<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 21, 1996
REG. NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
LINCOLN NATIONAL CORPORATION LINCOLN NATIONAL CAPITAL I
(EXACT NAME OF REGISTRANT AS SPECIFIED LINCOLN NATIONAL CAPITAL II
IN ITS CHARTER) LINCOLN NATIONAL CAPITAL III
(EXACT NAME OF EACH REGISTRANT AS
SPECIFIED IN ITS TRUST AGREEMENTS)
INDIANA DELAWARE
(STATE OR OTHER JURISDICTION OF (STATE OR OTHER JURISDICTION OF
INCORPORATION OR ORGANIZATION) INCORPORATION OR ORGANIZATION OF EACH
REGISTRANT)
35-1140070 EACH TO BE APPLIED FOR
(I.R.S. EMPLOYER (I.R.S. EMPLOYER
IDENTIFICATION NO.) IDENTIFICATION NO.)
200 EAST BERRY STREET C/O LINCOLN NATIONAL CORPORATION
FORT WAYNE, INDIANA 46802-2706 200 EAST BERRY STREET
(219) 455-2000 FORT WAYNE, INDIANA 46802-2706
(ADDRESS, INCLUDING ZIP CODE, AND (219) 455-2000
TELEPHONE NUMBER, (ADDRESS, INCLUDING ZIP CODE, AND
INCLUDING AREA CODE, OF REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE,
PRINCIPAL EXECUTIVE OFFICES) OF EACH REGISTRANT'S PRINCIPAL
EXECUTIVE OFFICES)
----------------
JACK D. HUNTER, ESQ.
EXECUTIVE VICE PRESIDENT AND GENERAL COUNSEL
LINCOLN NATIONAL CORPORATION
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 OF EACH REGISTRANT)
WITH COPIES TO:
JOHN L. STEINKAMP ARTHUR J. SIMON MARK J. WELSHIMER
VICE PRESIDENT AND SONNENSCHEIN NATH & SULLIVAN & CROMWELL
ASSOCIATE GENERAL ROSENTHAL 125 BROAD STREET
COUNSEL 8000 SEARS TOWER NEW YORK, NEW YORK 10004
LINCOLN NATIONAL CHICAGO, ILLINOIS 60606 (212) 558-4000
CORPORATION (312) 876-8000
200 BERRY STREET
FORT WAYNE, INDIANA
46802
(219) 455-2000
----------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after the Registration Statement becomes effective.
----------------
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. [_]
----------------
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 OR UNTIL THIS REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
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<PAGE>
----------------
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CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
PROPOSED PROPOSED
MAXIMUM MAXIMUM
TITLE OF EACH CLASS OF AMOUNT OFFERING AGGREGATE AMOUNT OF
SECURITIES TO BE TO BE PRICE OFFERING REGISTRATION
REGISTERED REGISTERED PER UNIT(1) PRICE(1) FEE
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<S> <C> <C> <C> <C>
Junior Subordinated
Deferrable Interest
Debentures of Lincoln
National
Corporation(2)........ NA
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Preferred Securities of
Lincoln National
Capital I, Lincoln
National Capital II and
Lincoln National
Capital III........... NA
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Lincoln National
Corporation Guarantee
with respect to
Preferred
Securities(3)(4)...... NA
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Total.................. $500,000,000(5) 100% $500,000,000(5) $172,414
</TABLE>
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(1) Estimated solely for the purpose of computing the registration fee.
(2) The Junior Subordinated Deferrable Interest Debentures will be purchased
by Lincoln Capital I, II and III with the proceeds of the sale of the
Preferred Securities.
(3) No separate consideration will be received for the Lincoln National
Corporation Guarantee.
(4) This Registration Statement is deemed to cover the Junior Subordinated
Deferrable Interest Debentures of Lincoln National Corporation, the rights
of holders of Junior Subordinated Deferrable Interest Debentures of
Lincoln National Corporation under the Indenture, the rights of holders of
Preferred Securities of Lincoln National Capital I, Lincoln National
Capital II and Lincoln National Capital III under each Trust Agreement,
the rights of holders of the Preferred Securities under the Guarantees,
the Expense Agreement entered into by Lincoln National Corporation and
certain backup undertakings as described herein.
(5) Such amount represents the principal amount of Junior Subordinated
Deferrable Interest Debentures issued at their principal amount and the
issue price rather than the principal amount of Junior Subordinated
Deferrable Interest Debentures issued at an original issue discount. Such
amount also represents the initial public offering price of the Lincoln
National Capital I, II and III Preferred Securities.
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. NEITHER THIS PROSPECTUS SUPPLEMENT NOR THE PROSPECTUS +
+SHALL CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR +
+SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, +
+SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION +
+UNDER THE SECURITIES LAWS OF ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED MAY 21, 1996
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED , 1996
PREFERRED SECURITIES
LINCOLN NATIONAL CAPITAL I
% CUMULATIVE QUARTERLY INCOME PREFERRED SECURITIES,
SERIES A (QUIPSSM)*
(LIQUIDATION PREFERENCE $25 PER PREFERRED SECURITY)
GUARANTEED TO THE EXTENT THE SERIES A ISSUER HAS FUNDS AS SET FORTH HEREIN BY
LINCOLN NATIONAL CORPORATION
The % Cumulative Quarterly Income Preferred Securities, Series A (the
"Series A QUIPS"), offered hereby represent beneficial interests in Lincoln
National Capital I, a trust formed under the laws of the State of Delaware (the
"Series A Issuer"). Lincoln National Corporation, an Indiana corporation
("Lincoln"), will be the owner of all of the beneficial interests represented
by common securities of the Series A Issuer ("Series A Common Securities" and,
collectively with the Series A QUIPS, the "Series A Securities"). The First
National Bank of Chicago is the Property Trustee of the Series A Issuer. The
Series A Issuer
(Continued on next page)
SEE "RISK FACTORS" BEGINNING ON PAGE S-4 HEREOF FOR CERTAIN INFORMATION
RELEVANT TO AN INVESTMENT IN THE SERIES A QUIPS.
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 SUPPLEMENT OR THE PROSPECTUS TO
WHICH IT RELATES. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
----------
<TABLE>
<CAPTION>
PROCEEDS TO
INITIAL PUBLIC UNDERWRITING THE SERIES A
OFFERING PRICE COMMISSION(1) ISSUER(2)(3)
-------------- ------------- ------------
<S> <C> <C> <C>
Per Series A QUIPS.................... $ (2) $
Total(4).............................. $ (2) $
</TABLE>
- -----
(1) The Series A Issuer and Lincoln have agreed to indemnify the several
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933. See "Underwriting".
(2) In view of the fact that the proceeds of the sale of the Series A QUIPS
will be used to purchase the Series A QUIDS, the Underwriting Agreement
provides that Lincoln will pay to the Underwriters, as compensation
("Underwriters' Compensation") for their arranging the investment therein
of such proceeds, $ per Series A QUIPS (or $ in the aggregate). See
"Underwriting".
(3) Expenses of the offering, which are payable by Lincoln, are estimated to be
$ .
(4) The Series A Issuer has granted the Underwriters an option exercisable for
10 days to purchase up to an additional Series A QUIPS at the initial
public offering price per Series A QUIPS solely to cover over-allotments,
if any. If such option is exercised in full, the total initial public
offering price and proceeds to the Series A Issuer will be $ and $ ,
respectively, and the total Underwriters' Compensation paid by Lincoln for
arranging the investment will be $ . See "Underwriting".
----------
The Series A QUIPS offered hereby are offered severally by the Underwriters,
as specified herein, subject to receipt and acceptance by them and subject to
their right to reject any order in whole or in part. It is expected that the
Series A QUIPS will be ready for delivery in book-entry form only through the
facilities of The Depository Trust Company in New York, New York, on or about
, 1996, against payment therefor in immediately available funds.
* QUIPS and QUIDS are servicemarks of Goldman, Sachs & Co.
GOLDMAN, SACHS & CO.
BEAR, STEARNS & CO. INC.
A. G. EDWARDS & SONS, INC.
MERRILL LYNCH & CO.
SMITH BARNEY INC.
The date of this Prospectus is , 1996
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SERIES A
QUIPS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET.
SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE OR OTHERWISE.
SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
----------------
(Continued from previous page)
exists for the sole purpose of issuing the Series A QUIPS and the Series A
Common Securities and investing the proceeds thereof in % Junior
Subordinated Deferrable Interest Debentures, Series A (the "Series A
QUIDS"SM), to be issued by Lincoln. The Series A QUIDS will mature on ,
2026, which date may be extended to a date not later than , 2045 if
certain conditions are met. The Series A QUIPS will have a preference under
certain circumstances with respect to cash distributions and amounts payable
on liquidation, redemption or otherwise over the Series A Common Securities.
See "Description of Preferred Securities--Subordination of Common Securities"
in the accompanying Prospectus.
Holders of the Series A QUIPS will be entitled to receive preferential
cumulative cash distributions accruing from the date of original issuance and
payable quarterly in arrears on the last day of March, June, September and
December of each year, commencing , 1996, at the annual rate of % of the
liquidation preference of $25 per Series A QUIPS ("Distributions"). Lincoln
has the right to defer payment of interest on the Series A QUIDS at any time
or from time to time for a period not exceeding 20 consecutive quarters with
respect to each deferral period (each, an "Extension Period"), provided that
no Extension Period may extend beyond the Stated Maturity (as defined herein)
of the Series A QUIDS. Upon the termination of any such Extension Period and
the payment of all amounts then due, Lincoln may elect to begin a new
Extension Period subject to the requirements set forth herein. If interest
payments on the Series A QUIDS are so deferred, Distributions on the Series A
QUIPS will also be deferred and Lincoln will not be permitted, subject to
certain exceptions set forth herein, to declare or pay any cash distributions
with respect to Lincoln's capital stock or debt securities of Lincoln that
rank pari passu with or junior to the Series A QUIDS. During an Extension
Period, interest on the Series A QUIDS will continue to accrue (and the amount
of Distributions to which holders of the Series A QUIPS are entitled will
accumulate) at the rate of % per annum, compounded quarterly, and holders of
Series A QUIPS will be required to accrue interest income for United States
federal income tax purposes. See "Certain Terms of Series A QUIDS--Option to
Extend Interest Payment Period" and "Certain Federal Income Tax Consequences--
Original Issue Discount".
Lincoln has, through the Series A Guarantee, the Trust Agreement, the Series
A QUIDS, the Indenture and the Expense Agreement (each as defined herein),
taken together, fully, irrevocably and unconditionally guaranteed all of the
Series A Issuer's obligations under the Series A QUIPS. The Series A Guarantee
of Lincoln guarantees the payment of Distributions and payments on liquidation
or redemption of the Series A QUIPS, but only in each case to the extent of
funds held by the Series A Issuer, as described herein (the "Series A
Guarantee"). See "Description of Guarantees" in the accompanying Prospectus.
If Lincoln does not make interest payments on the Series A QUIDS held by the
Series A Issuer, the Series A Issuer will have insufficient funds to pay
Distributions on the Series A QUIPS. The Series A Guarantee does not cover
payment of Distributions when the Series A Issuer does not have sufficient
funds to pay such Distributions. In such event, a holder of Series A QUIPS may
institute a legal proceeding directly against Lincoln to enforce, on behalf of
the Series A Issuer, payment of such Distributions. See "Description of Junior
Subordinated Debentures--Debenture Events of Default." The obligations of
Lincoln under the Series A Guarantee and the Series A QUIDS are subordinate
and junior in right of payment to all Senior Debt (as defined in "Description
of Junior Subordinated Debentures--Subordination" in the accompanying
Prospectus) of Lincoln.
The Series A QUIPS are subject to mandatory redemption, in whole or in part,
upon repayment of the Series A QUIDS at maturity or their earlier redemption.
The Series A QUIDS are redeemable prior
S-2
<PAGE>
to maturity at the option of Lincoln (i) on or after , 2001, in whole
at any time or in part from time to time, at a redemption price equal to the
accrued and unpaid interest on the Series A QUIDS so redeemed to the date
fixed for redemption, plus 100% of the principal amount thereof or (ii) at any
time, in whole (but not in part), upon the occurrence and continuation of a
Special Event (as defined herein), at a redemption price equal to the accrued
and unpaid interest on the Series A QUIDS so redeemed to the date fixed for
redemption, plus 100% of the principal amount thereof, in each case subject to
the further conditions described under "Description of Junior Subordinated
Debentures--Redemption" in the accompanying Prospectus.
At any time, Lincoln will have the right to terminate the Series A Issuer
and cause the Series A QUIDS to be distributed to the holders of the Series A
QUIPS in liquidation of the Series A Issuer. If Lincoln elects to liquidate
the Series A Issuer and thereby causes the Series A QUIDS to be distributed to
holders of the Series A QUIPS in liquidation of the Series A Issuer, Lincoln
shall have the right to shorten or extend the maturity of such Series A QUIDS,
provided that it can extend the maturity only if certain conditions are met.
See "Certain Terms of Series A QUIPS--Special Event Redemption or Distribution
of Series A QUIDS".
The Series A QUIDS are subordinate and junior in right of payment to all
Senior Debt of Lincoln. As of March 31, 1996, Lincoln had approximately $1.089
billion aggregate principal amount of Senior Debt outstanding. The terms of
the Series A QUIDS place no limitation on the amount of Senior Debt that may
be incurred by Lincoln. Lincoln is a non-operating holding company and almost
all of the operating assets of Lincoln and its consolidated subsidiaries are
owned by such subsidiaries. Lincoln relies primarily on interest and dividends
from such subsidiaries to meet its obligations for payment of principal and
interest on its outstanding debt obligations and corporate expenses. See
"Lincoln National Corporation". Accordingly, the Series A QUIDS will be
subordinated to all Senior Debt of Lincoln and effectively subordinated to all
existing and future liabilities of Lincoln's subsidiaries, and holders of
Series A QUIDS should look only to the assets of Lincoln for payments on
Series A QUIDS. The payment of dividends by Lincoln's insurance company
subsidiaries is limited under the insurance holding company laws of the states
in which such subsidiaries are domiciled. See "Description of Junior
Subordinated Debentures--Subordination" in the accompanying Prospectus.
