<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 1, 1995
POST-EFFECTIVE AMENDMENT NO. 1 (No. 33-55379)
REGISTRATION NO. 33-
________________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_______________________
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 (IRS 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 office)
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
200 East Berry Street
Fort Wayne, Indiana 46802-2706
(219) 455-3628
<PAGE>
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC:
From time to time after the effective date of this Registration
Statement as determined by the Registrant depending upon 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, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box: [X]
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering: [ ]
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering: [ ]
If delivery of the prospectus is expected to be made pursuant to
Rule 434, please check the following box: [X]
______________________
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
===============================================================================================================================
Proposed maximum
Title of each class of Amount to be Proposed maximum aggregate offering Amount of
securities to be registered registered (1)(2) offering price per unit price (1)(2)(3) registration fee(4)
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Debt Securities }
Preferred Stock, without par value (5) } $600,000,000 (1)(3) $600,000,000 $206,897
Common Stock, without par value (6) }
===============================================================================================================================
</TABLE>
(1) Not specified as to each class of securities to be registered pursuant to
General Instruction II.D. of Form S-3; however, in no event will the
aggregate initial offering price of all securities issued and sold pursuant
to this Registration Statement exceed $600,000,000 in U.S. dollars or the
equivalent thereof in foreign currency or currency units. Any securities
registered hereunder may be sold separately or as units with other
securities registered hereunder.
(2) Includes an aggregate of $100,000,000 of securities of the Registrant
registered and not sold on Form S-3 (File No. 33-55379), effective
September 15, 1994. This amount is included in the amount to be registered
and proposed maximum aggregate offering price. Includes $500,000,000 of
additional securities to be registered hereunder. Until such time as this
Registration Statement is declared effective, any offering of securities
under Registration Statement No. 33-55379 shall not exceed the aggregate
offering price of $100,000,000.
(3) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(o) under the Securities Act of 1933 and reflects the
offering price rather than the principal amount of any debt securities
issued at a discount. The maximum offering price per unit will be
determined from time to time by the Registrant in connection with the
issuance by the Registrant of the securities issued hereunder.
(4) Includes $34,483 associated with the $100,000,000 of securities being
carried forward from Registration Statement No. 33-55379, which amount has
already been paid, and $172,414 associated with the $500,000,000 of
additional securities being registered hereunder, which amount is being
paid in conjunction herewith.
(5) Such indeterminate number of shares of Preferred Stock as may from time to
time be issued at indeterminate prices. The Preferred Stock may include
Common Stock Purchase Rights which, prior to the occurrence of certain
events, would not be exercisable or evidenced separately from the Preferred
Stock.
(6) Such indeterminate number of shares of Common Stock as may from time to
time be issued at indeterminate prices. The Common Stock includes Common
Stock Purchase Rights which, prior to the occurrence of certain events,
will not be exercisable or evidenced separately from the Common Stock.
______________________
<PAGE>
PURSUANT TO RULE 429 UNDER THE SECURITIES ACT OF 1933, THE PROSPECTUS
INCLUDED IN THIS REGISTRATION STATEMENT IS A COMBINED PROSPECTUS AND RELATES TO
THIS REGISTRATION STATEMENT, WHICH IS A NEW REGISTRATION STATEMENT, AND TO A
REGISTRATION STATEMENT ON FORM S-3 (FILE NO. 33-55379) PREVIOUSLY FILED AND
DECLARED EFFECTIVE ON SEPTEMBER 15, 1994, AND WILL BE USED (TOGETHER WITH ANY
SUPPLEMENTS) IN CONNECTION WITH THE SECURITIES REGISTERED UNDER SUCH
REGISTRATION STATEMENT. THIS REGISTRATION STATEMENT, WHICH IS A NEW
REGISTRATION STATEMENT, ALSO CONSTITUTES POST-EFFECTIVE AMENDMENT NO. 1 TO THE
REGISTRATION STATEMENT WITH FILE NO. 33-55379, AND SUCH POST-EFFECTIVE AMENDMENT
SHALL HEREAFTER BECOME EFFECTIVE CONCURRENTLY WITH THE EFFECTIVENESS OF THIS
REGISTRATION STATEMENT AND IN ACCORDANCE WITH SECTION 8(c) OF THE SECURITIES ACT
OF 1933.
