(B), (i)(C) or (ii) of this Section 2(a) is
hereinafter referred to as an "Order" and collectively as "Orders" and each
Existing Holder and each Potential Holder placing an Order is hereinafter
referred to as a "Bidder" and collectively as "Bidders"; an Order containing
the information referred to in clause (i)(A) of this Section 2(a) is
hereinafter referred to as a "Hold Order" and collectively as "Hold Orders";
an Order containing the information referred to in clause (i)(B) or (ii) of
this Section 2(a) is hereinafter referred to as a "Bid" and collectively as
"Bids"; and an Order containing the information referred to in clause (i)(C)
of this Section 2(a) is hereinafter referred to as a "Sell Order" and
collectively as "Sell Orders."
(b)(i) A Bid by an Existing Holder shall constitute an irrevocable offer to
sell:
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(A) the number of Outstanding shares of Series D STAR Preferred
specified in such Bid if the Applicable Rate determined on such Auction
Date shall be less than such specified rate; or
(B) such number or a lesser number to be determined as set forth in
clause (iv) of Section 5(a) of this ARTICLE TWO if the Applicable Rate
determined on such Auction Date shall be equal to such specified rate; or
(C) a lesser number to be determined as set forth in clause (iii) of
Section 5(b) of this ARTICLE TWO if such specified rate shall be higher
than the Maximum Rate and Sufficient Clearing Bids do not exist.
(ii) A Sell Order by an Existing Holder shall constitute an irrevocable
offer to sell:
(A) the number of shares specified in such Sell Order; or
(B) such number or a lesser number as set forth in clause (iii) of
Section 5(b) of this ARTICLE TWO if Sufficient Clearing Bids do not
exist.
(iii) A bid by a Potential Holder shall constitute an irrevocable offer
to purchase:
(A) the number of shares of Series D STAR Preferred specified in such
Bid if the Applicable Rate determined on such Auction Date shall be
higher than such specified rate; or
(B) such number or a lesser number as set forth in clause (v) of
Section 5(a) of this ARTICLE TWO if the Applicable Rate determined on
such Auction Date shall be equal to such specified rate.
Section 3. Submission of Orders by Broker-Dealers to Trust Company.
-------------------------------------------------------
(a) Each Broker-Dealer shall submit in writing to the Trust Company prior to
the Submission Deadline on each Auction Date all Orders obtained by such Broker-
Dealer and specifying with respect to each Order:
(i) the name of the Bidder placing such Order;
(ii) the aggregate number of shares of Series D STAR Preferred that are the
subject of such Order;
(iii) to the extent that such Bidder is an Existing Holder:
(A) the number of shares, if any, of Series D STAR Preferred
subject to any Hold Order placed by such Existing Holder;
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(B) the number of shares, if any, of Series D STAR Preferred subject
to any Bid placed by such Existing Holder and the rate specified in such
Bid; and
(C) the number of shares, if any, of Series D STAR Preferred subject
to any Sell Order placed by such Existing Holder;
and
(iv) to the extent that such Bidder is a Potential Holder, the rate
specified in such Potential Holder's Bid.
(b) If any rate specified in any Bid contains more than three figures to the
right of the decimal point, the Trust Company shall round such rate up to the
next highest one thousandth (.001) of 1%.
(c) If an Order or Orders covering all of the Outstanding shares of Series D
STAR Preferred held by any Existing Holder is not submitted to the Trust Company
prior to the Submission Deadline, the Trust Company shall deem a Hold Order to
have been submitted on behalf of such Existing Holder covering the number of
Outstanding shares of Series D STAR Preferred held by such Existing Holder and
not subject to Orders submitted to the Trust Company.
(d) If one or more Orders covering in the aggregate more than the number of
Outstanding shares of Series D STAR Preferred held by any Existing Holder are
submitted to the Trust Company, such Orders shall be considered valid as follows
and in the following order of priority:
(i) any Hold Order submitted on behalf of such Existing Holder shall be
considered valid up to and including the number of Outstanding shares of
Series D STAR Preferred held by such Existing Holder; provided that if more
than one Hold Order is submitted on behalf of such Existing Holder and the
number of shares of Series D STAR Preferred subject to such Hold Orders
exceeds the number of Outstanding shares of Series D STAR Preferred held by
such Existing Holder, the number of shares of Series D STAR Preferred subject
to such Hold Orders shall be reduced pro rata so that such Hold Orders shall
cover the number of Outstanding shares of Series D STAR Preferred held by
such Existing Holder;
(ii)(A) any Bid shall be considered valid up to and including the excess
of the number of Outstanding shares of Series D STAR Preferred held by such
Existing Holder over the number of shares of Series D STAR Preferred subject
to Hold Orders referred to in clause (i) of this Section 3(d), (B) subject to
subclause (A), if more than one Bid with the same rate is submitted on behalf
of such Existing Holder and the number of Outstanding shares of Series D STAR
Preferred subject to such Bids is greater than such excess, the number of
shares of Series D STAR Preferred subject to such Bids shall be reduced pro
rata so that such Bids shall cover the number of shares of Series D STAR
Preferred equal
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to such excess, and (C) subject to subclause (A), if more than one Bid with
different rates is submitted on behalf of such Existing Holder, such Bids
shall be considered valid in the ascending order of their respective rates;
and in any such event, the number, if any, of such Outstanding shares subject
to Bids not valid under this clause (ii) shall be treated as the subject of a
Bid by a Potential Holder; and
(iii) any Sell Order shall be considered valid up to and including the
excess of the number of Outstanding shares of Series D STAR Preferred held by
such Existing Holder over the sum of the shares of Series D STAR Preferred
subject to Hold Orders referred to in clause (i) of this Section 3(d) and Bids
referred to in clause (ii) of this Section 3(d); provided that if more than
one Sell Order is submitted on behalf of any Existing Holder and the number of
shares of Series D STAR Preferred subject to such Sell Orders is greater than
such excess, the number of Outstanding shares of Series D STAR Preferred
subject to such Sell Orders shall be reduced pro rata so that such Sell Orders
shall cover the number of Outstanding shares of Series D STAR Preferred equal
to such excess.
(e) If more than one Bid is submitted on behalf of any Potential Holder, each
Bid submitted shall be a separate Bid with the rate and number of shares of
Series D STAR Preferred therein specified.
(f) If any rate specified in any Bid is lower than the Minimum Rate for the
Dividend Period with respect to which such Bid relates, such Bid shall be deemed
to be a Bid specifying a rate equal to such Minimum Rate.
Section 4. Determination of Sufficient Clearing Bids, Winning Bid Rate and
---------------------------------------------------------------
Applicable Rate.
- ---------------
(a) Not earlier than the Submission Deadline on each Auction Date, the Trust
Company shall assemble all Orders submitted or deemed submitted to it by the
Broker-Dealers (each such Order as submitted or deemed submitted by a Broker-
Dealer being hereinafter referred to individually as a "Submitted Hold Order," a
"Submitted Bid" or a "Submitted Sell Order", as the case may be, or as a
"Submitted Order" and collectively as "Submitted Hold Orders," "Submitted Bids"
or "Submitted Sell Orders," as the case may be, or as "Submitted Orders") and
shall determine:
(i) the excess of the total number of Outstanding shares of Series D
STAR Preferred over the number of Outstanding shares of Series D STAR
Preferred that are the subject of Submitted Hold Orders (such excess being
hereinafter referred to as the "Available STAR Preferred");
(ii) from the Submitted Orders whether:
(A) the number of Outstanding shares of Series D STAR Preferred
that are the subject of Submitted Bids by Potential Holders specifying
one or more rates equal to or lower than the Maximum Rate;
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exceeds or is equal to the sum of:
(B)(I) the number of Outstanding shares of Series D STAR
Preferred that are the subject of Submitted Bids by Existing Holders
specifying one or more rates higher than the Maximum Rate; and
(II) the number of Outstanding shares of Series D STAR Preferred
that are subject to Submitted Sell Orders
(in the event of such excess or such equality (other than because the number
of shares of Series D STAR Preferred in clauses (A) and (B) are each zero
because all of the Outstanding shares of Series D STAR Preferred are the
subject of Submitted Hold Orders), such Submitted Bids in clause (A) being
hereinafter referred to collectively as "Sufficient Clearing Bids"); and
(iii) if Sufficient Clearing Bids exist, the lowest rate specified in the
Submitted Bids (the "Winning Bid Rate") which if:
(A)(I) each Submitted Bid from Existing Holders specifying such
lowest rate and (II) all other Submitted Bids from Existing Holders
specifying lower rates were accepted, thus entitling such Existing
Holders to continue to hold the shares of Series D STAR Preferred that
are the subject of such Submitted Bids, and
(B)(I) each Submitted Bid from Potential Holders specifying such
lowest rate and (II) all other Submitted Bids from Potential Holders
specifying lower rates were accepted,
would result in such Existing Holders continuing to hold an aggregate number
of Outstanding shares of Series D STAR Preferred which, when added to the
number of Outstanding shares of Series D STAR Preferred to be purchased by
such Potential Holders, would equal not less than the Available STAR
Preferred.
(b) Promptly after the Trust Company has made the determinations pursuant to
Section 4(a) of this ARTICLE TWO, the Trust Company shall advise the Company of
the Maximum Rate and the Minimum Rate and, based on such determinations, the
Applicable Rate for the next succeeding Dividend Period as follows:
(i) if Sufficient Clearing Bids exist, that the Applicable Rate for the
next succeeding Dividend Period shall be equal to the Winning Bid Rate;
(ii) if Sufficient Clearing Bids do not exist (other than because all of
the Outstanding shares of Series D STAR Preferred are the subject of Submitted
Hold Orders), that the Applicable Rate for the next Succeeding Dividend Period
shall be equal to the Maximum Rate; or
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(iii) if all of the Outstanding shares of Series D STAR Preferred are the
subject of Submitted Hold Orders, that the Applicable Rate for the next
succeeding Dividend Period shall be equal to the Minimum Rate.
Section 5. Acceptance and Rejection of Submitted Bids and Submitted Sell Orders
-------------------------------------------------------------------
and Allocation of Shares.
- ------------------------
Based on the determinations made pursuant to Section 4(a) of this ARTICLE TWO,
the Submitted Bids and Submitted Sell Orders shall be accepted or rejected and
the Trust Company shall take such other action as set forth below:
(a) If Sufficient Clearing Bids have been made, subject to the provisions of
Sections 5(c) and 5(d) of this ARTICLE TWO, Submitted Bids and Submitted Sell
Orders shall be accepted or rejected as follows in the following order of
priority and all other Submitted Bids shall be rejected:
(i) the Submitted Sell Orders of Existing Holders shall be
accepted and the Submitted Bid of each of the Existing Holders specifying
any rate that is higher than the Winning Bid Rate shall be rejected, thus
requiring each such Existing Holder to sell the shares of Series D STAR
Preferred that are the subject of such Submitted Bid;
(ii) the Submitted Bid of each of the Existing Holders
specifying any rate that is lower than the Winning Bid Rate shall be
accepted, thus entitling each such Existing Holder to continue to hold
the shares of Series D STAR Preferred that are the subject of such
Submitted Bid;
(iii) the Submitted Bid of each of the Potential Holders
specifying any rate that is lower than the Winning Bid Rate shall be
accepted;
(iv) the Submitted Bid of each of the Existing Holders
specifying a rate that is equal to the Winning Bid Rate shall be
accepted, thus entitling each such Existing Holder to continue to hold
the shares of Series D STAR Preferred that are the subject of such
Submitted Bid, unless the number of Outstanding shares of Series D STAR
Preferred subject to all such Submitted Bids shall be greater than the
number of shares of Series D STAR Preferred ("remaining shares") equal to
the excess of the Available STAR Preferred over the number of shares of
Series D STAR Preferred subject to Submitted Bids described in clauses
(ii) and (iii) of this Section 5(a), in which event each such Existing
Holder shall be required to sell shares of Series D STAR Preferred, but
only in an amount equal to the difference between (A) the number of
Outstanding shares of Series D STAR Preferred then held by such Existing
Holder subject to such Submitted Bid and (B) the number of shares of
Series D STAR Preferred obtained by multiplying the number of remaining
shares by a fraction the numerator of which
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shall be the number of Outstanding shares of Series D STAR Preferred held
by such Existing Holder subject to such Submitted Bid and the denominator
of which shall be sum of the number of Outstanding shares of Series D
STAR Preferred subject to such Submitted Bids made by all such Existing
Holders that specified a rate equal to the Winning Bid Rate; and
(v) the Submitted Bid of each of the Potential Holders specifying a
rate that is equal to the Winning Bid Rate shall be accepted but only in
an amount equal to the number of shares of Series D STAR Preferred
obtained by multiplying the difference between the Available STAR
Preferred and the number of shares of Series D STAR Preferred subject to
Submitted Bids described in clauses (ii), (iii) and (iv) of this Section
5(a) by a fraction the numerator of which shall be the number of
Outstanding shares of Series D STAR Preferred subject to such Submitted
Bid and the denominator of which shall be the sum of the number of
Outstanding shares of Series D STAR Preferred subject to such Submitted
Bids made by all such Potential Holders that specified rates equal to the
Winning Bid Rate.
(b) If Sufficient Clearing Bids have not been made (other than because all of
the Outstanding shares of Series D STAR Preferred are subject to Submitted Hold
Orders), subject to the provisions of Sections 5(c) and 5(d) of this ARTICLE
TWO, Submitted Orders shall be accepted or rejected as follows in the following
order of priority and all other Submitted Bids shall be rejected:
(i) the Submitted Bid of each Existing Holder specifying any rate that
is equal to or lower than the Maximum Rate shall be accepted, thus
entitling such Existing Holder to continue to hold the shares of Series D
STAR Preferred that are the subject of such Submitted Bid;
(ii) the Submitted Bid of each Potential Holder specifying any rate
that is equal to or lower than the Maximum Rate shall be accepted; and
(iii) the Submitted Bids of each Existing Holder specifying any rate
that is higher than the Maximum Rate shall be rejected, thus requiring
each such Existing Holder to sell the shares of Series D STAR Preferred
that are the subject of such Submitted Bid, and the Submitted Sell Orders
of each Existing Holder shall be accepted, in both cases only in an
amount equal to the difference between (A) the number of Outstanding
shares of Series D STAR Preferred then held by such Existing Holder
subject to such Submitted Bid or Submitted Sell Order and (B) the number
of shares of Series D STAR Preferred obtained by multiplying the
difference between the Available STAR Preferred and the aggregate number
of shares of Series D STAR Preferred subject to Submitted Bids described
in clauses (i) and (ii) of this Section 5(b) by a fraction the
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numerator of which shall be the number of Outstanding shares of Series D
STAR Preferred held by such Existing Holder subject to such Submitted Bid
or Submitted Sell Order and the denominator of which shall be the number
of Outstanding shares of Series D STAR Preferred subject to all such
Submitted Bids and Submitted Sell Orders.
(c) If as a result of the procedures described in Sections 5(a) or 5(b) of
this ARTICLE TWO, any Existing Holder would be entitled or required to sell, or
any Potential Holder would be entitled or required to purchase, a fraction of a
share of Series D STAR Preferred on any Auction Date, the Trust Company shall,
in such manner as, in its sole discretion, it shall determine, round up or down
the number of shares of Series D STAR Preferred to be purchased or sold by any
Existing Holder or Potential Holder on such Auction Date so that the number of
shares purchased or sold by each Existing Holder or Potential Holder on such
Auction Date shall be whole shares of Series D STAR Preferred.
(d) If as a result of the procedures described in Section 5(a) of this ARTICLE
TWO, any Potential Holder would be entitled or required to purchase less than a
whole share of Series D STAR Preferred on any Auction Date, the Trust Company
shall, in such manner as, in its sole discretion, it shall determine, allocate
shares for purchase among Potential Holders so that only whole shares of Series
D STAR Preferred are purchased on such Auction Date by any Potential Holder,
even if such allocation results in one or more of such Potential Holders not
purchasing shares of Series D STAR Preferred on such Auction Date.
(e) Based on the results of each Auction, the Trust Company shall determine
the aggregate number of shares of Series D STAR Preferred to be purchased and
the aggregate number of shares of Series D STAR Preferred to be sold by
Potential Holders and Existing Holders on whose behalf each Broker-Dealer
submitted Bids or Sell Orders, and, with respect to each Broker-Dealer, to the
extent that such aggregate number of shares to be purchased and such aggregate
number of shares to be sold differ, determine to which other Broker-Dealer or
Broker-Dealers acting for one or more purchasers such Broker-Dealer shall
deliver, or from which other Broker-Dealer or Broker-Dealers acting for one or
more sellers such Broker-Dealer shall receive, as the case may be, shares of
Series D STAR Preferred.
Section 6. Participation in Auctions.
-------------------------
Neither the Company nor any Affiliate of the Company may submit a Bid in any
Auction.
Section 7. Miscellaneous.
-------------
The Board of Directors of the Corporation may interpret or adjust the
provisions of this ARTICLE TWO to resolve any inconsistency or ambiguity, remedy
any formal defect or make any other change or modification which does
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not adversely affect the rights of Existing Holders of Series D STAR Preferred.
During the Initial Dividend Period and so long as the Applicable Rate is based
on the results of an Auction, (a) shares of Series D STAR Preferred may be sold,
transferred or otherwise disposed of only pursuant to a Bid or Sell Order in
accordance with the procedures described in this ARTICLE TWO or to or through a
Broker-Dealer or to a Person that has delivered a signed copy of a Purchaser's
Letter to the Trust Company, provided that in the case of all transfers other
than pursuant to Auctions the transferor, its Broker-Dealer or its Agent Member
advises the Trust Company of such transfer, and (b) except as otherwise provided
by law or if there is no Securities Depository, all Outstanding shares of Series
D STAR Preferred shall be represented by a certificate or certificates
registered in the name of the nominee of the Securities Depository, and no
Person acquiring shares of Series D STAR Preferred shall be entitled to receive
a certificate representing such shares.
As long as the Applicable Rate is not based on LIBOR, the Corporation shall be
obligated to exercise its best efforts to maintain a Trust Company pursuant to
an agreement containing terms no less favorable to the Corporation than the
terms of the agreement first entered into by the Corporation pursuant to the
resolutions adopted by the Board of Directors of the Corporation on March 14,
1985.
Section 8. Headings of Subdivisions.
------------------------
The headings of the various subdivisions of this ARTICLE TWO are for
convenience of reference only and shall not affect the interpretation of any of
the provisions hereof.
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I, C. Suzanne Womack, hereby certify that I am the duly elected and qualified
Secretary of Lincoln National Corporation, that the following is a true and
correct copy of a resolution adopted by the Board of Directors at their regular
meeting of May 5, 1988, and that such resolution is in full force and effect as
of the date hereof:
WHEREAS, On May 5, 1988 the shareholders of the Corporation approved
an Amendment to the Articles of Incorporation of the Corporation ("the
Approved Amendment") which eliminates the Par Value designation for the
Corporation's Common Stock and the No Par Value designation for the
Corporation's Preferred Stock; and
WHEREAS, Pursuant to Article V, Section 4 of the Articles of
Incorporation of the Corporation, the Board of Directors is authorized to
determine and state the designations and relative rights with respect to
each series of the Corporation's Preferred Stock in the manner provided by
law;
NOW, THEREFORE, BE IT RESOLVED, That in conformance with the Approved
Amendment, the Certificates of Resolution adopted by the Board on May 28,
1969 with respect to the Corporation's Series A Preferred Stock and
November 13, 1984 with respect to the Corporation's STAR Preferred Stock,
Series B and the Certificates of Resolution adopted by the Preferred Stock
Committee of the Board on June 25, 1985 with respect to the Corporation's
STAR Preferred Stock, Series C and D, all such Certificates of Resolution
now being part of the Articles of Incorporation of the Corporation
according to law, are amended to eliminate all references to Par Value and
No Par Value and any related terms and punctuation contained therein, to be
effective with the filing of Articles of Amendment to the Articles of
Incorporation of the Corporation ("Articles of Amendment") with the
Secretary of State of the State of Indiana ("Secretary of State"); and
RESOLVED FURTHER, That the proper officers of the Corporation are
authorized to file with the Secretary of State Articles of Amendment
reflecting the elimination of such Par Value and No Par Value references
and related terms and punctuation and such other documents as may be
necessary, advisable or appropriate to carry out the intent of this
resolution.
May 18, 1988 /s/ C. Suzanne Womack
---------------------------------
C. Suzanne Womack, Secretary
<PAGE>
STATE OF INDIANA
OFFICE OF THE SECRETARY OF STATE
ARTICLES OF AMENDMENT
TO Whom These Presents Come, Greeting:
WHEREAS, there has been presented to me at this office, Articles of Amendment
for:
LINCOLN NATIONAL CORPORATION
and said Articles of Amendment have been prepared and signed in accordance with
the provisions of the Indiana Business Corporation Law, as amended.
NOW, THEREFORE, I, JOSEPH H. HOGSETT, Secretary of State of Indiana, hereby
certify that I have this day filed said articles in this office.
The effective date of these Articles of Amendment is July 03, 1990.
In Witness Whereof, I have hereunto set my
hand and affixed the seal of the State of
Indiana, at the City of Indianapolis, this
Third day of July, 1990
-------------------------------------------
JOSEPH H. HOGSETT, Secretary of State
By
-----------------------------------------
Deputy
<PAGE>
ARTICLES OF AMENDMENT
OF THE
ARTICLES OF INCORPORATION
LINCOLN NATIONAL CORPORATION
The undersigned officer of LINCOLN NATIONAL CORPORATION (hereinafter referred
to as "Corporation") existing pursuant to the provisions of the Indiana
Business Corporation Law, as amended (hereinafter referred to as the "Act"),
desiring to give notice of corporate action effectuating amendment of its
Articles of Incorporation, certifies to the following facts:
ARTICLE I
AMENDMENT
SECTION 1. The date of incorporation of the Corporation is January 5, 1968.
SECTION 2. The name of the Corporation is LINCOLN NATIONAL CORPORATION.
SECTION 3. The text of the amendment, which determines and sets forth the
designation and the relative rights, preferences, qualifications, limitations
and restrictions (other than voting rights) of the shares of a series of
Preferred Stock, is as follows:
Section 1. Designation.
-----------
1.1 The designation of the series of Preferred Stock, without par value, of
the Corporation created by this amendment is the "5 1/2% Cumulative Convertible
Exchangeable Preferred Stock, Series E", without par value (the "Series E
Preferred Stock").
Section 2. Authorized Number of Shares
---------------------------
2.1 The number of authorized shares constituting the Series E Preferred Stock
is 2,201,443 shares.
<PAGE>
Section 3. Dividends.
---------
3.1 The holders of shares of Series E Preferred Stock shall be entitled to
receive, when and as declared by the Board of Directors of the Corporation (the
"Board") out of assets of the Corporation legally available therefor, cumulative
cash dividends at the annual rate of 5 1/2% of the Liquidation Preference
(specified in section 5.1 hereof) per share, and no more, payable quarterly on
the 5th day of March, June, September and December in each year beginning on the
first quarterly dividend payment date following the first date on which the
Corporation shall issue any shares of the Series E Preferred Stock. Dividends on
the Series E Preferred Stock shall be cumulative from the first date on which
the Corporation shall issue any shares of the Series E Preferred Stock.
Dividends on the Series E Preferred Stock shall be payable to holders of record
as they appear on the stock record books of the Corporation on the dividend
payment dates, provided that the Board or any duly authorized committee may in
any case fix a record date, not more than 60 days nor less than 15 days before
the dividend payment date, in which event the dividend shall be payable to the
holders of record on such record date (whether or not such holders shall have
exercised their rights of conversion after such record date). Dividends on the
Series E Preferred Stock will be calculated on the basis of a 360-day year of
twelve 30-day months.
Holders of the Series E Preferred Stock shall not be entitled to any interest,
or sum of money in lieu of interest, in respect of any dividend payment or
payments on shares of Series E Preferred Stock which may be in arrears.
3.2 No dividend shall be declared or paid or set apart for payment on shares
of any series of the Preferred Stock of the Corporation for any period unless
full cumulative dividends on all outstanding shares of Series E Preferred Stock
shall have been or shall contemporaneously be declared and paid or declared and
a sum sufficient for payment thereof set apart for such payment for the current
and all past dividend periods; provided, however, that there may be declared and
paid or declared and a sum sufficient for payment thereof set apart for such
payment full dividends on all outstanding shares of Series A Preferred Stock
created by resolutions of the Board adopted on May 28, 1969 outstanding on the
first date the Corporation issues any shares of Series E Preferred Stock and
dividends pro rata, as provided in the next proviso, on all outstanding shares
of Series E Preferred Stock and of all series of Preferred Stock ranking on a
parity with the Series E Preferred Stock with respect to dividends; and provided
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<PAGE>
further that dividends may be declared and paid or declared and a sum sufficient
for payment thereof set apart for such payment pro rata on all outstanding
shares of Series E Preferred Stock and all series of Preferred Stock of the
Corporation ranking on a parity with the Series E Preferred Stock with respect
to dividends so that the amounts of the dividends per share declared on the
respective outstanding series of such Preferred Stock shall bear to each other
the same ratios that the amounts of accumulated and unpaid dividends on such
respective series shall bear to each other.
3.3 No dividend (other than a dividend payable in Common Stock of the
Corporation or in any other shares of the Corporation ranking junior to the
shares of Series E Preferred Stock as to dividends and upon liquidation,
dissolution or winding up) shall be declared or paid or set apart for payment,
and no other distribution shall be declared or made, on shares of Common Stock
of the Corporation or any other shares of the Corporation ranking junior to the
Series E Preferred Stock as to dividends or upon liquidation, dissolution or
winding up, and no shares of Common Stock or Preferred Stock, other than the
Series E Preferred Stock, of the Corporation and no other shares of the
Corporation ranking junior to or on a parity with the Series E Preferred Stock
as to dividends or upon liquidation, dissolution or winding up (except Series F
Preferred Stock contemplated in resolutions adopted by the Board on June 25,
1990) shall be redeemed, purchased or otherwise acquired for any consideration
(and no moneys shall be paid to or made available for a sinking fund for the
redemption of any such shares) by the Corporation (except by conversion into or
exchange for shares of Common Stock or other shares of the Corporation ranking
junior to the Series E Preferred Stock as to dividends and upon liquidation,
dissolution or winding up), unless, in each such case, full cumulative cash
dividends on all outstanding shares of Series E Preferred Stock shall have been
or shall contemporaneously be declared and paid or declared and a sum sufficient
for payment thereof set apart for such payment for the current and all past
dividend periods and unless, in the case of any such action after the twelfth
anniversary of the first date on which shares of Series E Preferred Stock are
issued, no shares of Series E Preferred Stock shall be outstanding.
Section 4. Voting.
------
The holders of the Series E Preferred Stock shall have the voting rights
provided in Section 5 Article V of the Articles of Incorporation of the
Corporation.
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<PAGE>
Section 5. Liquidation Rights.
------------------
5.1 In the event of the liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, the holders of shares of Series E
Preferred Stock then outstanding shall be entitled to receive, after payment or
provision for payment of all creditors of the Corporation, but before any
distribution or payment shall be made in respect of the Common Stock or any
other shares of the Corporation ranking junior to the Series E Preferred Stock
upon liquidation, dissolution or winding up, an amount equal to $68.85 per share
(the "Liquidation Preference"), plus an amount equal to all accumulated and
unpaid dividends thereon (whether or not earned or declared) to the distribution
or payment date, but such holders shall not be entitled to any further
participation in any distribution or payment in connection with any such
liquidation, dissolution or winding up. If, upon any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the Corporation, the
net assets of the Corporation distributable among the holders of all outstanding
shares of Series E Preferred Stock and any other series of Preferred Stock and
of any other shares of the Corporation ranking on a parity with the Series E
Preferred Stock upon liquidation, dissolution, or winding up shall be
insufficient to permit the payment in full to all such holders of the
preferential amounts to which they are entitled, then, the net assets so
distributable shall be distributed among such holders ratably in proportion to
the full amounts to which they would otherwise be entitled.
5.2 Neither the consolidation or merger of the Corporation with or into any
other corporation or corporations, nor the sale or transfer by the Corporation
of all or any part of its assets, shall be deemed to be a liquidation,
dissolution or winding up of the Corporation for purposes of this Section 5.
Section 6. Redemption.
----------
6.1 The Corporation may at its option at any time or from time to time redeem,
in whole or in part, any share of Series E Preferred Stock that, at the time the
notice of redemption thereof is given as provided in Section 6.3 hereof, is not
beneficially owned by The Dai-ichi Mutual Life Insurance Company ("Dai-ichi") or
any direct or indirect successor to all or substantially all of Dai-ichi's
business or by any corporation at least 99% of whose outstanding voting
securities is at the time owned directly or indirectly by such Company or any
such successor and which agrees to be bound to the same obligations as to which
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<PAGE>
Dai-ichi is bound under that certain Investment Agreement, dated as of June 25,
1990, at a redemption price per share, in cash, equal to the Liquidation
Preference plus an amount equal to all accumulated and unpaid dividends thereon
(whether or not earned or declared) to the redemption date.
If fewer than all of the outstanding shares of Series E Preferred Stock that
are subject to redemption pursuant to the provisions of this Section 6.1 are to
be redeemed, the Board shall have complete discretion as to which of such shares
subject to redemption are to be redeemed.
6.2 On the twelfth anniversary of the first date on which shares of Series E
Preferred Stock are issued, the Corporation shall redeem (but only out of assets
of the Corporation legally available therefor and subject to any applicable
redemption or dividend limitations set forth in Section 2.3 of the terms of the
Series A Preferred Stock and Section 3(d) of the terms of the Series B, C and D
Preferred Stocks, as such terms are in effect at the date of this amendment to
the Articles of Incorporation, Section 9.3 of the Purchase Agreement, dated as
of July 13, 1979, for the purchase of the Company's 9-3/4% Subordinated Notes
due 1994, Section 8.6 of the $300,000,000 Revolving Credit Agreement, dated as
of July 14, 1987, among the Company, Swiss Bank Corporation International
Limited, Swiss Bank Corporation, New York Branch, and several financial
institutions and Section 5.06 of the $200,000,000 Revolving Credit Agreement,
dated as of July 28, 1987, among the Company, certain financial institutions and
Morgan Guaranty Trust Company of New York) all shares of Series E Preferred
Stock then outstanding, at a redemption price per share, in cash, equal to the
Liquidation Preference per share plus an amount equal to all accumulated and
unpaid dividends thereon (whether or not earned or declared) to the redemption
date, provided, however, that this Section 6.2 shall not apply to any shares in
exchange for which the Corporation shall on such date issue other securities
pursuant to and in accordance with the provisions of Section 7 hereof. In the
event that on such twelfth anniversary date the Corporation shall be unable, by
reason of an insufficiency of assets legally available therefor or by reason of
the redemption and dividend limitations referred to above, to redeem all of the
outstanding shares of Series E Preferred Stock, the Corporation shall redeem on
such twelfth anniversary date under this Section 6.2 such number of shares as it
shall be able to redeem, pro rata as nearly as practicable (without redemption
of fractions of shares) in proportion to the respective numbers of shares held
by each holder, and thereafter, if and to the extent assets shall at any time or
-5-
<PAGE>
from time to time become legally available therefor and such redemption and
dividend limitations shall permit, the Corporation shall as promptly as
practicable redeem shares of Series E Preferred Stock, pro rata as provided
above, at such redemption price, plus an amount equal to accumulated and unpaid
dividends thereon (whether or not earned or declared) to the redemption date.
6.3 In the event the Corporation shall elect or be obligated to redeem shares
of Series E Preferred Stock, notice of such redemption shall be given by
airmail, postage prepaid, mailed not less than 30 nor more than 60 days prior to
the redemption date, to each holder of record of the shares to be redeemed, at
such holder's address as the same shall appear on the stock record books of the
Corporation. Each such notice shall state: (1) the redemption date; (2) the
number of shares of Series E Preferred Stock to be redeemed and, if fewer than
all the shares held by the holder are to be redeemed, the number of such
holder's shares to be redeemed; (3) the redemption price; (4) the place or
places in the States of Indiana or New York where certificates for such shares
are to be surrendered for payment of the redemption price; (5) that dividends on
the shares to be redeemed will cease to accumulate on the redemption date
specified in the notice; (6) the provision of this amendment to the Articles of
Incorporation authorizing or requiring such redemptions; and (7) the then
effective Conversion Price (as defined in Section 8.1 hereof), that until the
close of business on the redemption date the holders may exercise their right to
convert shares of Series E Preferred Stock being redeemed and that such right
will terminate at the close of business on the redemption date.
6.4 From and after the redemption date specified in any such notice of
redemption, unless default shall be made by the Corporation in providing monies
at the time and place specified for payment of the redemption price pursuant to
such notice, all dividends on the shares of Series E Preferred Stock thereby
called for redemption shall cease to accumulate and all rights of the holders
thereof as such holders, except the right to receive the redemption price upon
surrender, shall cease and terminate.
6.5 The Corporation may, however, at any time prior to the redemption date
specified in a duly given notice of redemption but after such notice of
redemption shall have been mailed as aforesaid, deposit in trust for the benefit
of the holders of the Series E Preferred Stock to be redeemed, with a bank or
trust company in good standing organized under the laws of the United States of
-6-
<PAGE>
America or of the State of New York, or of the State of Indiana, doing business
in the Borough of Manhattan, City of New York, or in the State of Indiana,
having capital, surplus and undivided profits aggregating at least $50,000,000,
designated in such notice of redemption, an amount in cash equal to the
redemption price of all such shares so called for redemption under arrangements
providing irrevocably for payment to such holders, and thereupon, whether or not
certificates for the shares so called for redemption shall have been surrendered
for cancellation (if such notice shall state that holders of the shares so
called for redemption may receive their redemption price at any time after such
deposit), all shares with respect to which such deposit shall have been made
shall be deemed to be no longer outstanding, dividends thereon for any period
after the date so fixed for redemption shall cease to accumulate and all rights
with respect to such shares shall forthwith upon such deposit in trust cease and
terminate except only (a) the rights of the holders thereof to receive from such
bank or trust company, at any time after the time of such deposit, the
redemption price of such shares to be redeemed, or (b) the right to exercise, on
or before the close of business on the date fixed for redemption, the privileges
of conversion. Any moneys so deposited by the Corporation which shall not be
required for such redemption because of the exercise of any such right of
conversion, shall be repaid to the Corporation forthwith. Any moneys so
deposited by the Corporation and unclaimed at the end of six years from the date
fixed for such redemption shall be repaid to the Corporation upon its request
expressed in a resolution of its Board of Directors, after which repayment the
holders of the shares so called for redemption shall look only to the
Corporation for the payment thereof.
6.6 Nothing in this Section 6 shall limit any legal right of the
Corporation to purchase or otherwise acquire any shares of the Series E
Preferred Stock at not exceeding the price at which the same may be redeemed at
the option of the Corporation.
Section 7. Exchange.
--------
7.1 On the twelfth anniversary of the first date on which shares of Series
E Preferred Stock are issued, the Corporation may, at its option, with respect
to any shares of Series E Preferred Stock then outstanding, other than any for
which notice of redemption shall have previously been given, issue in exchange
therefor either:
(1) a whole number of shares of a series of nonconvertible Preferred
Stock of the Corporation, or
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<PAGE>
(2) a whole number of shares of Common Stock of the Corporation,
or any combination of shares described in the foregoing clauses (1) and (2) (and
cash in lieu of fractional interests, if any), provided that the shares so
issued shall (a) have on the date of issue an aggregate fair market value, as
determined by an Independent Financial Firm (as defined hereinafter in this
Section 7.1) selected by the Board, equal to the aggregate Liquidation
Preference of the shares of Series E Preferred Stock for which such shares are
to be issued in exchange, plus an amount equal to accumulated and unpaid
dividends on such shares of Series E Preferred Stock (whether or not earned or
declared) to the exchange date; (b) be free of any transfer restriction and, if
and to the extent necessary for public offering and sale, registered or
qualified under the Federal Securities Act of 1933, as amended, or any successor
statute, and under such State securities laws as any holder may reasonably
request (provided, that in connection with qualification under State securities
laws the Corporation shall not be obligated to qualify to do business in any
jurisdiction when it is not so qualified or to take any action that would
subject it to taxation or general service of process in any State where it is
not otherwise subject to taxation or general service of process); and (c) in the
case of Common Stock, listed on each securities exchange, if any, upon which
outstanding Common Stock is listed at the time of the exchange. The term
"Independent Financial Firm," as of any time, shall mean an internationally
recognized investment banking or investment advisory firm which does not at such
time have a direct or indirect material interest in, or other direct or indirect
material relationship with, the Corporation or any of its subsidiaries or
affiliates.