In the event of the termination of the Series A Issuer, after satisfaction
of liabilities to creditors of the Series A Issuer as required by applicable
law, the holders of the Series A QUIPS will be entitled to receive a
liquidation preference of $25 per Series A QUIPS plus accumulated and unpaid
Distributions thereon to the date of payment, which may be in the form of a
distribution of such amount in Series A QUIDS, subject to certain exceptions.
See "Description of Preferred Securities--Liquidation Distribution Upon
Termination" in the accompanying Prospectus.
The Series A Issuer intends to list the Series A QUIPS on the New York Stock
Exchange. If the Series A QUIDS are distributed to the holders of Series A
QUIPS upon the liquidation of the Series A Issuer, Lincoln will use its best
efforts to list the Series A QUIDS on the New York Stock Exchange or such
other stock exchanges or other self-regulatory organizations, if any, on which
the Series A QUIPS are then listed or traded.
The Series A QUIPS will be represented by global certificates registered in
the name of The Depository Trust Company ("DTC") or its nominee. Beneficial
interests in the Series A QUIPS will be shown on, and transfers thereof will
be effected only through, records maintained by participants in DTC. Except as
described in the accompanying Prospectus, Series A QUIPS in certificated form
will not be issued in exchange for the global certificates. See "Book-Entry
Issuance" in the accompanying Prospectus.
FOR NORTH CAROLINA RESIDENTS: THESE SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE COMMISSIONER OF INSURANCE OF THE STATE OF NORTH CAROLINA,
NOR HAS THE COMMISSIONER OF INSURANCE RULED UPON THE ACCURACY OR THE ADEQUACY
OF THIS DOCUMENT.
S-3
<PAGE>
The following information supplements and should be read in conjunction with
the information contained in the accompanying Prospectus. As used herein, (i)
the "Indenture" means the Junior Subordinated Indenture, as amended and
supplemented from time to time, between Lincoln and The First National Bank of
Chicago, as trustee (the "Debenture Trustee"), and (ii) the "Trust Agreement"
means the Amended and Restated Trust Agreement among Lincoln, as Depositor,
The First National Bank of Chicago, as Property Trustee (the "Property
Trustee"), First Chicago Delaware Inc., as Delaware Trustee (the "Delaware
Trustee"), and the Administrative Trustees named therein (collectively, with
the Property Trustee and Delaware Trustee, the "Issuer Trustees"). Each of the
other capitalized terms used in this Prospectus Supplement and not otherwise
defined in this Prospectus Supplement has the meaning set forth in this
Prospectus Supplement or in the accompanying Prospectus.
RISK FACTORS
Prospective purchasers of the Series A QUIPS should carefully review the
information contained elsewhere in this Prospectus Supplement and in the
accompanying Prospectus and should particularly consider the following
matters.
RANKING OF SUBORDINATED OBLIGATIONS UNDER THE SERIES A GUARANTEE AND THE
SERIES A QUIDS
The obligations of Lincoln under the Series A Guarantee issued by Lincoln
for the benefit of the holders of Series A QUIPS are unsecured and rank
subordinate and junior in right of payment to all Senior Debt of Lincoln. The
obligations of Lincoln under the Series A QUIDS are subordinate and junior in
right of payment to all such Senior Debt. At March 31, 1996, the Senior Debt
of Lincoln aggregated approximately $1.089 billion. Lincoln is a non-operating
holding company and almost all of the operating assets of Lincoln and its
consolidated subsidiaries are owned by such subsidiaries. Lincoln relies
primarily on interest and dividends from such subsidiaries to meet its
obligations for payment of principal and interest on its outstanding debt
obligations and corporate expenses. Accordingly, the Series A QUIDS will be
effectively subordinated to all existing and future liabilities of Lincoln's
subsidiaries, and holders of Series A QUIDS should look only to the assets of
Lincoln for payments on the Series A QUIDS. The payment of dividends by
Lincoln's insurance company subsidiaries is limited under the insurance
holding company laws of the states in which such subsidiaries are domiciled.
See "Lincoln National Corporation". Neither of the Indenture, the Series A
Guarantee nor the Trust Agreement places any limitation on the amount of
secured or unsecured debt, including Senior Debt, that may be incurred by
Lincoln. See "Description of Guarantees--Status of the Guarantees" and
"Description of Junior Subordinated Debentures--Subordination" in the
accompanying Prospectus.
The ability of the Series A Issuer to pay amounts due on the Series A QUIPS
is solely dependent upon Lincoln making payments on the Series A QUIDS as and
when required.
OPTION TO EXTEND INTEREST PAYMENT PERIOD; TAX CONSEQUENCES
Lincoln has the right under the Indenture to defer the payment of interest
on the Series A QUIDS at any time or from time to time for a period not
exceeding 20 consecutive quarters with respect to each Extension Period,
provided that no Extension Period may extend beyond the Stated Maturity of the
Series A QUIDS. As a consequence of any such deferral, quarterly Distributions
on the Series A QUIPS by the Series A Issuer will be deferred (and the amount
of Distributions to which holders of the Series A QUIPS are entitled will
accumulate additional Distributions thereon at the rate of % per annum,
compounded quarterly from the relevant payment date for such Distributions)
during any such Extension Period. During any such Extension Period, Lincoln
may not and may not permit any subsidiary of Lincoln to, (i) declare or pay
any dividends or distributions on, or redeem, purchase, acquire, or make a
liquidation payment with respect to, any of Lincoln's capital stock or (ii)
make any payment of principal, interest or premium, if any, on or repay,
repurchase or redeem any debt
S-4
<PAGE>
securities of Lincoln (including other QUIDS) that rank pari passu with or
junior in interest to the Series A QUIDS or make any guarantee payments with
respect to any guarantee by Lincoln of the debt securities of any subsidiary
of Lincoln if such guarantee ranks pari passu or junior in interest to the
Series A QUIDS (other than (a) dividends or distributions in common stock of
Lincoln, (b) redemptions or purchases of any rights pursuant to Lincoln's
Rights Plan, or any successor to such Rights Plan, and the declaration of a
dividend of such rights or the issuance of stock under such plans in the
future, (c) payments under any Guarantee, and (d) purchases of common stock
related to the issuance of common stock or rights under any of Lincoln's
benefit plans for its directors, officers or employees). Prior to the
termination of any such Extension Period, Lincoln may further extend the
interest payment period, provided that no Extension Period may exceed 20
consecutive quarters or extend beyond the Stated Maturity of the Series A
QUIDS. Upon the termination of any Extension Period and the payment of all
amounts then due, Lincoln may elect to begin a new Extension Period subject to
the above requirements. See "Certain Terms of Series A QUIPS--Distributions"
and "Certain Terms of Series A QUIDS--Option to Extend Interest Payment
Period".
Should an Extension Period occur, a holder of Series A QUIPS will continue
to accrue income (in the form of original issue discount) in respect of its
pro rata share of the Series A QUIDS held by the Series A Issuer for United
States federal income tax purposes. As a result, a holder of Series A QUIPS
will include such income in gross income for United States federal income tax
purposes in advance of the receipt of cash, and will not receive the cash
related to such income from the Series A Issuer if the holder disposes of the
Series A QUIPS prior to the record date for the payment of Distributions. See
"Certain Federal Income Tax Consequences--Original Issue Discount" and "--Sale
or Redemption of Series A QUIPS".
Lincoln has no current intention of exercising its right to defer payments
of interest by extending the interest payment period on the Series A QUIDS.
However, should Lincoln elect to exercise such right in the future, the market
price of the Series A QUIPS is likely to be affected. A holder that disposes
of its Series A QUIPS during an Extension Period, therefore, might not receive
the same return on its investment as a holder that continues to hold its
Series A QUIPS. In addition, as a result of the existence of Lincoln's right
to defer interest payments, the market price of the Series A QUIPS (which
represent preferred beneficial interests in the Series A Issuer) may be more
volatile than the market prices of other securities on which original issue
discount accrues that are not subject to such deferrals.
SPECIAL EVENT REDEMPTION OR EXCHANGE
Upon the occurrence and continuation of a Special Event, as described in
"Description of Preferred Securities--Redemption or Exchange--Special Event
Redemption or Distribution of Corresponding Junior Subordinated Debentures" in
the accompanying Prospectus, Lincoln has the right to redeem the Series A
QUIDS in whole (but not in part) within 90 days following the occurrence of
such Special Event and therefore cause a mandatory redemption of the Series A
Securities at the redemption price. See "Certain Terms of Series A QUIPS--
Redemption" for the definition of "Special Event".
See "Certain Federal Income Tax Consequences--Possible Tax Law Changes" for
a discussion of certain legislative proposals that, if adopted, could give
rise to a Tax Event, which may permit Lincoln to cause a redemption of the
Series A QUIPS.
There can be no assurance as to the market prices for Series A QUIPS or
Series A QUIDS that may be distributed in exchange for Series A QUIPS if a
liquidation of the Series A Issuer occurs. Accordingly, the Series A QUIPS
that an investor may purchase, whether pursuant to the offer made hereby or in
the secondary market, or the Series A QUIDS that a holder of Series A QUIPS
may receive on liquidation of the Series A Issuer, may trade at a discount to
the price that the investor paid to purchase the Series A QUIPS offered
hereby. In addition, because Lincoln has the right to shorten
S-5
<PAGE>
or extend the maturity of the Series A QUIDS upon a termination of the Series
A Issuer and the distribution of the Series A QUIDS to holders of Series A
QUIPS, there can be no assurance that Lincoln will not exercise its option to
change the maturity of the Series A QUIDS upon an exchange. Because holders of
Series A QUIPS may receive Series A QUIDS on termination of the Series A
Issuer, prospective purchasers of Series A QUIPS are also making an investment
decision with regard to the Series A QUIDS and should carefully review all the
information regarding the Series A QUIDS contained herein. See "Description of
the Preferred Securities--Redemption or Exchange--Special Event Redemption or
Distribution of Corresponding Junior Subordinated Debentures" and "Description
of Junior Subordinated Debentures--Corresponding Junior Subordinated
Debentures" in the accompanying Prospectus.
RIGHTS UNDER THE SERIES A GUARANTEE
The Series A Guarantee will be qualified as an indenture under the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"). The First
National Bank of Chicago will act as the indenture trustee under the Series A
Guarantee (the "Guarantee Trustee") for the purposes of compliance with the
Trust Indenture Act and will hold the Series A Guarantee for the benefit of
the holders of the Series A QUIPS. The First National Bank of Chicago will
also act as Debenture Trustee for the Series A QUIDS and as Property Trustee
and First Chicago Delaware, Inc. will act as Delaware Trustee under the Trust
Agreement. The Series A Guarantee guarantees to the holders of the Series A
QUIPS the following payments, to the extent not paid by the Series A Issuer:
(i) any accumulated and unpaid Distributions required to be paid on the Series
A QUIPS, to the extent that the Series A Issuer has funds on hand available
therefor at such time, (ii) the redemption price with respect to any Series A
QUIPS called for redemption, to the extent that the Series A Issuer has funds
on hand available therefor at such time, and (iii) upon a voluntary or
involuntary dissolution, winding-up or liquidation of the Series A Issuer
(unless the Series A QUIDS are distributed to holders of the Series A QUIPS),
the lesser of (a) the aggregate of the liquidation preference and all
accumulated and unpaid Distributions to the date of payment to the extent that
the Series A Issuer has funds on hand available therefor at such time and (b)
the amount of assets of the Series A Issuer remaining available for
distribution to holders of the Series A QUIPS. The holders of not less than a
majority in aggregate liquidation amount of the Series A QUIPS have the right
to direct the time, method and place of conducting any proceeding for any
remedy available to the Guarantee Trustee in respect of the Series A Guarantee
or to direct the exercise of any trust power conferred upon the Guarantee
Trustee under the Series A Guarantee. Any holder of the Series A QUIPS may
institute a legal proceeding directly against Lincoln to enforce its rights
under the Series A Guarantee without first instituting a legal proceeding
against the Series A Issuer, the Guarantee Trustee or any other person or
entity. If Lincoln were to default on its obligation to pay amounts payable
under the Series A QUIDS, the Series A Issuer would lack funds for the payment
of Distributions or amounts payable on redemption of the Series A QUIPS or
otherwise, and, in such event, holders of the Series A QUIPS would not be able
to rely upon the Series A Guarantee for payment of such amounts. Instead, the
Property Trustee or a holder of Series A QUIPS would have to institute a legal
proceeding directly against Lincoln under the Indenture on behalf of the
Series A Issuer for enforcement of payment to the Series A Issuer of the
principal of or interest on the related QUIDS on or after the respective due
dates specified in such Series A QUIDS. See "Description of Junior
Subordinated Debentures--Debenture Events of Default" and "Description of
Guarantees" in the accompanying Prospectus. The Trust Agreement provides that
each holder of Series A QUIPS by acceptance thereof agrees to the provisions
of the Series A Guarantee and the Indenture.
LIMITED VOTING RIGHTS
Holders of Series A QUIPS will generally have limited voting rights relating
only to the modification of the Series A QUIPS, the dissolution, winding-up or
liquidation of the Series A Issuer, and the
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<PAGE>
exercise of the Series A Issuer's rights as holder of Series A QUIDS. Holders
of Series A QUIPS will not be entitled to vote to appoint, remove or replace
the Property Trustee or the Delaware Trustee, and such voting rights are
vested exclusively in the holder of the Series A Common Securities except upon
the occurrence of certain events described herein. The Issuer Trustees and
Lincoln may amend the Trust Agreement without the consent of holders of Series
A QUIPS to ensure that the Series A Issuer will be classified for United
States federal income tax purposes as a grantor trust even if such action
adversely affects the interests of such holders. See "Description of Preferred
Securities--Voting Rights; Amendment of Each Trust Agreement" and "--Removal
of Issuer Trustees" in the accompanying Prospectus.