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 THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION,
ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
<PAGE>
LINCOLN NATIONAL CORPORATION
DEBT SECURITIES, PREFERRED STOCK AND COMMON STOCK
Lincoln National Corporation (the "Company") from time to time may offer up
to $600,000,000 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 ____________, 1995.
<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, 1994 (as amended by the Form 10-K/A filed on May 12, 1995), Quarterly Report
on Form 10-Q for the quarter ended March 31, 1995, and Current Report on Form
8-K dated May 16, 1995 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 Debt Securities, Preferred Stock and
Common Stock 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 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.
-2-
<PAGE>
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.
THE COMPANY
The Company is a holding company, which through its subsidiary companies,
operates multiple insurance and investment management businesses. After the sale
in 1994 of a majority interest in the Company's primary writer of employee life-
health benefit coverages, the Company's insurance operations currently are
divided into three major business segments, 1) Property-Casualty, 2) Life
Insurance and Annuities, and 3) Life-Health Reinsurance. A fourth business
segment was created by the Company upon the acquisition on April 3, 1995 of
Delaware Management Holdings, Inc. and its subsidiaries (collectively,
"Delaware"), which serves as investment adviser to approximately 290 pension
fund and other institutional accounts, acts as investment manager, national
distributor, and shareholder services agent for 33 registered, open-end funds
and serves as investment manager for 2 registered, closed-end funds. This fourth
business segment includes the operations of Delaware and several other
investment management operations of the Company owned by the Company prior to
the acquisition of Delaware.
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.
As of December 31, 1994, Lincoln National had consolidated assets of $48.9
billion and shareholders' equity of approximately $3.0 billion. As of March 31,
1995, Lincoln National had consolidated assets of $52.3 billion and
shareholders' equity of approximately $3.6 billion.
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 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
-3-
<PAGE>
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.
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.
HISTORICAL RATIO OF EARNINGS TO FIXED CHARGES
Set forth below are the Company's historical ratios of earnings to fixed
charges for each of the years in the five-year period ended December 31, 1994
and the three month periods ended March 31, 1995 and March 31, 1994.
<TABLE>
<CAPTION>
THREE MONTHS
ENDED
MARCH 31, YEAR ENDED DECEMBER 31,
----------- -----------------------------
1995 1994 1994 1993 1992 1991 1990
----- ----- ---- ----- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges:
Excluding Interest on Annuities and
Financial Products(1)(4).............. 10.44 12.67 6.43 10.35 6.69 3.04 3.04
Including Interest on Annuities and
Financial Products(2)(4).............. 1.49 1.57 1.27 1.43 1.32 1.16 1.18
Ratio of Earnings to Combined Fixed
Charges and Preferred Stock
Dividends(3)(4)....................... 1.47 1.54 1.25 1.40 1.30 1.15 1.17
</TABLE>
____________________
(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.
(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.
(3) Same as the ratio of earnings to fixed charges including interest on
annuities and financial products, except fixed charges include the pre-tax
earnings required to cover preferred stock dividend requirements.
(4) Subsequent to March 31, 1995 through May 23, 1995, additional indebtedness
of $464 million was incurred as a net result of the acquisition of Delaware
and Laurentian Financial Group plc, and the issuance of debentures. If the
impact of this increase in aggregate indebtedness for these transactions
were included in the calculation for the three months ended March 31, 1995,
the ratio of earnings to fixed charges as described in note (1) above would
decrease by 3.12 and such ratios as described in notes (2) and (3) would
decrease by 0.03. If the impact of this increase in indebtedness for these
transactions were included in the calculation for the year ended December
31, 1994, the ratio of earnings to fixed charges as described in note (1)
above would decrease by 2.07 and such ratios as described in notes (2) and
(3) would decrease by 0.03.
-4-
<PAGE>
DESCRIPTION OF DEBT SECURITIES
The Debt Securities may be issued in one or more series under an Indenture
dated as of September 15, 1994 (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.
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 such
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
(other than those described herein); (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 Prospectus 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.
-5-
<PAGE>
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 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)
-6-
<PAGE>
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 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, premium, if any, 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, premium, if any, interest and 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)
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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 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).