7.2 In the event the Corporation shall elect to issue shares in exchange
pursuant to Section 7.1 hereof, notice of such exchange shall be given by
airmail, postage prepaid, mailed not less than 30 nor more than 60 days prior to
the exchange date, to each holder of record of the shares of Series E Preferred
Stock to be exchanged, at such holder's address as the same shall appear on the
stock record books of the Corporation. Each such notice shall state: (1) the
exchange date; (2) the number and terms of the shares to be issued in exchange
for shares held by such holder; (3) the identity of the Independent Financial
Firm selected by the Board to determine fair market value as provided in Section
7.1 hereof; (4) the place or places in the State of Indiana or New York where
certificates for the shares of Series E Preferred Stock to be exchanged are to
be surrendered for the shares to be issued in exchange
-8-
<PAGE>
therefor; (5) that dividends on the shares of Series E Preferred Stock to be
exchanged will cease to accumulate on the exchange date; and (6) the then
effective Conversion Price (as defined in Section 8.1 hereof), that until the
close of business on the exchange date the holders may exercise their right to
convert shares of Series E Preferred Stock being exchanged and that such right
shall terminate at the close of business on the exchange date.
7.3 From and after the exchange date specified on any such notice of exchange,
unless default shall be made by the Corporation in issuing the shares to be
issued in the exchange, all dividends on the shares of Series E Preferred Stock
to be exchanged as specified in the notice shall cease to accumulate and all
rights of the holders thereof as such holders, except the right to receive the
shares to be issued in the exchange, shall cease and terminate and the person or
persons entitled to the shares to be issued in the exchange shall be treated for
all purposes as the registered holder of the shares to be issued.
Section 8. Conversion.
----------
8.1 Subject to and upon compliance with the provisions of this Section 8, the
holder of each share of Series E Preferred Stock shall have the right, at the
holder's option, at any time (except that, if such share is called for
redemption or exchange, not after the close of business on the date fixed for
such redemption or exchange, unless default shall be made in the payment of the
redemption price or the issuance of shares in the exchange) to convert such
share into that number of fully paid and nonassessable shares of Common Stock
(calculated as to each conversion to the nearest l/l,000th of a share) obtained
by dividing the Liquidation Preference of such share being converted by the
Conversion Price (as defined below) and by surrender of such share so to be
converted, such surrender to be made in the manner provided in Section 8.2.
For the purposes of this Section 8, the term "Common Stock" shall include any
stock of any class of the Corporation which has no preference in respect of
dividends or of amounts payable in the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Corporation and which is not
subject to redemption by the Corporation. However, shares issuable on conversion
of shares of Series E Preferred Stock shall include only shares of the class
designated as Common Stock of the Corporation as of the date of this amendment
to the Articles of Incorporation creating the Series E Preferred Stock, or
shares of any class or classes resulting from any reclassi-
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<PAGE>
fication or reclassifications thereof and which have no preference in respect of
dividends or of amounts payable in the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Corporation and which are not
subject to redemption by the Corporation; provided that if at any time there
shall be more than one such resulting class, the shares of each such class then
so issuable upon conversion shall be substantially in the proportion which the
total number of shares of such class resulting from all such reclassifications
bears to the total number of shares of all such classes resulting from all such
reclassifications.
The term "Conversion Price" shall mean the Initial Conversion Price, as
adjusted in accordance with the provisions of this Section 8. The term "Initial
Conversion Price" shall mean an amount equal to the Liquidation Preference. On
the fifth anniversary of the first date on which shares of Series E Preferred
Stock are issued, the Conversion Price then in effect shall be increased by
4-1/6% and on the eighth anniversary of such first date, the Conversion Price
then in effect shall be increased by 4%.
8.2 In order to exercise the conversion privilege, the holder of each share
of Series E Preferred Stock to be converted shall surrender the certificate
representing such share at the office of the conversion agent for the Series E
Preferred Stock in the Borough of Manhattan, City of New York, appointed for
such purpose by the Corporation or, if no conversion agent has been appointed,
to the Corporation at its offices at 1300 South Clinton, Fort Wayne, Indiana
46801 Attention: Treasurer (such conversion agent or Corporation, as the case
may be, referred to herein as the "conversion agent"), with the Notice of
Election to Convert on the back of said certificate completed and signed. Such
notice shall be substantially in the following form:
"NOTICE OF ELECTION TO CONVERT
The undersigned, being a holder of the 5-1/2% Cumulative Convertible
Exchangeable Preferred Stock, Series E (the "Series E Preferred Stock") of
Lincoln National Corporation, irrevocably exercises the right to convert
_____ outstanding shares of Series E Preferred Stock on _______, ______, into
shares of Common Stock of Lincoln National Corporation in accordance with
the terms of the Series E Preferred Stock, and directs that the shares
issuable and deliverable upon the conversion, together with any check in
payment for fractional shares, be issued and delivered in the
denominations indicated below to the
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<PAGE>
registered holder hereof unless a different name has been indicated below. If
shares are to be issued in the name of a person other than the undersigned, the
undersigned will pay all transfer taxes payable with respect thereto.
Dated:
Fill in for registration of
shares of Common Stock
if to be issued otherwise
than to the registered
holder:
If fractional interests:
- --------------------------
Name TAX ID # _______________
- --------------------------
Address
- -------------------------- --------------------------
(Please print name and (Signature)
address, including
postal code number)
Denominations: ____________"
Unless the shares issuable on conversion are to be issued in the same name as
the name in which such share of Series E Preferred Stock is registered, each
share surrendered for conversion shall be accompanied by instruments of
transfer, in form satisfactory to the Corporation, duly executed by the holder
or his duly authorized attorney and an amount sufficient to pay any transfer or
similar tax. A payment shall be made on conversion for dividends accumulated on
the Series E Preferred Stock surrendered for conversion but not for dividends on
Common Stock delivered on such conversion. As promptly as practicable after the
surrender of the certificates for shares of Series E Preferred Stock as
aforesaid, the Corporation shall issue and shall deliver at such office to such
holder, or on his written order, a certificate or certificates for the number of
full shares of Common Stock issuable upon the conversion of such shares in
accordance with the provisions of this Section 8, and any fractional interest in
respect of a share of Common Stock arising upon such conversion shall be settled
as provided in Section 8.3 hereof.
Each conversion shall be deemed to have been effected immediately
prior to the close of business on the date on which the certificates for
shares of Series E
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<PAGE>
Preferred Stock shall have been surrendered and such notice received by the
Corporation as aforesaid, and the person or persons in whose name or names any
certificate or certificates for shares of Common Stock shall be issuable upon
such conversion shall be deemed to have become the holder or holders of record
of the shares represented thereby at such time on such date and such conversion
shall be at the Conversion Price in effect at such time on such date. All shares
of Common Stock delivered upon conversions of the Series E Preferred Stock shall
upon delivery be duly and validly issued and fully paid and non-assessable, free
of all liens and charges and not subject to any preemptive rights.
8.3 No fractional shares or scrip representing fractions of shares of
Common Stock shall be issued upon conversion of shares of Series E Preferred
Stock. Instead of any fractional interest in a share of Common Stock which would
otherwise be deliverable upon the conversion of a share of Series E Preferred
Stock, the Corporation shall pay to the holder of such share an amount in cash
(computed to the nearest one cent) equal to the Average Market Price of the
Common Stock at the close of business on the business day next preceding the day
of conversion. If more than one share shall be surrendered for conversion at one
time by the same holder, the number of full shares of Common Stock issuable upon
conversion thereof shall be computed on the basis of the aggregate Conversion
Price of the shares of Series E Preferred Stock so surrendered.
The term "Average Market Price" of any security on any date means the
average of the daily closing prices of such security for a period of five
consecutive trading days within the 10 trading days immediately preceding the
day in question, which five consecutive trading days are selected by the
Corporation provided, however, that if the "ex" date for any event (other than
the event requiring such computation) that requires an adjustment pursuant to
Section 8.4 occurs during the 10-trading day period in question and prior to the
"ex" date for the event requiring computation, the closing price for each
trading day prior to the "ex" date for such other event shall be adjusted by
multiplying such closing price by the same fraction by which the Conversion
Price is required to be adjusted pursuant to Section 8.4 as a result of such
other event (and in the case of Section 8.4(a) the fraction that would result in
the adjustment provided for therein). The closing price for each day shall be
the last reported sales price regular way or, in case no such reported sale
takes place on such day, the average of the reported closing bid and asked
prices regular way, in either case on the New York Stock Exchange
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<PAGE>
or, if such security is not listed or admitted to trading on such Exchange, on
the principal national securities exchange on which such security is listed or
admitted to trading or, if not listed or admitted to trading on any national
securities exchange, on the National Association of Securities Dealers Automated
Quotations National Market System or, if such security is not listed or admitted
to trading on any national securities exchange or quoted on such National Market
System, the average of the closing bid and asked prices in the over-the-counter
market as furnished by any New York Stock Exchange member firm selected from
time to time by the issuer of such security for that purpose. For the purposes
of this definition, the term "trading day" means each Monday, Tuesday,
Wednesday, Thursday and Friday, other than any day on which such security is not
traded on such exchange or in such market. For the purposes of this definition,
the term "'ex' date", (i) when used with respect to any issuance or
distribution, means the first date on which the Common Stock trades regular way
on the relevant exchange or in the relevant market from which the closing price
was obtained without the right to receive such issuance or distribution and (ii)
when used with respect to any subdivision or combination of shares of Common
Stock, means the first date on which the Common Stock trades regular way on such
exchange or in such market after the time at which such subdivision or
combination becomes effective.
8.4 In addition to the increases in the Conversion Price set forth in
Section 8.1 hereof, the Conversion Price shall be adjusted from time to time as
follows:
(a) In case the Corporation shall hereafter (i) pay a dividend or make
a distribution on the Common Stock in shares of Common Stock, (ii) subdivide
its outstanding shares of Common Stock into a greater number of shares, or
(iii) combine its outstanding shares of Common Stock into a smaller number
of shares, the Conversion Price in effect immediately prior to such action
shall be adjusted so that the holder of any share of Series E Preferred
Stock thereafter surrendered for conversion shall be entitled to receive the
number of shares of Common Stock which he would have been entitled to
receive immediately following such action had such share been converted
immediately prior thereto. An adjustment made pursuant to this Section
8.4(a) shall become effective immediately after the record date, in the case
of a dividend or distribution, or immediately after the effective date, in
the case of a subdivision or combination.
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<PAGE>
(b) In case the Corporation shall hereafter pay or make a dividend or other
distribution in shares of Common Stock on any class of capital stock of the
Corporation other than the Common Stock, the Conversion Price in effect
immediately after the record date mentioned in the next sentence shall be
adjusted so that the same shall equal the price determined by multiplying the
Conversion Price in effect immediately prior to the record date mentioned in the
next sentence by a fraction of which the numerator shall be the number of shares
of Common Stock outstanding at the close of business on the record date
mentioned in the next sentence and the denominator shall be the sum of such
number of shares and the total number of shares constituting such dividend or
other distribution. Such reduction shall become effective immediately after the
record date for the determination of shareholders entitled to receive such
dividend or other distribution. For the purposes of this Section 8.4(b), the
number of shares of Common Stock at any time outstanding shall not include
shares held in the treasury of the Corporation but shall include shares issuable
in respect of scrip certificates issued in lieu of fractions of shares of Common
Stock. The Corporation shall not pay any dividend or make any distribution on
shares of Common Stock held in the treasury of the Corporation.
(c) In case the Corporation shall hereafter issue rights or warrants to
holders of its outstanding shares of Common Stock generally entitling them to
subscribe for or purchase shares of Common Stock at a price per share less than
the Average Market Price of the Common Stock (as defined in Section 8.3 hereof)
on the record date mentioned in the next sentence (other than pursuant to an
automatic dividend reinvestment plan of the Corporation or any substantially
similar plan), the Conversion Price shall be reduced so that the same shall
equal the price determined by multiplying the Conversion Price in effect
immediately prior to the record date mentioned in the next sentence by a
fraction of which the numerator shall be the number of shares of Common Stock
outstanding at the close of business on the record date mentioned in the next
sentence plus the number of shares which the aggregate offering price of the
total number of shares so offered for subscription or purchase would purchase at
such Average Market Price, and of which the denominator shall be the number of
shares of Common Stock outstanding at the close of business on the record date
mentioned in the next sentence plus the number of
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shares of Common Stock so offered for subscription or purchase. Such reduction
shall become effective immediately after the record date for the determination
of shareholders entitled to receive such rights or warrants. For the purposes of
this Section 8.4(c), the number of shares of Common Stock at any time
outstanding shall not include shares held in the treasury of the Corporation but
shall include shares issuable in respect of scrip certificates issued in lieu of
fractions of shares of Common Stock. Rights or warrants issued or distributed by
the Company to all holders of its Common Stock entitling the holders thereof to
subscribe for or purchase shares of Common Stock, which rights or warrants (x)
are deemed to be transferred with such shares of Common Stock, (y) are not
exercisable and (z) are issued also in respect of future issuances of Common
Stock, in each case in clauses (x) through (z) until the occurrence of a
specified event or events ("Trigger Event"), shall for purposes of this Section
8.4 not be deemed issued or distributed until the occurrence of the earliest
Trigger Event. Such rights or warrants are referred to herein as "Rights".
(d) In case the Corporation shall, by dividend or otherwise, hereafter
distribute to holders of its outstanding shares of Common Stock generally
evidences of its indebtedness, any securities of the Corporation, any rights or
warrants to subscribe to securities of the Corporation, cash or assets
(excluding (i) any cash dividend paid from retained earnings of the Corporation
to the extent such dividends in any calendar year do not in the aggregate exceed
150% of the aggregate regular periodic cash dividends actually paid in the prior
calendar year, (ii) dividends or distributions payable in stock for which
adjustment is made pursuant to Section 8.4(a) or 8.4(b) hereof, (iii) rights or
warrants to subscribe to Common Stock for which adjustment is made pursuant to
Section 8.4(c) hereof, and (iv) pursuant to a consolidation, merger, statutory
exchange, sale or conveyance for which adjustment is made pursuant to Section
8.11 hereof), then in each such case the Conversion Price shall be adjusted so
that the same shall equal the price determined by multiplying the Conversion
Price in effect immediately prior to the record date mentioned in the next
sentence by a fraction (not equal to or less than zero) of which the numerator
shall be the Average Market Price of the Common Stock (as defined in Section 8.3
hereof) on the record date mentioned in the next sentence less the then fair
market value (as determined by the Board and
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Dai-ichi (or any direct or indirect successor to all or substantially all of
such Company's business) jointly (if such Company or successor or any
corporation at least 99% of whose outstanding voting securities at the time
outstanding is owned by such Company or successor shall be a holder of any
of the Series E Preferred Stock) or an internationally recognized investment
banking firm selected by them if they are unable to reach agreement, or the
Board in its reasonable discretion whose determination will be conclusive
and evidenced by a board resolution filed with the conversion agent (if none
of the foregoing shall be a holder of Series E Preferred Stock)) of the
portion of the evidences of indebtedness, securities, right or warrants,
cash or assets so distributed to the holder of one share of Common Stock,
and of which the denominator shall be such Average Market Price of the
Common Stock. Such adjustment shall become effective immediately after the
record date for the determination of shareholders entitled to receive such
distribution. Such determination of fair market value shall be set forth in
a statement filed with the conversion agent by the Corporation as soon as
practicable.
(e) The reclassification (including any reclassification upon a merger in
which the Corporation is the continuing corporation but excluding a
reclassification upon a consolidation, merger, statutory exchange, sale or
conveyance as to which Section 8.11 applies) of Common Stock into securities
including other than Common Stock shall be deemed to involve (i) a
distribution of such securities other than Common Stock to all holders of
Common Stock and the effective date of such reclassification shall be deemed
to be "the record date for the determination of shareholders entitled to
receive such distribution" within the meaning of Section 8.4(d) hereof, and
(ii) a subdivision or combination, as the case may be, of the number of
shares of Common Stock outstanding immediately prior to such
reclassification into the number of shares of Common Stock outstanding
immediately thereafter and the effective date of such reclassification shall
be deemed to be "the day upon which such subdivision becomes effective" or
"the day upon which such combination becomes effective", as the case may be.
(f) In any case in which this Section 8 shall require that an adjustment
be made immediately following a record date or an effective date, the
Corporation may elect to defer (but only until five business days following
the prompt filing by the Corporation with the
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conversion agent of the certificate of independent accountants required by
Section 8.4(h) hereof) issuing to the holder of any share of Series E
Preferred Stock converted after such record date or effective date the
additional shares of Common Stock or other capital stock issuable upon such
conversion over and above the shares of Common Stock or other capital stock
issuable upon such conversion on the basis of the Conversion Price prior to
adjustment, and paying to such holder any amount of cash in lieu of a
fractional share.
(g) All calculations under this Section 8 shall be made to the nearest one
cent or to the nearest l/l,000th of a share, as the case may be. Anything in
this Section 8 to the contrary notwithstanding, the Corporation shall be
entitled to make such reduction in the Conversion Price, in addition to
those required by this Section 8, as it considers to be advisable in order
that any stock dividend, subdivision of shares, distribution of rights to
purchase stock or securities, or distribution of securities convertible into
or exchangeable for stock hereafter made by the Corporation to its
shareholders shall not be taxable to the recipients.
(h) Whenever the Conversion Price is adjusted as herein provided, (A) the
Corporation shall promptly obtain and file with the conversion agent a
certificate of a firm of independent public accountants (who may be the
regular accountants employed by the Corporation) setting forth the
Conversion Price after such adjustment and setting forth a brief statement
of the facts requiring such adjustment and the manner of computing the same,
and (B) a notice stating that the Conversion Price has been adjusted and
setting forth that the adjusted Conversion Price shall forthwith be
airmailed by the Corporation to the holders of the Series E Preferred Stock
at their addresses as shown on the stock record books of the Corporation.
(i) In the event that at any time as a result of an adjustment made
pursuant to this Section 8, the holder of any share of Series E Preferred
Stock thereafter surrendered for conversion shall become entitled to receive
any shares of the Corporation other than shares of Common Stock, thereafter
the Conversion Price of such other shares so receivable upon conversion of
any share shall be subject to adjustment from time to time in a manner and
on terms as nearly equivalent as practicable to the provisions with respect
to Common Stock contained in this Section 8.
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(j) Anything herein to the contrary notwithstanding, in the event the
Corporation shall declare any dividend or distribution requiring an
adjustment in the Conversion Price hereunder and shall, thereafter and
before the payment of such dividend or distribution to shareholders, legally
abandon its plan to pay such dividend or distribution, the Conversion Price
then in effect hereunder, if changed to reflect such dividend or
distribution, shall be changed to the Conversion Price which would have been
in effect immediately after the date of such abandonment had such dividend
or distribution never been declared. Such change shall become effective
immediately after the date of such abandonment.
(k) No adjustment (except pursuant to Section 8.4(a)) in the Conversion
Price need be made unless the adjustment would require an increase or
decrease of at least 2% in the Conversion Price provided, however, that any
adjustments which by reason of this subsection (k) are not required to be
made shall be carried forward and taken into account in any subsequent
adjustment, and provided further, that adjustment shall be required and made
in accordance with the provisions hereof not later than such time as may be
required in order to preserve the tax-free nature of a distribution to the
holders of shares of Series E Preferred Stock.
8.5. In case:
(i) the Corporation shall declare a dividend (or any other distribution)
on its Common Stock other than a cash dividend payable in cash out of its
retained earnings for which adjustment under Section 8.4(d) is not required;
or
(ii) the Corporation shall authorize the granting to the holders of the
Common Stock of rights or warrants to subscribe for or purchase any shares
of stock of any class or of any other rights; or
(iii) there shall be any capital stock reorganization or reclassification
of the Common Stock (other than a subdivision or combination of the
outstanding Common Stock and other than a change in the par value of the
Common Stock), or any consolidation or merger to which the Corporation is a
party or any statutory exchange of securities with another corporation, or
any sale or transfer of all or substantially all the assets of the
Corporation, in each case which is to be effected in such a way that holders
of the Common Stock
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will be entitled to receive stock, securities, cash or other property with
respect to or in exchange for Common Stock; or
(iv) there shall be a voluntary dissolution, liquidation or winding
up of the Corporation;
then the Corporation shall cause to be filed with the conversion agent, and
shall cause to be airmailed to the holders of shares of the Series E Preferred
Stock at their addresses as shown on the stock record books of the Corporation,
at least 15 days (or 10 days in any case specified in clause (i) or (ii) above)
prior to the applicable record or effective date hereinafter specified, a notice
stating (A) the date on which a record is to be taken for the purpose of such
dividend, distribution, rights or warrants, or, if a record is not to be taken,
the date as of which the holders of Common Stock of record to be entitled to
such dividend, distribution, rights or warrants are to be determined, or (B) the
date on which such reorganization, reclassification, consolidation, merger,
statutory exchange, sale, transfer, dissolution, liquidation or winding up is
expected to become effective, and the date as of which it is expected that
holders of Common Stock of record shall be entitled to exchange their shares of
Common Stock for securities or other property deliverable upon such
reorganization, reclassification, consolidation, merger, statutory exchange,
sale, transfer, dissolution, liquidation or winding up.
8.6 The Corporation covenants that it will at all times reserve and keep
available, free from preemptive rights, out of the aggregate of its authorized
but unissued shares of Common Stock or its issued shares of Common Stock held in
its treasury, or both, for the purpose of effecting conversions of the Series E
Preferred Stock, the full number of shares of Common Stock, deliverable upon the
conversion of all outstanding shares of Series E Preferred Stock not theretofore
converted. For purposes of this Section 8.6, the number of shares of Common
Stock which shall be deliverable upon the conversion of all outstanding shares
of Series E Preferred Stock shall be computed as if at the time of computation
all such outstanding shares were held by a single holder.
8.7 Before taking any action which would cause an adjustment reducing the
Conversion Price below the then par value (if any) of the shares of Common Stock
deliverable upon conversion of the Series E Preferred Stock, the Corporation
will take any corporate action which may, in the opinion of its counsel, be
necessary in order that the
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Corporation may validly and legally issue fully paid and non-assessable shares
of Common Stock, at such adjusted Conversion Price.
8.8 The Corporation shall use its best efforts to list the shares of
Common Stock required to be delivered upon conversion of the Series E
Preferred Stock prior to such delivery upon each securities exchange, if any,
upon which the outstanding Common Stock is listed at the time of such delivery.
8.9 Prior to the delivery of any securities which the Corporation shall be
obligated to deliver upon conversion of the Series E Preferred Stock, the
Corporation shall use its best efforts to comply with all Federal and state laws
and regulations thereunder requiring the registration of such securities with,
or any approval of or consent to the delivery thereof by, any governmental
authority.
8.10 The Corporation shall pay any and all documentary, stamp or similar
issue or transfer taxes payable in respect of the issue or delivery of shares of
Common Stock on conversions of the Series E Preferred Stock pursuant hereto;
provided, however, that the Corporation shall not be required to pay any tax
which may be payable in respect of any transfer involved in the issue or
delivery of shares of Common Stock in a name other than that of the holder of
the Series E Preferred Stock to be converted and no such issue or delivery shall
be made unless and until the person requesting such issue or delivery has paid
to the Corporation the amount of any such tax or has established, to the
satisfaction of the Corporation, that such tax has been paid.
8.11 In case of any consolidation or merger in which the Corporation is a
party (other than a merger in which the Corporation is the continuing
corporation), or in case of any sale or conveyance to another corporation of the
property of the Corporation as an entirety or substantially as an entirety, or
in the case of any statutory exchange of securities with another corporation
(including any exchange effected in connection with a merger of a third
corporation into the Corporation), in each case effected in such a way that
holders of Common Stock shall be entitled to receive stock, securities, cash or
other property with respect to or in exchange for Common Stock, the holder of
each share of Series E Preferred Stock then outstanding shall have the right
thereafter to convert such share into the kind and amount of stock, securities,
cash or other property receivable upon such consolidation, merger, statutory
exchange, sale or conveyance by a holder of the number of
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shares of Common Stock into which such share of Series E Preferred Stock might
have been converted immediately prior to such consolidation, merger, statutory
exchange, sale or conveyance, assuming such holder of Common Stock failed to
exercise his rights of election, if any, as to the kind or amount of securities,
cash or other property receivable upon such consolidation, merger, statutory
exchange, sale or conveyance (provided, that if the kind or amount of
securities, cash or other property receivable upon such consolidation, merger,
statutory exchange, sale or conveyance is not the same for each share of Common
Stock in respect of which such rights of election shall not have been exercised
("non-electing share"), then for the purpose of this Section 8.11 the kind and
amount of securities, cash or other property receivable upon such consolidation,
merger, statutory exchange, sale or conveyance for each non-electing share shall
be deemed to be the kind and amount so receivable per share by a plurality of
the non-electing shares). Thereafter, the holders of the Series E Preferred
Stock shall be entitled to appropriate adjustments with respect to their
conversion rights to the end that the provisions set forth in this Section 8.11
shall correspondingly be made applicable, as nearly as may reasonably be, in
relation to any shares of stock or other securities or property thereafter
deliverable on the conversion of the Series E Preferred Stock. Any such
adjustment shall be approved by a firm of independent public accountants (who
may be the regular accountants employed by the Corporation), evidenced by a
certificate to that effect delivered to the conversion agent. The foregoing
provisions of this Section 8.11 shall similarly apply to successive
consolidations, mergers, statutory exchanges, sales or conveyances.
8.12 Notwithstanding Sections 8.4(c) and (d) hereof, no adjustments to the
Conversion Price by reason of any issuance or distribution of any Rights shall
be made if either (i) the Corporation had made proper provision so that each
holder of shares of Series E Preferred Stock who converts such shares into
shares of Common Stock after the record date for such distribution and prior to
the expiration or redemption of the Rights shall be entitled to receive upon
such conversion, in addition to the shares of Common Stock issuable upon such
conversion, a number of Rights to be determined as follows: (A) if such
conversion occurs on or prior to the date for the distribution to the holders of
Rights of separate certificates evidencing such Rights ("Distribution Date"),
the same number of Rights to which a holder of a number of shares of Common
Stock equal to the number of shares of Common Stock issuable upon such
conversion is entitled at the time of such conversion in accordance with the
terms and provisions of the applicable
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Rights; and (B) if such conversion occurs after the Distribution Date, the same
number of Rights to which a holder of the same number of shares of Common Stock
into which the shares of Series E Preferred Stock so converted was convertible
immediately prior to the Distribution Date would have been entitled on the
Distribution Date in accordance with the terms and provisions of and applicable
to the Rights or (ii) each holder of shares of Series E Preferred Stock shall
have received rights at all times substantially equivalent to the Rights, if
any, held from time to time by a holder of the number of shares of Common Stock
issuable upon conversion of the shares of Series E Preferred Stock held by such
Series E Preferred Stock holder.
Section 9. Status Upon Conversion, Redemption or Exchange.
----------------------------------------------
Upon any conversion, redemption or exchange of shares of Series E Preferred
Stock, the shares of Series E Preferred Stock so converted, redeemed or
exchanged shall have the status of authorized and unissued shares of Preferred
Stock undesignated as to series.
Section 10. General.
-------
10.1 Certificates representing shares of the Series E Preferred Stock
shall be exchangeable, at the option of the holder, for a new certificate or
certificates of the same or different denominations representing in the
aggregate the same number of shares.
10.2 The headings of the various subdivisions of this amendment to the
Articles of Incorporation are for convenience of reference only and shall not
affect the interpretation of any of the provisions hereof.
ARTICLE II
MANNER OF ADOPTION AND VOTE
SECTION 1. Action by Directors. The Board of Directors of the Corporation
adopted the foregoing amendment to the Articles of Incorporation by resolution
duly adopted at a meeting held on June 25, 1990, at which a quorum was present.
SECTION 2. Action by Shareholders. The foregoing amendment to the Articles
of Incorporation was duly adopted by the Board of Directors without shareholder
action. Pursuant to Sections 23-1-25-2(d) and 23-1-38-2(7) of the
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Act, no shareholder action is required in connection with such amendment to the
Articles of Incorporation.
SECTION 3. Compliance with Legal Requirements. The manner of adoption of
the Articles of Amendment and the vote by which they were adopted constitute
full legal compliance with the provisions of the Act and the Articles of
Incorporation and the Bylaws of the Corporation.
I hereby state subject to the penalties of perjury, that the statements
contained herein are true this 3rd day of July, 1990.
/s/ John L. Steinkamp
---------------------
Vice President
------------------
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DECLARATION OF NAME RECORDATION
I, Paje Etling, Assistant to the Counsel, State of Indiana, do hereby
----------- ------------------------
Name Title
declare that as of September 27, 1989, there was no Indiana corporation listed
by the name LINCOLN NATIONAL CORPORATION, INC., but rather there was an
Indiana corporation listed as
LINCOLN NATIONAL CORPORATION
1300 South [Clanton] Street
Fort Wayne, Indiana 46801
I hereby declare that all statements made herein of my own knowledge are
true and that all statements made on information and belief are believed to be
true; and further that these statements were made with the knowledge that
willful false statements and the like so made are punishable by fine or
imprisonment, or both, under Section 1001 of Title 18 of the United States Code,
and that such willful false statements may jeopardize the validity of the
application or any trademark issuing thereon.
Date July 30, 1990 Signature /s/ Paje Etling
------------------- -----------------------------
Title Assistant to the Counsel
-----------------------------
State of Indiana
<PAGE>
STATE OF INDIANA
OFFICE OF THE SECRETARY OF STATE
ARTICLES OF AMENDMENT
To Whom These Presents Come, Greeting:
WHEREAS, there has been presented to me at this office, Articles of Amendment
for:
LINCOLN NATIONAL CORPORATION
and said Articles of Amendment have been prepared and signed in accordance with
the provisions of the Indiana Business Corporation Law, as amended.
NOW, THEREFORE, I, JOSEPH H. HOGSETT, Secretary of State of Indiana, hereby
certify that I have this day filed said articles in this office.
The effective date of these Articles of Amendment is May 24, 1991.
In Witness Whereof, I have hereunto set my
hand and affixed the seal of the State of
Indiana, at the City of Indianapolis, this
Twenty-fourth day of May, 1991
-------------------------------------------
JOSEPH H. HOGSETT, Secretary of State
By_________________________________________
Deputy
<PAGE>
ARTICLES OF AMENDMENT
OF THE
ARTICLES OF INCORPORATION
LINCOLN NATIONAL CORPORATION
The undersigned officer of LINCOLN NATIONAL CORPORATION (the "Corporation")
existing pursuant to the provisions of the Indiana Business Corporation Law, as
amended (the "Act"), desiring to give notice of corporate action effectuating
amendment of its Articles of Incorporation, certifies to the following facts:
ARTICLE I
AMENDMENT
SECTION 1. The date of incorporation of the Corporation is January 5, 1968.
SECTION 2. The name of the Corporation is LINCOLN NATIONAL CORPORATION.
SECTION 3. The text of the following amendment, which determines and sets
forth the designation and the relative rights, preferences, qualifications,
limitations and restrictions (other than voting rights) of the shares of a
series of Preferred Stock, is as follows:
Section 1. Designation.
1.1 The designation of the series of Preferred Stock, without par value,
of the Corporation created by this amendment is the "5 1/2% Cumulative
Convertible Exchangeable Preferred Stock, Series F", without par value (the
"Series F Preferred Stock").
Section 2. Authorized Number of Shares.
2.1 The number of authorized shares constituting the Series F Preferred
Stock is 2,216,454 shares.
Section 3. Dividends.
3.1 The holders of shares of Series F Preferred Stock shall be entitled
to receive, when and as declared by the Board of Directors of the Corporation
(the "Board") out of assets of the Corporation legally available therefor,
cumulative cash dividends at the annual rate of 5 1/2% of the Liquidation
Preference (specified in Section 5.1 hereof) per share, and no more, payable
quarterly on the 5th day of March, June, September and December in each year
beginning on the first quarterly dividend payment date following the first
date on which the Corporation shall issue any shares of the Series F
<PAGE>
Preferred Stock. Dividends on the Series F Preferred Stock shall be cumulative
from the first date on which the Corporation shall issue any shares of the
Series F Preferred Stock. Dividends on the Series F Preferred Stock shall be
payable to holders of record as they appear on the stock record books of the
Corporation on the dividend payment dates, provided that the Board or any duly
authorized committee may in any case fix a record date, not more than 60 days
nor less than 15 days before the dividend payment date, in which event the
dividend shall be payable to the holders of record on such record date (whether
or not such holders shall have exercised their rights of conversion after such
record date). Dividends on the Series F Preferred Stock will be calculated on
the basis of a 360-day year of twelve 30-day months.
Holders of the Series F Preferred Stock shall not be entitled to any
interest, or sum of money in lieu of interest, in respect of any dividend
payment or payments on shares of Series F Preferred Stock which may be in
arrears.
3.2 No dividend shall be declared or paid or set apart for payment on shares
of any series of the Preferred Stock of the Corporation for any period unless
full cumulative dividends on all outstanding shares of Series F Preferred Stock
shall have been or shall contemporaneously be declared and paid or declared and
a sum sufficient for payment thereof set apart for such payment for the current
and all past dividend periods; provided, however, that there may be declared
and paid or declared and a sum sufficient for payment thereof set part for such
payment full dividends on all outstanding shares of $3.00 Cumulative Convertible
Preferred Stock, Series A, without par value (the "Series A Preferred Stock"),
created by resolutions of the Board adopted on May 28, 1969, which were
outstanding on July 6, 1990, the first date the Corporation issued any shares
of its 5-1/2% Cumulative Convertible Exchangeable Preferred Stock, Series E
(the "Series E Preferred Stock") and dividends pro rata, as provided in the
next proviso, on all outstanding shares of Series F Preferred Stock and of all
series of Preferred Stock ranking on a parity with the Series F Preferred Stock
with respect to dividends; and provided further that dividends may be declared
and paid or declared and a sum sufficient for payment thereof set apart for such
payment pro rata on all outstanding shares of Series F Preferred Stock and all
series of Preferred Stock of the Corporation ranking on a parity with the Series
F Preferred Stock with respect to dividends so that the amounts of the dividends
per share declared on the respective outstanding series of such Preferred Stock
shall bear to each other the same ratios that the amounts of accumulated and
unpaid dividends on such respective series shall bear to each other.
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3.3 No dividend (other than a dividend payable in Common Stock of the
Corporation or in any other shares of the Corporation ranking junior to the
shares of Series F Preferred Stock as to dividends and upon liquidation,
dissolution or winding up) shall be declared or paid or set apart for payment,
and no other distribution shall be declared or made, on shares of Common Stock
of the Corporation or any other shares of the Corporation ranking junior to the
Series F Preferred Stock as to dividends or upon liquidation, dissolution or
winding up, and no shares of Common Stock or Preferred Stock, other than the
Series F Preferred Stock, of the Corporation and no other shares of the
Corporation ranking junior to or on a parity with the Series F Preferred Stock
as to dividends or upon liquidation, dissolution or winding up (except the
Series E Preferred Stock) shall be redeemed, purchased or otherwise acquired
for any consideration (and no moneys shall be paid to or made available for a
sinking fund for the redemption of any such shares) by the Corporation (except
by conversion into or exchange for shares of Common Stock or other shares of
the Corporation ranking junior to the Series F Preferred Stock as to dividends
and upon liquidation, dissolution or winding up), unless, in each such case,
full cumulative cash dividends on all outstanding shares of Series F Preferred
Stock shall have been or shall contemporaneously be declared and paid or
declared and a sum sufficient for payment thereof set apart for such payment
for the current and all past dividend periods and unless, in the case of any
such action after July 6, 2002, the twelfth anniversary of the first date on
which shares of Series E Preferred Stock were issued, no shares of Series F
Preferred Stock shall be outstanding.
Section 4. Voting.
------
The holders of the Series F Preferred Stock shall have the voting rights
provided in Section 5 Article V of the Articles of Incorporation of the
Corporation.
Section 5. Liquidation Rights.