TRADING CHARACTERISTICS OF SERIES A QUIPS
The Series A Issuer intends to list the Series A QUIPS on the New York Stock
Exchange. The Series A QUIPS may trade at prices that do not fully reflect the
value of accrued but unpaid interest with respect to the underlying Series A
QUIDS. A holder of Series A QUIPS that disposes of its Series A QUIPS between
record dates for payments of Distributions (and consequently does not receive
a Distribution from the Series A Issuer for the period prior to such
disposition) will nevertheless be required to include accrued but unpaid
interest on the Series A QUIDS through the date of disposition in income as
ordinary income and to add such amount to its adjusted tax basis in the Series
A QUIPS disposed of. Such holder will recognize a capital loss to the extent
the selling price (which may not fully reflect the value of accrued but unpaid
interest) is less than its adjusted tax basis (which will include accrued but
unpaid interest). Subject to certain limited exceptions, capital losses cannot
be applied to offset ordinary income for United States federal income tax
purposes. See "Certain Federal Income Tax Consequences--Sale or Redemption of
Series A QUIPS".
S-7
<PAGE>
LINCOLN NATIONAL CAPITAL I
Lincoln National Capital I is a statutory business trust formed under
Delaware law pursuant to (i) the Trust Agreement executed by Lincoln, as
Depositor, The First National Bank of Chicago, as Property Trustee, First
Chicago Delaware Inc., Delaware Trustee, and the Administrative Trustees named
therein, and (ii) the filing of a certificate of trust with the Delaware
Secretary of State on May 21, 1996. The Series A Issuer's business and affairs
are conducted by the Issuer Trustees: The First National Bank of Chicago, as
Property Trustee, and First Chicago Delaware Inc., Delaware Trustee, and two
individual Administrative Trustees who are employees or officers of or
affiliated with Lincoln. The Series A Issuer exists for the exclusive purposes
of (i) issuing and selling the Series A QUIPS and Series A Common Securities,
(ii) using the proceeds from the sale of Series A QUIPS and Series A Common
Securities to acquire Series A QUIDS issued by Lincoln and (iii) engaging in
only those other activities necessary, convenient or incidental thereto.
Accordingly, the Series A QUIDS will be the sole assets of the Series A
Issuer, and payments under the Series A QUIDS will be the sole revenue of the
Series A Issuer. All of the Series A Common Securities will be owned by
Lincoln. The Series A Common Securities will rank pari passu, and payments
will be made thereon pro rata, with the Series A QUIPS, except that upon the
occurrence and continuance of an event of default under the Trust Agreement
resulting from an Event of Default under the Indenture, the rights of Lincoln
as holder of the Series A Common Securities to payment in respect of
Distributions and payments upon liquidation, redemption or otherwise will be
subordinated to the rights of the holders of the Series A QUIPS. See
"Description of Preferred Securities--Subordination of Common Securities" in
the accompanying Prospectus. Lincoln will acquire Series A Common Securities
in an aggregate liquidation amount equal to 3% of the total capital of the
Series A Issuer. The Series A Issuer has a term of 55 years, but may terminate
earlier as provided in the Trust Agreement. The principal executive office of
the Series A Issuer is 200 East Berry Street, Fort Wayne, Indiana 46802,
Attention: Secretary, and its telephone number is (219) 455-3271. See "The
Issuers" in the accompanying Prospectus.
LINCOLN NATIONAL CORPORATION
Lincoln National Corporation is a holding company with consolidated assets
on March 31, 1996 of approximately $64.3 billion and capital and surplus
(shareholders' equity) of approximately $4.1 billion. Lincoln's income from
operations for the year ended December 31, 1995 was $306.5 million, and income
from operations excluding special charges was $441.8 million, an increase of
13% over the same figure for 1994. Income from operations is net income less
realized gain (loss) on investments, gain (loss) on sale of
affiliates/operating property and cumulative effect of accounting change, all
net of taxes. Lincoln, through its subsidiaries, operates the following four
business segments: life insurance and annuities; life-health reinsurance;
property-casualty insurance; and investment management.
Lincoln's life insurance and annuities segment provides a broad range of
universal and term life products, annuity contracts and 401(k) plans through a
varied distribution system that includes career agents, insurance brokers,
banks, stockbrokers and financial planners. Income from operations for this
segment increased 35% to $251.6 million in 1995, compared with $185.8 million
in 1994. This growth was produced through a combination of expanded annuity
business in the United States and acquisitions in the U.K. Based upon an
independent survey, Lincoln National Life Insurance Company was the nation's
leading writer of individual fixed annuities and the third largest writer of
individual variable annuities in 1994, the most recent statistics available.
The life-health reinsurance segment primarily underwrites the excess risk
associated with individual and group life and health insurance liabilities
sold by other insurance companies, health maintenance organizations and self-
funded employers. The life-health reinsurance segment, conducted through
Lincoln National Reinsurance Companies, reported income from operations of
$68.9 million in 1995 (excluding a fourth quarter charge of $121.6 million
against earnings related to Lincoln's disability income business), an increase
of 3.5% from 1994. In addition, the segment
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<PAGE>
continues to expand its financial reinsurance business. Based upon net premium
income, Lincoln National Reinsurance Companies is the leading life-health
reinsurer worldwide, according to a recent independent survey.
The property-casualty insurance segment consists primarily of American
States Insurance Company and offers a broad spectrum of personal and
commercial property-casualty lines. The segment's focus is on providing
commercial insurance to small- to medium-sized businesses and preferred
personal line coverages to individuals. Excluding a special charge of $13.7
million for the realignment of American States' field structure, the property-
casualty segment reported income from operations of $166.3 million in 1995, a
5% increase over 1994.
Although newly established in 1995 as a distinct business segment,
investment management has long been an expertise at Lincoln. Operations are
currently conducted through four companies: Lincoln Investment Management
Inc., Delaware Management Holdings, Inc., Lynch & Mayer, Inc., and Vantage
Global Advisors, Inc. Each of the companies operates separately and employs
its own investment style and skills, but the diversity of skills, styles and
cultures serves to balance investment performance and operating results. The
segment has been reported separately only since April 1995. As of December 31,
1995, the segment had combined assets under management in excess of $76
billion, of which 83% were domestic institutional assets and 13% were retail
mutual fund assets.
For the three months ended March 31, 1996 and for the year ended December
31, 1995, the Company's consolidated revenue and net income were as follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED YEAR ENDED
MARCH 31, 1996 DECEMBER 31, 1995
-------------------- -------------------
REVENUE NET INCOME REVENUE NET INCOME
-------- ---------- -------- ----------
(MILLIONS OF DOLLARS)
<S> <C> <C> <C> <C>
Life Insurance and Annuities........... $ 753.2 $ 91.2 $3,058.6 $ 334.1
Reinsurance (1)........................ 346.5 17.4 1,362.4 (42.0)
Property-Casualty...................... 491.6 43.5 1,954.9 166.3
Investment Management.................. 67.9 5.7 192.7 19.0
Other Operations....................... (18.7) (17.8) 64.7 4.8
-------- ------ -------- -------
Total.................................. $1,640.5 $140.0 $6,633.3 $ 482.2
======== ====== ======== =======
</TABLE>
- --------
(1) Including a charge against earnings in the fourth quarter of 1995 related
to Lincoln's disability income business.
As a holding company with no significant business operations of its own,
Lincoln relies on dividends from its insurance company subsidiaries, which are
primarily domiciled in Indiana, as the principal source of cash to meet its
obligations, including the payment of principal of (and premium, if any) and
any interest on debt obligations of Lincoln (including the Series A QUIDS),
and to pay dividends to holders of its capital stock. An Indiana-domiciled
insurer may not pay a dividend without notifying the state insurance
department and providing certain information. In addition, the payment of
dividends by Indiana-domiciled insurers is limited under the insurance holding
company laws which require notice to and approval by the state insurance
commissioner for the declaration or payment of any dividend, which together
with other dividends or distributions made within the preceding twelve months,
exceeds the greater of (i) 10% of the insurer's statutory surplus as of
December 31 of the preceding year or (ii) net income if the insurer is a
property-casualty insurance company or net gain from operations if the insurer
is a life insurance company, for the twelve-month period ending on the thirty-
first day of December last preceding. The insurance holding company laws of
the other jurisdictions in which Lincoln's insurance subsidiaries are
incorporated generally contain similar (although in certain instances somewhat
more restrictive) limitations on the payment of dividends. Based upon these
regulations,Lincoln's insurance subsidiaries could pay dividends to Lincoln in
1996
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<PAGE>
of $518 million, without obtaining specific approval from the insurance
commissioners. In connection with the sale of stock by American States
Financial Corporation as described in "Recent Developments" below, American
States has adopted a dividend policy consistent with those of other similar
publicly-held companies. Giving effect to this dividend policy, the dividends
payable to Lincoln by its insurance subsidiaries in 1996 is reduced to
approximately $353 million. Dividends payable by non-insurance subsidiaries
are not subject to regulatory limitations.
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.
RECENT DEVELOPMENTS
Lincoln recently organized American States Financial Corporation ("ASFC") to
serve as the holding company for American States Insurance Company ("ASI"),
Lincoln's property-casualty insurance subsidiary. ASFC is currently
undertaking an offering of its common stock, which is expected to be completed
in May 1995, and which, if successful, would result in Lincoln beneficially
owning approximately 83% of ASFC's outstanding common stock. The proceeds of
the offering will be retained by ASFC and ASI.
In connection with the ASFC offering, ASI declared and distributed to
Lincoln $300 million of assets, consisting primarily of tax-exempt municipal
securities. In addition, ASFC will assume $100 million of Lincoln's
indebtedness and will issue a $200 million term note to Lincoln. In
particular, ASFC will assume Lincoln's obligation to pay the principal and
interest, as and when due, on Lincoln's outstanding 7 1/8% note due July 15,
1999 (although Lincoln will continue to be the obligor on the notes). See
"Capitalization". The ASFC term note will bear interest at 50 basis points
over the Treasury securities with a comparable maturity and will be repaid in
three equal principal payments in 1997, 1998 and 1999.
As a holding company, Lincoln relies primarily on interest and dividends
from its subsidiaries to meet its obligations on its outstanding debt
obligations and corporate expenses. Historically, ASI has paid dividends to
Lincoln based upon its annual operating results and statutory surplus.
Dividends of $199 million were paid by ASI to Lincoln in 1995. In connection
with the public offering of ASFC stock, ASFC has adopted a dividend policy of
declaring quarterly cash dividends of $0.21 per share on the common stock,
pursuant to which Lincoln would receive approximately $42 million in dividends
from ASFC annually, although there can be no assurance that ASFC will declare
and pay any dividends.
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<PAGE>
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth Lincoln's ratios of earnings to fixed charges
for the years and periods indicated:
<TABLE>
<CAPTION>
THREE
MONTHS
ENDED
MARCH 31, YEAR ENDED DECEMBER 31,
---------- -------------------------
1996 1995 1995 1994 1993 1992 1991
---- ----- ---- ---- ----- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges:
Excluding interest on annuities and
financial products(1)................. 9.25 10.44 7.51 6.43 10.35 6.69 3.20
Including interest on annuities and
financial products(2)................. 1.53 1.49 1.41 1.25 1.43 1.32 1.15
Ratio of Earnings to Combined Fixed
Charges and Preferred Stock
Dividends(3)............................ 1.53 1.47 1.40 1.23 1.40 1.30 1.14
</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 that fixed charges include the
pre-tax earnings required to cover preferred stock dividend requirements.
USE OF PROCEEDS
All of the proceeds from the sale of Series A QUIPS will be invested by the
Series A Issuer in Series A QUIDS. Lincoln intends that the proceeds from the
sale of such Series A QUIDS will be added to its general corporate funds and
will be used for general corporate purposes, including the repayment of short-
term indebtedness, including commercial paper. As of March 31, 1996, Lincoln
had $253.4 million of commercial paper outstanding that had a weighted average
maturity of 15.3 days and had an average interest rate of 5.32%. Until so
utilized, the net proceeds will be invested in income producing securities.
S-11
<PAGE>
CAPITALIZATION
The following table sets forth the consolidated capitalization of Lincoln
and its subsidiaries as of March 31, 1996 and as adjusted to give effect to
the consummation of the offering of the Series A QUIPS, without giving effect
to any exercise of the Underwriters' over-allotment option. The following data
should be read in conjunction with the consolidated financial statements and
notes thereto of Lincoln and its subsidiaries incorporated herein by
reference.
<TABLE>
<CAPTION>
MARCH 31, 1996
--------------------
ACTUAL AS ADJUSTED
-------- -----------
(IN MILLIONS)
<S> <C> <C>
Short-term debt (including current maturities of long-term
debt).................................................... $ 430.2 $
Long-term debt less current portion:
7 1/8% Notes due 1999................................... 99.5 99.5
7 5/8% Notes due 2002................................... 99.2 99.2
7 1/4% Debentures due 2005.............................. 199.1 199.1
9 1/8% Debentures due 2024.............................. 199.1 199.1
Mortgages and other notes............................... 62.0 62.0
-------- --------
Total long-term debt (less current portion)........... 658.9 658.9
Company Obligated Mandatorily Redeemable Preferred
Securities of Subsidiary Trust (1)....................... --
Shareholders' Equity:
Preferred Stock, without par value:
Authorized: 10,000,000 shares
Issued and outstanding:
$3.00 Convertible Cumulative Preferred Stock, Series A
(38,859 shares)...................................... 1.3 1.3
Common Stock, without par value: Authorized: 800,000,000
shares Issued and outstanding (104,247,751 shares)..... 891.0 891.0
Earned surplus............................................ 2,867.9 2,867.9
Foreign currency translation adjustment................... 11.5 11.5
Net unrealized gain on securities available-for-sale...... 374.3 374.3
-------- --------
Total shareholders' equity............................ 4,146.0 4,146.0
-------- --------
Total capitalization.................................. $5,235.1 $
======== ========
</TABLE>
- --------
(1) As described herein, all of the assets of the Series A Issuer will be
$ of % Junior Subordinated Deferrable Interest Debentures, Series A,
issued by Lincoln to the Series A Issuer. The Series A QUIDS will mature
on , 2026, which date may be extended to a date not later than
, 2045 if certain conditions are met. Lincoln owns all of the
Series A Common Securities of the Series A Issuer.
ACCOUNTING TREATMENT
For financial reporting purposes, the Series A Issuer will be treated as a
subsidiary of Lincoln and, accordingly, the accounts of the Series A Issuer
will be included in the consolidated financial statements of Lincoln. The
Series A QUIPS will be presented as a separate line item in the consolidated
balance sheets of Lincoln, entitled "Company Obligated Mandatorily Redeemable
Preferred Securities of Subsidiary" and appropriate disclosures about the
Series A QUIPS, the Series A Guarantee and the Series A QUIDS will be included
in the notes to the consolidated financial statements. For financial reporting
purposes, Lincoln will record Distributions payable on the Series A QUIPS as
an expense in the consolidated statements of income.