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 78%
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of the consolidated revenues of the Company during the year ended December 31,
1994 and 94% of the consolidated assets of the Company at December 31, 1994.
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 such
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 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
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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 of 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
Default or 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 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
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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 a majority 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 of 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 the 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. The Trustee also acts as trustee and paying agent for
the Company's 7-1/8% Notes due July 15, 1999, 7-5/8% Notes due July 15, 2002,
7-1/4% Debentures due May 15, 2005 and 9-1/8% Debentures due October 1, 2024.
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. The Company
has outstanding three
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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 March 31, 1995, the Company had
issued and outstanding 94,575,411 shares of Common Stock, 42,058 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
therefor. 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 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 of such outstanding
Common Stock (the earlier of such dates 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.
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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 the 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.
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.
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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 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 Company and 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
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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 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 respects with other series of Preferred Stock.
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SERIES A PREFERRED STOCK
At March 31, 1995, the Company had issued and outstanding 42,058 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 $3,364,640 in the aggregate at March 31,
1995, 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 share of Series A Preferred Stock. In the three
months ended March 31, 1995, 1,160 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").
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<PAGE>
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) 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 directors 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, or a stock option,
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
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 Lincoln National Life Insurance Company and
American States Insurance Company, are domiciled in Indiana and are primarily
regulated by the Indiana Commissioner.
As a holding company of insurance businesses, the Company is also subject to
regulatory requirements of the states where its insurance subsidiaries are
domiciled. For example, certain transactions involving an affiliated
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<PAGE>
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 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.
The Company's investment management subsidiaries are subject to a number of
federal and state laws and regulations, including without limitation, the
Investment Company Act of 1940, the Investment Advisers Act of 1940 and the
National Association of Securities Dealers Rules of Fair Practice. These laws
and regulations generally grant supervisory agencies and self-regulatory
organizations broad administrative powers, including the power to limit or
restrict the subsidiaries from carrying on their businesses in the event that
they fail to comply which such laws and regulations.
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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LEGAL OPINIONS
The validity of the Securities offered hereby will be passed upon for the
Company by Gardner, Carton & Douglas, Chicago, Illinois. 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 May 4, 1995, based on information filed with the Commission, Mr. Hunter
beneficially owned 53,323 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.
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, 1994, 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*
<TABLE>
<CAPTION>
<S> <C>
Securities and Exchange Commission fee $206,897
Legal fees and expenses $ 60,000
Accounting fees and expenses $ 36,000
Blue Sky fees and expenses (including counsel fees) $ 12,000
Printing and engraving expenses $ 36,000
Trustee fees and expenses $ 24,000
Miscellaneous $ 33,103
--------
, Total $408,000
========
</TABLE>
__________________
* Except for the Securities and Exchange Commission filing fee, expenses are
estimated. These fees and expenses relate to an aggregate of $600,000,000 of
registered securities, including $100,000,000 of securities carried forward from
Registration Statement No. 33-55379.
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 benefits plans, who were 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 agent 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 (ii) in the case of criminal
proceedings, the individual either has 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.
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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 $100,000,000 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 (incorporated by reference to Schedule II
to Registrant's Report on Form 8-K filed September 29, 1994)
3(a) Articles of Incorporation of Lincoln National Corporation, as amended
(incorporated by reference to Exhibit 3(a) to Registrant's Registration
Statement on Form S-3/A (File No. 33-55379) filed September 15, 1994)
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
Exhibit 4(e) to Registrant's 10-K for fiscal year ended December 31,
1994)
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, dated as of September 15, 1994, between the Registrant
and The Bank of New York, as Trustee (incorporated by reference to
Exhibit No. 4(c) to Registrant's Registration Statement on Form S-3/A
(File No. 33-55379) filed September 15, 1994)
4(d) Form of Note (incorporated by reference to Exhibit No. 4(d) to
Registrant's Registration Statement on Form S-3/A (File No. 33-55379)
filed September 15, 1994)
4(e) Form of Debenture (incorporated by reference to Exhibit No. 4(e) to
Registrant's Registration Statement on Form S-3/A (File No. 33-55379)
filed September 15, 1994)
4(f) Form of Zero Coupon Security (incorporated by reference to Exhibit No.