------------------
5.1 In the event of the liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, the holders of shares of Series
F Preferred Stock then outstanding shall be entitled to receive, after payment
or provision for payment of all creditors of the Corporation, but before any
distribution or payment shall be made in respect of the Common Stock or any
other shares of the Corporation ranking junior to the Series F Preferred Stock
upon liquidation, dissolution or winding up, an amount equal to $71.604 per
share (the "Liquidation Preference"), plus an amount equal to all accumulated
and unpaid dividends thereon (whether or not earned or declared) to the
distribution or payment date, but such
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<PAGE>
holders shall not be entitled to any further participation in any distribution
or payment in connection with any such liquidation, dissolution or winding up.
If, upon any voluntary or involuntary liquidation, dissolution or winding up of
the affairs of the Corporation, the net assets of the Corporation distributable
among the holders of all outstanding shares of Series F Preferred Stock and any
other series of Preferred Stock and of any other shares of the Corporation
ranking on a parity with the Series F Preferred Stock upon liquidation,
dissolution, or winding up shall be insufficient to permit the payment in full
to all such holders of the preferential amounts to which they are entitled,
then, the net assets so distributable shall be distributed among such holders
ratably in proportion to the full amounts to which they would otherwise be
entitled.
5.2 Neither the consolidation or merger of the Corporation with or into any
other corporation or corporations, nor the sale or transfer by the Corporation
of all or any part of its assets, shall be deemed to be a liquidation,
dissolution or winding up of the Corporation for purposes of this Section 5.
Section 6. Redemption.
----------
6.1 The Corporation may at its option at any time or from time to time
redeem, in whole or in part, any share of Series F Preferred Stock that, at the
time the notice of redemption thereof is given as provided in Section 6.3
hereof, is not beneficially owned by The Dai-ichi Mutual Life Insurance Company
("Dai-ichi") or any direct or indirect successor to all or substantially all of
Dai-ichi's business or by any corporation at least 99% of whose outstanding
voting securities is at the time owned directly or indirectly by such Company
or any such successor and which agrees to be bound to the same obligations as
to which Dai-ichi is bound under that certain Investment Agreement, dated as
of June 25, 1990, at a redemption price per share, in cash, equal to the
Liquidation Preference plus an amount equal to all accumulated and unpaid
dividends thereon (whether or not earned or declared) to the redemption date.
If fewer than all of the outstanding shares of Series F Preferred Stock that
are subject to redemption pursuant to the provisions of this Section 6.1 are to
be redeemed, the Board shall have complete discretion as to which of such shares
subject to redemption are to be redeemed.
6.2 On July 6, 2002, the twelfth anniversary of the first date on which
shares of Series E Preferred Stock were issued, the Corporation shall redeem
(but only out of assets of the Corporation legally available therefor and
subject to any
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applicable redemption or dividend limitations set forth in Section 2.3 of the
terms of the Series A Preferred Stock and Section 3(d) of the terms of the
Series B Preferred Stock, the Series C Preferred Stock and the Series D
Preferred Stock as such terms were in effect on July 3, 1990, the date the
amendment to the Articles of Incorporation creating the Series E Preferred Stock
was filed with the Indiana Secretary of State, Section 9.3 of the Purchase
Agreement, dated as of July 13, 1979, for the purchase of the Company's 9-3/4%
Subordinated Notes due 1994, Section 8.6 of the $300,000,000 Revolving Credit
Agreement, dated as of July 14, 1987, among the Company, Swiss Bank Corporation
International Limited, Swiss Bank Corporation, New York Branch, and several
financial institutions and Section 5.06 of the $200,000,000 Revolving Credit
Agreement, dated as of July 28, 1987, among the Company, certain financial
institutions and Morgan Guaranty Trust Company of New York) all shares of
Series F Preferred Stock then outstanding, at a redemption price per share, in
cash, equal to the Liquidation Preference per share plus an amount equal to all
accumulated and unpaid dividends thereon (whether or not earned or declared) to
the redemption date, provided, however, that this Section 6.2 shall not apply to
any shares in exchange for which the Corporation shall on such date issue other
securities pursuant to and in accordance with the provisions of Section 7
hereof. In the event that on July 6, 2002 the Corporation shall be unable, by
reason of an insufficiency of assets legally available therefor or by reason of
the redemption and dividend limitations referred to above, to redeem all of the
outstanding shares of Series F Preferred Stock, the Corporation shall redeem on
July 6, 2002 under this Section 6.2 such number of shares as it shall be able to
redeem, pro rata as nearly as practicable (without redemption of fractions of
shares) in proportion to the respective numbers of shares held by each holder,
and thereafter, if and to the extent assets shall at any time or from
time to time become legally available therefor and such redemption and dividend
limitations shall permit, the Corporation shall as promptly as practicable
redeem shares of Series F Preferred Stock, pro rata as provided above, at such
redemption price, plus an amount equal to accumulated and unpaid dividends
thereon (whether or not earned or declared) to the redemption date.
6.3 In the event the Corporation shall elect or be obligated to redeem
shares of Series F Preferred Stock, notice of such redemption shall be given by
airmail, postage prepaid, mailed not less than 30 nor more than 60 days prior to
the redemption date, to each holder of record of the shares to be redeemed, at
such holder's address as the same shall appear on the stock record books of the
Corporation. Each such notice shall state: (1) the redemption date; (2) the
number of shares of Series F Preferred Stock to be redeemed and, if fewer than
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all the shares held by the holder are to be redeemed, the number of such
holder's shares to be redeemed; (3) the redemption price; (4) the place or
places in the States of Indiana or New York where certificates for such shares
are to be surrendered for payment of the redemption price; (5) that dividends on
the shares to be redeemed will cease to accumulate on the redemption date
specified in the notice; (6) the provision of this amendment to Articles of
Incorporation authorizing or requiring such redemptions; and (7) the then
effective Conversion Price (as defined in Section 8.1 hereof), that until the
close of business on the redemption date the holders may exercise their right to
convert shares of Series F Preferred Stock being redeemed and that such right
will terminate at the close of business on the redemption date.
6.4 From and after the redemption date specified in any such notice of
redemption, unless default shall be made by the Corporation in providing monies
at the time and place specified for payment of the redemption price pursuant to
such notice, all dividends on the shares of Series F Preferred Stock thereby
called for redemption shall cease to accumulate and all rights of the holders
thereof as such holders, except the right to receive the redemption price upon
surrender, shall cease and terminate.
6.5 The Corporation may, however, at any time prior to the redemption date
specified in a duly given notice of redemption but after such notice of
redemption shall have been mailed as aforesaid, deposit in trust for the benefit
of the holders of the Series F Preferred Stock to be redeemed, with a bank or
trust company in good standing organized under the laws of the United States of
America or of the State of New York, or of the State of Indiana, doing business
in the Borough of Manhattan, City of New York, or in the State of Indiana,
having capital, surplus and undivided profits aggregating at least $50,000,000
designated in such notice of redemption, an amount in cash equal to the
redemption prices of all such shares so called for redemption under arrangements
providing irrevocably for payment to such holders, and thereupon, whether or not
certificates for the shares so called for redemption shall have been surrendered
for cancellation (if such notice shall state that holders of the shares so
called for redemption may receive their redemption price at any time after such
deposit), all shares with respect to which such deposit shall have been made
shall be deemed to be no longer outstanding, dividends thereon for any period
after the date so fixed for redemption shall cease to accumulate and all rights
with respect to such shares shall forthwith upon such deposit in trust cease and
terminate except only (a) the rights of the holders thereof to receive from such
bank or trust company, at any time after the time of such deposit, the
redemption price of such shares to be
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redeemed, or (b) the right to exercise, on or before the close of business on
the date fixed for redemption, the privileges of conversion. Any moneys so
deposited by the Corporation which shall not be required for such redemption
because of the exercise of any such right of conversion, shall be repaid to the
Corporation forthwith. Any moneys so deposited by the Corporation and unclaimed
at the end of six years from the date fixed for such redemption shall be
repaid to the Corporation upon its request expressed in a resolution of its
Board of Directors, after which repayment the holders of the shares so called
for redemption shall look only to the Corporation for the payment thereof.
6.6 Nothing in this Section 6 shall limit any legal right of the
Corporation to purchase or otherwise acquire any shares of the Series F
Preferred Stock at not exceeding the price at which the same may be redeemed at
the option of the Corporation.
Section 7. Exchange.
--------
7.1 On July 6, 2002, the twelfth anniversary of the first date on which
shares of Series E Preferred Stock were issued, the Corporation may, at its
option, with respect to any shares of Series F Preferred Stock then outstanding,
other than any for which notice of redemption shall have previously been given,
issue in exchange therefore either:
(1) a whole number of shares of a series of nonconvertible Preferred
Stock of the Corporation, or
(2) a whole number of shares of Common Stock of the Corporation,
or any combination of shares described in the foregoing clauses (1) and (2) (and
cash in lieu of fractional interests, if any), provided that the shares so
issued shall (a) have on the date of issue an aggregate fair market value, as
determined by an Independent Financial Firm (as defined hereinafter in this
Section 7.1) selected by the Board, equal to the aggregate Liquidation
Preference of the shares of Series F Preferred Stock for which such shares are
to be issued in exchange, plus an amount equal to accumulated and unpaid
dividends on such shares of Series F Preferred Stock (whether or not earned or
declared) to the exchange date; (b) be free of any transfer restriction and, if
and to the extent necessary for public offering and sale, registered or
qualified under the Federal Securities Act of 1933, as amended, or any successor
statute, and under such State securities laws as any holder may reasonably
request (provided, that in connection with qualification under State securities
laws the Corporation shall not be
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obligated to qualify to do business in any jurisdiction when it is not so
qualified or to take any action that would subject it to taxation or general
service of process in any State where it is not otherwise subject to taxation or
general service of process); and (c) in the case of Common Stock, listed on each
securities exchange, if any, upon which outstanding Common Stock is listed at
the time of the exchange. The term "Independent Financial Firm," as of any time,
shall mean an internationally recognized investment banking or investment
advisory firm which does not at such time have a direct or indirect material
interest in, or other direct or indirect material relationship with, the
Corporation or any of its subsidiaries or affiliates.
7.2 In the event the Corporation shall elect to issue shares in exchange
pursuant to Section 7.1 hereof, notice of such exchange shall be given by
airmail, postage prepaid, mailed not less than 30 nor more than 60 days prior to
the exchange date, to each holder of record of the shares of Series F Preferred
Stock to be exchanged, at such holder's address as the same shall appear on the
stock record books of the Corporation. Each such notice shall state: (1) the
exchange date; (2) the number and terms of the shares to be issued in exchange
for shares held by such holder; (3) the identity of the Independent Financial
Firm selected by the Board to determine fair market value as provided in Section
7.1 hereof; (4) the place or places in the State of Indiana or New York where
certificates for the shares of Series F Preferred Stock to be exchanged are to
be surrendered for the shares to be issued in exchange therefore; (5) that
dividends on the shares of Series F Preferred Stock to be exchanged will cease
to accumulate on the exchange date; (6) the then effective Conversion Price (as
defined in Section 8.1 hereof), that until the close of business on the exchange
date the holders may exercise their right to convert shares of Series F
Preferred Stock being exchanged and that such right shall terminate at the close
of business on the exchange date.
7.3 From and after the exchange date specified on any such notice of
exchange, unless default shall be made by the Corporation in issuing the shares
to be issued in the exchange, all dividends on the shares of Series F Preferred
Stock to be exchanged as specified in the notice shall cease to accumulate and
all rights of the holders thereof as such holders, except the right to receive
the shares to be issued in the exchange, shall cease and terminate and the
person or persons entitled to the shares to be issued in the exchange shall be
treated for all purposes as the registered holder of the shares to be issued.
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Section 8. Conversion.
----------
8.1 Subject to and upon compliance with the provisions of this Section 8,
the holder of each share of Series F Preferred Stock shall have the right, at
the holder's option, at any time (except that, if such share is called for
redemption or exchange, not after the close of business on the date fixed for
such redemption or exchange, unless default shall be made in the payment of the
redemption price or the issuance of shares in the exchange) to convert such
share into that number of fully paid and nonassessable shares of Common Stock
(calculated as to each conversion to the nearest 1/1,000th of a share) obtained
by dividing the Liquidation Preference of such share being converted by the
Conversion Price (as defined below) and by surrender of such share so to be
converted, such surrender to be made in the manner provided in Section 8.2.
For the purposes of this Section 8, the term "Common Stock" shall include
any stock of any class of the Corporation which has no preference in respect of
dividends or of amounts payable in the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Corporation and which is not
subject to redemption by the Corporation. However, shares issuable on conversion
of shares of Series F Preferred Stock shall include only shares of the class
designated as Common Stock of the Corporation as of the date of this amendment
to the Articles of Incorporation creating the Series F Preferred Stock, or
shares of any class or classes resulting from any reclassification or
reclassifications thereof and which have no preference in respect of dividends
or of amounts payable in the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation and which are not subject to
redemption by the Corporation; provided that if at any time there shall be more
than one such resulting class, the shares of each such class then so issuable
upon conversion shall be substantially in the proportion which the total number
of shares of such class resulting from all such reclassifications bears to the
total number of shares of all such classes resulting from all such
reclassifications.
The term "Conversion Price" shall mean the Initial Conversion Price, as
adjusted in accordance with the provisions of this Section 8. The term "Initial
Conversion Price" shall mean an amount equal to the Liquidation Preference. On
July 6, 1995, the fifth anniversary of the first date on which shares of Series
E Preferred Stock were issued, the Conversion Price then in effect for the
Series F Preferred Stock shall be increased by 4-1/6% and on July 6, 1998, the
eighth anniversary of such first date, the Conversion Price then in effect for
the Series F Preferred Stock shall be increased by 4%.
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<PAGE>
8.2 In order to exercise the conversion privilege, the holder of each share
of Series F Preferred Stock to be converted shall surrender the certificate
representing such share at the office of the conversion agent for the Series F
Preferred Stock in the Borough of Manhattan, City of New York, appointed for
such purpose by the Corporation or, if no conversion agent has been appointed,
to the Corporation at its offices at 1300 South Clinton Street, Fort Wayne,
Indiana 46801 Attention: Treasurer (such conversion agent or Corporation, as the
case may be, referred to herein as the "conversion agent"), with the Notice of
Election to Convert on the back of said certificate completed and signed. Such
notice shall be substantially in the following form:
"NOTICE OF ELECTION TO CONVERT
The undersigned, being a holder of the 5-1/2% Cumulative Convertible
Exchangeable Preferred Stock, Series F (the "Series F Preferred Stock") of
Lincoln National Corporation, irrevocably exercises the right to convert _____
outstanding shares of Series F Preferred Stock on _______, ______, into shares
of Common Stock of Lincoln National Corporation in accordance with the terms of
the Series F Preferred Stock, and directs that the shares issuable and
deliverable upon the conversion, together with any check in payment for
fractional shares, be issued and delivered in the denominations indicated below
to the registered holder hereof unless a different name has been indicated
below. If shares are to be issued in the name of a person other than the
undersigned, the undersigned will pay all transfer taxes payable with respect
thereto.
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Dated:
Fill in for registration of
shares of Common Stock
if to be issued otherwise
than to the registered holder: If fractional interests:
- -------------------------------- TAX ID # _______________________
Name
- --------------------------------
Address
- -------------------------------- ---------------------------------
(Please print name and (Signature)
address, including postal
code number)
Denominations: ___________________"
Unless the shares issuable on conversion are to be issued in the same name as
the name in which such share of Series F Preferred Stock is registered, each
share surrendered for conversion shall be accompanied by instruments of
transfer, in form satisfactory to the Corporation, duly executed by the holder
or his duly authorized attorney and an amount sufficient to pay any transfer or
similar tax. A payment shall be made on conversion for dividends accumulated on
the Series F Preferred Stock surrendered for conversion but not for dividends on
Common Stock delivered on such conversion. As promptly as practicable after the
surrender of the certificates for shares of Series F Preferred Stock as
aforesaid, the Corporation shall issue and shall deliver at such office to such
holder, or on his written order, a certificate or certificates for the number of
full shares of Common Stock issuable upon the conversion of such shares in
accordance with the provisions of this Section 8, and any fractional interest in
respect of a share of Common Stock arising upon such conversion shall be settled
as provided in Section 8.3 hereof.
Each conversion shall be deemed to have been effected immediately prior to
the close of business on the date on which the certificates for shares of Series
F Preferred Stock shall have been surrendered and such notice received by the
Corporation as aforesaid, and the person or persons in whose name or names any
certificate or certificates for shares of Common Stock shall be issuable upon
such conversion shall be deemed to have become the holder or holders of record
of the shares represented
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<PAGE>
thereby at such time on such date and such conversion shall be at the Conversion
Price in effect at such time on such date. All shares of Common Stock delivered
upon conversion of the Series F Preferred Stock shall upon delivery be duly and
validly issued and fully paid and non-assessable, free of all liens and charges
and not subject to any preemptive rights.
8.3 No fractional shares or scrip representing fractions of shares of Common
Stock shall be issued upon conversion of shares of Series F Preferred Stock.
Instead of any fractional interest in a share of Common Stock which would
otherwise be deliverable upon the conversion of a share of Series F Preferred
Stock, the Corporation shall pay to the holder of such share an amount in cash
(computed to the nearest one cent) equal to the Average Market Price of the
Common Stock at the close of business on the business day next preceding the day
of conversion. If more than one share shall be surrendered for conversion at one
time by the same holder, the number of full shares of Common Stock issuable upon
conversion thereof shall be computed on the basis of the aggregate Conversion
Price of the shares of Series F Preferred Stock so surrendered.
The term "Average Market Price" of any security on any date means the average
of the daily closing prices of such security for a period of five consecutive
trading days within the 10 trading days immediately preceding the day in
question, which five consecutive trading days are selected by the Corporation
provided, however, that if the "ex" date for any event (other than the event
requiring such computation) that requires an adjustment pursuant to Section 8.4
occurs during the 10-day trading period in question and prior to the "ex" date
for the event requiring computation, the closing price for each trading day
prior to the "ex" date for such other event shall be adjusted by multiplying
such closing price by the same fraction by which the Conversion Price is
required to be adjusted pursuant to Section 8.4 as a result of such other event
(and in the case of Section 8.4(a) the fraction that would result in the
adjustment provided for therein). The closing price for each day shall be the
last reported sales price regular way or, in case no such reported sale takes
place on such day, the average of the reported closing bid and asked prices
regular way, in either case on the New York Stock Exchange or, if such security
is not listed or admitted to trading on such Exchange, on the principal national
securities exchange on which such security is listed or admitted to trading or,
if not listed or admitted to trading on any national securities exchange, on the
National Association of Securities Dealers Automated Quotations National Market
System or, if such security is not listed or admitted to trading on any national
securities exchange or quoted on such National Market System, the average of the
closing bid and asked prices in the over-the-counter market as furnished by any
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New York Stock Exchange member firm selected from time to time by the issuer of
such security for that purpose. For the purposes of this definition, the term
"trading day" means each Monday, Tuesday, Wednesday, Thursday and Friday, other
than any day on which such security is not traded on such exchange or in such
market. For the purposes of this definition, the term "'ex' date", (i) when used
with respect to any issuance or distribution, means the first date on which the
Common Stock trades regular way on the relevant exchange or in the relevant
market from which the closing price was obtained without the right to receive
such issuance or distribution and (ii) when used with respect to any subdivision
or combination of shares of Common Stock, means the first date on which the
Common Stock trades regular way on such exchange or in such market after the
time at which such subdivision or combination becomes effective.
8.4 In addition to the increases in the Conversion Price set forth in
Section 8.1 hereof, the Conversion Price shall be adjusted from time to time as
follows:
(a) In case the Corporation shall hereafter (i) pay a dividend or make a
distribution on the Common Stock in shares of Common Stock, (ii) subdivide
its outstanding shares of Common Stock into a greater number of shares, or
(iii) combine its outstanding shares of Common Stock into a smaller number of
shares, the Conversion Price in effect immediately prior to such action shall
be adjusted so that the holder of any share of Series F Preferred Stock
thereafter surrendered for conversion shall be entitled to receive the number
of shares of Common Stock which he would have been entitled to receive
immediately following such action had such share been converted immediately
prior thereto. An adjustment made pursuant to this Section 8.4(a) shall
become effective immediately after the record date, in the case of a dividend
or distribution, or immediately after the effective date, in the case of a
subdivision or combination.
(b) In case the Corporation shall hereafter pay or make a dividend or other
distribution in shares of Common Stock on any class of capital stock of the
Corporation other than the Common Stock, the Conversion Price in effect
immediately after the record date mentioned in the next sentence shall be
adjusted so that the same shall equal the price determined by multiplying the
Conversion Price in effect immediately prior to the record date mentioned in
the next sentence by a fraction of which the numerator shall be the number of
shares of Common Stock outstanding at the close of business on the record
date mentioned in the next sentence and the denominator shall be the sum of
such number of shares and the total number of shares
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constituting such dividend or other distribution. Such reduction shall become
effective immediately after the record date for the determination of
shareholders entitled to receive such dividend or other distribution. For the
purposes of this Section 8.4(b), the number of shares of Common Stock at any
time outstanding shall not include shares held in the treasury of the
Corporation but shall include shares issuable in respect of scrip certificates
issued in lieu of fractions of shares of Common Stock. The Corporation shall not
pay any dividend or make any distribution on shares of Common Stock held in the
treasury of the Corporation.
(c) In case the Corporation shall hereafter issue rights or warrants to
holders of its outstanding shares of Common Stock generally entitling them to
subscribe for or purchase shares of Common Stock at a price per share less than
the Average Market Price of the Common Stock (as defined in Section 8.3 hereof)
on the record date mentioned in the next sentence (other than pursuant to an
automatic dividend reinvestment plan of the Corporation or any substantially
similar plan), the Conversion Price shall be reduced so that the same shall
equal the price determined by multiplying the Conversion Price in effect
immediately prior to the record date mentioned in the next sentence by a
fraction of which the numerator shall be the number of shares of Common Stock
outstanding at the close of business on the record date mentioned in the next
sentence plus the number of shares which the aggregate offering price of the
total number of shares so offered for subscription or purchase would purchase
at such Average Market Price, and of which the denominator shall be the number
of shares of Common Stock outstanding at the close of business on the record
date mentioned in the next sentence plus the number of shares of Common Stock
so offered for subscription or purchase. Such reduction shall become effective
immediately after the record date for the determination of shareholders entitled
to receive such rights or warrants. For the purposes of this Section 8.4(c), the
number of shares of Common Stock at any time outstanding shall not include
shares held in the treasury of the Corporation but shall include shares issuable
in respect of scrip certificates issued in lieu of fractions of shares of Common
Stock. Rights or warrants issued or distributed by the Company to all holders of
its Common Stock entitling the holders thereof to subscribe for or purchase
shares of Common Stock, which rights or warrants (x) are deemed to be
transferred with such shares of Common Stock, (y) are not exercisable and (z)
are issued also in respect of future issuances of Common Stock, in each case in
clauses (x) through (z) until the occurrence of a specified event or
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<PAGE>
events ("Trigger Event"), shall for purposes of this Section 8.4 not be deemed
issued or distributed until the occurrence of the earliest Trigger Event. Such
rights or warrants are referred to herein as "Rights".
(d) In case the Corporation shall, by dividend or otherwise, hereafter
distribute to holders of its outstanding shares of Common Stock generally
evidences of its indebtedness, any securities of the Corporation, any rights or
warrants to subscribe to securities of the Corporation, cash or assets
(excluding (i) any cash dividend paid from retained earnings of the Corporation
to the extent such dividends in any calendar year do not in the aggregate exceed
150% of the aggregate regular periodic cash dividends actually paid in the prior
calendar year, (ii) dividends or distributions payable in stock for which
adjustment is made pursuant to Section 8.4(a) or 8.4(b) hereof, (iii) rights or
warrants to subscribe to Common Stock for which adjustment is made pursuant to
Section 8.4(c) hereof, and (iv) pursuant to a consolidation, merger, statutory
exchange, sale or conveyance for which adjustment is made pursuant to Section
8.11 hereof), then in each such case the Conversion Price shall be adjusted so
that the same shall equal the price determined by multiplying the Conversion
Price in effect immediately prior to the record date mentioned in the next
sentence by a fraction (not equal to or less than zero) or which the numerator
shall be the Average Market Price of the Common Stock (as defined in Section 8.3
hereof) on the record date mentioned in the next sentence less the then fair
market value (as determined by the Board and Dai-ichi (or any direct or indirect
successor to all or substantially all of such Company's business) jointly (if
such Company or successor or any corporation at least 99% of whose outstanding
voting securities at the time outstanding is owned by such Company or successor
shall be a holder of any of the Series F Preferred Stock) or an internationally
recognized investment banking firm selected by them if they are unable to reach
agreement, or the Board in its reasonable discretion whose determination will be
conclusive and evidenced by a board resolution filed with the conversion agent
(if none of the foregoing shall be a holder of Series F Preferred Stock)) of the
portion of the evidences of indebtedness, securities, rights or warrants, cash
or assets so distributed to the holder of one share of Common Stock, and of
which the denominator shall be such Average Market Price of the Common Stock.
Such adjustment shall become effective immediately after the record date for the
determination of shareholders entitled to receive such distribution. Such
determination of fair market value shall be set forth in a statement filed with
the conversion agent by the Corporation as soon as practicable.
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(e) The reclassification (including any reclassification upon a merger in
which the Corporation is the continuing corporation but excluding a
reclassification upon a consolidation, merger, statutory exchange, sale or
conveyance as to which Section 8.11 applies) of Common Stock into securities
including other than Common Stock shall be deemed to involve (i) a distribution
of such securities other than Common Stock to all holders of Common Stock and
the effective date of such reclassification shall be deemed to be "the record
date for the determination of shareholders entitled to receive such
distribution" within the meaning of Section 8.4(d) hereof, and (ii) a
subdivision or combination, as the case may be, of the number of shares of
Common Stock outstanding immediately prior to such reclassification into the
number of shares of Common Stock outstanding immediately thereafter and the
effective date of such reclassification shall be deemed to be "the day upon
which such subdivision becomes effective" or "the day upon which such
combination becomes effective", as the case may be.
(f) In any case in which this Section 8 shall require that an adjustment be
made immediately following a record date or an effective date, the Corporation
may elect to defer (but only until five business days following the prompt
filing by the Corporation with the conversion agent of the certificate of
independent accountants required by Section 8.4(h) hereof) issuing to the holder
of any share of Series F Preferred Stock converted after such record date or
effective date the additional shares of Common Stock or other capital stock
issuable upon such conversion over and above the shares of Common Stock or other
capital stock issuable upon such conversion on the basis of the Conversion Price
prior to adjustment, and paying to such holder any amount of cash in lieu of a
fractional share.
(g) All calculations under this Section 8 shall be made to the nearest one
cent or to the nearest l/l,OOOth of a share, as the case may be. Anything in
this Section 8 to the contrary notwithstanding, the Corporation shall be
entitled to make such reduction in the Conversion Price, in addition to those
required by this Section 8, as it considers to be advisable in order that any
stock dividend, subdivision of shares, distribution of rights to purchase
stock or securities, or distribution of securities convertible into or
exchangeable for stock hereafter made by the Corporation to its shareholders
shall not be taxable to the recipients.
(h) Whenever the Conversion Price is adjusted as herein provided, (A) the
Corporation shall promptly obtain
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and file with the conversion agent a certificate of a firm of independent public
accountants (who may be the regular accountants employed by the Corporation)
setting forth the Conversion Price after such adjustment and setting forth a
brief statement of the facts requiring such adjustment and the manner of
computing the same, and (B) a notice stating that the Conversion Price has been
adjusted and setting forth that the adjusted Conversion Price shall forthwith be
airmailed by the Corporation to the holders of the Series F Preferred Stock at
their addresses as shown on the stock record books of the Corporation.
(i) In the event that at any time as a result of an adjustment made pursuant
to this Section 8, the holder of any share of Series F Preferred Stock
thereafter surrendered for conversion shall become entitled to receive any
shares of the Corporation other than shares of Common Stock, thereafter the
Conversion Price of such other shares so receivable upon conversion of any share
shall be subject to adjustment from time to time in a manner and on terms as
nearly equivalent as practicable to the provisions with respect to Common Stock
contained in this Section 8.
(j) Anything herein to the contrary notwithstanding, in the event the
Corporation shall declare any dividend or distribution requiring an adjustment
in the Conversion Price hereunder and shall, thereafter and before the payment
of such dividend or distribution to shareholders, legally abandon its plan to
pay such dividend or distribution, the Conversion Price then in effect
hereunder, if changed to reflect such dividend or distribution, shall be changed
to the Conversion Price which would have been in effect immediately after the
date of such abandonment had such dividend or distribution never been declared.
Such changes shall become effective immediately after the date of such
abandonment.
(k) No adjustment (except pursuant to Section 8.4(a)) in the Conversion Price
need be made unless the adjustment would require an increase or decrease of at
least 2% in the Conversion Price provided, however, that any adjustments which
by reason of this subsection (k) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment, and provided
further, that adjustment shall be required and made in accordance with the
provision hereof not later than such time as may be required in order to
preserve the tax-free nature of a distribution to the holders of shares of
Series F Preferred Stock.
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8.5 In case:
(i) the Corporation shall declare a dividend (or any other distribution) on
its Common Stock other than a cash dividend payable in cash out of its retained
earnings for which adjustment under Section 8.4(d) is not required; or
(ii) the Corporation shall authorize the granting to the holders of the Common
Stock of rights or warrants to subscribe for or purchase any shares of stock of
any class or of any other rights; or
(iii) there shall be any capital stock reorganization or reclassification of
the Common Stock (other than a subdivision or combination of the outstanding
Common Stock and other than a change in the par value of the Common Stock), or
any consolidation or merger to which the Corporation is a party or any statutory
exchange of securities with another corporation, or any sale or transfer of all
or substantially all the assets of the Corporation, in each case which is to be
effected in such a way that holders of the Common Stock will be entitled to
receive stock, securities, cash or other property with respect to or in exchange
for Common Stock; or
(iv) there shall be a voluntary dissolution, liquidation or winding up of the
Corporation;
then the Corporation shall cause to be filed with the conversion agent, and
shall cause to be airmailed to the holders of shares of the Series F Preferred
Stock at their addresses as shown on the stock record books of the Corporation,
at least 15 days (or 10 days in any case specified in clause (i) or (ii) above)
prior to the applicable record or effective date hereinafter specified, a notice
stating (A) the date on which a record is to be taken for the purpose of such
dividend, distribution, rights or warrants, or, if a record is not to be taken,
the date as of which the holders of Common Stock of record to be entitled to
such dividend, distribution, rights or warrants are to be determined, or (B) the
date on which such reorganization, reclassification, consolidation, merger,
statutory exchange, sale, transfer, dissolution, liquidation or winding up is
expected to become effective, and the date as of which it is expected that
holders of Common Stock of record shall be entitled to exchange their shares of
Common Stock for securities or other property deliverable upon such
reorganization, reclassification, consolidation, merger, statutory exchange,
sale, transfer, dissolution, liquidation or winding up.
-18-
<PAGE>
8.6 The Corporation covenants that it will at all times reserve and keep
available, free from preemptive rights, out of the aggregate of its authorized
but unissued shares of Common Stock or its issued shares of Common Stock held in
its treasury, or both, for the purpose of effecting conversions of the Series F
Preferred Stock, the full number of shares of Common Stock, deliverable upon the
conversion of all outstanding shares of Series F Preferred Stock not theretofore
converted. For purposes of this Section 8.6, the number of shares of Common
Stock which shall be deliverable upon the conversion of all outstanding shares
of Series F Preferred Stock shall be computed as if at the time of computation
a11 such outstanding shares were held by a single holder.
8.7 Before taking any action which would cause an adjustment reducing the
Conversion Price below the then par value (if any) of the shares of
Common Stock deliverable upon conversion of the Series F Preferred Stock, the
Corporation will take any corporate action which may, in the opinion of its
counsel, be necessary in order that the Corporation may validly and legally
issue fully paid and non-assessable shares of Common Stock, at such adjusted
Conversion Price.
8.8 The Corporation shall use its best efforts to list the shares of Common
Stock required to be delivered upon conversion of the Series F Preferred Stock
prior to such delivery upon each securities exchange, if any, upon which the
outstanding Common Stock is listed at the time of such delivery.
8.9 Prior to the delivery of any securities which the Corporation shall be
obligated to deliver upon conversion of the Series F Preferred Stock, the
Corporation shall use its best efforts to comply with all Federal and state
laws and regulations thereunder requiring the registration of such securities
with, or any approval of or consent to the delivery thereof by, any
governmental authority.
8.10 The Corporation shall pay any and all documentary, stamp or similar
issue or transfer taxes payable in respect of the issue or delivery of shares
of Common Stock on conversions of the Series F Preferred Stock pursuant
hereto; provided, however, that the Corporation shall not be required to pay
any tax which may be payable in respect of any transfer involved in the issue
or delivery of shares of Common Stock in a name other than that of the holder
of the Series F Preferred Stock to be converted and no such issue or delivery
shall be made unless and until the person requesting such issue or delivery
has paid to the Corporation the amount of any such tax or has established, to
the satisfaction of the Corporation, that such tax has been paid.
-19-
<PAGE>
8.11 In case of any consolidation or merger in which the Corporation is
a party (other than a merger in which the Corporation is the continuing
corporation), or in case of any sale or conveyance to another corporation of
the property of the Corporation as an entirety or substantially as an entirety,
or in the case of any statutory exchange of securities with another corporation
(including any exchange effected in connection with a merger of a third
corporation into the Corporation), in each case effected in such a way
that holders of Common Stock shall be entitled to receive stock, securities,
cash or other property with respect to or in exchange for Common Stock, the
holder of each share of Series F Preferred Stock then outstanding shall have
the right thereafter to convert such share into the kind and amount of stock,
securities, cash or other property receivable upon such consolidation, merger,
statutory exchange, sale or conveyance by a holder of the number of shares of
Common Stock into which such share of Series F Preferred Stock might have been
converted immediately prior to such consolidation, merger, statutory exchange,
sale or conveyance, assuming such holder of Common Stock failed to exercise his
rights of election, if any, as to the kind or amount of securities, cash or
other property receivable upon such consolidation, merger, statutory exchange,
sale or conveyance (provided, that if the kind or amount of securities, cash or
other property receivable upon such consolidation, merger, statutory exchange,
sale or conveyance is not the same for each share of Common Stock in respect of
which such rights of election shall not have been exercised ("non-electing
share"), then for the purpose of this Section 8.11 the kind and amount of
securities, cash or other property receivable upon such consolidation, merger,
statutory exchange, sale or conveyance for each non-electing share shall be
deemed to be the kind and amount so receivable per share by a plurality of the
non-electing shares). Thereafter, the holders of the Series F Preferred Stock
shall be entitled to appropriate adjustments with respect to their conversion
rights to the end that the provisions set forth in this Section 8.11 shall
correspondingly be made applicable, as nearly as may reasonably be, in relation
to any shares of stock or other securities or property thereafter deliverable
on the conversion of the Series F Preferred Stock. Any such adjustment shall
be approved by a firm of independent public accountants (who may be the regular
accountants employed by the Corporation), evidenced by a certificate to that
effect delivered to the conversion agent. The foregoing provisions of this
Section 8.11 shall similarly apply to successive consolidations, mergers,
statutory exchanges, sales or conveyances.
8.12 Notwithstanding Sections 8.4(c) and (d) hereof, no adjustment to the
Conversion Price by reason of any issuance or distribution of any Rights shall
be made if either (i) the
-20-
<PAGE>
Corporation had made proper provision so that each holder of shares of Series F
Preferred Stock who converts such shares into shares of Common Stock after the
record date for such distribution and prior to the expiration or redemption of
the Rights shall be entitled to receive upon such conversion, in addition to the
shares of Common Stock issuable upon such conversion, a number of Rights to be
determined as follows: (A) if such conversion occurs on or prior to the date for
the distribution to the holders of Rights of separate certificates evidencing
such Rights ("Distribution Date"), the same number of Rights to which a holder
of a number of shares of Common Stock equal to the number of shares of Common
Stock issuable upon such conversion is entitled at the time of such conversion
in accordance with the terms and provisions of the applicable Rights; and (B)
if such conversion occurs after the Distribution Date, the same number of Rights
to which a holder of the same number of shares of Common Stock into which the
shares of Series F Preferred Stock so converted was convertible immediately
prior to the Distribution Date would have been entitled on the Distribution Date
in accordance with the terms and provisions of and applicable to the Rights or
(ii) each holder of shares of Series F Preferred Stock shall have received
rights at all times substantially equivalent to the Rights, if any, held from
time to time by a holder of the number of shares of Common Stock issuable upon
conversion of the shares of Series F Preferred Stock held by such Series F
Preferred Stock holder.