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<PAGE>
SELECTED FINANCIAL INFORMATION
The following selected financial data for the five years ended December 31,
1995 are derived from the consolidated audited financial statements of Lincoln
and its subsidiaries. The following selected financial data for the periods
ended and as of March 31, 1996 and 1995 have been derived from financial
statements of Lincoln that have not been audited, but that, in the opinion of
the management of Lincoln, reflect all normal recurring adjustments necessary
for the fair presentation of such data for the interim periods. The results of
operations for the quarter ended March 31, 1996 are not necessarily indicative
of the results of operations for the full year. The following amounts should
be read in conjunction with the consolidated financial statements and notes
thereto of Lincoln incorporated herein by reference to Lincoln's Annual Report
on Form 10-K for the fiscal year ended December 31, 1995 and Quarterly Report
on Form 10-Q for the quarter ended March 31, 1996.
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31, YEAR ENDED DECEMBER 31,
------------------- ---------------------------------------------------
1996 1995 1995 1994 1993 1992 1991
--------- --------- --------- --------- --------- --------- ---------
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Revenue:
Premiums and fees..... $ 968.7 $ 866.9 $ 3,915.8 $ 4,074.4 $ 4,917.8 $ 4,915.6 $ 6,071.3
Net investment
income............... 571.3 530.1 2,285.6 2,011.3 2,146.5 1,987.3 1,799.3
Realized gains on sale
of investments/
operating properties.. 71.3 44.1 269.8 (82.0) 170.0 176.9 28.1
Other................. 29.2 42.6 162.1 176.2 158.5 187.9 283.1
--------- --------- --------- --------- --------- --------- ---------
Total revenue....... 1,640.5 1,483.7 6,633.3 6,179.9 7,392.8 7,267.7 8,181.8
--------- --------- --------- --------- --------- --------- ---------
Total benefits and
expenses............... $ 1,446.6 $ 1,304.3 $ 6,006.7 $ 5,803.6 $ 6,805.0 $ 6,843.0 $ 7,983.0
--------- --------- --------- --------- --------- --------- ---------
Income before federal
taxes and cumulative
effect of accounting
change................. 193.9 179.4 626.6 376.3 587.8 424.7 198.8
Cumulative effect of
accounting change...... (96.4)
Net income.............. $ 140.0 $ 134.8 $ 482.2 $ 349.9 $ 318.9 $ 359.2 $ 201.9
========= ========= ========= ========= ========= ========= =========
BALANCE SHEET DATA (AT
PERIOD END):
Total cash and
investments............ $32,455.6 $29,467.6 $33,509.3 $28,010.0 $30,437.5 $26,538.4 $23,528.8
Total assets............ 64,263.9 52,330.0 63,257.7 48,864.8 47,825.1 39,042.2 33,660.3
Policy liabilities and
accruals............... 13,720.8 11,691.9 13,735.9 11,341.5 12,661.7 11,610.6 10,969.8
Contractholder funds.... 18,684.5 17,752.6 18,784.5 17,250.4 15,196.7 12,982.0 10,849.5
Liabilities related to
separate accounts...... 24,245.3 16,079.3 22,769.1 14,301.7 12,430.6 8,368.1 6,207.7
Short-term debt......... 430.2 302.8 426.8 275.3 351.5 433.4 677.3
Long-term debt.......... 658.9 419.2 659.3 419.6 335.1 423.0 252.6
Total shareholders'
equity................. 4,146.0 3,651.7 4,378.1 3,042.1 4,072.3 2,826.8 2,655.8
</TABLE>
S-13
<PAGE>
CERTAIN TERMS OF SERIES A QUIPS
GENERAL
The following summary of certain terms and provisions of the Series A QUIPS
supplements the description of the terms and provisions of the QUIPS set forth
in the accompanying Prospectus under the heading "Description of Preferred
Securities", to which description reference is hereby made. This summary of
certain terms and provisions of the Series A QUIPS does not purport to be
complete and is subject to, and qualified in its entirety by reference to, the
Trust Agreement. The form of the Trust Agreement has been filed as an exhibit
to the Registration Statement of which this Prospectus Supplement and
accompanying Prospectus is a part.
DISTRIBUTIONS
The Series A QUIPS represent beneficial interests in the Series A Issuer,
and Distributions on each Series A QUIPS will be payable at the annual rate of
% of the stated liquidation preference of $25, payable quarterly in arrears
on March 31, June 30, September 30 and December 31 of each year. Distributions
will accumulate from the date of original issuance. The first Distribution
payment date for the Series A QUIPS will be , 1996. The amount of
Distributions payable for any period will be computed on the basis of a 360-
day year of twelve 30-day months. In the event that any date on which
Distributions are payable on the Series A QUIPS is not a Business Day, then
payment of the Distributions payable on such date will be made on the next
succeeding day that is a Business Day (and without any additional
Distributions or other payment in respect of any such delay), except that, if
such Business Day is in the next succeeding calendar year, such payment shall
be made on the immediately preceding Business Day, in each case with the same
force and effect as if made on the date such payment was originally payable.
See "Description of Preferred Securities--Distributions" in the accompanying
Prospectus.
So long as no Event of Default under the Indenture has occurred and is
continuing, Lincoln has the right under the Indenture to defer the payment of
interest on the Series A QUIDS at any time or from time to time for a period
not exceeding 20 consecutive quarters with respect to each Extension Period,
provided that no Extension Period may extend beyond the Stated Maturity of the
Series A QUIDS. As a consequence of any such election, quarterly Distributions
on the Series A QUIPS will be deferred by the Series A Issuer during any such
Extension Period. Distributions to which holders of the Series A QUIPS are
entitled will accumulate additional Distributions thereon at the rate per
annum of % thereof, compounded quarterly from the relevant payment date for
such Distributions. The term "Distributions" as used herein shall include any
such additional Distributions. During any such Extension Period, Lincoln may
not, and may not permit any subsidiary of Lincoln to, (i) declare or pay any
dividends or distributions on, or redeem, purchase, acquire, or make a
liquidation payment with respect to, any of Lincoln's capital stock or (ii)
make any payment of principal, interest or premium, if any, on or repay,
repurchase or redeem any debt securities of Lincoln (including other QUIDS)
that rank pari passu with or junior in interest to the Series A QUIDS or make
any guarantee payments with respect to any guarantee by Lincoln of the debt
securities of any subsidiary of Lincoln if such guarantee ranks pari passu or
junior in interest to the Series A QUIDS (other than (a) dividends or
distributions in common stock of Lincoln, (b) redemptions or purchases of any
rights pursuant to Lincoln's Rights Plan, or any successor to such Rights
Plan, and the declaration of a dividend of such rights or the issuance of
Stock under such plans in the future, (c) payments under any Guarantee, and
(d) purchases of common stock related to the issuance of common stock or
rights under any of Lincoln's benefit plans for its directors, officers or
employees). Prior to the termination of any such Extension Period, Lincoln may
further extend the interest payment period, provided that no Extension Period
may exceed 20 consecutive quarters or extend beyond the Stated Maturity of the
Series A QUIDS. Upon the termination of any such Extension Period and the
payment of all amounts then due, Lincoln may elect to begin a new Extension
Period. See "Certain Terms of Series A QUIDS--Option to Extend Interest
Payment Period" and "Certain Federal Income Tax Consequences--Original Issue
Discount".
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<PAGE>
Lincoln has no current intention of exercising its right to defer payments
of interest by extending the interest payment period on the Series A QUIDS.
REDEMPTION
Upon the repayment or redemption, in whole or in part, of the Series A
QUIDS, whether at Stated Maturity or upon earlier redemption as provided in
the Indenture, the proceeds from such repayment or redemption shall be applied
by the Property Trustee to redeem a Like Amount (as defined in the
accompanying Prospectus) of the Series A Securities, upon not less than 30 nor
more than 60 days notice prior to the date fixed for repayment or redemption,
at a redemption price, with respect to the Series A QUIPS (the "Redemption
Price"), equal to the aggregate liquidation preference of such Series A QUIPS
plus accumulated and unpaid Distributions thereon to the date of redemption
(the "Redemption Date"). See "Description of Preferred Securities--Redemption
or Exchange" in the accompanying Prospectus and "Certain Terms of Series A
QUIDS--Redemption".
Lincoln will have the right to redeem the Series A QUIDS (i) on or after
, 2001, in whole at any time or in part from time to time, at a redemption
price equal to the accrued and unpaid interest on the Series A QUIDS so
redeemed to the date fixed for redemption, plus 100% of the principal amount
thereof or (ii) at any time, in whole (but not in part), upon the occurrence
and continuation of a Tax Event or an Investment Company Event (each as
defined in the accompanying Prospectus, and as so collectively defined, a
"Special Event"), at a redemption price equal to the accrued and unpaid
interest on the Series A QUIDS so redeemed to the date fixed for redemption,
plus 100% of the principal amount thereof, in each case subject to conditions
described under "Description of Junior Subordinated Debentures--Redemption" in
the accompanying Prospectus.
SPECIAL EVENT REDEMPTION OR DISTRIBUTION OF SERIES A QUIDS
If a Special Event shall occur and be continuing, Lincoln will have the
right to redeem the Series A QUIDS in whole (but not in part) and thereby
cause a mandatory redemption of the Series A QUIPS in whole (but not in part)
at the Redemption Price within 90 days following the occurrence of such
Special Event. At any time, Lincoln will have the right to terminate the
Series A Issuer and after satisfaction of the liabilities of creditors of the
Series A Issuer as provided by applicable law, cause the Series A QUIDS to be
distributed to the holders of the Series A QUIPS in liquidation of the Series
A Issuer. Under current United States Federal income tax law and
interpretations and assuming, as expected, the Series A Issuer is treated as a
grantor trust, a distribution of the Series A QUIDS should not be a taxable
event to holders of the Series A QUIPS. Should there be a change in law, a
change in legal interpretation, a Special Event or other circumstances,
however, the distribution could be a taxable event to holders of the Series A
QUIPS. See "Certain Federal Income Tax Consequences--Distribution of Series A
QUIDS to Holders of Series A QUIPS". If Lincoln does not elect either option
described above, the Series A QUIPS will remain outstanding until the
repayment of the Series A QUIDS.
If Lincoln elects to liquidate the Series A Issuer and thereby causes the
Series A QUIDS to be distributed to holders of the Series A QUIPS in
liquidation of the Series A Issuer, Lincoln shall have the right to shorten or
extend the maturity of such Series A QUIDS, provided that it can extend the
maturity only if certain conditions are met. See "Description of Preferred
Securities--Redemption or Exchange--Extension of Maturity of Corresponding
Junior Subordinated Debentures" in the accompanying Prospectus and "Certain
Terms of Series A QUIDS--General".
LIQUIDATION VALUE
The amount payable on the Series A QUIPS in the event of any liquidation of
the Series A Issuer is $25 per Series A QUIPS plus accumulated and unpaid
Distributions, which may be in the form of a
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<PAGE>
distribution of such amount in Series A QUIDS, subject to certain exceptions.
See "Description of Preferred Securities--Liquidation Distribution Upon
Termination" in the accompanying Prospectus.
CERTAIN TERMS OF SERIES A QUIDS
GENERAL
The following summary of certain terms and provisions of the Series A QUIDS
supplements the description of the terms and provisions of the Corresponding
QUIDS set forth in the accompanying Prospectus under the headings "Description
of Junior Subordinated Debentures" and "Description of Junior Subordinated
Debentures--Corresponding Junior Subordinated Debentures", to which
description reference is hereby made. The summary of certain terms and
provisions of the Series A QUIDS set forth below does not purport to be
complete and is subject to, and qualified in its entirety by reference to, the
Indenture. The Indenture has been filed as an exhibit to the Registration
Statement of which this Prospectus Supplement and accompanying Prospectus is a
part.
Concurrently with the issuance of the Series A QUIPS, the Series A Issuer
will invest the proceeds thereof, together with the consideration paid by
Lincoln for the Series A Common Securities, in the Series A QUIDS issued by
Lincoln. The Series A QUIDS will bear interest at the annual rate of % of
the principal amount thereof, payable quarterly in arrears on March 31, June
30, September 30 and December 31 of each year (each, an "Interest Payment
Date"), commencing , 1996, to the person in whose name each Series A
QUIDS is registered, subject to certain exceptions, at the close of business
on the Business Day next preceding such Interest Payment Date. It is
anticipated that, until the liquidation, if any, of the Series A Issuer, each
Series A QUIDS will be held in the name of the Property Trustee in trust for
the benefit of the holders of the Series A QUIPS. The amount of interest
payable for any period will be computed on the basis of a 360-day year of
twelve 30-day months. In the event that any date on which interest is payable
on the Series A QUIDS is not a Business Day, then payment of the interest
payable on such date will be made on the next succeeding day that is a
Business Day (and without any interest or other payment in respect of any such
delay), except that, if such Business Day is in the next succeeding calendar
year, such payment shall be made on the immediately preceding Business Day, in
each case with the same force and effect as if made on the date such payment
was originally payable. Accrued interest that is not paid on the applicable
Interest Payment Date will bear additional interest on the amount thereof (to
the extent permitted by law) at the rate per annum of % thereof, compounded
quarterly. The term "interest" as used herein shall include quarterly interest
payments, interest on quarterly interest payments not paid on the applicable
Interest Payment Date and Additional Sums (as defined below), as applicable.
The Series A QUIDS will be issued as a series of QUIDS under the Indenture.