4(f) to Registrant's Registration Statement on Form S-3/A (File No. 33-
55379) filed September 15, 1994)
5 Opinion and consent of Gardner, Carton & Douglas
12(a) Computation of Historical Ratios of Earnings to Fixed Charges for each of
the four years ended December 31, 1993 (incorporated by reference to
Exhibit No. 12 to Registrant's Registration Statement on Form S-3 (File
No. 33-55379) filed September 6, 1994)
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12(b) Computation of Historical Ratios of Earnings to Fixed Charges for the
year ended December 31, 1994 and the three month periods ended March 31,
1995 and March 31, 1994 (incorporated by reference to Schedule I to the
Registrant's Report on Form 8-K filed May 17, 1995)
23(a) Consent of Ernst & Young LLP
23(b) Consent of Gardner, Carton & Douglas (included in Exhibit No. 5)
24 Powers of Attorney (included on Signature Page)
25 Form T-1, Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939 of Chemical Bank (incorporated by reference to
Exhibit No. 1 to Registrant's Registration Statement on Form S-3 (File
No. 33-55379) filed September 6, 1994)
28 Information from Reports Furnished to State Insurance Regulatory
Authorities (incorporated by reference to Exhibit No. 28 of Registrant's
10-K for fiscal year ended December 31, 1994)
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 proceedings) 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
II-3
<PAGE>
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.
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<PAGE>
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 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 1st day of June,
1995.
LINCOLN NATIONAL CORPORATION
By: /s/ Richard C. Vaughan
----------------------
Richard C. Vaughan
Title: Executive Vice President and
Chief Financial Officer
Each person whose signature appears below hereby appoints Richard C. Vaughan,
Donald L. Van Wyngarden and John L. Steinkamp and each of them severally, acting
alone and without the other, his true and lawful attorney-in-fact with authority
to execute in the name of each such person, and to file with the Securities and
Exchange Commission, together with any exhibits thereto and other documents
therewith, any and all amendments (including without limitation post-effective
amendments) to this Registration Statement necessary or advisable to enable the
Registration Statement to comply with the Securities Act of 1933, as amended,
and any rules, regulations and requirements of the Securities and Exchange
Commission in respect thereof, which amendments may make such other changes in
the Registration Statement as the aforesaid attorney-in-fact executing the same
deems appropriate.
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 Chairman, Chief Executive Officer June 1, 1995
- --------------------------- and Director (Principal Executive
Ian M. Rolland Officer)
/s/ Robert A. Anker President, Chief Operating Officer June 1, 1995
- --------------------------- and Director
Robert A. Anker
/s/ Richard C. Vaughan Executive Vice President June 1, 1995
- --------------------------- and Chief Financial Officer
Richard C. Vaughan (Principal Financial Officer)
/s/ Donald L. Van Wyngarden Second Vice President and June 1, 1995
- --------------------------- Controller (Principal Accounting
Donald L. Van Wyngarden Officer)
/s/ J. Patrick Barrett Director June 1, 1995
- ---------------------------
J. Patrick Barrett
/s/ Thomas D. Bell, Jr. Director June 1, 1995
- ---------------------------
Thomas D. Bell, Jr.
/s/ Daniel R. Efroymson Director June 1, 1995
- ---------------------------
Daniel R. Efroymson
II-5
<PAGE>
/s/ Harry L. Kavetas Director June 1, 1995
- ---------------------------
Harry L. Kavetas
/s/ M. Leanne Lachman Director June 1, 1995
- ---------------------------
M. Leanne Lachman
Director
- ---------------------------
Leo J. McKernan
/s/ Earl L. Neal Director June 1, 1995
- ---------------------------
Earl L. Neal
/s/ John M. Pietruski Director June 1, 1995
- ---------------------------
John M. Pietruski
/s/ Jill S. Ruckelshaus Director June 1, 1995
- ---------------------------
Jill S. Ruckelshaus
/s/ Gordon A. Walker Director June 1, 1995
- ---------------------------
Gordon A. Walker
/s/ Gilbert R. Whitaker, Jr. Director June 1, 1995
- ---------------------------
Gilbert R. Whitaker, Jr.