Section 9. Status Upon Conversion, Redemption or Exchange.
----------------------------------------------
Upon any conversion, redemption or exchange of shares of Series F Preferred
Stock, the shares of Series F Preferred Stock so converted, redeemed or
exchanged shall have the status of authorized and unissued shares of Preferred
Stock undesignated as to series.
Section 10. General.
-------
10.1 Certificates representing shares of the Series F Preferred Stock shall
be exchangeable, at the option of the holder, for a new certificate or
certificates of the same or different denominations representing in the
aggregate the same number of shares.
10.2 The headings of the various subdivisions of this amendment to the
Articles of Incorporation are for convenience of reference only and shall not
affect the interpretation of any of the provisions hereof.
-21-
<PAGE>
ARTICLE II
MANNER OF ADOPTION AND VOTE
SECTION 1. Action by Directors. The Board of Directors of the Corporation
--------- -------------------
adopted the foregoing amendment to the Articles of Incorporation by resolution
duly adopted at a meeting held on June 25, 1990, at which a quorum was present.
SECTION 2. Action by Shareholders. The foregoing amendment to the Articles
--------- ----------------------
of Incorporation was duly adopted by the Board of Directors without shareholder
action. Pursuant to Sections 23-1-25-2(d) and 23-1-38-2(7) of the Act, no
shareholder action is required in connection with such amendment to the
Articles of Incorporation.
SECTION 3. Compliance with Legal Requirements. The manner of adoption of
--------- ----------------------------------
the Articles of Amendment and the vote by which they were adopted constitute
full legal compliance with the provisions of the Act and the Articles of
Incorporation and the Bylaws of the Corporation.
I hereby state subject to the penalties of perjury, that the statements
contained herein are true this 20 day of May, 1991.
/s/ John L. Steinkamp
----------------------
John L. Steinkamp
Vice President
3007H
-22-
<PAGE>
STATE OF INDIANA
OFFICE OF THE SECRETARY OF STATE
ARTICLES OF AMENDMENT
To Whom These Presents Come, Greeting:
WHEREAS, there has been presented to me at this office, Articles of Amendment
for:
LINCOLN NATIONAL CORPORATION
and said Articles of Amendment have been prepared and signed in accordance with
the provisions of the Indiana Business Corporation Law, as amended.
NOW, THEREFORE, I, JOSEPH H. HOGSETT, Secretary of State of Indiana,
hereby certify that I have this day filed said articles in this office.
The effective date of these Articles of Amendment is May 12, 1994.
In Witness Whereof, I have hereunto set
my hand and affixed the seal of the State
of Indiana, at the City of Indianapolis,
this Twelfth day of May, 1994
/s/ Joseph H. Hogsett
----------------------------------------
JOSEPH H. HOGSETT, Secretary of State
[SEAL OF THE STATE OF INDIANA]
By Doug Mason
--------------------------------------
Deputy
<PAGE>
ARTICLES OF AMENDMENT OF THE
ARTICLES OF INCORPORATION OF
LINCOLN NATIONAL CORPORATION
The undersigned officer of Lincoln National Corporation (the "Corporation")
existing pursuant to the provisions of the Indiana Business Corporation Law, as
amended (the "Act"), desiring to give notice of corporate action effectuating
amendment of certain provisions of its Articles of Incorporation, certifies the
following facts:
ARTICLE I
AMENDMENT
Section 1. The date of incorporation of the Corporation is
January 5, 1968.
Section 2. The name of the Corporation following this amendment
to the Articles of Incorporation is Lincoln National Corporation.
Section 3. The text of Article V, Section 1 of the Articles of
Incorporation is hereby amended and restated as follows:
Section 1. Number and Classes of Shares. The total number
of shares which the Corporation shall have authority to
issue is eight hundred ten million (810,000,000) shares,
consisting of eight hundred million (800,000,000) shares
of a single class of shares to be known as Common Stock,
and ten million (10,000,000) shares of a single class of
shares to be known as Preferred Stock.
Section 4. Date of the amendment's adoption: May 12, 1994.
ARTICLE II
MANNER OF ADOPTION AND VOTE
Section 1. Action by Directors.
The Board of Directors of the Corporation duly adopted a resolution
proposing to amend the terms and provisions of Article V, Section 1 of the
Articles of Incorporation and directing a meeting of the shareholders, to
be held on May 12, 1994, allowing such shareholders to vote on the proposed
amendment. The resolution was adopted by vote of the Board of Directors at
a meeting held on November 11, 1993, at which a quorum of such Board was
present.
<PAGE>
Section 2. Action by Shareholders.
The shareholders of the Corporation entitled to vote in respect of the
Articles of Amendment adopted the proposed amendment. The designation, number of
outstanding shares, number of votes entitled to be cast by each voting group and
the number of votes of each voting group represented at a meeting held on May
12, 1994, pursuant to which the Articles of Amendment were approved by the
shareholders of the Corporation, are as follows:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------
Designation All capital stock, comprised of
of Each Common Common Stock, $3.00 Cumulative
Voting Stock Convertible Preferred Stock, Series
Group: A, 5 1/2% Cumulative Convertible
Exchangeable Preferred Stock, Series
E, and 5 1/2% Cumulative
Convertible Exchangeable Preferred
Stock, Series F
- -----------------------------------------------------------------------------
<S> <C> <C>
Number of
Outstanding 94,725,811 99,190,014
Shares:
- -----------------------------------------------------------------------------
Number of
Votes 94,725,811 99,190,014
Entitled to
be Cast:
- -----------------------------------------------------------------------------
Number of
Votes
Represented 79,739,258 85,633,973
at the
Meeting:
- -----------------------------------------------------------------------------
Shares Voted 70,104,590 75,828,877
in Favor:
- -----------------------------------------------------------------------------
Shares Voted 8,980,799 9,108,237
Against:
- -----------------------------------------------------------------------------
</TABLE>
-2-
<PAGE>
Section 3. Compliance with Legal Requirements.
---------
The manner of the adoption of the Articles of Amendment and the vote by which
they were adopted constitute full legal compliance with the provisions of the
Act, the Articles of Incorporation, and the By-Laws of the Corporation.
[The Remainder of this Page was Intentionally Left Blank]
-3-
<PAGE>
IN WITNESS WHEREOF, the undersigned Corporation has caused these Articles of
Amendment to be signed by a duly authorized officer this 12th day of May, 1994.
LINCOLN NATIONAL CORPORATION
By: /s/ John L. Steinkamp
-------------------------------------
John L. Steinkamp, Vice President
-4-
EXHIBIT 4(c)
LINCOLN NATIONAL CORPORATION
Issuer
_______________________
INDENTURE
Dated as of
_______________________
The Bank of New York
Trustee
_______________________
Providing for the Issuance of
Debt Securities in Series
<PAGE>
CROSS-REFERENCE TABLE
TIA INDENTURE
SECTION SECTION
310(a)(1). . . . . . . . . . . . . . . . . . . . . 7.10
310(a)(2). . . . . . . . . . . . . . . . . . . . . 7.10
310(a)(3). . . . . . . . . . . . . . . . . . . . . N.A.
310(a)(4). . . . . . . . . . . . . . . . . . . . . N.A.
310(a)(5). . . . . . . . . . . . . . . . . . . . . N.A.
310(b) . . . . . . . . . . . . . . . . . . 7.08; 7.10
310(c) . . . . . . . . . . . . . . . . . . . . . . N.A.
311(a) . . . . . . . . . . . . . . . . . . . . . 7.11
311(b) . . . . . . . . . . . . . . . . . . . . . 7.11
311(c) . . . . . . . . . . . . . . . . . . . . . N.A.
312(a) . . . . . . . . . . . . . . . . . . . . . 2.05
312(b) . . . . . . . . . . . . . . . . . . . . 13.03
312(c) . . . . . . . . . . . . . . . . . . . . 13.03
313(a) . . . . . . . . . . . . . . . . . . . . . 7.06
313(b)(1). . . . . . . . . . . . . . . . . . . . . N.A.
313(b)(2). . . . . . . . . . . . . . . . . . . . . 7.06
313(c) . . . . . . . . . . . . . . . . . . . . . . 7.06
313(d) . . . . . . . . . . . . . . . . . . . . . . 7.06
314(a) . . . . . . . . . . . . . . . . . . . . . . 4.04
314(b) . . . . . . . . . . . . . . . . . . . . . . N.A.
314(c)(1). . . . . . . . . . . . . . . . . . . . 13.04
314(c)(2). . . . . . . . . . . . . . . . . . . . 13.04
314(c)(3). . . . . . . . . . . . . . . . . . . . N.A.
314(d) . . . . . . . . . . . . . . . . . . . . . N.A.
314(e) . . . . . . . . . . . . . . . . . . . . . 13.05
314(f) . . . . . . . . . . . . . . . . . . . . . N.A.
315(a) . . . . . . . . . . . . . . . . . . . . . 7.01(b)
315(b) . . . . . . . . . . . . . . . . . . . . . 7.05
315(c) . . . . . . . . . . . . . . . . . . . . . 7.01(a)
315(d) . . . . . . . . . . . . . . . . . . . . . 7.01(c)
315(e) . . . . . . . . . . . . . . . . . . . . . 6.12
316(a)(last sentence). . . . . . . . . . . . . . .13.06
316(a)(1)(A) . . . . . . . . . . . . . . . . . . . 6.09
316(a)(1)(B) . . . . . . . . . . . . . . . . . . . 6.10
316(a)(2). . . . . . . . . . . . . . . . . . . . . N.A.
316(b) . . . . . . . . . . . . . . . . . . . . . . 6.07
317(a)(1). . . . . . . . . . . . . . . . . . . . . 6.04
317(a)(2). . . . . . . . . . . . . . . . . . . . . 6.04
317(b) . . . . . . . . . . . . . . . . . . . . . . 2.04
318(a) . . . . . . . . . . . . . . . . . . . . . 13.01
N.A. means Not Applicable
Note: This cross-reference table is not part of the Indenture.
<PAGE>
TABLE OF CONTENTS
Section Heading Page
ARTICLE ONE
Definitions and Incorporation by Reference
SECTION 1.01 Definitions . . . . . . . . . . . . . . . .1
SECTION 1.02 Incorporation by Reference of Trust
Indenture Act . . . . . . . . . . . . . . .5
SECTION 1.03 Rules of Construction . . . . . . . . . . .5
ARTICLE TWO
The Securities
SECTION 2.01 Terms and Form. . . . . . . . . . . . . . .6
SECTION 2.02 Execution and Authentication. . . . . . . .8
SECTION 2.03 Registrar and Paying Agent. . . . . . . . .10
SECTION 2.04 Paying Agent to Hold Money in Trust . . . .11
SECTION 2.05 Securityholder Lists. . . . . . . . . . . .11
SECTION 2.06 Transfer, Registration and Exchange . . . .11
SECTION 2.07 Replacement Securities. . . . . . . . . . .13
SECTION 2.08 Outstanding Securities. . . . . . . . . . .14
SECTION 2.09 Temporary Securities. . . . . . . . . . . .14
SECTION 2.10 Securities in Global Form . . . . . . . . .15
SECTION 2.11 Cancellation. . . . . . . . . . . . . . . .15
SECTION 2.12 Defaulted Interest. . . . . . . . . . . . .15
SECTION 2.13 Persons Deemed Owners . . . . . . . . . . .16
ARTICLE THREE
Redemption
SECTION 3.01 Applicability of Article. . . . . . . . . .16
SECTION 3.02 Notice to Trustee . . . . . . . . . . . . .16
SECTION 3.03 Selection of Securities to Be Redeemed. . .17
SECTION 3.04 Notice of Redemption. . . . . . . . . . . .17
SECTION 3.05 Effect of Notice of Redemption. . . . . . .18
SECTION 3.06 Deposit of Redemption Price or Securities .18
SECTION 3.07 Securities Redeemed in Part . . . . . . . .18
(i)
<PAGE>
ARTICLE FOUR
Covenants
SECTION 4.01 Payment of Securities . . . . . . . . . . .19
SECTION 4.02 Maintenance of Office or Agency . . . . . .19
SECTION 4.03 Money for Securities Payments to Be
Held in Trust . . . . . . . . . . . . . . .20
SECTION 4.04 SEC Reports . . . . . . . . . . . . . . . .21
SECTION 4.05 Statement as to Compliance. . . . . . . . .21
SECTION 4.06 Limitations on Liens on Stock of
Restricted Subsidiaries . . . . . . . . . 22
SECTION 4.07 Limitations on Issue or Disposition
of Stock of Restricted Subsidiaries. .. . .22
SECTION 4.08 Waiver of Certain Covenants . . . . . . . .22
ARTICLE FIVE
Successor Corporation and Assumption
SECTION 5.01 When Company May Merge, etc.. . . . . . . .23
SECTION 5.02 Successor Corporation Substituted . . . . .23
ARTICLE SIX
Defaults and Remedies
SECTION 6.01 Events of Default . . . . . . . . . . . . .23
SECTION 6.02 Collection of Indebtedness by Trustee;
Trustee May Prove Debt .. . . . . . . . . .25
SECTION 6.03 Application of Proceeds . . . . . . . . . .27
SECTION 6.04 Suits for Enforcement . . . . . . . . . . .27
SECTION 6.05 Restoration of Rights on Abandonments of
Proceedings . . . . . . . . . . . . . . . .27
SECTION 6.06 Limitations on Suits by Securityholders . .28
SECTION 6.07 Unconditional Right of Securityholder
to Institute Certain Suits .. . . . . . . .28
SECTION 6.08 Powers and Remedies Cumulative; Delay or
Omission Not Waiver of Default . . . . . .28
SECTION 6.09 Control by Holders of Securities. . . . . .28
SECTION 6.10 Waiver of Past Defaults . . . . . . . . . .29
SECTION 6.11 Trustee to Give Notice of Default, But May
Withhold in Certain Circumstances.. . . . .29
SECTION 6.12 Right of Court to Require Filing of
Undertaking to Pay Costs . . . . . . . . .30
(ii)
<PAGE>
ARTICLE SEVEN
Trustee
SECTION 7.01 Duties of Trustee . . . . . . . . . . . . .30
SECTION 7.02 Rights of Trustee . . . . . . . . . . . . .31
SECTION 7.03 Individual Rights of Trustee. . . . . . . .32
SECTION 7.04 Trustee's Disclaimer. . . . . . . . . . . .32
SECTION 7.05 Notice of Defaults. . . . . . . . . . . . .32
SECTION 7.06 Reports by Trustee to Holders . . . . . . .32
SECTION 7.07 Compensation and Indemnity. . . . . . . . .33
SECTION 7.08 Replacement of Trustee. . . . . . . . . . .33
SECTION 7.09 Successor Trustee by Merger, etc. . . . . .34
SECTION 7.10 Eligibility; Disqualification . . . . . . .34
SECTION 7.11 Preferential Collection of Claims against
Company . . . . . . . . . . . . . . . . . .34
ARTICLE EIGHT
Discharge of Indenture
SECTION 8.01 Termination of the Company's Obligations. .35
SECTION 8.02 Termination of the Company's Obligations
under Certain Circumstances.. . . . . . . .35
SECTION 8.03 Application of Trust Money. . . . . . . . .37
SECTION 8.04 Repayment to Company. . . . . . . . . . . .37
SECTION 8.05 Indemnity for Government Obligations. . . .37
ARTICLE NINE
Amendments, Supplements and Waivers
SECTION 9.01 Without Consent of Holders. . . . . . . . .37
SECTION 9.02 With Consent of Holders . . . . . . . . . .38
SECTION 9.03 Compliance with Trust Indenture Act . . . .39
SECTION 9.04 Revocation and Effect of Consents . . . . .40
SECTION 9.05 Notation on or Exchange of Securities . . .40
SECTION 9.06 Trustee to Sign Amendments, etc.. . . . . .40
ARTICLE TEN
Repayment at the Option of Holders
SECTION 10.01 Applicability of Article. . . . . . . . . .40
<r/>
ARTICLE ELEVEN
Concerning the Securityholders
SECTION 11.01 Evidence of Action Taken by Securityholders.41
SECTION 11.02 Proof of Execution of Instruments and of
Holding of Securities. .. . . . . . . . . .41
SECTION 11.03 Holders to be Treated as Owners . . . . . . 42
(iii)
<PAGE>
SECTION 11.04 Securities Owned by Company Deemed Not
Outstanding . . . . . . . . . . . . . . . . 43
SECTION 11.05 Right of Revocation of Action Taken . . . . 43
SECTION 11.06 Meetings of Holders . . . . . . . . . . . . 43
SECTION 11.07 Call, Notice and Place of Meetings. . . . . 43
SECTION 11.08 Persons Entitled to Vote at Meetings. . . . 44
SECTION 11.09 Quorum; Action. . . . . . . . . . . . . . . 44
SECTION 11.10 Determination of Voting Rights;
Conduct and Adjournment of Meetings. . . . .45
SECTION 11.11 Counting Votes and Recording Action of
Meetings . . . . . . . . . . . . . . . . . .45
ARTICLE TWELVE
Sinking Funds
SECTION 12.01 Applicability of Article. . . . . . . . . . 46
SECTION 12.02 Satisfaction of Sinking Fund Payments with
Securities . . . . . . . . . . . . . . . . .46
SECTION 12.03 Redemption of Securities for Sinking Fund . 46
ARTICLE THIRTEEN
Miscellaneous
SECTION 13.01 Trust Indenture Act Controls. . . . . . . . 47
SECTION 13.02 Notices . . . . . . . . . . . . . . . . . . 47
SECTION 13.03 Communication by Holders with Other Holders.48
SECTION 13.04 Certificate and Opinion as to Conditions
Precedent . . . . . . . . . . . . . . . . . 48
SECTION 13.05 Statements Required in Certificate or
Opinion . . . . . . . . . . . . . . . . . . 49
SECTION 13.06 When Treasury Securities Disregarded. . . . 49
SECTION 13.07 Legal Holidays. . . . . . . . . . . . . . . 49
SECTION 13.08 Governing Law . . . . . . . . . . . . . . . 49
SECTION 13.09 No Adverse Interpretation of Other
Agreements . . . . . . . . . . . . . . . . 50
SECTION 13.10 Successors. . . . . . . . . . . . . . . . . 50
SECTION 13.11 Duplicate Originals . . . . . . . . . . . . 50
SECTION 13.12 Securities in Foreign Currencies. . . . . . 50
SIGNATURES . . . . . . . . . . . . . . . . . . . .50
(iv)
<PAGE>
INDENTURE dated as of _____ ,_____ , between Lincoln National
Corporation, a company incorporated under the laws of Indiana (the "Company"),
and The Bank of New York, a New York banking corporation, as trustee hereunder
("Trustee").
Each party agrees as follows for the benefit of the other parties and
for the equal and ratable benefit of the Holders of the Company's Securities
issued hereunder:
Recitals
The Company has authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsecured
debentures, notes or other evidences of indebtedness ("Securities") to be
issued in one or more series as herein provided.
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed
as follows for the equal and ratable benefit of the Holders of the
Securities:
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01 Definitions.
"Additional Amounts" means any additional amounts which are required by
a Security or by or pursuant to a Board Resolution, under circumstances
specified therein, to be paid by the Company in respect of certain taxes
imposed on certain Holders, or as otherwise specified in the terms of a
Security established pursuant to Section 2.01, and which are owing to such
Holders.
"Agent" means any Registrar, Paying Agent or co-Registrar or agent for
service of notice and demands. See Section 2.03.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have the meanings correlative
to the foregoing.
"Authorized Newspaper" means a newspaper printed in the official
language or in the English language of the country of publication
and customarily published at least once a day on each Business Day
in each calendar week and of general circulation in New York, New York
or in any other place as required in this Indenture, whether or not such
newspaper is published on Legal Holidays, or, with respect to the
Securities of any series, such other newspaper(s), as may be
specified in or pursuant to the Board Resolution of the Company or
supplement to this Indenture pursuant to which such series of Securities is
issued. Whenever, under the provisions of this Indenture or such Board
Resolutions, two or more publications of a notice or other communication are
required or permitted, such publications may be in the same or different
newspapers. If, because of temporary or permanent suspension of publication
or general circulation of any newspaper or for any other reason, it is
impossible or impracticable to publish any notices required by this Indenture
or a Board Resolution in the manner provided, then such publication in lieu
thereof or such other notice as shall be made with the approval of the
Trustee shall constitute a sufficient publication of such notice.
"Bankruptcy Law" shall have the meaning set forth in Section 7.07.
"Bearer Security" means any Security in the form established pursuant to
Section 2.01 which is payable to bearer.
<PAGE>
"Board of Directors" means the Board of Directors of the Company or the
Executive Committee or any other committee of the Board of Directors duly
authorized to act for the Company hereunder.
"Board Resolution" means a copy of the resolutions certified by the
Secretary or an Assistant Secretary of the Company as properly adopted by the
Board of Directors of the Company and in full force and effect and delivered
to the Trustee.
"Business Day", except as may otherwise be provided in the form of
Securities of any particular series pursuant to the provisions of this
Indenture, with respect to any Place of Payment means each
Monday, Tuesday, Wednesday, Thursday and Friday which is not a Legal
Holiday in that Place of Payment.
"Capital Stock" means any and all shares, interests, rights to purchase,
warrants, options, participations or other equivalents of or interests in
(however designated) corporate stock.
"Company" means the party named in the first paragraph of this
Indenture until a successor replaces it pursuant to the Indenture and
thereafter means such successor.
"Company Request" and "Company Order" mean, respectively, a written
request or order signed in the name of the Company by the Chairman of the Board,
the President, the Chief Financial Officer or the Treasurer thereof or any other
officer specifically authorized to act by the Board of Directors of the Company
as certified to the Trustee, and delivered to the Trustee.
"Corporate Trust Office" means the office of the Trustee at which at any
particular time its corporate trust business shall be principally administered,
which office at the date hereof is located at 101 Barclay Street, Floor 21 West,
New York, New York 10286.
"Corporation" includes corporations, associations, companies and
business trusts.
"coupon" means any interest coupon appertaining to a Bearer Security.
"Debt" shall have the meaning set forth in Section 4.06.
"Default" means any event which is, or after notice or passage of time
would be, an Event of Default.
"Discharged" shall have the meaning set forth in Section 8.02.
"Event of Default" shall have the meaning set forth in Section 6.01.
"Government Obligations" with respect to any series of Securities means
direct noncallable obligations of the government which issued the currency in
which the Securities of that series are denominated, noncallable obligations
the payment of the principal of and interest on which is fully guaranteed by
such government, and noncallable obligations on which the full faith and
credit of such government is pledged to the payment of the principal thereof
and interest thereon, and shall also include a depositary receipt issued by a
bank or trust company as custodian with respect to any such Government
Obligation or a specific payment of interest on or principal of any such
Government Obligation held by such custodian for the account of the holder
of such depositary receipt, provided that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable
to the holder of such depositary receipt from any amount received by the
custodian in respect of the Government Obligation or the specific payment
of interest on or principal of the Government Obligation
evidenced by such depositary receipt.
"Holder" or "Securityholder" means, with respect to a Registered
Security, a Person in whose
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name such Security is registered on the Security
Register and, with respect to a Bearer Security or any coupon, the bearer
thereof.
"Indenture" means this Indenture, as it may from time to time be amended
or supplemented and shall include the forms and terms of particular series of
Securities established as contemplated herein.
"Independent Public Accountants" means independent public accountants or
a firm of independent public accountants who may be the independent public
accountants regularly retained by the Company or who may be other independent
public accountants. Such public accountants or firm shall be entitled to rely
upon any Opinion of Counsel as to the interpretation of any legal matters
relating to the Indenture or certificates required to be provided hereunder.
"Legal Holiday" shall have the meaning set forth in Section 13.07.
"Lien" means any mortgage, pledge, security interest or lien,
or other encumberance of any nature whatsoever.
"Notice of Default" shall have the meaning set forth in Section 6.01.
"Officer" means the Chairman of the Board, the President, any Vice
President, the Treasurer or Secretary thereof or any other officer specifically
authorized to act by the Board of Directors of the Company.
"Officers' Certificate" means a certificate signed by two Officers or by
an Officer other than the Secretary and an Assistant Treasurer or an Assistant
Secretary of the Company.
"Opinion of Counsel" means a written opinion of legal counsel, who
(except as otherwise expressly provided in this Indenture) may be an employee of
or counsel to or for the Company, or any other legal counsel acceptable to the
Trustee.
"Original Issue Discount Security" means any Security which provides
that an amount less than its principal amount is due and payable upon
acceleration of the maturity thereof after an Event of Default.
"Outstanding", when used with respect to Securities or a series, shall
have the meaning set forth in Section 2.08.
"Paying Agent" shall have the meaning set forth in Section 2.03.
"Periodic Offering" means an offering of Securities of a series from
time to time the specific terms of which Securities, including, without
limitation, the rate or rates of interest, if any, thereon, the maturity or
maturities thereof, the original issue date or dates thereof, the redemption
provisions, if any, and any other terms specified as contemplated by Section
2.01 with respect thereto, are to be determined by the Company, or one or
more of the Company's agents designated in an Officers' Certificate, upon
the issuance of such Securities.
"Person" means any individual, Corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Place of Payment" when used with respect to the Securities of any
series, means the place or places where the principal of and interest and any
Additional Amounts on the Securities of that series are payable as specified as
provided pursuant to Section 2.01.
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"principal", whenever used with reference to the Securities or any
Security or any portion thereof, shall be deemed to include "and premium, if
any," and, whenever used with reference to any Security which by its terms
provides (or as to which mandatory provisions of law provide) that less than
the principal amount thereof shall be due and payable upon a declaration of
the acceleration of the maturity thereof, and in the contexts of such a
declaration, of proving a claim under bankruptcy, insolvency or similar laws,
or of determining whether the holders of the requisite aggregate principal
amount of the Securities of any or all series then Outstanding have concurred
in any request, demand, authorization, direction, notice, consent, waiver or
other action by Securityholders hereunder, shall mean the portion of such
principal amount so provided to be due and payable upon a declaration of
acceleration of the maturity thereof.
"Redemption Date" means the date fixed for redemption of any Security to
be redeemed pursuant to this Indenture.
"Redemption Price" means the principal amount of any Security to be
redeemed.
"Registered Security" means any Security registered in the Security
Register.
"Registrar" shall have the meaning set forth in Section 2.03.
"Restricted Subsidiary" means each of American States Insurance Company
and The Lincoln National Life Insurance Company so long as it remains a
Subsidiary, and any successor to all or a principal part of the business or
properties of any thereof and any other subsidiary which the Board of
Directors designates as a Restricted Subsidiary.
"SEC" means the Securities and Exchange Commission as from time to time
constituted, created under the Securities Exchange Act of 1934, as amended,
or if at any time after the execution of this instrument such Commission is
not existing and performing the duties assigned to it under the TIA, then the
body performing such duties at such time.
"Securities" means the debt securities, as amended or supplemented from
time to time pursuant to this Indenture, that are issued under this Indenture.
"Security Register" shall have the meaning set forth in Section 2.03.
"Subsidiary" means any corporation of which at the time of determination
the Company and/or one or more Subsidiaries owns or controls directly or
indirectly more than 50% of the shares of Voting Stock.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code Section
77aaa-77bbbb), as amended from time to time.
"Trustee" means the party named as such in this Indenture until a
successor replaces it pursuant to this Indenture and thereafter means such
successor.
"Trust Officer" means any officer or assistant officer of the Trustee
assigned by the Trustee to administer its corporate trust matters.
"United States" means the United States of America (including the States
and the District of Columbia), its territories and possessions and other areas
subject to its jurisdiction.
"U.S. Depository" or "Depository" means, with respect to the Securities
of any series issuable or issued in whole or in part in the form of one or
more global Securities, the Person designated as U.S. Depository pursuant to
Section 2.01, which must be a clearing agency registered under the Securities
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Exchange Act of 1934, as amended, and, if so provided pursuant to Section 2.01
with respect to the Securities of any series, any successor to such Person.
If at any time there is more than one such Person, "U.S. Depository" shall
mean, with respect to any series of Securities, the qualifying entity which
has been appointed with respect to the Securities of that series.
"Voting Stock" means stock of a Corporation of the class or classes
having general voting power under ordinary circumstances in the election of
directors, managers or trustees of such Corporation (irrespective of whether
or not at the time stock of any other class or classes shall have or might have
voting power by reason of the happening of any contingency).
"Yield to Maturity" means the yield to maturity on a series of
Securities at the most recent redetermination of interest on such series, and
calculated in accordance with accepted financial practice.
SECTION 1.02 Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company or any other
obligor on the Securities.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule have the
meanings thereby assigned to them.
SECTION 1.03 Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) "or" is not exclusive;
(3) words in the singular include the plural, and in the plural
include the singular;
(4) an accounting term not otherwise defined has the meaning
assigned to it in accordance with United States generally accepted
accounting principles; and
(5) the Article and Section headings herein and in the Table of
Contents are for convenience only and do not constitute a part of this
Indenture and shall not affect the meaning, construction or effect of this
Indenture.
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ARTICLE TWO
THE SECURITIES
SECTION 2.01 Terms and Form.
The aggregate principal amount of Securities that may be authenticated
and delivered under this Indenture is unlimited. The Securities may be
issued in one or more series of Securities and shall bear the title, interest,
if any, at the rates and from the dates, shall mature at the times, may be
redeemable at the prices and upon the terms, shall be denominated and payable
at the place or places and in the currency or currencies (which may be other
than United States dollars), including composite currencies, and shall contain
or be subject to such other terms as shall be approved by or pursuant to a
Board Resolution of the Company or in one or more supplements to this
Indenture.
The Securities of each series hereunder shall be in one or more forms
approved from time to time by or pursuant to a Board Resolution of the Company
or in one or more supplements to this Indenture establishing the following:
(1) the title or designation of the Securities and the series in
which such Securities shall be included (which, unless such Securities
constitute part of a series of Securities previously issued, shall
distinguish the Securities of the series from all other Securities);
(2) any limit upon the aggregate principal amount of the
Securities of such title or the Securities of such series which may be
authenticated and delivered under this Indenture (except for Securities
authenticated and delivered upon registration or transfer of, or in
exchange for, or in lieu of, other Securities of the series pursuant to
Sections 2.06, 2.07, 2.09 or 3.07);
(3) whether Securities of the series are to be issuable as
Registered Securities, Bearer Securities (with or without coupons) or
both; any restrictions applicable to the offer, sale or delivery of
Bearer Securities and the terms upon which Bearer Securities of the
series may be exchanged for Registered Securities of the series; and
whether any Securities of the series are to be issuable initially in
global form and, if so, (i) whether beneficial owners of interests in
any such global Security may exchange such interest for Securities of
such series and of like tenor of any authorized form and denomination
and the circumstances under which any such exchanges may occur, if other
than in the manner specified in Section 2.09 and (ii) the name of the
Depository or the U.S. Depository, as the case may be, with respect to
any global Security;
(4) the date as of which any Bearer Securities of the series and
any temporary global Security representing Outstanding Securities of the
series shall be dated if other than the date of original issuance of the
first Security of the series to be issued;
(5) if Securities of the series are to be issuable as Bearer
Securities, whether interest in respect of any portion of a temporary
Bearer Security in global form (representing all of the Outstanding
Bearer Securities of the series) payable in respect of any date or dates
prior to the exchange of such temporary Bearer Security for definitive
Securities of the series shall be paid to any clearing organization with
respect to the portion of such temporary Bearer Security held for its
account and, in such event, the terms and conditions (including any
certification requirements) upon which any such interest payment
received by a clearing organization will be credited to the Persons
entitled to interest payable on such date or dates;
(6) the date or dates on which the principal of such Securities
is payable;
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(7) the rate or rates at which such Securities shall bear
interest, if any, or the method in which such rate or rates are
determined, the date or dates from which such interest shall accrue, the
dates on which such interest shall be payable and the record date for
Holders entitled to the interest payable on Registered Securities on any
such date, whether and under what circumstances Additional Amounts on
such Securities shall be payable and, if so, whether the Company has the
option to redeem the affected Securities rather than pay such Additional
Amounts, and the basis upon which interest shall be calculated if other
than as otherwise provided in this Indenture;
(8) the place or places, if any, in addition to or other than
The Borough of Manhattan, The City of New York, New York or the City of
Chicago, Illinois where the principal of and interest on or Additional
Amounts, if any, payable in respect of such Securities shall be payable;
(9) the period or periods within which, the price or prices at
which and the terms and conditions upon which such Securities may be
redeemed, in whole or in part, at the option of the Company;
(10) the obligation, if any, of the Company to redeem or purchase
such Securities pursuant to a sinking fund, at the option of a Holder
thereof or otherwise and the period or periods within which, the price
or prices at which and the terms and conditions upon which such
Securities shall be redeemed or purchased in whole or in part, pursuant
to such obligation, and any provisions for the remarketing of such
Securities;
(11) the denominations in which Registered Securities of the
series, if any, shall be issuable, and the denominations in which Bearer
Securities of the series, if any, shall be issuable, in either case if
other than as otherwise provided in this Indenture;
(12) if other than the principal amount thereof, the portion of
the principal amount of such Securities which shall be payable upon
declaration of acceleration of the maturity thereof pursuant to
Section 6.02;
(13) if other than such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public
or private debts, the coin or currency, including composite currencies,
in which payment of the principal of or interest, if any, and any
Additional Amounts in respect of such Securities shall be payable and
whether the Securities of the series may be discharged other than as
provided in Article 8;
(14) if the principal of or interest, if any, and any Additional
Amounts in respect of such Securities are to be payable, at the election
of the Company or a Holder thereof, in a coin or currency, including
composite currencies, other than that in which the Securities are stated
to be payable, the period or periods within which, and the terms and
conditions upon which, such election may be made;
(15) if the amount of payments of principal of or interest, if
any, or any Additional Amounts in respect of such Securities may be
determined with reference to an index, formula or other method based on
a coin or currency other than that in which the Securities are stated to
be payable, the manner in which such amounts shall be determined;
(16) if the Securities of such series are to be issuable in
definitive form (whether upon original issue or upon exchange of a
temporary Security of such series) only upon receipt of certain
certificates or other documents or satisfaction of other conditions,
then the form and terms of such certificates, documents or conditions;
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(17) any terms which may be related to warrants issued by the
Company in connection with, or for the purchase of, Securities of such
series, including whether and under what circumstances the Securities of
any series may be used toward the exercise price of any such warrants;
(18) the terms and conditions upon which the Securities of the
series will be convertible into shares of common stock or other
securities of the Company, including the conversion price, conversion
period and other conversion provisions.
(19) any other events of default or covenants with respect to
Securities of such series; and
(20) any other terms of such Securities (which terms shall not be
inconsistent with the provisions of this Indenture).
If the form of the Security of any series is approved by or pursuant to
a Board Resolution of the Company, an Officers' Certificate of the Company
delivered to the Trustee shall state that all conditions precedent relating to
the authentication and delivery of such Security have been complied with and
shall be accompanied by a copy of the Board Resolution of the Company by or
pursuant to which the form of such Security has been approved. The Securities
may have notations, legends or endorsements required by law, stock exchange
rule or usage. Each Security shall be dated the date of its authentication.
Each Security may contain any other terms as are not inconsistent with the
provisions of this Indenture.
All Securities of any one series and coupons appertaining to Bearer
Securities of such series, if any, shall be substantially identical except as to
denomination and the rate or rates of interest, if any, the time or times at
which the principal thereof may be payable, the date from which interest, if
any, shall accrue and except as may otherwise be provided in or pursuant to
such Board Resolution and set forth in the Officers' Certificate hereinabove
described or in any such indenture supplemental hereto. All Securities of
any one series need not be issued at the same time and, unless otherwise
provided, a series may be reopened for issuances of additional Securities of
such series or to establish additional terms of such series of Securities.
The Securities of each series may be issued as Registered Securities
without coupons or, if provided by the terms of the instrument establishing
such series of Securities, as Bearer Securities, with or without coupons and, in
either case, may be issued initially, temporarily or permanently in global form
(as provided in Section 2.10). Unless the form of a Security for a series
provides otherwise, the Registered Securities shall be issued in
denominations of $1,000 or integral multiples thereof and Bearer Securities
shall be issuable in the denomination of $5,000.
Except as otherwise specified as contemplated by this Section 2.01 for
Securities of any series, interest on the Securities of each series shall be
computed on the basis of a 360-day year of twelve 30-day months.