The Series A QUIDS will mature on , 2026, which date may be extended at any
time at the election of Lincoln for one or more periods, but in no event to a
date later than , 2045 (such date, as it may be extended, the "Stated
Maturity"), provided that at the time such election is made and at the time of
extension (i) Lincoln is not in bankruptcy, otherwise insolvent or in
liquidation, (ii) Lincoln is not in default in the payment of any interest or
principal on the Series A QUIDS, (iii) the Series A Issuer is not in arrears
on payments of Distributions on the Series A QUIPS and no deferred
Distributions are accumulated, (iv) the Series A QUIDS are rated not less than
BBB- by Standard & Poor's Ratings Services or Baa3 by Moody's Investors
Service, Inc. or the equivalent by any other nationally recognized statistical
rating organization and (v) the extended Stated Maturity is no later than the
49th anniversary of the initial issuance of the Series A QUIPS; provided,
however, that, if Lincoln exercises its right to liquidate the Series A Issuer
and distribute the Series A QUIDS, effective upon such exercise the Stated
Maturity of the Series A QUIDS may be changed to any date elected by Lincoln
that is (i) no earlier than the date five years after the initial issuance of
the Series A QUIPS and (ii) no
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<PAGE>
later than the date 30 years (plus an extended term of up to an additional 19
years if the above-referenced conditions are satisfied) after the date of the
initial issuance of the Series A QUIPS.
The Series A QUIDS will be unsecured and will rank junior and be subordinate
in right of payment to all Senior Debt of Lincoln. See "Description of Junior
Subordinated Debentures--Subordination" in the accompanying Prospectus.
Lincoln is a non-operating holding company and almost all of the operating
assets of Lincoln and its consolidated subsidiaries are owned by such
subsidiaries. Lincoln relies primarily on interest and dividends from such
subsidiaries to meet its obligations for payment of principal and interest on
its outstanding debt obligations and corporate expenses. Accordingly, the
Series A QUIDS will be subordinated to all Senior Debt of Lincoln and
effectively subordinated to all existing and future liabilities of Lincoln's
subsidiaries, and holders of Series A QUIDS should look only to the assets of
Lincoln for payments on the Series A QUIDS. The Indenture does not limit the
incurrence or issuance of other secured or unsecured debt of Lincoln, whether
under the Indenture or any existing or other indenture that Lincoln may enter
into in the future or otherwise, including Lincoln's Senior and Subordinated
Indentures entered into with The Bank of New York and The First National Bank
of Chicago, respectively. See "Description of Junior Subordinated Debentures--
Subordination" in the accompanying Prospectus.
OPTION TO EXTEND INTEREST PAYMENT PERIOD
So long as no Event of Default under the Indenture has occurred or is
continuing, Lincoln has the right under the Indenture at any time during the
term of the Series A QUIDS to defer the payment of interest at any time or
from time to time for a period not exceeding 20 consecutive quarters with
respect to each Extension Period, provided that no Extension Period may extend
beyond the Stated Maturity of the Series A QUIDS. At the end of such Extension
Period, Lincoln must pay all interest then accrued and unpaid (together with
interest thereon at the annual rate of %, compounded quarterly, to the
extent permitted by applicable law). During an Extension Period, interest will
continue to accrue and holders of Series A QUIDS (or holders of Series A QUIPS
while such series is outstanding) will be required to accrue interest income
for United States federal income tax purposes. See "Certain Federal Income Tax
Consequences--Original Issue Discount".
During any such Extension Period, Lincoln may not, and may not permit any
subsidiary of Lincoln to, (i) declare or pay any dividends or distributions
on, or redeem, purchase, acquire, or make a liquidation payment with respect
to, any of Lincoln's capital stock or (ii) make any payment of principal,
interest or premium, if any, on or repay, repurchase or redeem any debt
securities of Lincoln (including other QUIDS) that rank pari passu with or
junior in interest to the Series A QUIDS or make any guarantee payments with
respect to any guarantee by Lincoln of the debt securities of any subsidiary
of Lincoln if such guarantee ranks pari passu or junior in interest to the
Series A QUIDS (other than (a) dividends or distributions in common stock of
Lincoln, (b) redemptions or purchases of any rights pursuant to Lincoln's
Rights Plan, or any successor to such Rights Plan, and the declaration of a
dividend of such rights or the issuance of preferred stock under such plans in
the future, (c) payments under any Guarantee, and (d) purchases of Common
Stock related to the issuance of Common Stock under any of Lincoln's benefit
plans for its directors, officers or employees). Prior to the termination of
any such Extension Period, Lincoln may further extend the interest payment
period, provided that no Extension Period may exceed 20 consecutive quarters
or extend beyond the Stated Maturity of the Series A QUIDS. Upon the
termination of any such Extension Period and the payment of all amounts then
due on any Interest Payment Date, Lincoln may elect to begin a new Extension
Period subject to the above requirements. No interest shall be due and payable
during an Extension Period, except at the end thereof. Lincoln must give the
Property Trustee, the Administrative Trustees and the Debenture Trustee notice
of its election of such Extension Period at least one Business Day prior to
the earlier of (i) the date the Distributions on the Series A QUIPS would have
been payable except for the election to begin such Extension Period or (ii)
the date the Administrative Trustees are required to give notice to the New
York Stock Exchange, the Nasdaq National Market or other applicable self-
S-17
<PAGE>
regulatory organization or to holders of such Series A QUIPS of the record
date or the date such Distributions are payable, but in any event not less
than one Business Day prior to such record date. The Debenture Trustee shall
give notice of Lincoln's election to begin a new Extension Period to the
holders of the Series A QUIPS. See "Description of Junior Subordinated
Debentures--Option to Extend Interest Payment Date" in the accompanying
Prospectus.
ADDITIONAL SUMS
If the Series A Issuer is required to pay any additional taxes, duties or
other governmental charges ("Additional Sums") as a result of a Tax Event,
Lincoln will pay as additional amounts on the Series A QUIDS such amounts as
shall be required so that the Distributions payable by the Series A Issuer
shall not be reduced as a result of any such additional taxes, duties or other
governmental charges, subject to the conditions described under "Description
of Preferred Securities--Redemption or Exchange--Special Event Redemption or
Distribution of Corresponding Junior Subordinated Debentures" in the
accompanying Prospectus.
REDEMPTION
The Series A QUIDS are redeemable prior to maturity at the option of Lincoln
(i) on or after , 2001, in whole at any time or in part from time to time,
at a redemption price equal to the accrued and unpaid interest on the Series A
QUIDS so redeemed to the date fixed for redemption, plus 100% of the principal
amount thereof or (ii) at any time in whole (but not in part), upon the
occurrence and continuation of a Special Event, at a redemption price equal to
the accrued and unpaid interest on the Series A QUIDS so redeemed to the date
fixed for redemption, plus 100% of the principal amount thereof, in each case
subject to the further conditions described under "Description of Junior
Subordinated Debentures--Redemption" in the accompanying Prospectus.
DISTRIBUTION OF SERIES A QUIDS
Under certain circumstances involving the termination of the Series A
Issuer, Series A QUIDS may be distributed to the holders of the Series A QUIPS
in liquidation of the Series A Issuer after satisfaction of liabilities to
creditors of the Series A Issuer as provided by applicable law. If distributed
to holders of Series A QUIPS in liquidation, the Series A QUIDS will initially
be issued in the form of one or more global securities and DTC, or any
successor depositary for the Series A QUIPS, will act as depositary for the
Series A QUIDS. It is anticipated that the depositary arrangements for the
Series A QUIDS would be substantially identical to those in effect for the
Series A QUIPS. If the Series A QUIDS are distributed to the holders of Series
A QUIPS upon the liquidation of the Series A Issuer, Lincoln will use its best
efforts to list the Series A QUIDS on the New York Stock Exchange or such
other stock exchanges, if any, on which the Series A QUIPS are then listed.
There can be no assurance as to the market price of any Series A QUIDS that
may be distributed to the holders of Series A QUIPS. For a description of DTC
and the terms of the depositary matters, see "Book-Entry Issuance" in the
accompanying Prospectus.
REGISTRATION OF SERIES A QUIDS
A global security shall be exchangeable for Series A QUIDS registered in the
names of persons other than DTC or its nominee only if (i) DTC notifies
Lincoln that it is unwilling or unable to continue as a depository for such
global security and no successor depository shall have been appointed, or if
at any time DTC ceases to be a clearing agency registered under the Securities
Exchange Act of 1934, as amended, at a time when DTC is required to be so
registered to act as such depository, (ii) Lincoln in its sole discretion
determines that such global security shall be so exchangeable, or (iii) there
shall have occurred and be continuing an Event of Default under the Indenture
with respect to such global security. Any global security that is exchangeable
pursuant to the preceding sentence shall be exchangeable for definitive
certificates registered in such names as DTC shall direct. It is expected that
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<PAGE>
such instructions will be based upon directions received by DTC from its
Participants (as defined in the accompanying Prospectus) with respect to
ownership of beneficial interests in such global security. In the event that
Series A QUIDS are issued in definitive form, such Series A QUIDS will be in
denominations of $25 and integral multiples thereof and may be transferred or
exchanged at the offices described below.
Payments on Series A QUIDS represented by a global security will be made to
DTC, as the depositary for the Series A QUIDS. In the event Series A QUIDS are
issued in definitive form, principal and interest will be payable, the
transfer of the Series A QUIDS will be registrable, and Series A QUIDS will be
exchangeable for Series A QUIDS of other denominations of a like aggregate
principal amount, at the corporate office of the Debenture Trustee in Chicago,
Illinois, or at the offices of any paying agent or transfer agent appointed by
Lincoln, provided that payment of interest may be made at the option of
Lincoln by check mailed to the address of the persons entitled thereto or by
wire transfer. In addition, if the Series A QUIDS are issued in certificated
form, the record dates for payment of interest will be the 15th day of the
last month of each calendar quarter. For a description of DTC and the terms of
the depositary arrangements relating to payments, transfers, voting rights,
redemptions and other notices and other matters, see "Book-Entry Issuance" in
the accompanying Prospectus.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of the principal United States federal income tax
consequences of the purchase, ownership and disposition of Series A QUIPS.
This summary only addresses the tax consequences to a person that acquires
Series A QUIPS on their original issue at their original offering price and
that is (i) an individual citizen or resident of the United States, (ii) a
corporation or partnership organized in or under the laws of the United States
or any state thereof or the District of Columbia or (iii) an estate or trust
the income of which is subject to United States federal income tax regardless
of source (a "United States Person"). This summary does not address all tax
consequences that may be applicable to a United States Person that is a
beneficial owner of Series A QUIPS, nor does it address the tax consequences
to (i) persons that are not United States Persons, (ii) persons that may be
subject to special treatment under United States federal income tax law, such
as banks, insurance companies, thrift institutions, regulated investment
companies, real estate investment trusts, tax-exempt organizations and dealers
in securities or currencies, (iii) persons that will hold Series A QUIPS as
part of a position in a "straddle" or as part of a "hedging," "conversion" or
other integrated investment transaction for federal income tax purposes, (iv)
persons whose functional currency is not the United States dollar or (v)
persons that do not hold Series A QUIPS as capital assets.
The statements of law or legal conclusion set forth in this summary
constitute the opinion of Sonnenschein Nath & Rosenthal, counsel to Lincoln
and the Series A Issuer. This summary is based upon the Internal Revenue Code
of 1986, as amended (the "Code"), Treasury Regulations, Internal Revenue
Service rulings and pronouncements and judicial decisions now in effect, all
of which are subject to change at any time. Such changes may be applied
retroactively in a manner that could cause the tax consequences to vary
substantially from the consequences described below, possibly adversely
affecting a beneficial owner of Series A QUIPS. In particular, legislation has
been proposed that could adversely affect Lincoln's ability to deduct interest
on the Series A QUIDS, which may in turn permit Lincoln to cause a redemption
of the Series A QUIPS. See "--Possible Tax Law Changes". The authorities on
which this summary is based are subject to various interpretations, and it is
therefore possible that the federal income tax treatment of the purchase,
ownership and disposition of Series A QUIPS may differ from the treatment
described below.
PROSPECTIVE INVESTORS ARE ADVISED TO CONSULT WITH THEIR OWN TAX ADVISORS IN
LIGHT OF THEIR OWN PARTICULAR CIRCUMSTANCES AS TO THE FEDERAL TAX CONSEQUENCES
OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF SERIES A QUIPS, AS WELL AS THE
EFFECT OF ANY STATE, LOCAL OR FOREIGN TAX LAWS.
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<PAGE>
CLASSIFICATION OF THE SERIES A ISSUER
In connection with the issuance of the Series A QUIPS, Sonnenschein Nath &
Rosenthal will render its opinion to the effect that, under then current law
and assuming compliance with the terms of the Trust Agreement and certain
other documents, and based on certain facts and assumptions contained in such
opinion, the Series A Issuer will be classified as a grantor trust and not as
an association taxable as a corporation for United States federal income tax
purposes. As a result, each beneficial owner of Series A QUIPS (a
"Securityholder") will be treated as owning an undivided beneficial interest
in the Series A QUIDS. Accordingly, each Securityholder will be required to
include in its gross income its pro rata share of the original issue discount
accrued with respect to the Series A QUIDS whether or not cash is actually
distributed to the Securityholders. See "--Original Issue Discount." No amount
included in income with respect to the Series A QUIPS will be eligible for the
dividends-received deduction.
ORIGINAL ISSUE DISCOUNT
Under the Indenture, Lincoln has the right to defer the payment of interest
on the Series A QUIDS at any time or from time to time for a period not
exceeding 20 consecutive quarters with respect to each Extension Period,
provided that no Extension Period may extend beyond the Stated Maturity of the
Series A QUIDS. Because of this option, all interest payable on the Series A
QUIDS will be treated as "original issue discount" ("OID") for federal income
tax purposes. Accordingly, a Securityholder will recognize income (in the form
of OID) on a daily basis under a constant yield method over the term of the
Series A QUIDS (including during any Extension Period), regardless of the
receipt of cash with respect to the period to which such income is
attributable. (Subsequent uses of the term "interest" in this summary shall
include income in the form of OID.)
As a result, Securityholders of record during an Extension Period will
include interest in gross income in advance of the receipt of cash, and any
Securityholders who dispose of Series A QUIPS prior to the record date for the
payment of Distributions following such Extension Period will include interest
in gross income but will not receive any cash related thereto from the Series
A Issuer. Any amount of OID included in a Securityholder's gross income
(whether or not during an Extension Period) will increase such
Securityholder's tax basis in its Series A QUIPS, and the amount of
Distributions received by a Securityholder will reduce such Securityholder's
tax basis in its Series A QUIPS.