II-6
<PAGE>
Exhibit 5
Gardner, Carton & Douglas
321 North Clark Street
Suite 3400
Chicago, Illinois 60610
June 1, 1995
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Lincoln National Corporation
Registration Statement on Form S-3/
Post-Effective Amendment No. 1 to Registration
Statement on Form S-3 (File No. 33-55379)
Ladies and Gentlemen:
As counsel to Lincoln National Corporation, an Indiana corporation (the
"Company"), we have participated in the legal proceedings and matters relating
to the proposed registration of $500,000,000 aggregate public offering price,
and the prior registration on Form S-3 (File No. 33-55379) ("Prior Registration
Statement") of $500,000,000 aggregate public offering price, of (i) debt
securities (the "Debt Securities"), (ii) shares of its preferred stock, without
par value (the "Preferred Stock"), and (iii) shares of its common stock, without
par value (the "Common Stock"). Of the $500,000,000 aggregate public offering
price of Debt Securities, Preferred Stock and Common Stock registered in the
Prior Registration Statement, $100,000,000 of such securities have not yet been
offered for sale as of the date hereof. The $600,000,000 aggregate public
offering price of the Debt Securities, Preferred Stock and Common Stock yet to
be offered for sale are collectively referred to herein as the "Securities". The
Debt Securities will be issued under an Indenture (the "Indenture") between the
Company and The Bank of New York, as Trustee.
We advise you that in our opinion:
1. The Company is a corporation duly organized and existing under and by
virtue of the laws of the State of Indiana and has adequate corporate powers to
own and operate its property and to transact the business in which it is
engaged.
2. When the Registration Statement on Form S-3 relating to the Securities,
which Registration Statement is a new Registration Statement and also
constitutes Post-Effective Amendment No. 1 to the Prior Registration Statement,
<PAGE>
Securities and Exchange Commission
June 1, 1995
Page 2
has become effective, and provided no stop order shall have been issued by the
Securities and Exchange Commission relating thereto, and further provided that
the Securities are qualified for sale under, or are exempt from, the securities
laws of the states in which they are offered for sale:
(i) the Common Stock, when issued, sold and delivered in the manner and for
the consideration stated in the Registration Statement and any Prospectus
Supplement relating thereto, will be duly authorized and validly issued, fully
paid and non-assessable;
(ii) the Preferred Stock, when (a) the terms of any particular series of
Preferred Stock have been duly approved and established in accordance with the
resolutions of the Company's Board of Directors; (b) the Articles of Amendment
to the Company's Articles of Incorporation setting forth the terms of the series
of Preferred Stock have been filed with, and accepted for recording by, the
State of Indiana; and (c) the Preferred Stock has been issued, sold and
delivered in the manner and for the consideration stated in the Registration
Statement and any Prospectus Supplement relating thereto, will be duly
authorized and validly issued, fully paid and non-assessable; and
(iii) the Debt Securities, upon the issuance and sale of such Debt
Securities in conformance with the provisions of the Indenture, will be, when
sold, duly authorized, legally issued, fully paid, non-assessable and binding
obligations of the Company entitled to all of the benefits of the Indenture.
The opinions set forth above are subject to the qualifications that (a)
enforcement of the Company's obligations under the Indenture and the Debt
Securities and the Articles of Amendment and the Preferred Stock may be subject
to (i) bankruptcy, insolvency, reorganization, moratorium or other similar laws
now or hereafter in effect relating to or affecting creditors' rights generally
and (ii) general principles of equity (regardless of whether such enforcement is
sought in a proceeding at law or in equity), and (b) the remedy of specific
performance and injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.
We are aware that we are named in the Registration Statement as counsel for
the Company. We hereby consent to such use of our name in the Registration
Statement and to the filing of our opinion as an exhibit to the Registration
Statement.
Very truly yours,
/s/ Gardner, Carton & Douglas
<PAGE>
Exhibit 23(a)
Consent of Ernst & Young LLP, Independent Auditors
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3) and related Prospectus of Lincoln National
Corporation for the registration of up to $600,000,000 aggregate public offering
price of either debt securities, preferred stock, or common stock or a
combination thereof and to the incorporation by reference therein of our report
dated February 8, 1995, with respect to the consolidated financial statements
and schedules of Lincoln National Corporation included in its Annual Report
(Form 10-K) for the year ended December 31, 1994, filed with the Securities and
Exchange Commission.
/s/ Ernst & Young LLP
Fort Wayne, Indiana
May 31, 1995