SECTION 2.02 Execution and Authentication.
Two Officers of the Company shall sign the Securities and the coupons
for the Company by manual or facsimile signature. The Company's seal, if any,
may be reproduced on the Securities, but the Company's seal shall not be
required to be included on the Securities.
If an Officer whose signature is on a Security or coupon no longer holds
that office at the time the Trustee authenticates the Security, the Security
and coupon shall be valid and binding on the Company nevertheless.
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The aggregate principal amount of Securities Outstanding hereunder at
any time shall be unlimited except that such Outstanding amount (exclusive of
any premium) may not exceed the amount authorized from time to time by the
Board of Directors of the Company and except as provided in Section 2.07.
Upon receipt of a Company Order for the authentication and delivery of
Securities of a series, the Trustee shall authenticate and deliver for original
issue Securities of a series as to which an Officers' Certificate of the
Company or a supplemental indenture has been delivered to the Trustee
pursuant to Section 2.01.
No Security or any coupon appertaining thereto shall be valid until the
Trustee or the authenticating agent referred to below manually signs the
certificate of authentication on the Security. Each Registered Security
shall be dated the date of its authentication. Bearer Securities and any
temporary Bearer Security in global form shall be dated as specified in the
Officers' Certificate of the Company or in the supplements to this Indenture
contemplated by Section 2.01. The signature of the Trustee or the
authenticating agent referred to below shall be conclusive evidence that
the Security has been authenticated under this Indenture.
The Trustee may appoint an authenticating agent to authenticate
Securities. An authenticating agent may authenticate Securities whenever the
Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent has
the same rights as an Agent to deal with the Company or an Affiliate thereof.
Except as permitted by Section 2.07, the Trustee shall not authenticate
and deliver any Bearer Security unless all appurtenant coupons for interest
then matured have been detached and cancelled.
The Trustee's authentication shall be in the following form:
Dated:
Trustee's Certificate of Authentication
This is one of the Securities of the series designated herein and
referred to in the within-mentioned Indenture.
THE BANK OF NEW YORK,
as Trustee
By:
Authorized Signatory
If the forms and terms of the Securities of the series and any related coupons
have been established in or pursuant to one or more Officers' Certificates as
permitted by Section 2.01 and 2.02, in authenticating such Securities and
accepting the additional responsibilities under this Indenture in relating to
such Securities the Trustee shall be entitled to receive, and (subject to
Section 7.01) shall be fully protected in relying upon an Opinion of Counsel
to the effect that:
(a) the form and terms of such Securities and coupons, if any,
have been duly authorized and established pursuant to Sections 2.01 and
2.02 and comply with this Indenture, and
(b) such Securities, when authenticated and delivered by the
Trustee and issued by the Company, and such coupons, if any, when issued
by the Company, in the manner and subject to any conditions specified in
such Opinion of Counsel, will constitute valid and legally binding
obligations of the Company, enforceable in accordance with their terms,
subject to customary exceptions,
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provided, however, that, with respect to Securities of a series subject to a
Periodic Offering, the Trustee shall be entitled to receive such Opinion of
Counsel only once at or prior to the time of the first authentication of
Securities of such series and that the Opinion of Counsel above may state:
(x) that the forms of such Securities have been, and the terms
of such Securities (when established in accordance with such procedures
as may be specified from time to time in a Company Order, all as
contemplated by and in accordance with a Board Resolution or any
Officers' Certificate pursuant to Section 2.01, as the case may be) will
have been, duly authorized by the Company and established in conformity
with the provisions of this Indenture; and
(y) that such Securities, together with the coupons, if any,
appertaining thereto, when (1) executed by the Company, (2) completed,
authenticated and delivered by the Trustee in accordance with this
Indenture, and (3) issued by the Company in the manner and subject to
any conditions specified in such Opinion of Counsel, will constitute
valid and legally binding obligations of the Company, enforceable in
accordance with their terms, subject to customary exceptions.
With respect to Securities of a series subject to a Periodic Offering,
the Trustee may conclusively rely, as to the authorization by the Company of
any of such Securities, the form and terms thereof and the legality, validity,
binding effect and enforceability thereof, upon the Opinion of Counsel and
other documents delivered pursuant to Section 2.01 and this Section, as
applicable, at or prior to the time of the first authentication of Securities
of such series unless and until it has received written notification that
such opinion or other documents have been superseded or revoked. In
connection with the authentication and delivery of Securities of a series
subject to a Periodic Offering, the Trustee shall be entitled to assume that
the Company's instructions to authenticate and deliver such Securities do not
violate any rules, regulations or orders of any governmental agency or
commission having jurisdiction over the Company.
SECTION 2.03 Registrar and Paying Agent.
The Company shall designate a Registrar who shall maintain an office or
agency where Securities may be presented for registration of transfer and where
each series of Registered Securities may be presented for exchange ("Registrar")
and a Paying Agent who shall maintain an office or agency where Securities and
coupons may be presented for payment ("Paying Agent") and an office or agency
where notices and demands to or upon the Company in respect of the Securities
and this Indenture may be served. The Registrar shall keep a register
("Security Register") of each series of Registered Securities and of their
transfer and exchange. The Company may have one or more co-Registrars and one
or more additional Paying Agents and shall maintain the Registrar or a
co-Registrar and a Paying Agent in each place required by Section 4.02.
The term "Paying Agent" includes any additional paying agent. In the event
that the Trustee shall not be the Registrar, it shall have the right to examine
the Security Register at all reasonable times.
The Company shall enter into an appropriate agency agreement with any
Agent not a party to this Indenture. The agreement shall implement the
provisions of this Indenture that relate to such Agent. The Company shall
notify the Trustee of the name and address of any such Agent. If the Company
fails to maintain a Registrar or Paying Agent, or the Company fails to
maintain an agent for service of notices, process and demands, or the Company
fails to give the foregoing notice, the Trustee shall act as such.
The Company initially appoints the Trustee to be the Registrar, Paying
Agent and agent for services of notices and demands.
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SECTION 2.04 Paying Agent to Hold Money in Trust.
Each Paying Agent shall hold in trust for the benefit of Securityholders or
the Trustee all money held by the Paying Agent for the payment of principal of
or any interest or Additional Amounts on the Securities, and shall notify the
Trustee of any default by the Company (or any other obligor on the Securities)
in making any such payment. If the Company or a Subsidiary acts as Paying
Agent, it shall on or before each due date of the principal of or any
interest or Additional Amounts on any Securities segregate the money and
hold it as a separate trust fund. The Company at any time may require a
Paying Agent to pay all money held by it to the Trustee and the Trustee may
at any time during the continuance of any payment default, upon written request
to a Paying Agent, require such Paying Agent to pay to the trustee all
sums so held in trust by such Paying Agent. Upon doing so the Paying Agent
shall have no further liability for the money.
SECTION 2.05 Securityholder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Holders of Registered Securities. If the Trustee is not the Registrar, the
Company shall furnish to the Trustee from information in the possession or
control of the Company (a) on or before each interest payment date, as of the
relevant record date, for any series of Securities, (b) pursuant to the
form of Security for each series of non-interest bearing Securities and (c)
at such other times as the Trustee may request in writing a list in such form
and as of such date as the Trustee may reasonably require of the names and
addresses of Securityholders, provided that if the provisions of (a) or (b)
do not provide for the furnishing of such information at stated intervals of
not more than six months, at least as frequently as semiannually, not later
than May 15 and November 15 of each year.
SECTION 2.06 Transfer, Registration and Exchange.
When a Registered Security is presented at an office or agency
maintained for that series pursuant to Section 4.02 in proper form for
registration of transfer with a request to register a transfer, the Registrar or
co-Registrar at that office shall register the transfer as requested.
At the option of the Securityholder, Registered Securities of any series
may be exchanged upon surrender to the Registrar or a co-Registrar for
Registered Securities of the same series of like aggregate principal amount,
stated maturity and tenor and of other authorized denominations upon surrender
at any office or agency maintained for that series pursuant to Section 4.02.
If so provided with respect to Securities of a series, at the option of the
Holder, Bearer Securities of any such series may be exchanged for Registered
Securities of the same series containing identical terms and provisions,of any
authorized denominations and aggregate principal amount, upon surrender of the
Bearer Securities to be exchanged at any office or agency maintained for that
series pursuant to Section 4.02, with all unmatured coupons and all matured
coupons in default thereto appertaining. If the Holder of a Bearer Security is
unable to produce any such unmatured coupon or coupons or matured coupon or
coupons in default, such exchange may be effected if the Bearer Securities are
accompanied by payment in funds acceptable to the Company and the Trustee in an
amount equal to the face amount of such missing coupon or coupons, or the
surrender of such missing coupon or coupons may be waived by the Company and
the Trustee if there is furnished to them such security or indemnity as they
may require to save each of them and any Paying Agent for that series harmless.
If thereafter the Holder of such Security shall surrender to any Paying Agent
for that series any such missing coupon in respect of which such a payment
shall have been made, such Holder shall be entitled to receive the amount
of such payment; provided, however, that except as otherwise provided
in Section 4.02, interest represented by coupons shall be payable only
upon presentation and surrender of those coupons at an office or agency
located outside the United States. Notwithstanding the foregoing, in case a
a Bearer Security of any series is surrendered at any such office or agency
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maintained for that series pursuant to Section 4.02 in exchange for a
Registered Security of the same series and like tenor after the close of
business at such office or agency on any record date for the payment of
interest and any Additional Amounts thereon and before the opening of
business at such office or agency on the relevant payment date therefor, such
Bearer Security shall be surrendered without the coupon relating to such payment
date or proposed date of payment, as the case may be (or if such coupon is so
surrendered with such Bearer Security, such coupon shall be returned to the
person so surrendering the Bearer Security), and interest will not be payable on
such payment date or proposed date for payment, as the case may be, in respect
of the Registered Security issued in exchange for such Bearer Security, but
will be payable only to the Holder of such coupon when due in accordance
with the provisions of this Indenture.
Every Security presented or surrendered for registration of transfer or
exchange shall (if so required by the Company or the Registrar or co-Registrar)
be duly endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Registrar duly executed by the Holder
thereof or his attorney duly authorized in writing. To permit transfers and
exchanges, the Company shall execute and the Trustee shall authenticate
Securities at the Registrar's or co-Registrar's request.
Notwithstanding the foregoing, except as otherwise specified as
contemplated by Section 2.01, any global Security shall be exchangeable only
if (i) the Securities Depository is at any time unwilling, unable or ineligible
to continue as Securities Depository and a successor Depository is not
appointed by the Company within 90 days of the date the Company is so informed
in writing, (ii) the Company executes and delivers to the Trustee a Company
Order to the effect that such global Security shall be so exchangeable, or
(iii) an Event of Default has occurred and is continuing with respect to
the Securities. If the beneficial owners of interests in a global Security
are entitled to exchange such interests for Securities of such series and of
like tenor and principal amount of any authorized form and denomination, as
specified as contemplated by Section 2.01, then without unnecessary delay
but in any event not later than the earliest date on which such interests
may be so exchanged, Company shall deliver to the Trustee definitive Securities
of that series in aggregate principal amount equal to the principal amount of
such global Security, executed by the Company. On or after the earliest date on
which such interests may be so exchanged, such global Securities shall be
surrendered from time to time by the U.S. Depository or such other Depository
as shall be specified in the Company Order with respect thereto, and in
accordance with instructions given to the Trustee and the U.S. Depository or
such Depository, as the case may be, which instructions shall be in writing
but need not be accompanied by an Officers' Certificate of the Company or an
Opinion of Counsel, as shall be specified in the Company Order with respect
thereto to the Trustee, as the Company's agent for such purpose, to be
exchanged, in whole or in part, for definitive Securities of the same series
without charge. The Trustee shall authenticate and make available for
delivery, in exchange for each portion of such surrendered global
Security, a like aggregate principal amount of definitive Securities of the
same series of authorized denominations and of like tenor as the portion of
such global Security to be exchanged which shall be in the form of Bearer
Securities or Registered Securities, or any combination thereof, as shall be
specified by the beneficial owner thereof (unless the Securities of the
series are not issuable both as Bearer Securities and as Registered
Securities, in which case the definitive Securities exchanged for the global
Security shall be issuable only in the form in which the Securities are
issuable, as specified as contemplated by Section 2.01); provided, however,
that no such exchanges may occur during a period beginning at the opening
of business 15 days before any selection of Securities of that series to
be redeemed and ending on the relevant Redemption Date; and provided,
further, that (unless otherwise specified as contemplated by Section 2.01)
no Bearer Security delivered in exchange for a portion of a global Security
shall be mailed or otherwise delivered to any location in the
United States. Promptly following any such exchange in part,
such global Security shall be returned by the Trustee to such depository or
the U.S. Depository referred to above in accordance with the instructions of
the Company referred to above. If a Registered Security is issued in
exchange for any portion of a global Security after the close of business at
the office or agency where such exchange occurs on any record date for the
payment of interest or any Additional Amounts thereon, and before the opening
of business
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at such office or agency on the relevant payment date therefor,
interest and any Additional Amounts in respect of such Registered
Security will not be payable on such payment date, but will be payable
on such payment date only to the Person to whom interest or any
any Additional Amounts in respect of such portion of such global
Security is payable in accordance with the provisions of this Indenture.
No service charge shall be made for any registration of transfer or
exchange, or redemption of Securities, but the Company may require payment of a
sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any registration of transfer or exchange of
Securities, other than exchanges pursuant to Section 2.09, 3.07 or 9.05
not involving any transfer.
The Company shall not be required (a) to issue, register the transfer
of, or exchange any Securities of any series for a period of 15 days next
preceding the day of any selection of Securities of such series to be redeemed
pursuant to Section 3.03, or (b) to register the transfer of or exchange any
Securities of any series selected, called or being called for redemption
in whole or in part except, in the case of any Registered Security to
be redeemed in part, the portion thereof not so to be redeemed or (c) to
exchange any Bearer Security so selected for redemption except, to the
extent provided with respect to Securities of a series, that such a Bearer
Security may be exchanged for a Registered Security of that series, provided
that such Registered Security shall be immediately surrendered for redemption
with written instruction for payment consistent with the provisions of this
Indenture.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
endorsed thereon surrendered upon such registration of transfer or exchange.
SECTION 2.07 Replacement Securities.
If the Holder of a mutilated or defaced Security or a Security with a
mutilated or defaced coupon appertaining to it surrenders such Security to the
Trustee or if the Holder of a Security presents evidence to the satisfaction
of the Company and the Trustee that the Security has been lost, destroyed or
wrongfully taken or that a coupon has been lost, stolen or wrongfully taken and
surrenders the Security to which such coupon appertains with all appurtenant
coupons not so lost, stolen or wrongfully taken, the Company shall issue and
the Trustee shall authenticate a replacement Security of the same series and
of like tenor, with coupons corresponding to the coupons, if any,appertaining
to the surrendered Security. In case any such mutilated, defaced, lost,
destroyed or wrongfully taken Security or coupon has or is about to become
due and payable, the Company may pay the Security or coupon instead of
issuing a new Security or coupon; provided, however, that payment of
principal of and any interest on and Additional Amounts with respect to
Bearer Securities shall, except as otherwise provided in Section 4.02, be
payable only at an office or agency located outside the United States and,
unless otherwise specified as contemplated by Section 2.01, any interest on
Bearer Securities shall be payable only upon presentation and surrender of
the coupons appertaining thereto. If required by the Trustee or the Company,
an indemnity bond must be provided which is sufficient in the
judgment of the Company and the Trustee to protect the Company
and the Trustee or any Agent from any loss which any of them may suffer if a
Security is replaced. The Company and the Trustee may charge the Holder for
their fees and expenses in replacing a Security.
Every replacement Security of any series, with its coupons, if any, is
an additional obligation of the Company and shall be entitled to all of the
benefits of this Indenture equally and proportionately with any and all other
Securities of that series and their coupons, if any, duly issued under this
Indenture.
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SECTION 2.08 Outstanding Securities.
Securities Outstanding at any time are all Securities authenticated by the
Trustee except for those cancelled by it and those described in this Section.
A Security does not cease to be Outstanding because the Company or one of its
Affiliates holds the Security except as provided in Section 13.06.
If a Security is replaced pursuant to Section 2.07, it ceases to be
Outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.
If the Paying Agent holds on a Redemption Date or maturity date money
sufficient to pay Securities payable on that date, then on and after that date
such Securities cease to be Outstanding and interest on them ceases to accrue,
provided that, if such Securities are to be redeemed, notice of such redemption
has been duly given pursuant to this Indenture or provision therefor
satisfactory to the Trustee has been made.
If the Company is deemed to be discharged from its obligations with
respect to the Securities of any series pursuant to Section 8.01 or 8.02, the
Securities of such series shall cease to be Outstanding.
In determining whether the Holders of the requisite principal amount of
Outstanding Securities of any or all series have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, the principal
amount of an Original Issue Discount Security that shall be deemed to be
Outstanding for such purposes shall be the amount of the principal thereof that
would be due and payable as of the date of such determination upon a
declaration of acceleration of the maturity thereof pursuant to Section 6.01,
as adjusted pursuant to Section 13.12 if applicable.
SECTION 2.09 Temporary Securities.
Until definitive Securities are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Securities. Temporary
Securities and, if Bearer Securities, temporary coupons shall be
substantially in the form of definitive Securities and, if Bearer
Securities, definitive coupons but may have variations in form that
the Company considers appropriate for temporary Securities.
In the case of Bearer Securities of any series, such temporary Securities
may be in global form representing all of the Outstanding Bearer
Securities of such series. Except in the case of temporary Securities in global
global form (which shall be exchanged in accordance with the provisions
thereof), without unreasonable delay, the Company shall prepare definitive
Securities (accompanied by any unmatured coupons pertaining thereto) of
like tenor as the temporary Securities.
After the preparation of definitive Securities of a series, the
temporary Securities of such series shall be exchangeable upon request for
definitive Securities of such series containing identical terms and provisions
upon surrender of the temporary Securities of such series at an office or agency
of the Company maintained for such purpose pursuant to Section 4.02, without
charge to the Holder. Upon surrender for cancellation of any one or more
temporary Securities of any series (accompanied by any unmatured coupons
appertaining thereto), the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a like principal amount of
definitive Securities of authorized denominations of the same series containing
identical terms and provisions; provided, however, that no definitive Bearer
Security, except as provided pursuant to Section 2.01, shall be delivered in
exchange for a temporary Registered Security; and provided, further, that a
definitive Bearer Security shall be delivered in exchange for a temporary Bearer
Security only in compliance with the conditions set forth therein. Unless
otherwise specified as contemplated by Section 2.01 with respect to a temporary
global Security, until so exchanged the temporary Securities of any series shall
in all respects be entitled to the same benefits under this Indenture as
definitive Securities of such series.
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SECTION 2.10 Securities in Global Form.
If Securities of a series are issuable in global form, any such Security
may provide that it shall represent the aggregate amount of Outstanding
Securities from time to time endorsed thereon and may also provide that the
aggregate amount of Outstanding Securities represented thereby may from time to
time be reduced to reflect exchanges. Any endorsement of a Security in global
form to reflect the amount,or any increase or decrease in the amount,or changes
in the rights of Holders, of Outstanding Securities represented thereby shall be
made in such manner and by such Person or Persons as shall be specified
therein.
SECTION 2.11 Cancellation.
The Company at any time may deliver Securities or coupons to the Trustee
for cancellation. The Registrar and Paying Agent shall forward to the Trustee
any Securities surrendered to them for transfer, exchange or payment and all
coupons surrendered for payment. The Trustee shall cancel all Securities
surrendered for transfer, exchange, payment or cancellation and all
coupons surrendered for payment and return such cancelled Securities to the
Company upon Company Order, provided, however, that the Trustee may but
shall not be required to destroy cancelled Securities unless the Company
directs their return to the Company. The Company may not issue new
Securities to replace Securities that it has paid or delivered to the Trustee
for cancellation.
SECTION 2.12 Defaulted Interest.
If the Company defaults in a payment of interest or any Additional Amounts
on any series of Registered Securities, the Company shall pay the defaulted
interest and any Additional Amounts to Persons who are Holders of Registered
Securities of such series on a subsequent special record date in the
following manner. The Company shall fix the special record date
(which shall be between 10 and 30 days before the payment date) for
the payment of such defaulted interest and any Additional Amounts on
such Securities and the payment date for such defaulted interest.
At least 15 days before the special record date, the Company shall
mail each Holder of Registered Securities a notice that states the
special record date, the payment date and the amount of defaulted interest
and any Additional Amounts to be paid, provided the Company has made
arrangements satisfactory to the Trustee for payment of the aggregate
amount to be paid on such payment date. On such payment date the Trustee
shall pay out of funds provided by the Company such defaulted interest
and any Additional Amounts. In case a Bearer Security of
any series is surrendered at the office or agency of the Company maintained
pursuant to Section 4.02 in a Place of Payment for such series in exchange for a
Registered Security of such series after the close of business at such office or
agency on any special record date and before the opening of business at such
office or agency on the related proposed date for payment of defaulted interest
and any Additional Amounts, such Bearer Security shall be surrendered without
the coupon relating to such proposed date of payment and defaulted interest and
any Additional Amounts will not be payable on such proposed date of payment in
respect of the Registered Security issued in exchange for such Bearer Security,
but will be payable only to the Holder of such coupon on or after such payment
date in accordance with the provisions of this Indenture. The Company may pay
defaulted interest and any Additional Amounts in any other lawful manner.
SECTION 2.13 Persons Deemed Owners.
Prior to due presentment of a Registered Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name such Registered Security is registered as the
owner of such Registered Security for the purpose of receiving payments of
principal of and (subject to Sections 2.06 and 4.01) interest on and Additional
Amounts with respect to such Registered Security and for all other purposes
whatsoever, whether or not such Registered Security shall be overdue, and
neither the Company, the Trustee nor any agent of the Company or the Trustee
shall be affected by notice to the contrary.
The Company, the Trustee and any agent of the Company or the Trustee may
treat the bearer of any Bearer Security and the bearer of any coupon as the
absolute owner of such Security or coupon for the purpose of receiving payment
thereof or on account thereof and for all other purposes whatsoever, whether
or not such Security or coupon shall be overdue, and neither the Company, the
Trustee nor any agent of the Company or the Trustee shall be affected by
notice to the contrary.
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SECTION 2.14 CUSIP Numbers.
The Company in issuing the Securities may use "CUSIP" numbers (if
then generally in use), and, if so, the Trustee shall use "CUSIP" numbers
in notices of redemption as a convenience to Holders, provided that any
such notice may state that no representation is made as to the correctness
of such numbers either as printed on the Securities or as contained in any
notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Securities, and any such redemption
shall not be affected by any defect in or omission of such numbers.
ARTICLE THREE
REDEMPTION
SECTION 3.01 Applicability of Article.
This Article shall apply to the Securities of each series, if any, that by
their terms are subject to redemption at the option of the Company or pursuant
to the operation of a sinking fund or otherwise are required to be redeemed
pursuant to the terms of the Securities. If the terms of any Security shall
conflict with any provision of this Article, the terms of such Security shall
govern.
SECTION 3.02 Notice to Trustee.
The election of the Company to redeem any Securities shall be evidenced
by a Board Resolution. If the Company wants to redeem Securities of any
series in whole or in part pursuant to the terms of the Securities of that
series, the Company shall notify the Trustee of the Redemption Date therefor
and the principal amount and other terms and provisions of the Securities
to be redeemed. Each such notice shall be accompanied by an Officers'
Certificate of the Company stating that any conditions to such redemption
as provided in such Security and in this Article have been complied with.
If the Company elects to redeem less than all of the Securities of a series
with the same terms and provisions, the Company shall notify the Trustee
of such Redemption Date and of the principal amount of such Securities
to be redeemed and shall deliver to the Trustee such documentation
and records as shall enable the Trustee to select the Securities to be
redeemed pursuant to Section 3.03.
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If Securities of any series by their terms are redeemable pursuant to
the operation of a sinking fund or pursuant to another mandatory redemption
provision of the Securities, the Company shall notify the Trustee by an
Officers' Certificate of the amount of the next sinking fund payment or
amount required to satisfy such mandatory redemption payment and the
portion of such payment which is to be satisfied by delivering and crediting
Securities of the same series pursuant to Section 3.06.
If the Company wants to reduce pursuant to the terms of such Securities the
principal amount of Securities to be redeemed, it shall notify the Trustee by
Officers' Certificate of the amount of the reduction and the basis for it. If
the Company wants to credit against any such redemption Securities of the same
series it has not previously delivered to the Trustee for cancellation, it
shall deliver the Securities with such Officers' Certificate.
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The Company shall give each notice and an Officers' Certificate provided
for in this Section at least 45 days before the applicable Redemption Date
(unless shorter notice is satisfactory to the Trustee or a shorter or longer
notice is required by the applicable Security).
SECTION 3.03 Selection of Securities to Be Redeemed.
If less than all the Securities of a series with the same terms and
provisions are to be redeemed, the Trustee shall select the Securities to be
redeemed by a method the Trustee considers fair and appropriate. The Trustee
shall make the selection from such Securities Outstanding not previously called
for redemption. The Trustee may select for redemption portions of the principal
of Registered Securities of such series that have denominations larger than the
minimum authorized denominations for Registered Securities of that series.
Securities and portions thereof the Trustee selects shall be in amounts equal to
the smallest authorized denominations or an integral multiple thereof.
Provisions of this Indenture that apply to Securities called for redemption
also apply to portions of Registered Securities called for redemption.
The Trustee shall promptly notify the Company and the Registrar (if
other than itself) in writing of the Securities selected for redemption and,
in the case of any Securities selected for partial redemption, the principal
amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Securities redeemed or to be redeemed only in part, to the
portion of the principal of such Securities which has been or is to be redeemed.
SECTION 3.04 Notice of Redemption.
At least 30 days but not more than 60 days before a Redemption Date
(unless a shorter or longer period is specified in the Securities to be
redeemed), the Company shall give notice of such redemption to the Holders
of the Securities to be redeemed as a whole or in part, with respect to
Registered Securities, by mailing a notice of such redemption by first-class
mail to each Holder of Registered Securities to be redeemed and, with
respect to Bearer Securities, by publishing in an Authorized Newspaper
notice of such redemption on two separate days.
The notice shall identify the Securities to be redeemed and shall state:
(1) the Redemption Date;
(2) the Redemption Price, including premium, if any, accrued
interest and Additional Amounts, if any;
(3) if less than all Securities of a series Outstanding are to
be redeemed, the identification (and, if any Security is to be redeemed
in part, the principal amount) of the particular Securities to be
redeemed;
(4) the name or names and address or addresses of the Paying
Agent;
(5) that Securities called for redemption must be surrendered to
the Paying Agent to collect the Redemption Price, including premium, if
any, accrued interest and Additional Amounts, if any;
(6) that interest on Securities called for redemption ceases to
accrue on and after the Redemption Date;
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(7) that the redemption is pursuant to a sinking fund, if such
is the case;
(8) the Place or Places of Payment where such Securities are
to be surrendered for payment for the Redemption Price; and
(9) the CUSIP number, if any, of the Securities.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense.
SECTION 3.05 Effect of Notice of Redemption.
Once notice of redemption is given pursuant to Section 3.04, Securities
called for redemption shall become due and payable on the Redemption Date
therefor and at the applicable Redemption Price. Upon surrender to the Paying
Agent for such Securities of such Securities together with all unmatured
coupons, if any, appertaining thereto, such Securities shall be paid at the
applicable Redemption Price, plus accrued interest to the Redemption Date and
any Additional Amounts payable with respect thereto; provided, however,
that any regular payment of interest and any Additional Amounts payable
with respect thereto becoming due on the Redemption Date shall be payable,
in the case of Bearer Securities, to bearers of the coupons for such
interest and Additional Amounts upon surrender thereof and in the case of
Registered Securities to the Holders of such Securities in accordance
with their terms.
If any Bearer Security surrendered for redemption shall not be
accompanied by all appurtenant coupons maturing after the Redemption Date, such
Security may be paid after deducting from the Redemption Price an amount
equal to the face amount of all such missing coupons, or the surrender
of each missing coupon or coupons may be waived by the Company and the
Trustee if there shall be furnished to them such security or indemnity
as they may require to save each of them and any Paying Agent for such
Security harmless. If thereafter the Holder of such Security shall
surrender to the Trustee or any Paying Agent for such Security
any such missing coupon in respect of which a deduction shall have been
made from the Redemption Price, such Holder shall be entitled to receive the
amount so deducted; provided, however, that interest (and any Additional
Amounts) represented by coupons shall be payable only upon presentation
and surrender of these coupons at an office or agency located outside of
the United States except as otherwise provided in Section 4.02.
SECTION 3.06 Deposit of Redemption Price or Securities.
On or before the Redemption Date, the Company shall deposit with the
applicable Paying Agent (or if the Company is its own Paying Agent, shall
segregate and hold in trust) money sufficient to pay the Redemption Price of
and accrued interest and Additional Amounts, if any, on all Securities to be
redeemed on that date.
If any Security by its terms permits any sinking fund payment obligation
to be satisfied by delivering and crediting Securities, the Company shall
deliver such Securities to the Trustee for crediting against such payment
obligation in accordance with the terms of such Securities and this Indenture.
SECTION 3.07 Securities Redeemed in Part.
Upon surrender of a Security that is redeemed in part at any office or
agency maintained by the Company pursuant to Section 4.02, the
Company shall execute and Trustee shall authenticate for the Holder a new
Security of the same series equal in principal amount to the unredeemed
portion of the Security surrendered.
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If a Security in global form is surrendered upon redemption in part, the
Company shall execute, and the Trustee shall authenticate and deliver to the
U.S. Depository or other Depository for such Security in global form as shall
be specified in the Company Order to the Trustee with respect thereto,without
service charge, a new Security in global form in a denomination equal to and
in exchange for the unredeemed portion of the principal of the Security in
global form so surrendered.
ARTICLE FOUR
COVENANTS
SECTION 4.01 Payment of Securities.
The Company shall pay the principal of and any interest or Additional
Amounts, if any, on the Securities of each series on the dates and in the manner
provided in the Securities, any coupons appertaining thereto and this
Indenture. At the Company's option, it can pay any interest or Additional
Amounts, if any, on Registered Securities of any series by mailing checks or
drafts to the Holders of such Securities at their addresses as shown in the
Security Register. Any interest due on and any Additional Amounts payable
in respect of Bearer Securities on or before their maturity, in respect of
the principal of such a Security shall be payable only upon presentation
and surrender of the several coupons for such interest installments as are
evidenced thereby as they severally mature.
The Company shall pay interest on overdue principal of any Security at the
rate borne by such Security; it shall pay interest on overdue installments of
interest or Additional Amounts, if any, at the same rate to the extent lawful.
In case a Bearer Security of any series is surrendered in exchange for a
Registered Security of such series after the close of business (at an office
or agency in a Place of Payment for such series) on any record date
established to determine the Person to whom interest or Additional Amounts
are payable on the next following interest payment date therefor and
before the opening of business (at such office or agency) on such interest
payment date, such Bearer Security shall be surrendered without the coupon
relating to such interest payment date and interest will not be payable on
such interest payment date in respect of the Registered Security issued in
exchange of such Bearer Security, but will be payable only to the Holder of
such coupon when due in accordance with the provisions of this Indenture.
SECTION 4.02 Maintenance of Office or Agency.
The Company shall maintain in each Place of Payment for any series of
Securities an office or agency where Securities of that series (but not Bearer
Securities, except as otherwise provided below, unless such Place of Payment
is located outside the United States) may be presented or surrendered for
payment, where Securities of that series may be surrendered for registration
of transfer or exchange and where notices and demands to or upon the Company
in respect of the Securities of that series and this Indenture may be served.
If Securities of a series are issuable as Bearer Securities, the Company
shall maintain,subject to any laws or regulations applicable thereto,an office
or agency in a Place of Payment for such series which is located outside the
United States where Securities of such series and the related coupons may be
presented and surrendered for payment (including payment of any Additional
Amounts payable on Securities of such series); provided, however, that if the
Securities of such series are listed on The International Stock Exchange of the
United Kingdom and the Republic of Ireland Limited or the Luxembourg Stock
Exchange or any other stock exchange located outside the United States and such
stock exchange shall so require, the Company will maintain a Paying Agent in
London, Luxembourg or any other city so required located outside the United
States, as the case may be, so long as the
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Securities of such series are listed on such exchange. The Company will
give prompt written notice to the Trustee of the location, and any change
in the location, of such office or agency. If at any time the Company
shall fail to maintain any such required office or agency or shall fail
to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office of the Trustee, except that Bearer Securities of that series and the
related coupons may be presented and surrendered for payment (including
payment of any Additional Amounts payable on Bearer Securities of that
series) at the place specified for that purpose pursuant to Section 2.01.
Except as otherwise provided in the form of Bearer Security of any
particular series pursuant to the provisions of this Indenture, no payment of
principal or interest or Additional Amounts on Bearer Securities shall be
made at any office or agency of the Company in the United States or by check
mailed to any address in the United States or by transfer to an account
maintained with a bank located in the United States; provided, however,
payment of principal of and interest in U.S. dollars (including
Additional Amounts payable in respect thereof) on any Bearer Security
may be made at the office of the Paying Agent in the Borough of Manhattan,
The City of New York, New York, or in the City of Chicago,
State of Illinois if (but only if) payment of the full amount of such
principal, interest or Additional Amounts at all offices outside the United
States maintained for that purpose by the Company in accordance with this
Indenture is illegal or effectively precluded by exchange controls or other
similar restrictions.
The Company may from time to time designate one or more other offices or
agencies where the Securities of one or more series may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations; provided, however, that no such designation or rescission shall in
any manner relieve the Company of its obligation to maintain an office or agency
in each Place of Payment for Securities of any series for such purposes. The
Company will give prompt written notice to the Trustee of any such
designation or rescission and of any change in the location of any such other
office or agency.
SECTION 4.03 Money for Securities Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent with
respect to any series of Securities, it shall, on or before each due date of the
principal of, or interest or Additional Amounts on, any of the Securities of
that series,segregate and hold in trust for the benefit of the Person entitled
thereto a sum sufficient to pay the principal or interest or Additional Amounts
so becoming due until such sums shall be paid to such Persons or otherwise
disposed of as herein provided, and shall promptly notify the Trustee of its
action or failure so to act.
Whenever the Company shall have one or more Paying Agents for any series
of Securities, it will, on or prior to each due date of the principal of, or
interest or Additional Amounts on, any Securities of that series, deposit with
any Paying Agent a sum sufficient to pay the principal or interest and
Additional Amounts so becoming due, such sum to be held in trust for the
benefit of the Persons entitled to such principal, interest or Additional
Amounts, and (unless such Paying Agent is the Trustee) the Company shall
promptly notify the Trustee of its action or failure so to act.
The Company shall cause each Paying Agent for any series of Securities
other than the Trustee to execute and deliver to the Trustee an instrument in
which such Paying Agent shall agree with the Trustee, subject to the provisions
of this Section, that such Paying Agent shall:
(1) hold all sums held by it for the payment of the principal of
or interest or any Additional Amounts on Securities of that series in
trust for the benefit of the Persons entitled thereto until such sums
shall be paid to such Persons or otherwise disposed of as herein
provided;
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(2) give the Trustee notice of any Default by the Company in the
making of any payment of principal or interest or any Additional Amounts
on the Securities of that series; and
(3) at any time during the continuance of any such Default, upon
the written request of the Trustee, forthwith pay to the Trustee all
sums so held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
direct any Paying Agent to pay, to the Trustee all sums held in trust by the
Company or such Paying Agent, such sums to be held by the Trustee upon the same
terms as those upon which such sums were held by the Company or such Paying
Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying
Agent shall be released from all further liability with respect to such money.
Except as otherwise provided in the form of Securities of any particular
series pursuant to the provisions of this Indenture, any money deposited with
the Trustee or any Paying Agent, or then held by the Company, in trust for the
payment of the principal of or interest or any Additional Amounts on any
Security of any series and remaining unclaimed for one year after such
principal or interest has or Additional Amounts have become due and payable
shall be paid to the Company upon receipt of a Company Order to that effect,
or (if then held by the Company) shall be discharged from such trust;
and the Holder of such Security or any coupon appertaining thereto shall
thereafter, as an unsecured general creditor, look only to the Company
for payment thereof, and all liability of the Trustee or such Paying
Agent with respect to such trust money, and all liability of the
Company as trustee thereof, shall thereupon cease; provided, however, that
the Trustee or such Paying Agent, before being required to make any such
repayment, may at the expense of the Company cause to be published once,in an
Authorized Newspaper in each Place of Payment or to be mailed to Holders of
Registered Securities, or both, notice that such money remains unclaimed and
that, after a date specified therein, which shall not be less than 30 days from
the date of such publication or mailing nor shall it be later than one year
after such principal or interest or Additional Amount has become due and
payable, any unclaimed balance of such money then remaining shall be repaid
to the Company.