DISTRIBUTION OF SERIES A QUIDS TO HOLDERS OF SERIES A QUIPS
Under current law, a distribution by the Series A Issuer of the Series A
QUIDS as described under the caption "Certain Terms of Series A QUIPS--Special
Event Redemption or Distribution of Corresponding QUIDS" will be non-taxable
and will result in the Securityholder receiving directly his pro rata share of
the Series A QUIDS previously held indirectly through the Series A Issuer,
with a holding period and aggregate tax basis equal to the holding period and
aggregate tax basis such Securityholder had in its Series A QUIPS before such
distribution. A Securityholder will accrue interest in respect of Series A
QUIDS received from the Series A Issuer in the manner described above under
"--Original Issue Discount".
SALES OR REDEMPTION OF SERIES A QUIPS
Gain or loss will be recognized by a Securityholder on a sale of Series A
QUIPS (including a redemption for cash) in an amount equal to the difference
between the amount realized and the Securityholder's adjusted tax basis in the
Series A QUIPS sold or so redeemed. Gain or loss recognized by a
Securityholder on Series A QUIPS held for more than one year will generally be
taxable as long-term capital gain or loss.
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<PAGE>
The Series A QUIPS may trade at a price that does not fully reflect the
value of accrued but unpaid interest with respect to the underlying Series A
QUIDS. A Securityholder that disposes of its Series A QUIPS between record
dates for payments of Distributions (and consequently does not receive a
Distribution from the Series A Issuer for the period prior to such
disposition) will nevertheless be required to include in income as ordinary
income accrued but unpaid interest on the Series A QUIDS through the date of
disposition and to add such amount to its adjusted tax basis in its Series A
QUIPS disposed of. Such Securityholder will recognize a capital loss on the
disposition of its Series A QUIPS to the extent the selling price (which may
not fully reflect the value of accrued but unpaid interest) is less than the
Securityholder's adjusted tax basis in the Series A QUIPS (which will include
accrued but unpaid interest). Subject to certain limited exceptions, capital
losses cannot be applied to offset ordinary income for federal income tax
purposes.
BACKUP WITHHOLDING TAX AND INFORMATION REPORTING
The amount of OID accrued on the Series A QUIPS held of record by United
States Persons (other than corporations and other exempt Securityholders) will
be reported to the Internal Revenue Service. "Backup" withholding at a rate of
31% will apply to payments of interest to non-exempt United States Persons
unless the Securityholder furnishes its taxpayer identification number in the
manner prescribed in applicable Treasury Regulations, certifies that such
number is correct, certifies as to no loss of exemption from backup
withholding and meets certain other conditions.
Payment of the proceeds from the disposition of Series A QUIPS to or through
the United States office of a broker is subject to information reporting and
backup withholding unless the holder or beneficial owner establishes an
exemption from information reporting and backup withholding.
Any amounts withheld from a Securityholder under the backup withholding
rules will be allowed as a refund or a credit against such Securityholder's
United States federal income tax liability, provided the required information
is furnished to the Internal Revenue Service.
It is anticipated that income on the Series A QUIPS will be reported to
holders on Form 1099 and mailed to holders of the Series A QUIPS by January 31
following each calendar year.
POSSIBLE TAX LAW CHANGES
On March 19, 1996, the Revenue Reconciliation Bill of 1996 (the "Bill"), the
revenue portion of President Clinton's budget proposal, was released. The Bill
would, among other things, generally deny interest deductions for interest on
an instrument, issued by a corporation, that has a maximum weighted average
maturity of more than 40 years. The Bill would also generally deny interest
deductions for interest on an instrument, issued by a corporation, that has a
maximum term of more than 20 years and that is not shown as indebtedness on
the separate balance sheet of the issuer or, where the instrument is issued to
a related party (other than a corporation), where the holder or some other
related party issues a related instrument that is not shown as indebtedness on
the issuer's consolidated balance sheet. For purposes of determining the
weighted average maturity or the term of an instrument, any right to extend
would be treated as exercised. The above-described provisions of the Bill were
proposed to be effective generally for instruments issued on or after December
7, 1995. If either provision were to apply to the Series A QUIDS, Lincoln
would be unable to deduct interest on the Series A QUIDS. However, on March
29, 1996, the Chairmen of the Senate Finance and House Ways and Means
Committees issued a joint statement to the effect that it was their intention
that the effective date of the President's legislative proposals, if adopted,
will be no earlier than the date of appropriate Congressional action. Under
current law, Lincoln will be able to deduct interest on the Series A QUIDS.
There can be no assurance, however, that current or future legislative
proposals or final legislation will not affect the ability of Lincoln to
deduct interest on the Series A QUIDS. Such a change could give rise to a Tax
Event, which may permit Lincoln to cause a redemption of the Series A QUIPS,
as described more fully in the accompanying Prospectus under "Description of
Preferred Securities--Redemption or Exchange--Special Event Redemption or
Distribution of Corresponding Junior Subordinated Debentures". Such a tax law
change would not alter the United States Federal income tax consequences of
the purchase, ownership and disposition of Series A QUIPS.
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UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting Agreement,
Lincoln and the Series A Issuer have agreed that the Series A Issuer will sell
to each of the Underwriters named below, and each of such Underwriters, for
whom Goldman, Sachs & Co., Bear, Stearns & Co. Inc., A.G. Edwards & Sons,
Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated and Smith Barney Inc.
are acting as representatives, has severally agreed to purchase from the
Series A Issuer the respective number of Series A QUIPS set forth opposite its
name below:
<TABLE>
<CAPTION>
NUMBER OF
SERIES A
UNDERWRITER QUIPS
- ----------- ---------
<S> <C>
Goldman, Sachs & Co...................................................
Bear, Stearns & Co. Inc...............................................
A.G. Edwards & Sons, Inc..............................................
Merrill Lynch, Pierce, Fenner & Smith
Incorporated.................................................
Smith Barney Inc......................................................
-------
Total.............................................................
=======
</TABLE>
Subject to the terms and conditions set forth in the Underwriting Agreement,
the Underwriters are committed to take and pay for all such Series A QUIPS
offered hereby, if any are taken.
The Underwriters propose to offer the Series A QUIPS in part directly to the
public at the initial public offering price set forth on the cover page of
this Prospectus Supplement and in part to certain securities dealers at such
price less a concession of $ per Series A QUIPS. The Underwriters may
allow, and such dealers may reallow, a concession not to exceed $ per
Series A QUIPS to certain brokers and dealers. After the Series A QUIPS are
released for sale to the public, the offering price and other selling terms
may from time to time be varied by the representatives.
The Series A Issuer has granted the Underwriters an option exercisable for
10 days after the date of this Prospectus Supplement to purchase up to an
aggregate of additional Series A
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QUIPS solely to cover over-allotments, if any. If the Underwriters exercise
their over-allotment option, the Underwriters have severally agreed, subject
to certain conditions, to purchase approximately the same percentage thereof
that the number of Series A QUIPS to be purchased by each of them, as shown in
the foregoing table, bears to the Series A QUIPS offered.
In view of the fact that the proceeds from the sale of the Series A QUIPS
will be used to purchase the Series A QUIDS issued by Lincoln, the
Underwriting Agreement provides that Lincoln will pay as Underwriters'
Compensation for the Underwriters' arranging the investment therein of such
proceeds an amount of $ per Series A QUIPS for the accounts of the several
Underwriters.
Lincoln and the Series A Issuer have agreed that, during the period
beginning from the date of the Underwriting Agreement and continuing to and
including the earlier of (i) the termination of trading restrictions on the
Series A QUIPS, as determined by the Underwriters, and (ii) days after the
closing date, they will not offer, sell, contract to sell or otherwise dispose
of any QUIPS, any other beneficial interests in the assets of the Series A
Issuer, or any preferred securities or any other securities of the Series A
Issuer or Lincoln which are substantially similar to the Series A QUIPS,
including any guarantee of such securities, or any securities convertible into
or exchangeable for or representing the right to receive securities, preferred
securities or any such substantially similar securities of either the Series A
Issuer or Lincoln, without the prior written consent of the representatives,
except for the Series A QUIPS offered in connection with the offering.
Prior to this offering, there has been no public market for the Series A
QUIPS. The Series A Issuer intends to list the Series A QUIPS on the New York
Stock Exchange. Trading of the Series A QUIPS on the New York Stock Exchange
is expected to commence within a seven-day period after the initial delivery
of the Series A QUIPS. The representatives of the Underwriters have advised
Lincoln that they intend to make a market in the Series A QUIPS prior to
commencement of trading on the New York Stock Exchange, but are not obligated
to do so and may discontinue market making at any time without notice. No
assurance can be given as to the liquidity of the trading market for the
Series A QUIPS.
Lincoln and the Series A Issuer have agreed to indemnify the several
Underwriters against and contribute toward certain liabilities, including
liabilities under the Securities Act of 1933, as amended.
Certain of the Underwriters or their affiliates have provided from time to
time, and expect to provide in the future, investment or commercial banking
services to Lincoln and its affiliates, for which such Underwriters or their
affiliates have received or will receive customary fees and commissions.
VALIDITY OF SECURITIES
Certain matters of Delaware law relating to the validity of the Series A
QUIPS, the enforceability of the Trust Agreement and the formation of the
Series A Issuer will be passed upon by Richards, Layton & Finger, special
Delaware Counsel to Lincoln and the Series A Issuer. The validity of the
Series A Guarantee and the Series A QUIDS will be passed upon for Lincoln by
Sonnenschein Nath & Rosenthal, and for the Underwriters by Sullivan &
Cromwell, New York, New York. Sonnenschein Nath & Rosenthal and Sullivan &
Cromwell will rely on the opinion of Richards, Layton & Finger as to matters
of Delaware law and upon the opinion of Jack D. Hunter, Esq., Executive Vice
President and General Counsel of Lincoln, as to matters of Indiana law.
Sonnenschein Nath & Rosenthal and Sullivan & Cromwell from time to time
perform legal services for Lincoln. Certain matters relating to United States
federal income tax considerations will be passed upon for Lincoln by
Sonnenschein Nath & Rosenthal.
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<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED MAY 21, 1996
$500,000,000
PROSPECTUS
LINCOLN NATIONAL CORPORATION
JUNIOR SUBORDINATED DEFERRABLE
INTEREST DEBENTURES
LINCOLN NATIONAL CAPITAL I
LINCOLN NATIONAL CAPITAL II
LINCOLN NATIONAL CAPITAL III
PREFERRED SECURITIES GUARANTEED TO THE
EXTENT THE ISSUER HAS FUNDS AS SET FORTH HEREIN BY
LINCOLN NATIONAL CORPORATION
Lincoln National Corporation, an Indiana corporation ("Lincoln"), may from
time to time offer in one or more series or issuances its junior subordinated
deferrable interest debentures (the "Junior Subordinated Debentures"). The
Junior Subordinated Debentures will be unsecured and subordinate and junior in
right of payment to Senior Debt (as defined in "Description of Junior
Subordinated Debentures--Subordination") of Lincoln. If provided in an
accompanying Prospectus Supplement, Lincoln will have the right to defer
payments of interest on any series of Junior Subordinated Debentures by
extending the interest payment period thereon at any time or from time to time
for such number of consecutive interest payment periods (which shall not extend
beyond the Stated Maturity (as defined herein) of the Junior Subordinated
Debentures) with respect to each deferral period as may be specified in such
Prospectus Supplement (each, an "Extension Period"). See "Description of Junior
Subordinated Debentures--Option to Extend Interest Payment Date."
Lincoln National Capital I, Lincoln National Capital II and Lincoln National
Capital III, each a trust formed under the laws of the State of Delaware (each,
an "Issuer," and collectively, the "Issuers"), may severally offer, from time
to time, preferred securities (the "Preferred Securities") representing
preferred beneficial interests in such Issuer. Lincoln will be the owner of the
common securities (the "Common Securities" and, together with the Preferred
Securities, the "Trust Securities") of each Issuer. The payment of periodic
cash distributions ("Distributions") with respect to the Preferred Securities
of each Issuer and payments on liquidation or redemption with respect to such
Preferred Securities, in each case out of funds held by such Issuer, are each
irrevocably guaranteed by Lincoln to the extent described herein (each, a
"Guarantee"). See "Description of Guarantees." The obligations of Lincoln under
each Guarantee will be subordinate and junior in right of payment to all Senior
Debt of Lincoln. Concurrently with the issuance by an Issuer of its Preferred
Securities, such Issuer will invest the proceeds thereof and any contributions
made in respect of the Common Securities in a corresponding series of Lincoln's
Junior Subordinated Debentures (the "Corresponding Junior Subordinated
Debentures") with terms corresponding to the terms of that Issuer's Preferred
Securities (the "Related Preferred Securities"). The Corresponding Junior
Subordinated Debentures will be the sole assets of each Issuer, and payments
under the Corresponding Junior Subordinated Debentures and the related Expense
Agreement (as defined herein) will be the only revenue of each Issuer. Lincoln
may redeem the Corresponding Junior Subordinated Debentures (and cause the
redemption of the Trust Securities) or may terminate each Issuer and cause the
Corresponding Junior Subordinated Debentures to be distributed to the holders
of Preferred Securities in liquidation of their interests in such Issuer. See
"Description of Preferred Securities--Liquidation Distribution Upon
Termination."
Holders of the Preferred Securities will be entitled to receive preferential
cumulative cash Distributions accumulating from the date of original issuance
and payable periodically as specified in an accompanying Prospectus Supplement.
If provided in an accompanying Prospectus Supplement, Lincoln will have the
right to defer payments of interest on any series of Corresponding Junior
Subordinated Debentures by extending the interest payment period thereon at any
time or from time to time for one or more Extension Periods (which shall not
extend beyond the Stated Maturity of the Corresponding Junior Subordinated
Debentures). If interest payments are so deferred, Distributions on the Related
Preferred Securities will also be deferred and Lincoln will not be permitted,
subject to
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certain exceptions set forth herein, to declare or pay any cash distributions
with respect to Lincoln's capital stock or debt securities that rank pari
passu with or junior to the Corresponding Junior Subordinated Debentures.
During an Extension Period, Distributions will continue to accumulate (and the
Preferred Securities will accumulate additional Distributions thereon at the
rate per annum set forth in the related Prospectus Supplement). See
"Description of Preferred Securities--Distributions."