SECTION 4.04 SEC Reports.
The Company shall file with the Trustee within 15 days after it files
them with the SEC copies of the annual reports and of the information,documents
and other reports (or copies of such portions of any of the foregoing as the
SEC may by rules and regulations prescribe) which the Company is required
to file with the SEC pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended. The Company also shall comply with the
other provisions of TIA Section 314(a).
SECTION 4.05 Statement as to Compliance.
(a) The Company shall deliver to the Trustee, within 120 days after
the end of each fiscal year, commencing ______ ___, 19__ (no more than one
year after closing), a written statement, which need not comply with
Section 13.05 hereof, signed by a principal executive officer, principal
financial officer or principal accounting officer, stating, as to the signer
thereof, that
(1) a review of the activities of the Company during such year
and of performance under this Indenture has been made under his
supervision, and
(2) to the best of his knowledge, based on such review, (a) the
Company has fulfilled its obligations under this Indenture throughout
such year, or, if there has been a default in the fulfillment of any
such obligation, specifying each such default known to him and the
nature and status thereof, and (b) no event has occurred and is
continuing which is, or after notice or lapse of time or both would
become, an Event of Default, or, if such an event has
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occurred and is continuing, specifying each such event known to him
and the nature and status thereof.
(b) The Company shall deliver to the Trustee, within thirty days after
the Company obtains knowledge of the occurrence thereof, written notice of
any Default.
SECTION 4.06 Limitations on Liens on Stock of Restricted Subsidiaries.
The Company will not, and will not permit any Restricted Subsidiary to,
issue, assume or guarantee any debt for money borrowed (hereafter in this
Section referred to as "Debt") secured by a mortgage, security interest,
pledge, lien or other encumbrance upon any shares of stock of any
Restricted Subsidiary (whether such shares of stock are now owned or
hereafter acquired) without in any such case effectively providing
concurrently with the issuance, assumption or guarantee of any such Debt
that the Securities (together with, if the Company shall so determine,
any other indebtedness of or guarantee by the Company ranking equally with
the Securities and then existing or thereafter created) shall be
secured equally and ratably with such Debt.
SECTION 4.07 Limitations on Issue or Disposition of Stock of Restricted
Subsidiaries.
The Company will not, and will not permit any Restricted Subsidiary to,
issue, sell, assign, transfer or otherwise dispose of, directly or indirectly,
any of the Capital Stock (other than nonvoting preferred stock) of any
Restricted Subsidiary (except to the Company or to one or more Restricted
Subsidiaries or for the purpose of qualifying directors); provided, however,
that this covenant shall not apply if:
(1) all or any part of such Capital Stock is sold, assigned,
transferred or otherwise disposed of in a transaction for consideration which is
at least equal to the fair value of such Capital Stock, as determined by the
Board of Directors (acting in good faith); or
(2) the issuance, sale, assignment, transfer or other disposition is
required to comply with the order of a court or regulatory authority of
competent jurisdiction, other than an order issued at the request of the
Company or of one of its Restricted Subsidiaries.
SECTION 4.08 Waiver of Certain Covenants.
The Company may omit in any particular instance, to comply with any
covenant or condition set forth in Sections 4.06 or 4.07, if before or after
the time for such compliance the Holders of at least a majority in principal
amount of all Outstanding Securities, and the Holders of at least a majority
in principal amount of the Outstanding Securities of each series to be affected,
shall either waive such compliance in such instance or generally waive
compliance with such covenant or condition, but no such waiver shall extend
to or affect such covenant or condition except to the extent so expressly
waived, and, until such waiver shall become effective, the obligations of
the Company and the duties of the Trustee in respect of any such covenant
or condition shall remain in full force and effect.
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ARTICLE FIVE
SUCCESSOR CORPORATION AND ASSUMPTION
SECTION 5.01 When Company May Merge, etc.
The Company shall not consolidate with or merge into, or sell, lease or
convey all or substantially all of its assets to, another Corporation unless the
successor or transferee Corporation expressly assumes by supplemental indenture,
in form satisfactory to the Trustee, all the obligations of the Company with
respect to the Securities and this Indenture, and the Company or successor
Corporation, as the case may be, (i) shall be a Corporation organized under the
laws of one of the states in the United States and (ii) shall not, immediately
after such consolidation or merger or sale, lease or conveyance, be in
default in the performance of any covenant or condition with respect to
the Securities or the Indenture. The Company shall deliver to the Trustee
an Officers' Certificate and an Opinion of Counsel, each stating that such
consolidation, merger or transfer and such supplemental indenture comply
with this Indenture. Thereafter all such obligations of the predecessor
corporation shall terminate.
SECTION 5.02 Successor Corporation Substituted.
Upon any consolidation or merger, or any sale, lease or conveyance of
all or substantially all of the assets of the Company in accordance with Section
5.01, the successor Corporation formed by such consolidation or into which the
Company is merged or to which such transfer is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Company under
this Indenture with the same effect as if such successor Corporation had been
named as the Company herein.
ARTICLE SIX
DEFAULTS AND REMEDIES
SECTION 6.01 Events of Default.
An "Event of Default" occurs with respect to the Securities of any
series upon:
(a) default in the payment of any installment of interest upon or any
Additional Amounts payable in respect of any of the Securities of such series as
and when the same shall become due and payable, and continuance of such default
for a period of 30 days; or
(b) default in the payment of all or any part of the principal on any of the
Securities of such series as and when the same shall become due and payable
either at maturity, upon redemption, by declaration or otherwise (except the
failure to make payment when due and payable if such failure results solely
from nonpayment by reason of mistake, oversight or transfer difficulties and
does not continue beyond 3 Business Days after the day on which such payment
is due and payable); or
(c) default in the payment of any sinking fund installment as and when
the same shall become due and payable by the terms of the Securities of such
series (except the failure to make payment when due and payable if such failure
results solely from nonpayment by reason of mistake, oversight or transfer
difficulties and does not continue beyond 3 Business Days after the day on
which such payment is due and payable); or
(d) default in the performance, or breach, of any covenant or warranty of
the Company in respect of the Securities of such series (other than a covenant
or warranty in respect of the Securities
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of such series a default in whose performance or whose breach is elsewhere in
this Section specifically dealt with), and continuance of such default or
breach for a period of 60 days after there has been given, by registered or
certified mail, to the Company by the Trustee or to the Company and Trustee
by the Holders of at least 25% in principal amount of the Outstanding
Securities (determined pursuant to Section 2.08) of all series affected
thereby, a written notice specifying such default or breach and requiring
it to be remedied and stating that such notice is a "Notice of Default"
hereunder; or
(e) a court having jurisdiction in the premises entering a decree or
order for relief in respect of the Company in an involuntary case under the
Bankruptcy Law now or hereafter in effect, or appointing a receiver, liquidator,
assignee, custodian, trustee or sequestrator (or similar official) of the
Company or for any substantial part of its property or ordering the winding
up or liquidation of its affairs, and such decree or order shall remain
unstayed and in effect for a period of 60 consecutive days; or
(f) the Company commencing a voluntary case under any applicable
Bankruptcy Law now or hereafter in effect, or consent to the entry of an order
for relief in an involuntary case under any such law, or consent to the
appointment of or taking possession by a receiver, liquidator, assignee,
custodian, trustee or sequestrator (or similar official) of the Company or for
any substantial part of its property, or making any general assignment for the
benefit of creditors; or
(g) any other Event of Default provided in the supplemental indenture
or Board Resolutions under which such series of Securities is issued or in
the form of Security for such series.
If an Event of Default described in clause (a), (b), (c) or (d) above (if the
Event of Default under clause (d) is with respect to less than all series of
Securities then Outstanding) occurs and is continuing, then, and in each and
every such case, unless the principal of all of the Securities of such series
shall have already become due and payable, either the Trustee or the Holders of
not less than 25% in aggregate principal amount of the Securities of such
series then Outstanding hereunder (each such series voting as a separate
class) by notice in writing to the Company (and to the Trustee if given by
Securityholders), may declare the entire principal (or, if the Securities of
such series are Original Issue Discount Securities, such portion of the
principal amount as may be specified in the terms of such series) of all
Securities of such series and the interest accrued thereon and Additional
Amounts payable in respect thereof, if any, to be due and payable
immediately, and upon any such declaration the same shall become
immediately due and payable. If an Event of Default described in Clause
(d) (if the Event of Default under clause (d) is with respect
to all series of Securities then Outstanding), (e) or (f) occurs and is
continuing, then and in each and every such case, unless the principal of
all the Securities shall have already become due and payable, either the
Trustee or the Holders of not less than 25% in aggregate principal amount
of all the Securities then Outstanding hereunder (treated as one class),
by notice in writing to the Company (and to the Trustee if given by
Securityholders), may declare the entire principal (or, if any
Securities are Original Issue Discount Securities, such portion
of the principal as may be specified in the terms thereof) of all the
Securities then Outstanding and interest accrued thereon and Additional Amounts
payable in respect thereof, if any, to be due and payable immediately, and
upon any such declaration the same shall become immediately due and payable.
The foregoing provisions, however are subject to the condition that if, at
any time after the principal (or, if the Securities are Discount Securities,
such portion of the principal as may be specified in the terms thereof) of the
Securities of any series (or of all the Securities, as the case may be) shall
have been so declared due and payable, and before any judgment or decree for
the payment of the moneys due shall have been obtained or entered as hereinafter
provided, the Company shall pay or shall deposit with the Trustee a sum
sufficient to pay all matured installments of interest upon and any Additional
Amounts payable in respect of all the Securities of such series (or of all the
Securities, as the case may be) and the principal of any and all Securities of
such series (or of all the Securities, as the case may be) which shall have
become due otherwise than by acceleration (with interest upon such principal
and, to the extent that payment of such interest is enforceable under
applicable law, on
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overdue installments of interest or any Additional Amounts, at the same rate
as the rate of interest or Yield to Maturity (in the case of Original Issue
Discount Securities) specified in the Securities of such series (or at the
respective rates of interest or Yields to Maturity of all the securities, as the
case may be, to the date of such payment or deposit) and such amount as shall be
sufficient to cover reasonable compensation to the Trustee, its agents,
attorneys and counsel, and all other expenses and liabilities incurred, and
all advances made, by the trustee except as a result of negligence or
bad faith, and if any and all Events of Default under the Indenture,
other than the non-payment of the principal of Securities which shall have
become due by acceleration, shall have been cured, waived or otherwise
remedied as provided herein -- then the Holders of a majority in
aggregate principal amount of all the Securities of such series,
each series voting as a separate class (or of all the Securities, as the case
may be, voting as a single class) then Outstanding, by written notice to the
Company and to the Trustee, may waive all defaults with respect to such
series (or with respect to all the Securities, as the case may be) and
rescind and annul such declaration and its consequences, but no such waiver
or rescission and annulment shall extend to or shall affect any
subsequent default or shall impair any right consequent thereon.
For all purposes under this Indenture, if a portion of the principal of
any Original Issue Discount Securities shall have been accelerated and declared
due and payable pursuant to the provisions hereof, then, from and after such
declaration, unless such declaration has been rescinded and annulled, the
principal amount of such Original Issue Discount Securities shall be deemed, for
all purposes hereunder, to be such portion of the principal thereof as shall be
due and payable as a result of such acceleration, and payment of such portion of
the principal thereof as shall be due and payable as a result of such
acceleration, together with interest, if any, thereon and all other amounts
owing thereunder, shall constitute payment in full or such Original Issue
Discount Securities.
SECTION 6.02 Collection of Indebtedness by Trustee; Trustee May Prove Debt.
The Company covenants that (a) in the case default shall be made in the
payment of any installment of interest on or any Additional Amounts payable in
respect of any of the Securities of any series when such interest or Additional
Amounts shall have continued for a period of 30 days or (b) in case principal
shall have become due and payable, and such default shall be made in the payment
of all or any part of the principal of any of the Securities of any series when
the same shall have become due and payable, whether upon maturity of the
Securities of such series, or upon any redemption or by declaration or
otherwise -- then, upon demand of the Trustee, the Company will pay to the
Trustee for the benefit of the Holders of the Securities of such series the
whole amount that then shall have become due and payable on all Securities
of such series, and such coupons, for principal, interest or Additional
Amounts, if any, as the case may be (with interest to the date of such
payment upon the overdue installments of interest or any Additional Amounts
at the same rate as the rate of interest or Yield to Maturity (in the
case of Original Issue Discount Securities) specified in the Securities
of such series); and, in addition thereto, such further amount as shall
be sufficient to cover the costs and expenses of collection including
reasonable compensation to the Trustee and each predecessor Trustee,
their respective agents, attorneys and counsel, and any expenses and
liabilities incurred, and all advances made, by the Trustee and
predecessor Trustee except as a result of its negligence or bad faith.
In case the Company shall fail forthwith to pay such amounts upon such
demand,the Trustee, in its own name and as trustee of an express trust, shall
be entitled and empowered to institute any action or proceeding at law or in
equity for the collection of the sums so due and unpaid, and may prosecute
any such action or proceedings to judgment or final decree, and may enforce
any such judgment or final decree against the Company or other obligor upon
such Securities and collect in the manner provided by law out of the
property of the Company or other obligor upon such Securities, wherever
situated, the moneys adjudged or decreed to be payable.
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In case there shall be pending proceedings relative to the Company or
any other obligor upon the Securities under Bankruptcy Law, or in case a
receiver, assignee or trustee in bankruptcy or reorganization, liquidator,
sequestrator or similar official shall have been appointed for or taken
possession of the Company or its property or such other obligor, or in
case of any other comparable judicial proceedings relative to the Company
or other obligor upon the Securities or any series, or to the creditors or
property of the Company or such other obligor, the Trustee, irrespective of
whether the principal of any Securities shall then be due and payable as
therein expressed or by declaration or otherwise and irrespective of whether
the Trustee shall have made any demand pursuant to the provisions of this
Section, shall be entitled and empowered, by intervention in such proceedings
or otherwise:
(a) to file and prove a claim or claims for the whole amount of
principal, interest (or, if the Securities of any series are Original Issue
Discount Securities, such portion of the principal amount as may be specified in
the terms of such series) and any Additional Amounts owing and unpaid in respect
of the Securities of any series, and to file such other papers or documents as
may be necessary or advisable in order to have the claims of the Trustee
(including any claim for reasonable compensation to the Trustee and each
predecessor Trustee, and their respective agents, attorneys and counsel, and for
reimbursement of all expenses and liabilities incurred, and all advances
made, by the Trustee and each predecessor Trustee, except as a result
of negligence or bad faith) and of the Securityholders allowed in any
judicial proceedings relative to the Company or other obligor upon the
Securities of any series, or to the creditors or property of the
Company or such other obligor,
(b) unless prohibited by applicable law and regulations, to vote
on behalf of the Holders of the Securities of any series in any election of a
trustee or a standby trustee in arrangement, reorganization, liquidation or
other bankruptcy or insolvency proceedings or person performing similar
functions in comparable proceedings, and
(c) to collect and receive any moneys or other property payable
or deliverable on any such claims, and to distribute all amounts received with
respect to the claims of the Securityholders and of the Trustee on their behalf;
and any trustee, receiver, or liquidator, custodian or other similar official is
hereby authorized by each of the Securityholders to make payments to the
Trustee,and in the event that the Trustee shall consent to the making of
payments directly to the Securityholders, to pay to the Trustee such amounts
as shall be sufficient to cover reasonable compensation to the Trustee, each
predecessor trustee and their respective agents, attorneys and counsel, and
all other expenses and liabilities incurred, and all advances made, by the
trustee and each predecessor Trustee except as a result of negligence or bad
faith and all other amounts due to the Trustee or any predecessor Trustee
under this Indenture.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or vote for or accept or adopt on behalf of any
Securityholder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities of any series or the rights of any
Holder thereof, or to authorize the Trustee to vote in respect of the claim
of any Securityholder in any such proceeding except, as aforesaid, to vote
for the election of a trustee in bankruptcy or similar person.
All rights of action and of asserting claims under this Indenture, or
under any of the Securities of any series or coupons appertaining to such
Securities, may be enforced by the Trustee without the possession of any of
the Securities of such series or coupons appertaining to such Securities or the
production thereof at any trial or other proceedings relative thereto, and any
such action or proceedings instituted by the Trustee shall be brought in its
own name as trustee of an express trust, and any recovery or judgment, subject
to the payment of the expenses, disbursements and compensation of the Trustee,
each predecessor Trustee and their respective agents and attorneys, shall
be for the ratable benefit of the Holders of the Securities or of coupons
appertaining to such Securities in respect of which action was taken.
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In any proceedings brought by the Trustee (and also any proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party) the Trustee shall be held to represent all the
Holders of the Securities or coupons appertaining to such Securities in
respect to which such action was taken, and it shall not be necessary to make
any Holders of such Securities or coupons appertaining to such Securities
parties to any such proceedings.
SECTION 6.03 Application of Proceeds.
Any moneys collected by the Trustee pursuant to this Article with
respect to the Securities of any series shall be applied in the following order
at the date or dates fixed by the Trustee and, in case of the distribution of
such moneys on account of principal, interest or any Additional Amounts, upon
presentation of the several Securities and coupons appertaining to such
Securities in respect of which monies have been collected and stamping (or
otherwise noting) thereof the payment, or issuing Securities of such series in
reduced principal amounts in exchange for the presented Securities of like
series if only partially paid, or upon surrender thereof if fully paid.
FIRST: to the Trustee and any predecessor Trustee for amounts due
under Section 7.07.
SECOND: to the Holders of Securities of such series or coupons
appertaining thereto for amounts due and unpaid on the Securities and
coupons for principal, interest and Additional Amounts,ratably, without
preference or priority of any kind, according to the amounts due and
payable on the Securities and coupons for principal, interest and
Additional Amounts, respectively; and
THIRD: to the Person or Persons lawfully entitled thereto.
SECTION 6.04 Suits for Enforcement.
In case an Event of Default has occurred, has not been waived and is
continuing, the Trustee may in its discretion proceed to protect and enforce
the rights vested in it by this Indenture by such appropriate judicial
proceedings as the Trustee shall deem most effectual to protect and
enforce any of such rights, either at law or in equity or in bankruptcy
or otherwise, whether for the specific enforcement of any covenant or
agreement contained in this Indenture or in aid of the exercise of
any power granted in this Indenture or to enforce any other legal or
equitable right vested in the Trustee by this Indenture or by law.
SECTION 6.05 Restoration of Rights on Abandonments of Proceedings.
In case the Trustee shall have proceeded to enforce any right under this
Indenture and such proceedings shall have been discounted or abandoned for any
reason, or shall have been determined adversely to the Trustee, then and
in every such case the Company and the Trustee shall be restored
respectively to their former positions and rights hereunder, and all
rights, remedies and powers of the Company, the Trustee and the
Securityholders shall continue as though no such proceedings had been taken.
SECTION 6.06 Limitations on Suits by Securityholders.
No Holder of any Security of any series or of any coupon appertaining
thereto shall have any right by virtue or by availing of any provision of this
Indenture to institute any action or proceeding at law or in equity or in
bankruptcy or otherwise upon or under or with respect to this Indenture, or for
the appointment of a trustee, receiver, liquidator, custodian or other similar
official or for any other remedy hereunder, unless such Holder previously shall
have given to the Trustee written notice of default and of the continuance
thereof, as hereinbefore provided, and unless also the Holders of not
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less than 25% in aggregate principal amount of the Securities of such series
then Outstanding shall have made written request upon the Trustee to institute
such action or proceedings in its own name as Trustee hereunder and shall have
offered to the Trustee such reasonable indemnity as it may require against
the costs, expenses and liabilities to be incurred therein or thereby and
the Trustee for 60 days after its receipt of such notice, request and
offer of indemnity shall have failed to institute any such action or
proceeding and no direction inconsistent with such written request shall
have been given to the Trustee, it being understood and intended, and
being expressly covenanted by the taker and Holder of every
Security or coupon with every other taker and Holder and the Trustee, that
no one or more Holders of Securities of any series or coupons appertaining
to such Securities shall have any right in any manner whatever by virtue or by
availing of any provision of this Indenture to affect, disturb or prejudice the
rights of any other such Holder of Securities or coupons appertaining to such
Securities, or to obtain or seek to obtain priority over or preference to any
other such Holder or to enforce any right under this Indenture, except in the
manner herein provided and for the equal, ratable and common benefit of all
Holders of Securities of the applicable series and coupons appertaining to such
Securities. Forthe protection and enforcement of the provisions of this
Section, each and every Securityholder and the Trustee shall be entitled
to such relief as can be given either at law or in equity.
SECTION 6.07 Unconditional Right of Securityholder to Institute Certain Suits.
Notwithstanding any other provision in this Indenture and any provision
of any Security, the right of any Holder of any Security or coupon to receive
payment of the principal of, interest on and any Additional Amounts in
respect of such Security or coupon on or after the respective due dates
expressed in such Security or coupon, or to institute suit for the
enforcement of any such payment on or after such respective dates, shall not
be impaired or affected without the consent of such Holder.
SECTION 6.08 Powers and Remedies Cumulative; Delay or Omission Not Waiver of
Default.
Except as provided in Section 6.06, no right or remedy herein conferred
upon or reserved to the Trustee or to the Holders of Securities or coupons is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition
to every other right and remedy given hereunder or now or hereafter existing
at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
No delay or omission of the Trustee or of any Holder of Securities or
coupons to exercise any right or power accruing upon any Event of Default
occurring and continuing as aforesaid shall impair any such right or power or
shall be construed to be a waiver of any such Event of Default or an
acquiescence therein; and, subject to Section 6.06, every power and remedy
given by this Indenture or by law to the Trustee or to the Holders of
Securities or coupons may be exercised from time to time, and as often as
shall be deemed expedient, by the Trustee or by the Holders of Securities
or coupons.
SECTION 6.09 Control by Holders of Securities.
The Holders of a majority in aggregate principal amount of the
Securities of each series affected (with each series voting as a separate
class) at the time Outstanding shall have the right to direct the time,
method, and place of conducting any proceeding for any remedy available to
the Trustee, or exercising any trust or power conferred on the Trustee with
respect to the Securities of such series by this Indenture; provided that
such direction shall not be otherwise than in accordance with law and the
provisions of this Indenture and provided further that (subject to the
provisions of Section 6.01) the Trustee shall have the right to decline
to follow any such direction if the Trustee, being advised by counsel,
shall determine that the action or proceeding so directed may not lawfully
be taken or if the Trustee in good faith by its board of directors, the
executive committee, or a trust committee of two or more directors or
responsible officers of the Trustee, which may include Trust Officers,
shall determine that the action or proceedings so directed would involve
the Trustee in personal liability or
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if the Trustee in good faith shall so determine that the actions or
forebearances specified in or pursuant to such direction
would be unduly prejudicial to the interests of Holders of the
Securities of all series so affected not joining in the giving of
said direction, it being understood that the Trustee shall have no duty
to ascertain whether or not such actions or forebearances are unduly
prejudicial to such Holders.
Nothing in this Indenture shall impair the right of the Trustee in its
discretion to take any action deemed proper by the Trustee and which is not
inconsistent with such direction or directions by Securityholders.
SECTION 6.10 Waiver of Past Defaults.
Prior to the declaration of the acceleration of the maturity of the
Securities of any series as provided in Section 6.01, the Holders of a majority
in aggregate principal amount of the Securities of such series at the time
Outstanding may on behalf of the Holders of all the securities of such series
waive any past default or Event of Default described in clause (c) of Section
6.01 (or, in the case of an event specified in clause (d) of Section 6.01 which
relates to less than all series of Securities then Outstanding, the Holders of a
majority in aggregate principal amount of the Securities then Outstanding
affected thereby (each series voting as a separate class) may waive any such
default or Event of Default, or, in the case of an event specified in clause
(d) (if the Event of Default under clause (d) relates to all series of
Securities then Outstanding),(e) or (f)of Section 6.01 the Holders of
Securities of a majority in principal amount of all the Securities then
Outstanding (voting as one class) may waive any such default or Event of
Default), and its consequences except a default in respect of a covenant or
provision hereof which cannot be modified or amended without the consent
of the Holder of each Security affected. In the case of any such waiver,
the Company, the Trustee and the Holders of the Securities of such series
shall be restored to their former positions and rights hereunder,
respectively; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.
Upon any such waiver, such default shall cease to exist and be deemed to
have been cured and not to have occurred, and any Event of Default arising
therefrom shall be deemed to have been cured, and not to have occurred for
every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any right
consequent thereon.
SECTION 6.11 Trustee to Give Notice of Default, But May Withhold in Certain
Circumstances.
The Trustee shall, within ninety days after the occurrence of a default
with respect to the Securities of any series, give notice of all defaults with
respect to that series known to the Trustee (i) if any Bearer Securities of that
series are then Outstanding, to the Holders thereof, by publication at least
once in an Authorized Newspaper in the Place of Payment, (ii) if any
Bearer Securities of that series are then Outstanding, to all Holders
thereof who have filed their names and addresses with the Trustee, by
mailing such notice to such Holders at such addresses and (iii) to all
Holders of then Outstanding Registered Securities of that series, by
mailing such notice to such Holders at their addresses as they
shall appear in the registry books, unless in each case such defaults
shall have been cured before the mailing or publication of such notice
(the term "defaults") for the purpose of this Section being hereby defined
to mean any event or condition which is, or with notice or lapse of time
or both would become, an Event of Default); provided that, except in the
case of default in the payment of the principal of or interest or
Additional Amounts, if any, on any of the Securities of such series or
in the payment of any sinking or purchase fund installment, the Trustee
shall be protected in withholding such notice if and so long as the
board of directors, the executive committee, or a trust committe
comprised of two or more directors or trustees and/or responsible officers
of the Trustee, which may include Trust Officers, in good faith determines
that the withholding of such notice is in the interests of the
Securityholders of such series.
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SECTION 6.12 Right of Court to Require Filing of Undertaking to Pay Costs.
All parties to this Indenture agree, and each Holder of any Security
or coupon by his acceptance thereof shall be deemed to have agreed, that any
court may in its discretion require, in any suit for the enforcement of any
right or remedy under this Indenture or in any suit against the Trustee for
any action taken, suffered or omitted by it as Trustee, the filing by any
party litigant in such suit (other than the Trustee) of an undertaking to pay
the costs of such suit, and that such court may in its discretion assess
reasonable costs, including reasonable attorneys' fees, against any party
litigant in such suit, having due regard to the merits and good faith of the
claims or defenses made by such party litigant; but the provisions of this
Section shall not apply to any suit instituted by the Trustee, to any suit
instituted by any Securityholder or group of Securityholders of any series
holding in the aggregate more than 10% in aggregate principal amount of the
Outstanding Securities of such series, or, in the case of any suit relating
to or arising under clause (d) of Section 6.01 (if the suit relates to
Securities of more than one but less than all series), 10% in aggregate
principal amount of Securities Outstanding affected thereby, or in the
case of any suit relating to or arising under clause (d) (if the suit under
clause (d) relates to all the Securities then Outstanding), (e) or (f) of
Section 6.01, 10% in aggregate principal amount of all Securities Outstanding,
or to any suit instituted by any Securityholder for the enforcement of the
payment of the principal of or interest on any Security on or after the due
date expressed in such Security or any date fixed for redemption.
The Holders of a majority in principal amount of the Outstanding
Securities of such series by notice to the Company and the Trustee may
rescind an acceleration and its consequences if (i) all existing Events of
Default with respect to the Securities of such series, other than the
non-payment of the principal of the Securities which have become due
solely by such declaration of acceleration, have been cured or waived,
(ii) the Company has paid or deposited with the Trustee a sum sufficient
to pay the whole amount then due and payable on such Securities and any
coupons appertaining thereto for principal and interest
and Additional Amounts, if any, with interest upon the overdue principal
and, to the extent that payment of such interest shall be legally
enforceable, upon overdue installments of interest or any Additional
Amounts, at the rate or rates borne by or provided for in such Securities,
and, in addition thereto, such further amount as shall be sufficient
to cover the costs and expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the Trustee, its
agents and counsel, and (iii) the rescission would not conflict with any
judgment or decree. No such rescission shall have any effect on
any subsequent default or impair any right consequent thereon.
ARTICLE SEVEN
TRUSTEE
SECTION 7.01 Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise its rights and powers hereunder and use the same degree of care
and skill in its exercise as a prudent man would exercise or use under the
circumstances in the conduct of his own affairs.
(b) Except during the continuance of an Event of Default:
(1) The Trustee need perform only those duties that are
specifically set forth in this Indenture and no others.
(2) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions
furnished to the Trustee and conforming to the requirements of this
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Indenture. The Trustee, however, shall examine the certificates and
opinions to determine whether or not they conform to the requirements of
this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(1) This paragraph does not limit the effect of paragraph (b) of
this Section.
(2) The Trustee shall not be liable for any error of judgment
made in good faith by a responsible officer or officers of the Trustee,
which may include Trust Officers, unless it is proved that the Trustee
was negligent in ascertaining the pertinent facts.
(3) The Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.09.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section.
(e) The Trustee may refuse to perform any duty or exercise any right
or power unless it receives indemnity satisfactory to it against any loss,
liability or expense.
(f) Money held by the Trustee in trust hereunder need not be
segregated except to the extent required by law. The Trustee shall not be
liable for interest on any money received by it except as the Trustee
may agree with the Company.
(g) The Trustee shall not be liable with respect to any action taken
or omitted to be taken or with respect to exercising any trust or power
conferred upon the Trustee, under this Indenture, by it in good faith in
accordance with the direction of the Holders of a majority in principal
amount of the Outstanding Securities of any series given pursuant to
Section 6.09 of this Indenture, relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee; and
(h) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur any financial liability other than
for its own negligence, willful misconduct or bad faith, in the performance
of any of its duties hereunder, or in the exercise of any of its rights or
powers, if it shall have reasonable grounds for believing that repayment of
such funds or adequate indemnity against such risk or liability is not
reasonably assured to it.
SECTION 7.02 Rights of Trustee.
Except as provided in Section 7.01:
(a) The Trustee may rely on any document believed by it to be genuine
and to have been signed or presented by the proper Person or Persons. The
Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate of the Company or an Opinion of Counsel. The Trustee
shall not be liable for any action it takes or omits to take in good faith
and in reliance on such Officers' Certificate or Certificates or Opinion of
Counsel.
(c) The Trustee may act through agents and shall not be responsible
for the misconduct or negligence of any agent appointed with due care.
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(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its rights
or powers.
(e) Any demand, request, direction or notice from the Company
mentioned herein shall, unless otherwise specifically provided, be sufficiently
evidenced by a Company Request or Company Order and any resolution of the
Board of Directors may be sufficiently evidenced by a Board Resolution.
(f) The Trustee may consult with counsel of its selection and the
advice of such counsel or any Opinion of Counsel, shall be full and
complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance thereon.
(g) The Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further inquiry
or investigation into such facts or matters as it may see fit, and, if the
Trustee shall determine to make such further inquiry or investigation, it
shall be entitled to examine, to the extent necessary and consistent with
each inquiry or investigation, the books, records and premises of the
Company, personally or by agent or attorney.
SECTION 7.03 Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the owner
or pledgee of Securities or coupons and may otherwise deal with the Company or
its Affiliates with the same rights it would have if it were not Trustee. Any
Agent may do the same with like rights. The Trustee, however, must comply with
Sections 7.10 and 7.11.
SECTION 7.04 Trustee's Disclaimer.
The Trustee makes no representation as to the validity or adequacy of
this Indenture or the Securities; it shall not be accountable for the Company's
use of the Securities or the proceeds from the Securities; and it shall not be
responsible for any statement in the Securities other than its certificate of
authentication.
SECTION 7.05 Notice of Defaults.
If a Default occurs and is continuing with respect to Securities and if
it is known to the Trustee, the Trustee shall give to each Holder of Securities
of any series to which such Default relates, in the manner and to the extent
provided in TIA Section 313(c), and otherwise as provided in Section 13.02 of
this Indenture, notice of the Default within 90 days after it occurs. Except
in the case of a Default in payment of principal of or interest or Additional
Amounts, if any, on a Security of any series, or in the payment of any
sinking or purchase fund installment, the Trustee may withhold the notice if
and so long as the board of directors of the Trustee, the executive committee
or a trust committee of directors and/or of responsible officers, which may
include Trust Officers, of the Trustee in good faith determines that
withholding the notice is in the interests of Holders of Securities of such
series or the coupon appertaining thereto.
SECTION 7.06 Reports by Trustee to Holders.
Within 60 days after each May 15 beginning with the May 15 following the
date of this Indenture, the Trustee shall mail to each Securityholder a brief
report dated as of such May 15 that complies with TIA Section 313(a). The
Trustee also shall comply with TIA Section 313(b)(2). Reports to Holders
pursuant to this Section 7.06 shall be transmitted in the manner and to the
extent provided in TIA Section 313(c).
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A copy of each report at the time of its mailing to Securityholders
shall be filed with the SEC and each stock exchange on which any Securities
are listed.
The Company agrees to notify the Trustee whenever the Securities of any
series become listed on any stock exchange.
SECTION 7.07 Compensation and Indemnity.
The Company shall pay to the Trustee from time to time such reasonable
compensation as the Company and the Trustee shall from time to time agree in
writing for all services rendered by it hereunder (which compensation shall
not be limited by any provision of law in regard to the compensation of a
Trustee of an express trust). The Company shall reimburse the Trustee and any
predecessor Trustee upon request for all reasonable out-of-pocket expenses
and advances incurred or made by it. Such expenses shall include the
reasonable compensation and expenses of the Trustee's agents and counsel. The
Company shall indemnify each of the Trustee and any predecessor Trustee
against any loss damage claim, expense or liability (including legal fees
and expenses) incurred by it in connection with the acceptance and
administration of the trust and the performance of its duties hereunder,
including the costs and expenses and disbursements of defending itself against
any claim or liability in connection with the exercise or performance of any
of its powers or duties hereunder. The Trustee shall notify the Company
promptly of any claim asserted against it for which it may seek indemnity;
provided, however, that the failure to give the Company any notice of any
claim shall not in any way affect the rights of the Trustee hereunder to
indemnification for such claim. The Company need not reimburse any expense
or indemnify against any loss or liability incurred by the Trustee or any
predecessor Trustee to the extent due to its own negligence, willful
misconduct or bad faith.
To secure the Company's payment obligations in this Section, the Trustee
shall have a lien prior to the Securities on all money or property held or
collected by the Trustee, except that held in trust to pay principal of or
interest or Additional Amounts, if any, on the Securities.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01 (e) and (f) occurs, the expenses and the
compensation for services are intended to constitute expenses of administration
under any Bankruptcy Law. The term "Bankruptcy Law" means Title 11, U.S. Code.
The provisions of this Section 7.07 shall survive termination of this
Indenture or the resignation and removal of the Trustee.
SECTION 7.08 Replacement of Trustee.
The Trustee may resign by so notifying the Company. The Holders of a
majority in principal amount of the Outstanding Securities may remove the
Trustee by so notifying the Trustee and may appoint a successor
Trustee with respect to the Securities. The Company may by or pursuant to
a Board Resolution remove the Trustee with respect to all Securities if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the
Trustee or its property; or
(4) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee.
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A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. As soon as
possible after that, the retiring Trustee shall, upon payment of its charges,
transfer all property held by it as Trustee to the successor Trustee, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. A successor Trustee shall give notice of its succession
to each Holder of Securities.
If a successor Trustee does not take office within 45 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or
the Holders of a majority in principal amount of the Outstanding Securities
may petition any court of competent jurisdiction for the appointment of a
successor Trustee.
If the Trustee fails to comply with Section 7.10, any Securityholder may
petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
SECTION 7.09 Successor Trustee by Merger, etc.
If the Trustee consolidates with, merges or converts into, or transfers
all or substantially all of its corporate trust business to, another
corporation, the successor corporation without any further act shall be
the successor Trustee.
SECTION 7.10 Eligibility; Disqualification.