Taken together, Lincoln's obligations under each series of Junior
Subordinated Debentures, the Indenture, the related Trust Agreement, the
related Expense Agreement and the related Guarantee (each, as defined herein),
in the aggregate, provide a full, irrevocable and unconditional guarantee of
payments of distributions and other amounts due on the related series of
Preferred Securities. See "Relationship Among the Preferred Securities, the
Corresponding Junior Subordinated Debentures and the Guarantees."
The Junior Subordinated Debentures and Preferred Securities may be offered
in amounts, at prices and on terms to be determined at the time of offering;
provided, however, the aggregate initial public offering price of all Junior
Subordinated Debentures (other than Corresponding Junior Subordinated
Debentures) and Preferred Securities (including the Corresponding Junior
Subordinated Debentures) issued pursuant to the Registration Statement of
which this Prospectus forms a part shall not exceed $500,000,000. Certain
specific terms of the Junior Subordinated Debentures or Preferred Securities
in respect of which this Prospectus is being delivered will be described in an
accompanying Prospectus Supplement, including without limitation and where
applicable and to the extent not set forth herein, (a) in the case of Junior
Subordinated Debentures, the specific designation, aggregate principal amount,
denominations, Stated Maturity (including any extension thereof), interest
payment dates, interest rate (which may be fixed or variable) or method of
calculating interest, if any, applicable Extension Period or interest deferral
terms, if any, place or places where principal, premium, if any, and interest,
if any, will be payable, any terms of redemption, any sinking fund provisions,
terms for any conversion or exchange into other securities, initial offering
or purchase price, methods of distribution and any other special terms, and
(b) in the case of Preferred Securities, the identity of the Issuer, specific
title, aggregate amount, stated liquidation preference, number of securities,
Distribution rate or method of calculating such rate, applicable Extension
Period or Distribution deferral terms, if any, place or places where
Distributions will be payable, any terms of redemption, exchange, initial
offering or purchase price, methods of distribution and any other special
terms.
The Prospectus Supplement also will contain information, as applicable,
about certain United States Federal income tax consequences relating to the
Junior Subordinated Debentures or Preferred Securities.
The Junior Subordinated Debentures and Preferred Securities may be sold to
or through underwriters, through dealers, remarketing firms or agents or
directly to purchasers. See "Plan of Distribution." The names of any
underwriters, dealers, remarketing firms or agents involved in the sale of
Junior Subordinated Debentures or Preferred Securities in respect of which
this Prospectus is being delivered and any applicable fee, commission or
discount arrangements with them will be set forth in a Prospectus Supplement.
The Prospectus Supplement will state whether the Junior Subordinated
Debentures or Preferred Securities will be listed on any national securities
exchange or the Nasdaq National Market. If the Junior Subordinated Debentures
or Preferred Securities are not listed on any national securities exchange or
the Nasdaq National Market, there can be no assurance that there will be a
secondary market for the Junior Subordinated Debentures or Preferred
Securities.
This Prospectus may not be used to consummate sales of Junior Subordinated
Debentures or Preferred Securities unless accompanied by a Prospectus
Supplement.
----------------
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.
The date of this Prospectus is , 1996.
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No dealer, salesperson or other person has been authorized to give any
information or make any representations, other than those contained in this
Prospectus and the applicable Prospectus Supplement, and if given or made such
information or representations must not be relied upon as having been
authorized by Lincoln or any agent, underwriter or dealer. This Prospectus and
the applicable Prospectus Supplement do not constitute an offer of any
securities other than those to which they relate, or an offer to sell or a
solicitation of an offer to buy those to which they relate, in any
jurisdiction to any person to whom it is unlawful to make such offer or
solicitation in such jurisdiction. The delivery of this Prospectus and/or the
applicable Prospectus Supplement at any time does not imply that the
information herein or therein is correct as of any time subsequent to its
date.
FOR NORTH CAROLINA RESIDENTS: THESE SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE COMMISSIONER OF INSURANCE OF THE STATE OF NORTH CAROLINA,
NOR HAS THE COMMISSIONER OF INSURANCE RULED UPON THE ACCURACY OR THE ADEQUACY
OF THIS DOCUMENT.
AVAILABLE INFORMATION
Lincoln is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities of the Commission at Room 1024, 450 Fifth Street, N.W.,
Judiciary Plaza, Washington, D.C. 20549 and at the regional offices of the
Commission located at 7 World Trade Center, 13th Floor, Suite 1300, New York,
New York 10048 and Suite 1400, Citicorp Center, 14th Floor, 500 West Madison
Street, Chicago, Illinois 60661. Copies of such material can also be obtained
at prescribed rates by writing to the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549.
In addition, such reports, proxy statements and other information concerning
Lincoln can be inspected at the offices of the New York Stock Exchange, Inc.,
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.
Lincoln and the Issuers have filed with the Commission a Registration
Statement on Form S-3 (together with all amendments and exhibits thereto, the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act") with respect to the securities offered hereby. This
Prospectus does not contain all the information set forth in the Registration
Statement, certain portions of which have been omitted as permitted by the
rules and regulations of the Commission. For further information with respect
to Lincoln and the securities offered hereby, reference is made to the
Registration Statement and the exhibits and the financial statements, notes
and schedules filed as a part thereof or incorporated by reference therein,
which may be inspected at the public reference facilities of the Commission,
at the addresses set forth above. Statements made in this Prospectus
concerning the contents of any documents referred to herein are not
necessarily complete, and in each instance are qualified in all respects by
reference to the copy of such document filed as an exhibit to the Registration
Statement.
No separate financial statements of any Issuer have been included herein.
Lincoln and the Issuers do not consider that such financial statements would
be material to holders of the Preferred Securities because each Issuer is a
newly formed special purpose entity, has no operating history or independent
operations and is not engaged in and does not propose to engage in any
activity other than holding as trust assets the Corresponding Junior
Subordinated Debentures of Lincoln and issuing the Trust Securities. See "The
Issuers," "Description of Preferred Securities," "Description of Junior
Subordinated Debentures--Corresponding Junior Subordinated Debentures" and
"Description of Guarantees."
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by Lincoln with the Commission are
incorporated into this Prospectus by reference:
1. Lincoln's Annual Report on Form 10-K for the year ended December 31,
1995; and
2. Lincoln's Quarterly Report on Form 10-Q for the quarter ended March
31, 1996.
Each document or report filed by Lincoln pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act after the date hereof and prior to the
termination of any offering of securities made by this Prospectus shall be
deemed to be incorporated by reference into this Prospectus and to be a part
of this Prospectus from the date of filing of such document. Any statement
contained herein, or in a document all or a portion of which is incorporated
or deemed to be incorporated by reference herein, shall be deemed to be
modified or superseded for purposes of the Registration Statement and this
Prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is or 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 the Registration Statement or this
Prospectus.
Lincoln will provide without charge to any person to whom this Prospectus is
delivered, on the written or oral request of such person, a copy of any or all
of the foregoing documents incorporated by reference herein (other than
exhibits not specifically incorporated by reference into the texts of such
documents). Requests for such documents 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.
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LINCOLN NATIONAL CORPORATION
The Company is a holding company with consolidated assets at March 31, 1996
of approximately $64.3 billion and shareholders' equity of approximately $4.1
billion. The Company, through its subsidiaries, provides life insurance and
annuities, life-health reinsurance, property-casualty insurance, and
investment management services to its customers.
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.
THE ISSUERS
Each Issuer is a statutory business trust formed under Delaware law pursuant
to (i) a trust agreement executed by Lincoln, as sponsor of the Issuer, and
the Delaware Trustee (as defined herein) of such Issuer and (ii) the filing of
a certificate of trust with the Delaware Secretary of State. Each trust
agreement will be amended and restated in its entirety (each, as so amended
and restated, a "Trust Agreement") substantially in the form filed as an
exhibit to the Registration Statement of which this Prospectus forms a part.
Each Trust Agreement will be qualified as an indenture under the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"). Each Issuer
exists for the exclusive purposes of (i) issuing and selling its Trust
Securities, (ii) using the proceeds from the sale of such Trust Securities to
acquire a corresponding series of Corresponding Junior Subordinated Debentures
issued by Lincoln, and (iii) engaging in only those other activities
necessary, convenient or incidental thereto. Accordingly, the Corresponding
Junior Subordinated Debentures and the right to reimbursement of expenses
under the related Expense Agreement will be the sole assets of each Issuer,
and payments under the Corresponding Junior Subordinated Debentures and the
related Expense Agreement will be the sole revenue of each Issuer.
All of the Common Securities of each Issuer will be owned by Lincoln. The
Common Securities of an Issuer will rank pari passu, and payments will be made
thereon pro rata, with the Preferred Securities of such Issuer, except that
upon the occurrence and continuance of an event of default under a Trust
Agreement resulting from a Debenture Event of Default (as defined herein), the
rights of Lincoln as holder of the Common Securities to payment in respect of
Distributions and payments upon liquidation, redemption or otherwise will be
subordinated to the rights of the holders of the Preferred Securities of such
Issuer. See "Description of Preferred Securities-- Subordination of Common
Securities." Lincoln will acquire Common Securities in an aggregate
liquidation amount equal to not less than 3% of the total capital of each
Issuer.
Unless otherwise specified in the applicable Prospectus Supplement, each
Issuer has a term of approximately 55 years, but may terminate earlier as
provided in the applicable Trust Agreement. Each Issuer's business and affairs
are conducted by its trustees, each appointed by Lincoln as holder of the
Common Securities. The trustees for each Issuer will be The First National
Bank of Chicago, as the Property Trustee (the "Property Trustee"), First
Chicago Delaware, Inc., as the Delaware Trustee (the "Delaware Trustee"), and
two individual trustees (the "Administrative Trustees") who are employees or
officers of or affiliated with Lincoln (collectively, the "Issuer Trustees").
The First National Bank of Chicago, as Property Trustee, will act as sole
indenture trustee under each Trust Agreement for purposes of compliance with
the Trust Indenture Act. The First National Bank of Chicago will also act as
trustee under the Guarantees and the Indenture (each as defined herein). See
"Description of Guarantees" and "Description of Junior Subordinated
Debentures." The holder of the Common Securities of an Issuer, or the holders
of a majority in liquidation preference of the Related Preferred Securities if
a Debenture Event of Default under the Trust Agreement for such Issuer has
occurred and is continuing, will be entitled to appoint, remove or replace the
Property Trustee and/or the Delaware Trustee for such Issuer. In no event will
the holders of the Preferred Securities have the right to vote to appoint,
remove or replace the Administrative Trustees; such voting rights are vested
exclusively in
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the holder of the Common Securities. The duties and obligations of each Issuer
Trustee are governed by the applicable Trust Agreement. Lincoln will pay all
fees and expenses related to each Issuer and the offering of the Preferred
Securities and will pay, directly or indirectly, all ongoing costs, expenses
and liabilities of each Issuer.
The principal executive office of each issuer is 200 East Berry Street, Fort
Wayne, Indiana 46802-2706 and its telephone number is (219) 455-2000.
USE OF PROCEEDS
Except as otherwise set forth in the applicable Prospectus Supplement,
Lincoln intends to use the proceeds from the sale of its Junior Subordinated
Debentures (including Corresponding Junior Subordinated Debentures issued to
the Issuers in connection with the investment by the Issuers of all of the
proceeds from the sale of Preferred Securities) for general corporate
purposes, including working capital, capital expenditures, investments in or
loans to subsidiaries, refinancing of debt, including outstanding commercial
paper and other short term bank indebtedness, the satisfaction of other
obligations or for such other purposes as may be specified in the applicable
Prospectus Supplement. A more detailed description of the use of proceeds of
any specific offering shall be set forth in the Prospectus Supplement
pertaining to such offering.
DESCRIPTION OF JUNIOR SUBORDINATED DEBENTURES
The Junior Subordinated Debentures are to be issued in one or more series
under a Junior Subordinated Indenture, as supplemented from time to time (as
so supplemented, the "Indenture"), between Lincoln and The First National Bank
of Chicago, as trustee (the "Debenture Trustee"). This summary of certain
terms and provisions of the Junior Subordinated Debentures, Corresponding
Junior Subordinated Debentures and the Indenture does not purport to be
complete and is subject to, and is qualified in its entirety by reference to,
the Indenture, the form of which is filed as an exhibit to the Registration
Statement of which this Prospectus forms a part, and to the Trust Indenture
Act of 1939, as amended (the "Trust Indenture Act"). Whenever particular
defined terms of the Indenture (as supplemented or amended from time to time)
are referred to herein or in a Prospectus Supplement, such defined terms are
incorporated herein or therein by reference.
GENERAL
Each series of Junior Subordinated Debentures will rank pari passu with all
other series of Junior Subordinated Debentures and will be unsecured and
subordinate and junior in right of payment to the extent and in the manner set
forth in the Indenture to all Senior Debt (as defined below) of Lincoln. See
"--Subordination." Lincoln is a non-operating holding company and almost all
of the operating assets of Lincoln and its consolidated subsidiaries are owned
by such subsidiaries. Lincoln relies primarily on dividends from such
subsidiaries to meet its obligations. The payment of dividends by Lincoln's
insurance company subsidiaries is limited under the insurance company holding
company laws of the states in which such subsidiaries are domiciled.
Accordingly, the Junior Subordinated Debentures will be effectively
subordinated to all existing and future liabilities of Lincoln's subsidiaries,
and holders of Junior Subordinated Debentures should look only to the assets
of Lincoln for payments on the Junior Subordinated Debentures. The payment of
dividends by Lincoln's insurance company subsidiaries is limited under the
insurance holding company laws of the states in which such subsidiaries are
domiciled. Except as otherwise provided in the applicable Prospectus
Supplement, the Indenture does not limit the incurrence or issuance of other
secured or unsecured debt of Lincoln, whether under the Indenture, any other
indenture that Lincoln may enter into in the future or otherwise. See "--
Subordination" and the Prospectus Supplement relating to any offering of
Securities.
The Junior Subordinated Debentures will be issuable in one or more series
pursuant to an indenture supplemental to the Indenture or a resolution of
Lincoln's Board of Directors or a committee thereof.