This Indenture shall always have a Trustee who satisfies the requirements
of TIA Section 310(a)(1). The Trustee shall have a combined capital and
surplus of at least $5,000,000 as set forth in its most recent published
annual report of condition. If any series of Securities is admitted to
trading on the New York Stock Exchange, Inc., or any successor thereto, the
Trustee shall maintain an office or agency in The Borough of Manhattan, The City
of New York, New York as long as such series of Securities shall be so admitted.
The Trustee shall comply with TIA Section 310(b).
SECTION 7.11 Preferential Collection of Claims against Company.
The Trustee shall comply with TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has
resigned or been removed shall be subject to TIA Section 311(a) to the
extent indicated.
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ARTICLE EIGHT
DISCHARGE OF INDENTURE
SECTION 8.01 Termination of the Company's Obligations.
The Company may terminate all of its obligations under the Securities of
any series and this Indenture with respect to such series if all Securities of
such series previously authenticated and delivered (other than destroyed,
lost or stolen Securities of such series which have been replaced or paid)
and all coupons appertaining thereto (other than (i) coupons appertaining to
Bearer Securities surrendered for exchange for Registered Securities and
maturing after such exchange, whose surrender is not required or has been
waived as provided in Section 2.06, (ii) Securities and coupons which
have been destroyed, lost or stolen and which have been replaced or paid
as provided in Section 2.07, and (iii) Securities and coupons for whose
payment money has theretofore been deposited in trust or segregated and
held in trust by the Company and thereafter repaid to the Company or
discharged from such trust, as provided in Section 4.03 or 8.04) have
been delivered to the Trustee for cancellation or if:
(1) the Securities of such series mature within one year or all
of them are to be called for redemption within one year under
arrangements satisfactory to the Trustee for giving the notice of
redemption;
(2) the Company irrevocably deposits in trust with the Trustee
money or Government Obligations sufficient to pay principal of and any
interest and Additional Amounts on the Securities of such series to
maturity or redemption, as the case may be (other than moneys paid to
the Company or discharged from trust in accordance with Section 4.03 or
8.04); and
(3) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and discharge
of this Indenture have been complied with.
The Company's obligations in Sections 2.03, 2.04, 2.05, 2.06, 2.07,
7.07, 7.08, and 8.03 with respect to the Securities of such series, however,
shall survive so long as any principal of, interest, if any, or any Additional
Amounts on the Securities of such series, and coupons appertaining thereto,
remains unpaid. Thereafter the Company's obligations in Section 7.07 shall
survive.
After a deposit of such moneys, and delivery of the Officers'
Certificate and Opinion of Counsel required by clause (3) above, the Trustee
upon request shall acknowledge in writing the discharge of the Company's
obligations under the Securities of such series and this Indenture with respect
to the Securities of such series except for those surviving obligations
specified above.
SECTION 8.02 Termination of the Company's Obligations under Certain
Circumstances.
Unless otherwise provided in a Board Resolution of the Company delivered
to the Trustee pursuant to Section 2.01 or an indenture supplemental hereto
with respect to the Securities of any series, the Company, at its option,
either (a) shall be deemed to have been Discharged (as defined below)
from its obligations with respect to the Securities of any series, and
coupons appertaining thereto, on the ninety-first day after the applicable
conditions set forth below have been satisfied or (b) shall cease to be
under any obligation to comply with any term, provision or condition set
forth in Sections 4.04, 4.05, 4.06 and 4.07 and Sections 6.01 and 6.02 as
they relate to Section 6.01(d), with respect to the Securities of any series
and any coupons appertaining thereto and any other covenants provided
in the Board Resolution of the Company (except Section 7.07) delivered
to the Trustee pursuant to Section 2.01 or an indenture supplemental
hereto with respect to the Securities of such
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series and any coupons appertaining thereto at any time after the applicable
conditions set forth below have been satisfied:
(1) the Company shall have deposited or caused to be deposited
irrevocably with the Trustee as trust funds in trust, specifically
pledged as security for, and dedicated solely to, the benefit of the
Holders of the Securities of such series and any coupons appertaining
thereto (A) money in an amount, or (B) Government Obligations which
through the payment of interest and principal in respect thereof in
accordance with their terms will provide, not later than one day (or, if
such day is a Legal Holiday, the first day preceding such day which is
not a Legal Holiday) before the due date of any payment, money in an
amount, or (C) a combination of (A) and (B), sufficient, in the opinion
of a recognized firm of Independent Public Accountants selected by the
Company expressed in a written certification thereof delivered to the
Trustee, to pay and discharge each installment of principal (including
mandatory sinking fund payments) of, and interest, if any, and
Additional Amounts, if any, on the Outstanding Securities of such series
on the dates such installments of principal, interest, if any, and
Additional Amounts, if any, are due (taking into account any redemption
pursuant to optional sinking fund payments notice of which redemption is
provided to the Trustee at the time of the deposit referred to in this
paragraph (1));
(2) if the Securities of such series are then listed on the New
York Stock Exchange, the Company shall have delivered to the Trustee an
Opinion of Counsel to the effect that the Company's exercise of its
option under this paragraph would not cause such Securities to be
delisted;
(3) no Event of Default, or event which with the giving of
notice or lapse of time, or both, would become an Event of Default, with
respect to the Securities of such series shall have occurred and be
continuing on the date of such deposit and the Company shall have
furnished to the Trustee an Officers' Certificate to such effect; and
(4) the Company shall have delivered to the Trustee an Opinion
of Counsel to the effect that Holders of the Securities of such series
will not recognize income, gain or loss for United States Federal income
tax purposes as a result of the exercise of the option under this
Section 8.02 and will be subject to United States Federal income tax on
the same amount and in the same manner and at the same times as would
have been the case if such option had not been exercised, and, in the
case of Securities being Discharged, such opinion shall be accompanied
by a private letter ruling to that effect received from the United
States Internal Revenue Service or a revenue ruling pertaining to a
comparable form of transaction to that effect published by the United
States Internal Revenue Service.
"Discharged" means, for purposes of this Section 8.02, that the Company
shall be deemed to have paid and discharged the entire indebtedness represented
by, and obligations under, the Securities of any series and to have satisfied
all the obligations under this Indenture relating to the Securities of such
series (and the Trustee, at the expense of the Company, shall execute
such instruments as may be requested by the Company acknowledging the same),
except (A) the rights of Holders of Securities of such series or the coupons,
if any, appertaining thereto, as the case may be, to receive, solely
from the trust fund described above, payment of the principal of and
interest, if any, and Additional Amounts, if any, on such Securities
when such payments are due; (B) the Company's obligations with respect
to such Securities under Sections 2.03, 2.04, 2.05, 2.06, 2.07, 7.07,
7.08 and 8.03; and (C) the rights, powers, duties and immunities of the
Trustee hereunder. Notwithstanding the satisfaction and discharge of
this Indenture with respect to any series of Securities, the
obligations of the Company to the Trustee and any predecessor Trustee under
Section 7.07 shall survive.
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SECTION 8.03 Application of Trust Money.
All moneys and Government Obligations deposited with the Trustee
pursuant to Sections 8.01 and 8.02 and, with respect to Government Obligations,
the principal and interest in respect thereof, with respect to Securities of any
series shall be held irrevocably in trust and applied by it to the payment in
accordance with the provisions of the Securities of such series and this
Indenture, either directly or through any Paying Agent for the Securities
of that series (including the Company if acting as its own Paying Agent),
to the Holders of the Securities of such series or the coupons, if any,
appertaining thereto, as the case may be, for the payment or redemption
of which such money has been deposited with the Trustee, of all sums due
and to become due thereon for principal, interest, if any, and Additional
Amounts, if any, but such money need not be segregated from other funds
except to the extent required by law.
SECTION 8.04 Repayment to Company.
The Trustee and the Paying Agent shall promptly pay to the Company upon
request any excess money or securities held by them at any time under this
Article Eight. Any money deposited with the Trustee or any Paying Agent,
or then held by the Company, under this Article Eight in trust for the
payment of the principal of, interest or Additional Amounts, if any, on
any Security and remaining unclaimed for two years after such principal,
interest or Additional Amounts have become due and payable shall be paid to
the Company on request, or (if then held by the Company) shall be discharged
from such trust; and the Holder of such Security shall thereafter, as an
unsecured general creditor, look only to the Company for payment thereof,
and all liability of the Trustee or such Paying Agent with respect to such
trust money, and all liability of the Company as trustee thereof,
shall thereupon cease.
SECTION 8.05 Indemnity for Government Obligations.
The Company shall pay and shall indemnify the Trustee against any tax,
fee or other charge imposed on or assessed against deposited Government
Obligations or the principal and interest received on such Government
Obligations.
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01 Without Consent of Holders.
The Company, when authorized by a Board Resolution, and the
Trustee may amend or supplement this Indenture or the Securities
without notice to or consent of any Securityholder:
(a) to convey, transfer, assign, mortgage or pledge to the
trustee as security for the Securities of one or more series any property or
assets;
(b) to evidence the succession of another corporation to the
Company, or successive successions, and the assumption by the successor
corporation of the covenants, agreements and obligations of the Company pursuant
to Article Five;
(c) to add to the covenants of the Company such further
covenants, restrictions, conditions or provisions as its Board of Directors and
the Trustee shall consider to be for the protection of the Holders of Securities
or coupons appertaining thereto, and to make the occurrence, or the occurrence
and continuance, of a default in any such additional covenants, restrictions,
conditions or provisions an Event of Default permitting the enforcement of
all or any of the several remedies provided in this Indenture as herein
set forth; provided, that in respect of any such additional covenant,
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restriction, condition or provision such supplemental indenture may provide
for a particular period of grace after default (which period may be
shorter or longer than that allowed in the case of other defaults) or
may provide for immediate enforcement upon such an Event of Default or
may limit the remedies available to the Trustee upon such an Event of
Default or may limit the right of the Holders of a majority in aggregate
principal amount of the Securities of such series to waive such an Event of
Default.
(d) to cure any ambiguity or to correct or supplement any
provision contained herein or in any supplemental indenture which may be
defective or inconsistent with any other provision contained herein or in any
supplemental indenture, or to make any other provisions as the Board of
Directors may deem necessary or desirable, provided that no such action
shall adversely affect the interests of the Holders of the Securities or
coupons appertaining thereto;
(e) to establish the form or terms of Securities of any series
or of the coupons appertaining to such Securities as permitted by Section 2.01;
(f) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one or more
series;
(g) to add to or change any of the provisions of this Indenture to
provide that Bearer Securities may be registrable as to principal, to change
or eliminate any restrictions (including restrictions relating to payment in
the United States) on the payment of principal of any premium or interest
on Bearer Securities, to permit Bearer Securities to be issued in exchange
for Registered Securities, to permit Bearer Securities to be issued in
exchange for Bearer Securities of other authorized denominations or to permit
the issuance of Securities in uncertificated form, provided that any such
actions shall not adversely affect the interest of the Holders of the
Securities of any series or any related coupons in any material respect; or
(h) to add to, change or eliminate any of the provisions of this
Indenture (which addition, change or elimination may apply to one or more series
of Securities), provided that any such addition, change or elimination shall
neither (A) apply to any Security or any series created prior to the
execution of such supplemental indenture and entitled to the benefit of such
provision nor (B) modify the rights of the Holder of any such Security with
respect to such provision.
The Trustee is hereby authorized to join with the Company in the
execution of any such supplemental indenture, to make any further appropriate
agreements and stipulations which may be therein contained and to accept the
conveyance, transfer, assignment, mortgage or pledge of any property thereunder,
but the Trustee shall not be obligated to enter into any such supplemental
indenture which affects the Trustee's own rights, duties or immunities under
this Indenture or otherwise.
Any supplemental indenture authorized by the provisions of this Section
may be executed without the consent of the Holders of any of the Securities at
the time Outstanding, notwithstanding any of the provisions of Section 9.02.
SECTION 9.02 With Consent of Holders.
With the consent of the Holders of not less than a majority of the
principal amount of the Securities at the time Outstanding in each series
affected by such supplemental indenture (voting as one class), the Company,
when authorized by a resolution of its Board of Directors, and the Trustee
may, from time to time and at any time, enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or changing
in any manner or eliminating any of the provisions of this Indenture or any
supplemental indenture or of modifying in any manner the rights of the
Holders of the Securities of each such series or of the coupons appertaining
to such Securities; provided, that
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no such supplemental indenture shall, without the consent of each
Securityholder affected:
(1) reduce the amount of Securities whose Holders must consent
to an amendment, supplement or waiver or reduce the requirements of
Section 11.09 establishing a quorum or voting or amend this
Section 9.02;
(2) reduce the rate or rates of or extend the time for payment
of interest or Additional Amounts, if any, on any Security;
(3) reduce the principal of or extend the fixed maturity of any
Security;
(4) modify or effect in any manner adverse to the Holders of
Securities the terms and conditions of the obligations of the Company in
respect of its obligations hereunder;
(5) waive a default in the payment of the principal of or
interest or Additional Amounts, if any, on any Security;
(6) impair the right to institute suit for the enforcement of
any payment on or with respect to any series of Securities;
(7) change a Place of Payment; or
(8) make any Security payable in currency other than that stated
in the Security.
A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Securities, or which modifies the
rights of Holders of Securities of such series, or of coupons appertaining to
such Securities, with respect to such covenant or provision, shall be deemed
not to affect the rights under this Indenture of the Holders of Securities
of any other series or of the coupons appertaining to Securities of such
other series.
It shall not be necessary for the consent of the Securityholders under
this Section to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of this Section, the Trustee
shall give a notice thereof (i) to the Holders of then Outstanding Registered
Securities of each series affected thereby, by mailing a notice thereof by
first-class mail to such Holders at their addresses as they shall appear on
the Security Register, (ii) if any Bearer Securities of a series affected
thereby are then Outstanding, to the Holders thereof who have filed their
names and addresses with the Trustee, by mailing a notice thereof by
first-class mail to such Holders at such addresses as were so furnished
to the Trustee and (iii) if any Bearer Securities of a series affected
thereby are then Outstanding, to all Holders thereof, by publication
of a notice thereof at least once in an Authorized Newspaper in the Place
of Payment, and in each case such notice shall set forth in general
terms the substance of such supplemental indenture. Any failure the
Trustee to give such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such supplemental
indenture.
SECTION 9.03 Compliance with Trust Indenture Act.
Every amendment to or supplement of this Indenture or the Securities
shall comply with the TIA as then in effect.
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SECTION 9.04 Revocation and Effect of Consents.
A consent to an amendment, supplement or waiver to any other action
hereunder by a Holder of a Security of any series shall bind the Holder and
every subsequent Holder of a Security or portion of a Security of that series
that evidences the same debt as the consenting Holder's Security, even if
notation of the consent is not made on any Security. Any such Holder or
subsequent Holder, however, may revoke the consent as to his Security or
portion of a Security. Such revocation shall be effective only if the Trustee
receives the notice of revocation before the date the amendment, supplement or
waiver or other action becomes effective.
After an amendment, supplement or waiver with respect to a series of
Securities becomes effective, it shall bind every Holder of Securities of that
series.
SECTION 9.05 Notation on or Exchange of Securities.
If an amendment, supplement or waiver changes the terms of a Security, the
Trustee may request the Holder of the Security to deliver it to the Trustee.
The Trustee may then place an appropriate notation on the Security about the
changed terms and return it to the Holder. Alternatively, if the Company so
determines, the Company in exchange for the Security shall issue and the Trustee
shall authenticate a new Security that reflects the changed terms.
SECTION 9.06 Trustee to Sign Amendments, etc.
The Trustee shall sign any amendment or supplement authorized pursuant
to this Article if the amendment or supplement does not adversely affect the
rights, duties, liabilities (present or potential), or immunities of the
Trustee. If it does, the Trustee may but need not sign it. In signing such
amendment or supplement, the Trustee shall be entitled to receive and
(subject to Sections 7.01 and 7.02) shall be fully protected in relying upon
an Opinion of Counsel stating that such amendment or supplement is
authorized or permitted by this Indenture.
ARTICLE TEN
REPAYMENT AT THE OPTION OF HOLDERS
SECTION 10.01 Applicability of Article.
Securities of any series which are repayable at the option of the
Holders thereof before their maturity shall be repaid in accordance with the
terms of the Securities of such series. The repayment of any principal
amount of Securities pursuant to such option of the Holder to require
repayment of Securities before their maturity shall not operate as a payment,
redemption or satisfaction of the indebtedness represented by such
Securities unless and until the Company, at its option, shall deliver or
surrender the same to the Trustee with a directive that such Securities be
cancelled. Notwithstanding anything to the contrary contained in
this Article Ten, in connection with any repayment of Securities,
the Company may arrange for the purchase of any Securities by an
agreement with one or more investment bankers or other purchasers to purchase
such Securities by paying to the Holders of such Securities on or before the
close of business on the repayment date an amount not less than the repayment
price payable by the Company on repayment of such Securities, and the
obligation of the Company to pay the repayment price of such Securities
shall be satisfied and discharged to the extent such payment is so paid by
such purchasers.
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ARTICLE ELEVEN
CONCERNING THE SECURITYHOLDERS
SECTION 11.01 Evidence of Action Taken by Securityholders.
Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Indenture to be given or taken by a specified
percentage in principal amount of the Securityholders of any or all series
may be embodied in and evidenced by one or more instruments of substantially
similar tenor signed by such specified percentage of Securityholders in
person or by agent duly appointed in writing. If Securities of a series
are issuable as Bearer Securities, any request, demand, authorization,
direction, notice,consent, waiver or other action provided by this Indenture
to be given or taken by Holders of such series may, alternatively, be
embodied in and evidenced by the record of Holders of Securities of
such series voting in favor thereof, either in person or by proxies
duly appointed in writing, at any meeting of Holders of Securities of
such series duly called and held in accordance with the provisions of
Sections 11.06 through 11.11, or a combination of such instruments
such record. Except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments or
record or both are delivered to the Trustee and, where it is hereby
expressly required, to the Company. Such instrument or instruments and
any such record (and the action embodied therein and evidenced thereby)
are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments and so voting at any such meeting.
Proof of execution of any such instrument or of a writing appointing
any such agent, or of the holding by any Person of a Security, be
sufficient for any purpose of this Indenture and (subject to Section 7.02)
conclusive in favor of the Trustee and the Company, if made in the manner
provided in Section 11.02. The record of any meeting of Holders of
Securities shall be proved in the manner provided in Section 11.11.
SECTION 11.02 Proof of Execution of Instruments and of Holding of Securities.
The execution of any instrument by a Securityholder or his agent or
proxy may be proved in the following manner:
(a) The fact and date of the execution by any Holder of any instrument
may be proved by the certificate of any notary public or other officer
of any jurisdiction authorized to take acknowledgements of deeds or administer
oaths that the person executing such instruments acknowledged to him the
execution thereof, or by an affidavit of a witness to such execution sworn to
before any such notary or other such officer. Where such execution is by or
on behalf of any legal entity other than an individual, such certificate or
affidavit shall also constitute sufficient proof of the authority of the
person executing the same. The fact of the holding by any Holder of a
Bearer Security of any series, and the identifying number of such
Security and the date of his holding the same, may be proved by the
production of such Security or by a certificate executed by any trust
company, bank, banker or recognized securities dealer wherever situated
satisfactory to the Trustee, if such certificate shall be deemed by the
Trustee to be satisfactory. Each such certificate shall be dated
and shall state that on the date thereof a Security of such series bearing
a specified identifying number was deposited with or exhibited to such trust
company, bank, banker or recognized securities dealer by the person named in
such certificate. Any such certificate may be issued in respect of one or
more Bearer Securities of one or more series specified therein. The holding
by the person named in any such certificate of any Bearer Security or
Securities of any series specified therein shall be presumed to continue
for a period of one year from the date of such certificate unless at
the time of any determination of such holding (1) another certificate
bearing a later date issued in respect of the same Security or Securities
shall be produced, or (2) the Security or Securities of such series
specified in such certificate shall be produced by some other person,
or (3) the Security or Securities of such series specified in such
certificate shall have ceased to be Outstanding. Subject to Section 7.02,
the fact and date of the execution of any such instrument and the amount
and numbers of Securities of any series
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held by the person so executing such instrument and the amount and numbers
of any Security or Securities for such series may also be proven in
accordance with such reasonable rules and regulations as may be prescribed
by the Trustee for such series or in any other manner which the Trustee for
such series may deem sufficient.
(b) In the case of Registered Securities, the ownership of such
Securities shall be proved by the Security Register or by a certificate of
the Security Registrar.
(c) Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Security shall bind every
future Holder of the same Security and the Holder of every Security issued
upon the registration of transfer thereof or in exchange therefor or in
lieu thereof in respect of anything done, omitted or suffered to be done by
the Trustee or the Company in reliance thereon, whether or not notation of
such action is made upon such Security.
(d) If the Company shall solicit from the Holders any request,
demand, authorization, direction, notice, consent, waiver or other Act, the
Company may, at its option, by or pursuant to an Officers' Certificate delivered
to the Trustee, fix in advance a record date for the determination of Holders
entitled to give such request, demand, authorization, direction, notice,
consent, waiver or other Act, but the Company shall have no obligation to do
so. If such a record date is fixed, such request, demand, authorization,
direction, notice,consent, waiver or other Act may be given before or after
such record date, but only the Holders of record at the close of business on
such record date shall be deemed to be Holders for the purposes of determining
whether Holders of the requisite percentage of Outstanding Securities or
Outstanding Securities of a series, as the case may be, have authorized or
agreed or consented to such request, demand, authorization, direction,
notice, consent, waiver or other Act, and for that purpose the Outstanding
Securities or Outstanding Securities of the series, as the case may be,
shall be computed as of such record date.
SECTION 11.03 Holders to be Treated as Owners.
The Company, the Trustee and any agent of the Company or the Trustee may
deem and treat the person in whose name any Security shall be registered upon
the Security Register for such series as the absolute owner of such Security
(whether or not such Security shall be overdue and notwithstanding any
notation of ownership or other writing thereon) for the purpose of receiving
payment of or on account of the principal of and, subject to the provisions
of this Indenture, interest on and any Additional Amounts payable in respect
of such Security and for all other purposes; and neither the Company nor the
Trustee nor any agent of the Company or the Trustee shall be affected by any
notice to the contrary. The Company, the Trustee and any agent of the
Company or the Trustee may treat the Holder of any Bearer Security and
the Holder of any coupon as the absolute owner of such Bearer Security or
coupon (whether or not such Bearer Security or coupon shall be overdue) for
the purpose of receiving payment thereof or on account thereof and for
all other purposes and neither the Company, the Trustee, nor any agent of
the Company or the Trustee shall be affected by any notice to the contrary.
All such payments so made to any such person, or upon his order, shall be
valid, and, to the extent of the sum or sums so paid, effectual to satisfy
and discharge the liability for moneys payable upon any such Security or
coupon.
None of the Company, the Trustee or any paying agent or the Security
Registrar will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests of a Security in global form or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
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SECTION 11.04 Securities Owned by Company Deemed Not Outstanding.
In determining whether the Holders of the requisite aggregate principal
amount of Outstanding Securities of any or all series have concurred in any
direction, consent or waiver under this Indenture, Securities which are owned by
the Company or any other obligor on the Securities with respect to which such
determination is being made or by any Affiliate of the Company or any such
obligor shall be disregarded and deemed not to be Outstanding for the purpose of
any such determination, except that for the purpose of determining whether the
Trustee shall be protected in relying on any such direction, consent or waiver
only Securities which the Trustee knows are so owned shall be so disregarded.
Securities so owned which have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Trustee the
pledgee's right so to act with respect to such Securities and that the pledgee
is not the Company or any other obligor upon the Securities or any Affiliate
of the Company or any other obligor on the Securities. In case of a dispute
as to such right, the advice of counsel shall be full protection in respect
of any decision made by the Trustee in accordance with such advice. Upon
request of the Trustee, the Company shall furnish to the Trustee promptly an
Officers' Certificate listing and identifying all Securities, if any, known
by the Company to be owned or held by or for the account of any of the
above-described persons; and, subject to Section 7.02, the Trustee
shall be entitled to accept such Officers' Certificate as conclusive
evidence of the facts therein set forth and of the fact that all
Securities not listed therein are Outstanding for the purpose of an
such determination.
SECTION 11.05 Right of Revocation of Action Taken.
At any time prior to (but not after) the evidencing to the Trustee, as
provided in Section 11.01, of the taking of any action by the Holders of the
percentage in aggregate principal amount of the Securities of any or all series,
as the case may be, specified in this Indenture in connection with such action,
any Holder of a Security the serial number of which is shown by the evidence to
be included among the serial numbers of the Securities the Holders of which have
consented to such action may, by filing written notice at the Corporate Trust
Office and upon proof of holding as provided in this Article, revoke such action
so far as concerns such Security. Except as aforesaid any such action taken by
the Holder of any Security shall be conclusive and binding upon such Holder and
upon all future Holders and owners of such Security and of any Securities issued
in exchange or substitution therefor or on registration of transfer thereof,
irrespective of whether or not any notation in regard thereto is made upon any
such Security. Any action taken by the Holders of the percentage in aggregate
principal amount of the Securities of any or all series, as the case may be,
specified in this Indenture in connection with such action shall be conclusively
binding upon the Company, the Trustee and the Holders of all the Securities
affected by such action.
SECTION 11.06 Meetings of Holders.
A meeting of Holders of Securities of any series may be called at any
time and from time to time pursuant to this Section 11.06 to make, give or take
any request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be made, given or taken by Holders of
Securities of such series.
SECTION 11.07 Call, Notice and Place of Meetings.
(a) The Trustee may at any time call a meeting of Holders of
Securities of any series for any purpose specified in Section 11.06, to be held
at such time and at such place in the Borough of Manhattan, The City of New
York, or in London as the Trustee shall determine or,with the approval of the
Company, at any other place. Notice of every meeting of Holders of Securities
of any series, setting forth the time and the place of such meeting and in
general terms the action proposed to be taken at such meeting, shall be given,
in the manner provided in Section 13.02 not less than 21 nor more than 180
days prior to the date fixed for the meeting.
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(b) In case at any time the Company or the Holders of at least 10% in
principal amount of the Outstanding Securities of any series shall have
requested the Trustee to call a meeting of the Holders of Securities of
such series for any purpose specified in Section 11.06, by written request
setting forth in reasonable detail the action proposed to be taken at
the meeting, and the Trustee shall not have made the first publication of
the notice of such meeting within 21 days after receipt of such request
or shall not thereafter proceed to cause the meeting to be held as
provided herein, the Company or the Holders of Securities of such series
in the amount above specified, as the case may be, may determine
the time and the place in the Borough of Manhattan, The City of New York, the
City of Chicago, Illinois or in London, or in such other place as shall be
determined and approved by the Company, for such meeting and may call such
meeting for such purposes by giving notice thereof as provided in Subsection
(a) of this Section.
SECTION 11.08 Persons Entitled to Vote at Meetings.
To be entitled to vote at any meeting of Holders of any series, a Person
shall be (1) a Holder of one or more Outstanding Securities of such series, or
(2) a Person appointed by an instrument in writing as proxy for a Holder or
Holders of one or more Outstanding Securities of such series by such Holder or
Holders. The only Persons who shall be entitled to be present or to speak at
any meeting of Holders of Securities or any series shall be the Persons
entitled to vote at such meeting and their counsel, any representatives of
the Trustee and its counsel and any representatives of the Company and its
counsel.
SECTION 11.09 Quorum; Action.
The Persons entitled to vote a majority in principal amount of the
Outstanding Securities of a series shall constitute a quorum for a meeting of
Holders of Securities of such series. In the absence of a quorum within 30
minutes of the time appointed for any such meeting, the meeting shall, if
convened at the request of Holders of Securities of such series, be dissolved.
In any other case, the meeting may be adjourned for a period determined by the
chairman of the meeting prior to the adjournment of such meeting. In
the absence of a quorum at any such adjourned meeting, such adjourned
meeting may be further adjourned for a period determined by the chairman of
the meeting prior to the adjournment of such adjourned meeting. Notice of
the reconvening of any adjourned meeting shall be given as provided in
Section 11.07(a), except that any such notice by publication need be given
only once not less than five days prior to the date on which the meeting is
scheduled to be reconvened. Notice of the reconvening of an adjourned
meeting shall state expressly the percentage, as provided above, of the
principal amount of the Outstanding Securities of such series which shall
constitute a quorum.
Any resolution presented to a meeting or adjourned meeting duly
reconvened at which a quorum is present as aforesaid may be adopted by the
affirmative vote of the Holders of a majority in principal amount of the
Outstanding Securities of that series; provided, however, that any resolution
with respect to any request, demand, authorization, direction, notice, consent,
waiver or other action which this Indenture expressly provides may be made,
given or taken by the Holders of a specified percentage, which is less than
a majority, in principal amount of the Outstanding Securities of a series may
be adopted at a meeting or an adjourned meeting duly reconvened and at which
a quorum is present as aforesaid by the affirmative vote of the Holders of
such specified percentage in principal amount of the Outstanding Securities
of that series.
Any resolution passed or decision taken at any meeting of Holders of
Securities of any series duly held in accordance with this Section shall be
binding on all the Holders of Securities of such series and the related coupons,
whether or not present or represented at the meeting.
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SECTION 11.10 Determination of Voting Rights; Conduct and Adjournment of
Meetings.
(a) Notwithstanding any other provisions of this Indenture, the Trustee
may make such reasonable regulations as it may deem advisable for any meeting
of Holders of Securities of a series in regard to proof of the holding of
Securities of such series and of the appointment of proxies and in regard to
the appointment and duties of inspectors of votes, the submission and
examination of proxies, certificates and other evidence of the right to vote,
and such other matters concerning the conduct of the meeting as it shall deem
appropriate. Except as otherwise permitted or required by any such
regulations, the holdings of Securities shall be proved in the manner
specified in Section 11.02 and the appointment of any proxy shall be provided
in the manner specified in Section 11.02 or by having the signature of the
person executing the proxy witnessed or guaranteed by any trust company,
bank or banker authorized by Section 11.02 to certify to the holding of
Bearer Securities. Such regulations may provide that written instruments
appointing proxies, regular on their face,may be presumed valid and
genuine without the proof specified in Section 11.02 or other proof.
(b) The Trustee shall, by an instrument in writing, appoint a
temporary chairman of the meeting, unless the meeting shall have been called by
the Company or by Holders of Securities as provided in Section 11.07(b), in
which case the Company or the Holders of Securities of the series calling the
meeting,as the case may be, shall in like manner appoint a temporary chairman.
A permanent chairman and a permanent secretary of the meeting shall be
elected by vote of the Persons entitled to vote a majority in principal
amount of the Outstanding Securities of such series represented at the meeting.
(c) At any meeting each Holder of a Security of such series or proxy shall
be entitled to one vote for each $1,000 principal amount of the Outstanding
Securities of such series held or represented by him; provided, however, that no
vote shall be cast or counted at any meeting in respect to any Security
challenged as not Outstanding and ruled by the chairman of the meeting to be
not Outstanding. The chairman of the meeting shall have no right to vote,
except as a Holder of Securities of such series or proxy.
(d) Any meeting of Holders of Securities of any series duly called
pursuant to Section 11.07 at which a quorum is present may be adjourned from
time to time by Persons entitled to vote a majority in principal amount of the
Outstanding Securities of such series represented at the meeting; and the
meeting may be held as so adjourned without further notice.
SECTION 11.11 Counting Votes and Recording Action of Meetings.
The vote upon any resolution submitted to any meeting of Holders of
Securities of any series shall be by written ballots on which shall be
subscribed signatures of the Holders of Securities of such series or their
representatives by proxy and the principal amounts and serial numbers of the
Outstanding Securities of such series held or represented by them. The
permanent chairman of the meeting shall appoint two inspectors of votes who
shall count all votes cast at the meeting for or against any resolution and
who shall make and file with the secretary of the meeting their verified
written reports in duplicate of all votes cast at the meeting. A record,
at least in duplicate, of the proceedings of each meeting of
Holders of Securities of any series shall be prepared by the secretary
of the meeting and there shall be attached to said record the original reports
of the inspectors of votes on any vote by ballot taken thereat and affidavits
by one or more persons having knowledge of the facts setting forth a copy of
the notice of the meeting and showing that said notice was given as provided
in Section 11.07 and, if applicable, Section 11.09. Each copy shall be
signed and verified by the affidavits of the permanent chairman and secretary
of the meeting and one such copy shall be delivered to the Company, and
another to the Trustee to be preserved by the Trustee, the latter to have
attached thereto the ballots voted at the meeting. Any record so signed and
verified shall be conclusive evidence of the matters therein stated.
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ARTICLE TWELVE
SINKING FUNDS
SECTION 12.01 Applicability of Article.
The provisions of this Article shall be applicable to any sinking fund
for the retirement of Securities of a series, except as otherwise permitted or
required by any form of Security of such series issued pursuant to this
Indenture.
The minimum amount of any sinking fund payment provided for by the terms
of Securities of any series is referred to in this Article Twelve as a
"mandatory sinking fund payment," and any payment in excess of such minimum
amount provided for by the terms of Securities of such series is herein
referred to as an "optional sinking fund payment." If provided for by the
terms of Securities of any series, the cash amount of any sinking fund
payment may be subject to reduction as provided in Section 12.02. Each
sinking fund payment shall be applied to the redemption of Securities of any
series as provided for by the terms of Securities of such series.
SECTION 12.02 Satisfaction of Sinking Fund Payments with Securities.
The Company may, in satisfaction of all or any part of any sinking fund
payment with respect to the Securities of such series to be made pursuant to the
terms of such Securities as provided for by the terms of such series (1) deliver
Outstanding Securities of such series (other than any of such Securities
previously called for redemption or any of such Securities in respect of which
cash shall have been released to the Company), together in the case of any
Bearer Securities of such series with all unmatured coupons appertaining
thereto, and (2) apply as a credit Securities of such series which have been
redeemed either at the election of the Company pursuant to the terms of such
series of Securities or through the application of permitted optional sinking
fund payments pursuant to the terms of such Securities, provided that such
series of Securities have not been previously so credited. Such Securities
shall be received and credited for such purpose by the Trustee at the
Redemption Price specified in such Securities for redemption through
operation of the sinking fund and the amount of such sinking fund payment
shall be reduced accordingly. If as a result of the delivery or credit of
Securities of any series in lieu of cash payments pursuant to this Section
12.02, the principal amount of Securities of such series to be redeemed in
order to exhaust the aforesaid cash payment shall be less than
$100,000, the Trustee need not call Securities of such series for redemption,
except upon Company request, and such cash payment shall be held by the
Trustee or a Paying Agent for Securities of that series and applied to the
next succeeding sinking fund payment, provided, however, that the Trustee or
such Paying Agent shall at the request of the Company from time to time pay
over and deliver to the Company any cash payment so being held by the
Trustee or such Paying Agent upon delivery by the Company to the Trustee of
Securities purchased by the Company having an unpaid principal amount equal
to the cash payment requested to be released to the Company.
SECTION 12.03 Redemption of Securities for Sinking Fund.
Not less than 60 days prior to each sinking fund payment date for any
series of Securities, the Company will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing mandatory sinking fund
payment for that series pursuant to the terms of that series, the portion
thereof, if any, which is to be satisfied by payment of cash and the portion
thereof, if any, which is to be satisfied by delivering and crediting of
Securities of that series pursuant to Section 12.02, and the optional amount,
if any, to be added in cash to the next ensuing mandatory sinking fund payment,
and will also deliver to the Trustee any Securities to be so credited and not
theretofore delivered. If such Officers' Certificate shall specify an optional
amount to be added in cash to the next ensuing mandatory sinking fund payment,
the Company shall thereupon be obligated to pay the amount therein specified.
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Not less than 30 days before each such sinking fund payment date the Trustee
shall select the Securities to be redeemed upon such sinking fund payment
date in the manner specified in Section 3.03 and cause notice of the
redemption thereof to be given in the name of and at the expense of the
Company in the manner provided in Section 3.04. Such notice having been
duly given, the redemption of such Securities shall be made upon the
terms and in the manner stated in Sections 3.05 and 3.06.
ARTICLE THIRTEEN
Miscellaneous
SECTION 13.01 Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies, or conflicts with
the duties which are required to be included in this Indenture by the TIA
Section 310 to 317, inclusive, such duties set forth in the TIA shall control.
SECTION 13.02 Notices.
Except as otherwise expressly provided herein or in the form of
Securities of any particular series pursuant to the provisions of this
Indenture, any notice or communication shall be sufficiently given if in
writing and delivered in Person or mailed by first-class mail, postage
prepaid, addressed as follows:
if to the Company:
Lincoln National Corporation
200 East Berry Street
Fort Wayne, Indiana 46802-2706
Attention: Treasurer
with a copy to:
Gardner, Carton & Douglas
321 North Clark Street
Suite 3400
Chicago, IL 60610
Attention: Arthur J. Simon
if to the Trustee:
The Bank of New York
101 Barclay Street, Floor 21 West
New York, New York 10286
Attention: Corporate Trust
Trustee Administration
The Company or the Trustee by notice to the others may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication mailed to a Holder of a Registered Security
shall be mailed to him by first class mail at his address as it appears on the
Security Register and shall be sufficiently given to him if so mailed within
the time prescribed.
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Failure to mail a notice or communication to a Holder of any Registered
Security or any defect in it shall not affect its sufficiency with respect to
other Securityholders. If a notice or communication is mailed in the manner
provided above, it is duly given, whether or not the addressee receives it.
In case, by reason of the suspension of regular mail service or by reason
of any other cause, it shall be impossible to mail any notice as required
by this Indenture, then such method of notification as shall be made with the
approval of the Trustee shall constitute a sufficient mailing of such notice.
Any notice required or permitted to be given to a Holder of Bearer
Securities of any series shall be deemed to be properly given if such notice
is published in an Authorized Newspaper on two separate days within the time
prescribed.
In case, by reason of the suspension of publication of any Authorized
Newspaper or Authorized Newspapers or by reason of any other cause, it shall
be impracticable to publish any notice to Holders of Bearer Securities as
provided above, then such notification to Holders of Bearer Securities as
shall be given with the approval of the Trustee shall constitute sufficient
notice to such Holders for every purpose hereunder. Neither failure to give
notice by publication to Holders of Bearer Securities as provided above, nor
any defect in any notice so published, shall affect the sufficiency of
any notice mailed to Holders of Registered Securities as provided above.
Where this Indenture provides for notice in any manner, such notice may
be waived, in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders of Securities shall be filed with the
Trustee, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.
Any request, demand, authorization, direction, notice, consent, election
or waiver required or permitted under this Indenture shall be in the English
language, except that, if the Company so elects, any published notice may be
in an official language of the country of publication.
SECTION 13.03 Communication by Holders with Other Holders.
Securityholders may communicate pursuant to TIA Section 312(b) with
other Securityholders with respect to their rights under this Indenture or
the Securities. The Company, the Trustee, the Registrar and anyone else
shall have the protection of TIA Section 312(c).
SECTION 13.04 Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take
any action under this Indenture (except that, in the case of any request or
application as to which the furnishing of such documents is specifically
required by any provision of this Indenture relating to such particular
request or application, no additional certificate or opinion need be
furnished), the Company shall furnish to the Trustee:
(1) an Officers' Certificate stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with; and
(2) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
-48-
<PAGE>
SECTION 13.05 Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture shall include:
(1) a statement that the Person making such certificate or
opinion has read such covenant or condition and the definitions relating
thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such Person, he has made
such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(4) a statement as to whether or not, in the opinion of such
Person, such condition or covenant has been complied with.
SECTION 13.06 When Treasury Securities Disregarded.
In determining whether the Holders of the required principal amount of
Securities or a series thereof have concurred in any direction, waiver or
consent, Securities owned by the Company or any other obligor upon the
Securities or by any Affiliate of the Company or such obligor shall be
disregarded, except that for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Securities which the Trustee knows are so owned shall be so disregarded.
Securities so owned which have been pledged in good faith shall not be
disregarded if the pledgee establishes to the satisfaction of the Trustee
the pledgee's right so to act with respect to the Securities and that the
pledgee is not the Company or any other obligor upon the Securities or any
Affiliate of the Company or such obligor.
SECTION 13.07 Legal Holidays.
A "Legal Holiday", except as otherwise provided in the form of Security
of any particular series pursuant to the provisions of this Indenture, with
respect to any Place of Payment means a Saturday, a Sunday or a day on which
banking institutions or trust companies in that Place of Payment are not
required to be open. Except as provided otherwise in the applicable Security,
if a payment date with respect to such payment is a Legal Holiday at any
Place of Payment, payment due on such Security with respect to such Security
may be made at such place on the next succeeding day that is not a Legal
Holiday, and no interest shall accrue with respect to such payment for
the intervening period.
SECTION 13.08 Governing Law.
The laws of the State of New York applicable to contracts made and
performed in said state shall govern this Indenture and the Securities and
coupons, without regard to choice of law principles. Unless the form of
Security provides otherwise, all money or dollar amounts expressed herein
or in the Securities refer to United States dollars.
SECTION 13.09 No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company or a Subsidiary. Any such indenture, loan or debt
agreement may not be used to interpret this Indenture.
-49-
<PAGE>
SECTION 13.10 Successors.
All agreements of the Company in this Indenture and the Securities shall
bind its successor and assigns, whether so expressed or not. All agreements
of the Trustee in this Indenture shall bind its successor.
SECTION 13.11 Duplicate Originals.
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.
SECTION 13.12 Securities in Foreign Currencies.
Wherever this Indenture provides for any action by, or the determination
of any of the rights of, Holders of Securities of any series in which not all of
such Securities are denominated in the same currency, or any distribution to
Holders of Securities, in the absence of any provision to the contrary in the
form of Security of any particular series, any amount in respect of any Security
denominated in a currency other than United States dollars shall be treated for
any such action, determination or distribution as that amount of United States
dollars that could be obtained for such amount on such reasonable basis of
exchange and as of such date as the Company may specify in a written notice to
the Trustee, or in the absence of such notice, as the Trustee may determine.
* * * * *
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
SIGNATURES
LINCOLN NATIONAL CORPORATION
Dated: as of By:
Name:
Title:
THE BANK OF NEW YORK, AS TRUSTEE
By:
Name:
Title:
Attest:
Title: (SEAL)
Dated: as of
-50-
Exhibit 4(d)
[FORM OF FACE OF NOTE]
[THIS NOTE IS A GLOBAL SECURITY WITHIN THE MEANING OF
THE INDENTURE HEREINAFTER REFERRED TO AND IS
REGISTERED IN THE NAME OF A DEPOSITORY OR A NOMINEE
THEREOF. THIS NOTE MAY NOT BE TRANSFERRED TO, OR
REGISTERED OR EXCHANGED FOR NOTES REGISTERED IN THE
NAME OF, ANY PERSON OTHER THAN THE DEPOSITORY OR A
NOMINEE THEREOF AND NO SUCH TRANSFER MAY BE
REGISTERED, EXCEPT IN THE LIMITED CIRCUMSTANCES
DESCRIBED IN THE INDENTURE. EVERY NOTE AUTHENTICATED
AND DELIVERED UPON REGISTRATION OF TRANSFER OF, OR IN
EXCHANGE FOR OR IN LIEU OF, THIS NOTE SHALL BE A GLOBAL
SECURITY SUBJECT TO THE FOREGOING, EXCEPT IN SUCH
LIMITED CIRCUMSTANCES.]
CUSIP NO. ___
No. $
LINCOLN NATIONAL CORPORATION
% Note Due , Series
Lincoln National Corporation, an Indiana corporation (the
"Company"), promises to pay to or registered assigns the
principal sum of $ Dollars [or, insert applicable
currency] on .
The Company will pay interest on the principal amount of this Note
semi-annually at the rate of % per annum. Interest payment dates are
and , and interest record dates are and
.
[Insert provisions on Additional Amounts, if applicable.]
All of the provisions on the other side of this Note are part hereof
as if set forth in full here.
(Seal) LINCOLN NATIONAL CORPORATION
ATTEST: BY:
[Vice] President
Secretary
Dated: Trustee's Certificate of Authentication
This is one of the Securities of the series designated herein and
referred to in the within-mentioned Indenture.
THE BANK OF NEW YORK,
AS TRUSTEE
By:
Authorized Signatory
<PAGE>
[FORM OF REVERSE OF NOTE]
LINCOLN NATIONAL CORPORATION
% Note Due , Series
1. Interest
The Company promises to pay interest on the principal amount of this
% Note due , Series (the "Notes") at the rate of %
per annum, commencing __________. The Company will pay interest semi-annuall
of each year. Interest on the Notes will accrue from the most recent date to
which interest has been paid or, if no interest has been paid, from ,
provided, that, if there is no existing default in the payment of interest and
if this Note is authenticated between a record date referred to on the other
side of this Note and the next succeeding interest payment date, interest shall
accrue from such interest payment date. Interest will be computed on the basis
of a 360-day year of twelve 30-day months.
[Insert provisions on the payment of Additional Amounts, if applicable.]
2. Method of Payment.
The Company will pay interest [and Additional Amounts] on the Notes
(except defaulted interest) to the persons who are registered holders of the
Notes ("Holders") at the close of business on the record date referred to on
the other side of this Note. Holders of Notes must surrender them to a Paying
Agent to collect principal payments. The Company will pay principal
[,Additional Amounts] and interest in money of the United States that at the
time of payment is legal tender for payment of public and private debts [or,
insert applicable currency]. The Company may at its option, however, pay
principal and interest by its check payable in such money. The Company may
mail an interest check or draft to a Holder's registered address.
3. Paying Agent and Registrar.
Initially, The Bank of New York (the "Trustee"), [Address], will act
as Paying Agent and Registrar. The Company may change any Paying Agent,
Registrar or co-Registrar without notice to Holders. The Company or any of its
Subsidiaries may act as Paying Agent, Registrar or co-Registrar.
4. Indenture.
The Company issued the Notes under an Indenture dated as of _____,
____ (the "Indenture") between the Company and the Trustee. The terms
of the Notes include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939 (15 U.S. Code
Section 77aaa-77bbbb) as in effect on the date of the Indenture. The Notes
are subject to all such terms, and Holders of Notes are referred to the
Indenture and said Act for a statement of them. The Notes are general
unsecured obligations of the Company limited to $ aggregate
principal amount.
The Indenture provides that one or more series of debt securities of
the Company in addition to this series of Notes (collectively the "Securities")
may be issued thereunder in various aggregate principal amounts that may
mature at different times, may bear interest (if any) at different rates, may be
-2-
<PAGE>
subject to different redemption premiums (if any), may be subject to different
sinking fund or analogous provisions (if any), may be subject to different
Events of Default (as defined in the Indenture) and may otherwise vary as
provided in the Indenture. The Indenture does not limit the amount of
Securities that may be issued thereunder.
[5. Optional Redemption.
The Company may redeem all of the Notes at any time or some of
them from time to time [insert redemption dates, if applicable] at [insert
redemption price or table][, except that no redemption at the option of the
Company may be carried out prior to , directly or indirectly from the
proceeds of, or in anticipation of, the issuance of indebtedness for borrowed
money having an interest cost, computed in accordance with generally accepted
financial practice, of less than % per annum.]
Notice of redemption will be mailed at least 30 days but not more than
60 days before the redemption date to each Holder of Notes to be redeemed at
his registered address. Notes in denominations larger than the smallest
authorized denomination may be redeemed in part. On and after the redemption
date interest ceases to accrue on Notes or portions of them called for
redemption.]
[6. Defeasance.
The Indenture contains provisions for defeasance at any time of (a) the
entire indebtedness of the Notes and (b) certain restrictive covenants and
certain Events of Default upon compliance by the Company with certain conditions
set forth therein, which provisions apply to this Note.]
7. Denominations, Transfer and Exchange.
The Notes are in registered form without coupons in denominations of
$1,000 and integral multiples of $1,000 [or, insert applicable denomination]. A
Holder may register the transfer of or exchange Notes in accordance with the
Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay any taxes and fees
required by law or permitted by the Indenture. [The Registrar need not
register the transfer of or exchange any Note selected for redemption or
register the transfer of or exchange any Note for a period of 15 days before
a selection of Notes to be redeemed.]
8. Persons Deemed Owners.
The registered Holder of a Note may be treated as the owner of it for
all purposes.
9. Unclaimed Money.
If money for the payment of principal or interest remains unclaimed
for one year, the Trustee or Paying Agent will pay the money back to the
Company at its request. After that, Holders entitled to the money must look
to the Company for payment.
10. Amendment, Supplement and Waiver.
Subject to certain exceptions, the Indenture or the Notes may be
amended or supplemented with the consent of the holders of at least a majority
in principal amount of the outstanding Securities affected by such amendment
or supplement voting as one class. Subject to certain exceptions, any past
default may be waived by a majority in principal amount of the outstanding
Securities or compliance with any provision may be waived in a particular
instance with the consent of the holders of a majority in principal amount of
the outstanding Securities of any series affected on behalf of the holders of
the Securities of that series. Without the consent of any Holder, the
Company may amend or supplement the Indenture or the Notes to, among other
things, cure any ambiguity, defect or inconsistency.
-3-
<PAGE>
11. Successor Corporation.
When a successor corporation assumes all of the obligations of its
predecessor under the Notes and the Indenture, the predecessor corporation
will be released from those obligations.
12. Defaults and Remedies.
An Event of Default is: (a) default for 30 days in payment of any
interest or Additional Amounts, if any, on the Notes; (b) default in payment
of principal or premium, if any, on the Notes when due either at maturity,
upon redemption, by declaration or otherwise (except a failure to make payment
resulting from mistake, oversight or transfer difficulties not continuing for
more than 3 Business Days beyond the date on which such payment is due);
(c) default in payment of any sinking fund installment when due and payable
(except a failure to make payment resulting from mistake, oversight or
transfer difficulties not continuing for more than 3 Business Days beyond the
date on which such payment is due); (d) default by the Company in the
performance or breach of any other covenant or warranty contained in the
Notes or in the Indenture for the benefit of such Notes for a period of 60
days after the notice thereof; or (e) certain events in bankruptcy or
insolvency of the Company [or (f) insert any other events specified in the
Supplemental Indenture or Board Resolution under which the Notes are issued,
if applicable].
If an Event of Default described in clause (a), (b), (c) or, in the event
of a default with respect to less than all outstanding Securities, (d) above
shall have occurred and be continuing with respect to the Notes, either the
Trustee or the holders of 25 percent in principal amount of the Notes then
outstanding may declare the principal (or, in the case of original issue
discount Notes, the portion thereof specified in the terms thereof) of all
outstanding Notes and the interest accrued thereon and Additional Amounts
payable in respect thereof, if any, to be due and payable immediately. If
an Event of Default described in clause (d) (in the event of a default with
respect to all outstanding Securities) or (e) above shall have occurred and
be continuing, either the Trustee or the holders of 25 percent in principal
amount of all Securities then outstanding (voting as one class) may declare
the principal (or, in the case of original issue discount Securities, the
portion of the principal amount thereof specified in the terms thereof)
of all Securities then outstanding and the interest accrued thereon
and Additional Amounts payable in respect thereof, if any, to be due and
payable immediately, but upon certain conditions such declarations may be
annulled and past defaults (except for defaults in the payment of principal
of, or premium, interest or Additional Amounts, if any, on such Securities)
may be waived by the holders of a majority in principal amount of the
Securities of such series (or of all series, as the case may be) then
outstanding. Holders may not enforce the Indenture or the Notes except as
provided in the Indenture or the Notes. The Trustee may require indemnity
satisfactory to it before it enforces the Indenture or the Securities.
Subject to certain limitations, holders of a majority in principal amount of
the outstanding Securities may direct the Trustee in its exercise of any
trust or power with respect to the Securities. The Trustee may withhold from
Holders notice of any continuing default (except a default in payment of
principal, premium, if any, or interest or Additional Amounts, if any, or any
sinking fund or purchase fund installment) if it determines that withholding
notice is in their interests. The Company is required to file periodic
reports with the Trustee as to the absence of default.
13. Authentication.
This Note shall not be valid until the Trustee signs the certificate of
authentication on the other side of this Note.
-4-
EXHIBIT 4(e)
[FORM ON FACE OF DEBENTURE]
[THIS DEBENTURE IS A GLOBAL SECURITY WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME
OF A DEPOSITORY OR A NOMINEE THEREOF. THIS DEBENTURE MAY NOT BE
TRANSFERRED TO, OR REGISTERED OR EXCHANGED FOR DEBENTURES
REGISTERED IN THE NAME OF, ANY PERSON OTHER THAN THE DEPOSITORY
OR A NOMINEE THEREOF AND NO SUCH TRANSFER MAY BE REGISTERED,
EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
EVERY DEBENTURE AUTHENTICATED AND DELIVERED UPON REGISTRATION
OF TRANSFER OF, OR IN EXCHANGE FOR OR IN LIEU OF, THIS DEBENTURE
SHALL BE A GLOBAL SECURITY SUBJECT TO THE FOREGOING, EXCEPT IN
SUCH LIMITED CIRCUMSTANCES.]
CUSIP NO. ____
No. $
LINCOLN NATIONAL CORPORATION
% Debenture Due , Series
Lincoln National Corporation, an Indiana corporation (the "Company"),
promises to pay to or registered assigns the principal sum of
$ Dollars [or, insert applicable currency] on .
The Company will pay interest on the principal amount of this Debenture
semi-annually at the rate of % per annum, commencing ________.
Interest payment dates are and , and interest record dates
are and .
[Insert provisions on Additional Amounts, if applicable.]
All of the provisions on the other side of this Debenture are part hereof as
if set forth in full here.
(Seal) LINCOLN NATIONAL CORPORATION
ATTEST: By:
[Vice] President
Secretary
Dated: Trustee's Certificate of Authentication
This is one of the Securities of the series designated herein and
referred to in the within-mentioned Indenture.
THE BANK OF NEW YORK,
AS TRUSTEE
By:
Authorized Signatory
<PAGE>
[FORM OF REVERSE OF DEBENTURE]
LINCOLN NATIONAL CORPORATION
% Debenture Due , Series
1. Interest.
The Company promises to pay interest on the principal amount of this %
Debenture due , Series (the "Debentures") at the rate of
% per annum. The Company will pay interest semi-annually on
and of each year, commencing ________. Interest on the Debentures
will accrue from the most recent date to which interest has been paid or, if
no interest has been paid, from , provided, that, if there is no
existing default in the payment of interest and if this Debenture is
authenticated between a record date referred to on the other side of this
Debenture and the next succeeding interest payment date, interest shall accrue
from such interest payment date. Interest will be computed on the basis of a
360-day year of twelve 30-day months.
[Insert provisions on the payment of Additional Amounts, if applicable.]
2. Method of Payment.
The Company will pay interest [and Additional Amounts] on the Debentures
(except defaulted interest) to the persons who are registered holders of the
Debentures ("Holders") at the close of business on the record date referred to
on the other side of this Debenture. Holders of Debentures must surrender
them to a Paying Agent to collect principal payments [and Additional
Amounts]. The Company will pay principal [, Additional Amounts] and interest
in money of the United States that at the time of payment is legal tender for
payment of public and private debts [or, insert applicable currency]. The
Company may at its option, however, pay principal and interest by its check
payable in such money. The Company may mail an interest check or draft to a
Holder's registered address.
3. Paying Agent and Registrar.
Initially, The Bank of New York (the "Trustee), [Address], will act as Paying
Agent and Registrar. The Company may change any Paying Agent, Registrar or
co-Registrar without notice to Holders. The Company or any of its Subsidiaries
may act as Paying Agent, Registrar or co-Registrar.
-2-
<PAGE>
4. Indenture.
The Company issued the Debentures under an Indenture dated as of ______,
____ (the "Indenture") between the Company and the Trustee. The terms of the
Debentures include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.
Code Section 77aaa-77bbbb) as in effect on the date of the Indenture. The
Debentures are subject to all such terms, and Holders of Debentures are
referred to the Indenture and said Act for a statement of them. The
Debentures are general unsecured obligations of the Company limited
to $ aggregate principal amount.
The Indenture provides that one or more series of debt securities of the
Company in addition to this series of Debentures (collectively the
"Securities") may be issued thereunder in various aggregate principal amounts
that may mature at different times, may bear interest (if any) at different
rates, may be subject to different redemption premiums (if any), may be
subject to different sinking fund or analogous provisions (if any), may be
subject to different Events of Default (as defined in the Indenture) and may
otherwise vary as provided in the Indenture. The Indenture does not limit
the amount of Securities that may be issued thereunder.
[5. Optional Redemption.
The Company may redeem all of the Debentures at any time or some of them
from time to time [insert redemption dates, if applicable] at [insert
redemption price or table] [, except that no redemption at the option of the
Company may be carried out prior to , directly or indirectly from
the proceeds of, or in anticipation of, the issuance of indebtedness for
borrowed money having an interest cost, computed in accordance with generally
accepted financial practice, of less than % per annum.]]
[6. Sinking Fund.
The Company will redeem $ principal amount of Debentures on , ,
and on each thereafter through , at
a redemption price of 100% of principal amount, plus accrued interest to the
redemption date, by paying such $ to the Trustee, as a sinking fund
payment, on or before each such . The Company may reduce the principal
amount of Debentures to be redeemed pursuant to this paragraph 6 by
subtracting 100% of the principal amount of any Debentures that the Company
has delivered to the Trustee for cancellation or redeemed other than pursuant
to this paragraph 6. The Company may so subtract the same Debenture only once.]
[7. Notice of Redemption.
Notice of redemption will be mailed at least 30 days but not more than 60 days
before the redemption date to each Holder of Debentures to be redeemed at his
registered address. Debentures in denominations larger than the smallest
authorized denomination may be redeemed in part. On and after the redemption
date interest ceases to accrue on Debentures or portions of them called for
redemption.]
[8. Defeasance.
The Indenture contains provisions for defeasance at any time of (a) the
entire indebtedness of the Debentures and (b) certain restrictive covenants
and certain Events of Default upon compliance by the Company with certain
conditions set forth therein, which provisions apply to this Debenture.]
9. Denominations, Transfer and Exchange.
The Debentures are in registered form without coupons in denominations of
$1,000 and integral multiples of $1,000 [or, insert applicable denomination].
A Holder may register the transfer of or exchange Debentures in accordance with
the Indenture. The Registrar may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents and to pay any taxes and
fees required by law or permitted by the Indenture. [The Registrar need not
register the transfer of or exchange any Debenture selected for redemption or
register the transfer of or exchange any Debenture for a period of 15 days
before a selection of Debentures to be redeemed.]
10. Persons Deemed Owners.
The registered Holder of a Debenture may be treated as the owner of it for
all purposes.
11. Unclaimed Money.
If money for the payment of principal or interest remains unclaimed for one
year, the Trustee or Paying Agent will pay the money back to the Company at its
request. After that, Holders entitled to the money must look to the Company for
payment.
12. Amendment, Supplement and Waiver.
Subject to certain exceptions, the Indenture or the Debentures may be amended
or supplemented with the consent of the holders of at least a majority in
principal amount of the outstanding Securities affected by such amendment or
supplement voting as one class. Subject to certain exceptions, any past default
may be waived by a majority in principal amount of the outstanding Securities or
compliance with any provision may be waived in a particular instance with the
consent of the holders of a majority in principal amount of the outstanding
Securities of any series affected on behalf of the holders of the Securities
of that series. Without the consent of any Holder, the Company may amend or
supplement the Indenture or the Debentures to, among other things, cure any
ambiguity, defect or inconsistency.
13. Successor Corporation.
When a successor corporation assumes all of the obligations of its predecessor
under the Debentures and the Indenture, the predecessor corporation will be
released from those obligations.
-4-
<PAGE>
14. Defaults and Remedies.
An Event of Default is: (a) default for 30 days in payment of any interest
or Additional Amounts, if any, on the Debentures; (b) default in payment of
principal or premium, if any, on the Debentures when due either at maturity,
upon redemption, by declaration or otherwise (except a failure to make payment
resulting from mistake, oversight or transfer difficulties not continuing for
more than 3 Business Days beyond the date on which such payment is due);
(c) default in payment of any sinking fund installment when due and payable
(except a failure to make payment resulting from mistake, oversight or transfer
difficulties not continuing for more than 3 Business Days
beyond the date on which such payment is due); (d) default by the Company in
the performance or breach of any other covenant or warranty contained in the
Debentures or in the Indenture for the benefit of such Debentures for a
period of 60 days after the notice thereof; or (e) certain events in
bankruptcy or insolvency of the Company [or (f) insert any other events
specified in the Supplemental Indenture or Board Resolution under which the
Debentures are issued, if applicable].
If an Event of Default described in clause (a), (b), (c) or, in the event of a
default with respect to less than all outstanding Securities, (d) above shall
have occurred and be continuing with respect to the Debentures, either the
Trustee or the holders of 25 percent in principal amount of the Debentures
then outstanding may declare the principal (or, in the case of original issue
discount Debentures, the portion thereof specified in the terms thereof)of all
outstanding Debentures, and the interest accrued thereon and Additional
Amounts payable in respect thereof, if any, to be due and
payable immediately. If an Event of Default described in clause
(d) (in the event of a default with respect to all outstanding Securities) or
(e) above shall have occurred and be continuing, either the Trustee or the
holders of 25 percent in principal amount of all Securities then outstanding
(voting as one class) may declare the principal (or, in the case of the
original issue discount Securities, the portion of the principal amount
thereof specified in the terms thereof) of all Securities then
outstanding and the interest accrued thereon and Additional Amounts payable in
respect thereof, if any, to be due and payable immediately, but upon certain
conditions such declarations may be annulled and past defaults (except for
defaults in the payment of principal of, or premium, interest or Additional
Amounts, if any, on such Securities) may be waived by the holders of a
majority in principal amount of the Securities of such series (or of all
series, as the case may be) then outstanding. Holders may not enforce the
Indenture or the Debentures except as provided in the Indenture or the
Debentures. The Trustee may require indemnity satisfactory to it
before it enforces the Indenture or the Securities. Subject to certain
limitations, holders of a majority in principal amount of the outstanding
Securities may direct the Trustee in its exercise of any trust or power with
respect to the Securities. The Trustee may withhold from Holders notice of
any continuing default (except a default in payment of principal, premium, if
any, or interest or Additional Amounts, if any, or any sinking
fund or purchase fund installment) if it determines that withholding notice is
in their interests. The Company is required to file periodic reports with the
Trustee as to the absence of default.
15. Authentication.
This Debenture shall not be valid until the Trustee signs the certificate of
authentication on the other side of this Debenture.
Exhibit 4(f)
[FORM OF FACE OF ZERO COUPON SECURITY]
[THIS ZERO COUPON SECURITY IS A GLOBAL SECURITY WITHIN
THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO
AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A
NOMINEE THEREOF. THIS ZERO COUPON SECURITY MAY NOT BE
TRANSFERRED TO, OR REGISTERED OR EXCHANGED FOR ZERO
COUPON SECURITIES REGISTERED IN THE NAME OF, ANY PERSON
OTHER THAN THE DEPOSITORY OR A NOMINEE THEREOF AND NO
SUCH TRANSFER MAY BE REGISTERED, EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE. EVERY ZERO
COUPON SECURITY AUTHENTICATED AND DELIVERED UPON
REGISTRATION OF TRANSFER OF, OR IN EXCHANGE FOR OR IN
LIEU OF, THIS ZERO COUPON SECURITY SHALL BE A GLOBAL
SECURITY SUBJECT TO THE FOREGOING, EXCEPT IN SUCH LIMITED
CIRCUMSTANCES.]
CUSIP NO. ______
No. $
LINCOLN NATIONAL CORPORATION
Zero Coupon Security, Series
Lincoln National Corporation, an Indiana corporation (the "Company"),
promises to pay to or registered assigns the principal sum of $
dollars [or, insert applicable currency] on .
The principal amount of this Zero Coupon Security does not bear interest
except as provided on the other side hereof.
[Insert provisions on Additional Amounts, if applicable.]
All of the provisions on the other side of this Zero Coupon Security are
part hereof as if set forth in full here.
(Seal) LINCOLN NATIONAL CORPORATION
ATTEST: By:
[Vice] President
Secretary
Dated: Trustee's Certificate of Authentication
This is one of the Securities of the series designated herein and referred
to in the within-mentioned Indenture.
THE BANK OF NEW YORK,
AS TRUSTEE
By:
Authorized Signatory
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[FORM OF REVERSE OF ZERO COUPON SECURITY]
FOR THE PURPOSES OF SECTION 1272 OF THE UNITED STATES
INTERNAL REVENUE CODE OF 1986, AS AMENDED, THE ISSUE PRICE
OF THIS ZERO COUPON SECURITY IS % OF ITS PRINCIPAL AMOUNT
AND THE ISSUE DATE IS .
LINCOLN NATIONAL CORPORATION
Zero Coupon Security, Series
1. No Interest Payable.
The principal amount of this Zero Coupon Security, Series (the "Zero
Coupon Securities") does not bear interest and no interest is payable
otherwise with respect to this Zero Coupon Security, except in the case of
default in payment of principal upon acceleration
[, redemption] or maturity, and in such case the amount in default shall bear
interest at the rate of __% per annum (to the extent enforceable
under applicable law) from the date of default in payment to the date such
payment has been made or duly provided for.
[Insert provisions on payment of Additional Amounts, if applicable.]
2. Method of Payment.
Holders of Zero Coupon Securities ("Holders") must surrender them to a
Paying Agent to collect principal payments [and Additional Amounts]. The
Company will pay principal [and Additional Amounts] in money of the United
States that at the time of payment is legal tender for payment of public and
private debts [or, insert applicable currency]. The Company may at its option,
however, pay principal by its check payable in such money.
3. Paying Agent and Registrar.
Initially, The Bank of New York (the "Trustee"), [Address], will act as
Paying Agent and Registrar. The Company may change any Paying Agent,
Registrar or co-Registrar without notice to Holders. The Company or any of its
Subsidiaries may act as Paying Agent, Registrar or co-Registrar.
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4. Indenture.
The Company issued the Zero Coupon Securities under an Indenture
dated as of _______, ____ (the "Indenture") between the Company and the
Trustee. The terms of the Zero Coupon Securities include those stated in the
Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939 (15 U.S. Code Section 77aaa-77bbbb) as in effect on the
date of the Indenture. The Zero Coupon Securities are subject to all such
terms, and Holders of Zero Coupon Securities are referred to the Indenture
and said Act for a statement of them. The Zero Coupon Securities are general
unsecured obligations of the Company limited to $ aggregate
principal amount.
The Indenture provides that one or more series of debt securities of the
Company in addition to this series of Zero Coupon Securities (collectively the
"Securities") may be issued thereunder in various aggregate principal amounts
that may mature at different times, may bear interest (if any) at different
rates, may be subject to different redemption premiums (if any), may be subject
to different sinking fund or analogous provisions (if any), may be subject to
different Events of Default (as defined in the Indenture) and may otherwise
vary as provided in the Indenture. The Indenture does not limit the amount of
Securities that may be issued thereunder.
[5. Optional Redemption.
The Company may redeem all of the Zero Coupon Securities at any time
or some of them from time to time [insert redemption dates, if applicable] at
[insert redemption price or table] [, except that no redemption at the option
of the Company may be carried out prior to , directly or indirectly from
the proceeds of, or in anticipation of, the issuance of indebtedness for
borrowed money having an interest cost, computed in accordance with generally
accepted financial practice, of less than % per annum.
Notice of redemption will be mailed at least 30 days but not more than 60
days before the redemption date to each Holder of Zero Coupon Securities to be
redeemed at his registered address. Zero Coupon Securities in denominations
larger than the smallest authorized denomination may be redeemed in part.]
[6. Defeasance.
The Indenture contains provisions for defeasance at any time of (a) the
entire indebtedness of the Zero Coupon Securities and (b) certain restrictive
covenants and certain Events of Default upon compliance by the Company with
certain conditions set forth therein, which provisions apply to this Zero
Coupon Security.]
7. Denominations, Transfer and Exchange
The Zero Coupon Securities are in registered form without coupons in
denominations of $1,000 and integral multiples of $1,000 [or, insert applicable
denomination]. A Holder may register the transfer of or exchange Zero Coupon
Securities in accordance with the Indenture. The Registrar may require a
Holder, among other things, to furnish appropriate endorsements and transfer
documents and to pay any taxes and fees required by law or permitted by the
Indenture. [The Registrar need not register the transfer of or exchange any
Zero Coupon Security selected for redemption or register the transfer of or
exchange any Zero Coupon Security for a period of 15 days before a selection of
Zero Coupon Securities to be redeemed.]
8. Persons Deemed Owners.
The registered Holder of a Zero Coupon Security may be treated as the
owner of it for all purposes.
9. Unclaimed Money.
If money for the payment of principal remains unclaimed for one year,
the Trustee or Paying Agent will pay the money back to the Company at its
request. After that, Holders entitled to the money must look to the Company
for payment.
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10. Amendment, Supplement and Waiver.
Subject to certain exceptions, the Indenture or the Zero Coupon Securities
may be amended or supplemented with the consent of the holders of at least a
majority in principal amount of the outstanding Securities affected by such
amendment or supplement voting as one class. Subject to certain exceptions, any
past default may be waived by a majority in principal amount of the outstanding
Securities or compliance with any provision may be waived in a particular
instance with the consent of the holders of a majority in principal amount of
the outstanding Securities of any series affected on behalf of the holders of
the Securities of that series. Without the consent of any Holder, the Company
may amend or supplement the Indenture or the Zero Coupon Securities to, among
other things, cure any ambiguity, defect or inconsistency.
11. Successor Corporation.
When a successor corporation assumes all of the obligations of its
predecessor under the Zero Coupon Securities and the Indenture, the
predecessor corporation will be released from those obligations.
12. Defaults and Remedies.
An Event of Default is: (a) default for 30 days in payment of any
Additional Amounts, if any, on the Zero Coupon Securities; (b) default in
payment of principal or premium, if any, on the Zero Coupon Securities when due
either at maturity, upon redemption, by declaration or otherwise (except a
failure to make payment resulting from mistake, oversight or transfer
difficulties not continuing for more than 3 Business Days beyond the date on
which such payment is due); (c) default in payment of any sinking fund
installment when due and payable (except a failure to make payment resulting
from mistake, oversight or transfer difficulties not continuing for more than 3
Business Days beyond the date on which such payment is due); (d) default by
the Company in the performance or breach of any other covenant or warranty
contained in the Zero Coupon Securities or in the Indenture for the benefit
of such Zero Coupon Securities for a period of 60 days after the notice
thereof; or (e) certain events in bankruptcy or insolvency of the
Company [or (f) insert any other events specified in the Supplemental Indenture
or Board Resolutions under which the Zero Coupon Securities are issued, if
applicable].
If an Event of Default described in clause (a), (b), (c) or, in the event of
default with respect to less than all outstanding Securities, (d) above shall
have occurred and be continuing with respect to the Zero Coupon Securities,
either the Trustee or the holders of 25 percent in principal amount of the
Zero Coupon Securities then outstanding may declare (i) that portion of the
principal equal to the initial public offering price of the Zero Coupon
Securities plus accrued amortization of the original issue discount calculated
using the "interest" method (computed in accordance with generally accepted
accounting principles in effect on the date of the Indenture) from ,
to the date of acceleration, and (ii) any accrued interest from the date of
default to the date of acceleration, and upon such declaration such amount
shall become due and payable, in the manner, with the effect and subject to the
conditions provided in the Indenture. If an Event of Default
described in clause (d) (in the event of a default with respect to all
outstanding Securities) or (e) above shall have occurred and be continuing,
either the Trustee or the holders of 25 percent in principal amount of all
Securities then outstanding (voting as one class) may declare the principal
(or, in the case of the Zero Coupon Securities the amount specified above) of
all Securities then outstanding and the interest accrued thereon and Additional
Amounts payable in respect thereof, if any, to be due and payable
immediately, but upon certain conditions such declarations may be annulled and
past defaults(except for defaults in the payment of principal of, or premium,
interest or Additional Amounts, if any, on such Securities) may be waived by
the holders of a majority in principal amount of the Securities of such series
(or of all series, as the case may be) then outstanding. Holders may not
enforce the Indenture or the Zero Coupon Securities except as provided in the
Indenture or the Zero Coupon Securities. The Trustee may require indemnity
satisfactory to it before it enforces the Indenture or the
Securities. Subject to certain limitations, holders of a majority in
principal amount of the outstanding Securities may direct the Trustee in its
exercise of any trust or power with respect to the Securities.
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The Trustee may withhold from Holders notice of any continuing default
(except a default in payment of principal, premium, if any, or Additional
Amounts, if any, or any sinking fund or purchase fund installment) if it
determines that withholding notice is in their interests. The Company
is required to file periodic reports with the Trustee as to the
absence of default.
13. Authentication.
This Zero Coupon Security shall not be valid until the Trustee signs the
certificate of authentication on the other side of this Zero Coupon Security.
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