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The applicable Prospectus Supplement or Prospectus Supplements will describe
the following terms of the Junior Subordinated Debentures: (1) the title of
the Junior Subordinated Debentures; (2) any limit upon the aggregate principal
amount of the Junior Subordinated Debentures; (3) the date or dates on which
the principal of the Junior Subordinated Debentures is payable (the "Stated
Maturity") or the method of determination thereof; (4) the rate or rates, if
any, at which the Junior Subordinated Debentures shall bear interest, the
Interest Payment Dates on which any such interest shall be payable, the right,
if any, of Lincoln to defer or extend an Interest Payment Date, and the
Regular Record Date for any interest payable on any Interest Payment Date or
the method by which any of the foregoing shall be determined; (5) the place or
places where, subject to the terms of the Indenture as described below under
"Payment and Paying Agents," the principal of and premium, if any, and
interest on the Junior Subordinated Debentures will be payable and where,
subject to the terms of the Indenture as described below under "--
Denominations, Registration and Transfer," the Junior Subordinated Debentures
may be presented for registration of transfer or exchange and the place or
places where notices and demands to or upon Lincoln in respect of the Junior
Subordinated Debentures and the Indentures may be made ("Place of Payment");
(6) any period or periods within or date or dates on which, the price or
prices at which and the terms and conditions upon which Junior Subordinated
Debentures may be redeemed, in whole or in part, at the option of Lincoln or a
holder thereof; (7) the obligation or the right, if any, of Lincoln or a
holder thereof to redeem, purchase or repay the Junior Subordinated Debentures
and the period or periods within which, the price or prices at which, the
currency or currencies (including currency unit or units) in which and the
other terms and conditions upon which the Junior Subordinated Debentures shall
be redeemed, repaid or purchased, in whole or in part, pursuant to such
obligation; (8) the denominations in which any Junior Subordinated Debentures
shall be issuable if other than denominations of $25 and any integral multiple
thereof; (9) if other than in U.S. Dollars, the currency or currencies
(including currency unit or units) in which the principal of (and premium, if
any) and interest, if any, on the Junior Subordinated Debentures shall be
payable, or in which the Junior Subordinated Debentures shall be denominated;
(10) any additions, modifications or deletions in the Events of Default or
covenants of Lincoln specified in the Indenture with respect to the Junior
Subordinated Debentures; (11) if other than the principal amount thereof, the
portion of the principal amount of Junior Subordinated Debentures that shall
be payable upon declaration of acceleration of the maturity thereof; (12) any
additions or changes to the Indenture with respect to a series of Junior
Subordinated Debentures as shall be necessary to permit or facilitate the
issuance of such series in bearer form, registrable or not registrable as to
principal, and with or without interest coupons; (13) any index or indices
used to determine the amount of payments of principal of and premium, if any,
on the Junior Subordinated Debentures and the manner in which such amounts
will be determined; (14) the terms and conditions relating to the issuance of
a temporary Global Security representing all of the Junior Subordinated
Debentures of such series and the exchange of such temporary Global Security
for definitive Junior Subordinated Debentures of such series; (15) subject to
the terms described under "--Global Junior Subordinated Debentures," whether
the Junior Subordinated Debentures of the series shall be issued in whole or
in part in the form of one or more Global Securities and, in such case, the
Depositary for such Global Securities, which Depositary shall be a clearing
agency registered under the Exchange Act; (16) the appointment of any Paying
Agent or Agents; (17) the terms and conditions of any obligation or right of
Lincoln or a holder to convert or exchange the Junior Subordinated Debentures
into Preferred Securities or other securities; (18) the relative degree, if
any, to which such Junior Subordinated Debentures of the series shall be
senior to or be subordinated to other series of such Junior Subordinated
Debentures or other indebtedness of Lincoln in right of payment, whether such
other series of Junior Subordinated Debentures or other indebtedness are
outstanding or not; and (19) any other terms of the Junior Subordinated
Debentures not inconsistent with the provisions of the Indenture.
Junior Subordinated Debentures may be sold at a substantial discount below
their stated principal amount, bearing no interest or interest at a rate which
at the time of issuance is below market rates.
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Certain United States Federal income tax consequences and special
considerations applicable to any such Junior Subordinated Debentures will be
described in the applicable Prospectus Supplement.
If the purchase price of any of the Junior Subordinated Debentures is
payable in one or more foreign currencies or currency units or if any Junior
Subordinated Debentures 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 Junior Subordinated Debentures is payable in one or more foreign
currencies or currency units, the restrictions, elections, certain United
States Federal income tax consequences, specific terms and other information
with respect to such issue of Junior Subordinated Debentures and such foreign
currency or currency units will be set forth in the applicable Prospectus
Supplement.
If any index is used to determine the amount of payments of principal of,
premium, if any, or interest on any series of Junior Subordinated Debentures,
special United States Federal income tax, accounting and other considerations
applicable thereto will be described in the applicable Prospectus Supplement.
DENOMINATIONS, REGISTRATION AND TRANSFER
Unless otherwise specified in the applicable Prospectus Supplement, the
Junior Subordinated Debentures will be issuable only in registered form
without coupons in denominations of $25 and any integral multiple thereof.
Junior Subordinated Debentures of any series will be exchangeable for other
Junior Subordinated Debentures of the same issue and series, of any authorized
denominations, of a like aggregate principal amount, of the same Original
Issue Date and Stated Maturity and bearing the same interest rate.
Junior Subordinated Debentures may be presented for exchange as provided
above, and may be presented for registration of transfer (with the form of
transfer endorsed thereon, or a satisfactory written instrument of transfer,
duly executed), at the office of the appropriate Securities Registrar or at
the office of any transfer agent designated by Lincoln for such purpose with
respect to any series of Junior Subordinated Debentures 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.
Lincoln will appoint the Trustee as Securities Registrar under the Indenture.
If the applicable Prospectus Supplement refers to any transfer agents (in
addition to the Securities Registrar) initially designated by Lincoln with
respect to any series of Junior Subordinated Debentures, Lincoln may at any
time rescind the designation of any such transfer agent or approve a change in
the location through which any such transfer agent acts, provided that Lincoln
maintains a transfer agent in each Place of Payment for such series. Lincoln
may at any time designate additional transfer agents with respect to any
series of Junior Subordinated Debentures.
In the event of any redemption, neither Lincoln nor the Debenture Trustee
shall be required to (i) issue, register the transfer of or exchange Junior
Subordinated Debentures of any series during a period beginning at the opening
of business 15 days before the day of selection for redemption of Junior
Subordinated Debentures of that series and ending at the close of business on
the day of mailing of the relevant notice of redemption or (ii) transfer or
exchange any Junior Subordinated Debentures so selected for redemption,
except, in the case of any Junior Subordinated Debentures being redeemed in
part, any portion thereof not to be redeemed.
GLOBAL JUNIOR SUBORDINATED DEBENTURES
The Junior Subordinated Debentures of a series may be issued in whole or in
part in the form of one or more Global Junior Subordinated Debentures that
will be deposited with, or on behalf of, a depositary (the "Depositary")
identified in the Prospectus Supplement relating to such series. Global Junior
Subordinated Debentures may be issued only in fully registered form and in
either temporary or permanent form. Unless and until it is exchanged in whole
or in part for the individual Junior Subordinated Debentures represented
thereby, a Global Junior Subordinated Debenture may not be transferred except
as a whole by the Depositary for such Global Junior Subordinated Debenture to
a
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nominee of such Depositary or by a nominee of such Depositary to such
Depositary or another nominee of such Depositary or by the Depositary or any
nominee to a successor Depositary or any nominee of such successor.
The specific terms of the depositary arrangement with respect to a series of
Junior Subordinated Debentures will be described in the Prospectus Supplement
relating to such series. Lincoln anticipates that the following provisions
will generally apply to depositary arrangements.
Upon the issuance of a Global Junior Subordinated Debenture, and the deposit
of such Global Junior Subordinated Debenture with or on behalf of the
Depositary, the Depositary for such Global Junior Subordinated Debenture or
its nominee will credit, on its book-entry registration and transfer system,
the respective principal amounts of the individual Junior Subordinated
Debentures represented by such Global Junior Subordinated Debenture to the
accounts of persons that have accounts with such Depositary ("Participants").
Such accounts shall be designated by the dealers, underwriters or agents with
respect to such Junior Subordinated Debentures or by Lincoln if such Junior
Subordinated Debentures are offered and sold directly by Lincoln. Ownership of
beneficial interests in a Global Junior Subordinated Debenture will be limited
to Participants or persons that may hold interests through Participants.
Ownership of beneficial interests in such Global Junior Subordinated Debenture
will be shown on, and the transfer of that ownership will be effected only
through, records maintained by the applicable Depositary or its nominee (with
respect to interests of Participants) and the records of Participants (with
respect to interests of persons who hold through Participants). The laws of
some states require that certain purchasers of securities take physical
delivery of such securities in definitive form. Such limits and such laws may
impair the ability to transfer beneficial interests in a Global Junior
Subordinated Debenture.
So long as the Depositary for a Global Junior Subordinated Debenture, or its
nominee, is the registered owner of such Global Junior Subordinated Debenture,
such Depositary or such nominee, as the case may be, will be considered the
sole owner or holder of the Junior Subordinated Debentures represented by such
Global Junior Subordinated Debenture for all purposes under the Indenture
governing such Junior Subordinated Debentures. Except as provided below,
owners of beneficial interests in a Global Junior Subordinated Debenture will
not be entitled to have any of the individual Junior Subordinated Debentures
of the series represented by such Global Junior Subordinated Debenture
registered in their names, will not receive or be entitled to receive physical
delivery of any such Junior Subordinated Debentures of such series in
definitive form and will not be considered the owners or holders thereof under
the Indenture.
Payments of principal of (and premium, if any) and interest on individual
Junior Subordinated Debentures represented by a Global Junior Subordinated
Debenture registered in the name of a Depositary or its nominee will be made
to the Depositary or its nominee, as the case may be, as the registered owner
of the Global Junior Subordinated Debenture representing such Junior
Subordinated Debentures. None of Lincoln, the Debenture Trustee, any Paying
Agent, or the Securities Registrar for such Junior Subordinated Debentures
will have any responsibility or liability for any aspect of the records
relating to or payments made on account of beneficial ownership interests of
the Global Junior Subordinated Debenture representing such Junior Subordinated
Debentures or for maintaining, supervising or reviewing any records relating
to such beneficial ownership interests.
Lincoln expects that the Depositary for a series of Junior Subordinated
Debentures or its nominee, upon receipt of any payment of principal, premium
or interest in respect of a permanent Global Junior Subordinated Debenture
representing any of such Junior Subordinated Debentures, immediately will
credit Participants' accounts with payments in amounts proportionate to their
respective beneficial interest in the principal amount of such Global Junior
Subordinated Debenture for such Junior Subordinated Debentures as shown on the
records of such Depositary or its nominee. Lincoln also expects that payments
by Participants to owners of beneficial interests in such Global Junior
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Subordinated Debenture held through such Participants will be governed by
standing instructions and customary practices, as is now the case with
securities held for the accounts of customers in bearer form or registered in
"street name." Such payments will be the responsibility of such Participants.
Unless otherwise specified in the applicable Prospectus Supplement, if a
Depositary for a series of Junior Subordinated Debentures is at any time
unwilling, unable or ineligible to continue as depositary and a successor
depositary is not appointed by Lincoln within 90 days, Lincoln will issue
individual Junior Subordinated Debentures of such series in exchange for the
Global Junior Subordinated Debenture representing such series of Junior
Subordinated Debentures. In addition, Lincoln may at any time and in its sole
discretion, subject to any limitations described in the Prospectus Supplement
relating to such Junior Subordinated Debentures, determine not to have any
Junior Subordinated Debentures of such series represented by one or more
Global Junior Subordinated Debentures and, in such event, will issue
individual Junior Subordinated Debentures of such series in exchange for the
Global Junior Subordinated Debenture or Securities representing such series of
Junior Subordinated Debentures. Further, if Lincoln so specifies with respect
to the Junior Subordinated Debentures of a series, an owner of a beneficial
interest in a Global Junior Subordinated Debenture representing Junior
Subordinated Debentures of such series may, on terms acceptable to Lincoln,
the Debenture Trustee and the Depositary for such Global Junior Subordinated
Debenture, receive individual Junior Subordinated Debentures of such series in
exchange for such beneficial interests, subject to any limitations described
in the Prospectus Supplement relating to such Junior Subordinated Debentures.
In any such instance, an owner of a beneficial interest in a Global Junior
Subordinated Debenture will be entitled to physical delivery of individual
Junior Subordinated Debentures of the series represented by such Global Junior
Subordinated Debenture equal in principal amount to such beneficial interest
and to have such Junior Subordinated Debentures registered in its name.
Individual Junior Subordinated Debentures of such series so issued will be
issued in denominations, unless otherwise specified by Lincoln, of $25 and
integral multiples thereof.
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in the applicable Prospectus Supplement, payment
of principal of (and premium, if any) and any interest on Junior Subordinated
Debentures will be made at the office of the Debenture Trustee in the City of
New York or at the office of such Paying Agent or Paying Agents as Lincoln may
designate from time to time in the applicable Prospectus Supplement, except
that at the option of Lincoln payment of any interest may be made (i), except
in the case of Global Junior Subordinated Debentures, by check mailed to the
address of the Person entitled thereto as such address shall appear in the
Securities Register or (ii) by transfer to an account maintained by the Person
entitled thereto as specified in the Securities Register, provided that proper
transfer instructions have been received by the Regular Record Date. Unless
otherwise indicated in the applicable Prospectus Supplement, payment of any
interest on Junior Subordinated Debentures will be made to the Person in whose
name such Junior Subordinated Debenture is registered at the close of business
on the Regular Record Date for such interest, except in the case of Defaulted
Interest. Lincoln may at any time designate additional Paying Agents or
rescind the designation of any Paying Agent; however Lincoln will at all times
be required to maintain a Paying Agent in each Place of Payment for each
series of Junior Subordinated Debentures.
Any moneys deposited with the Debenture Trustee or any Paying Agent, or then
held by Lincoln in trust, for the payment of the principal of (and premium, if
any) or interest on any Junior Subordinated Debenture and remaining unclaimed
for two years after such principal (and premium, if any) or interest has
become due and payable shall, at the request of Lincoln, be repaid to Lincoln
and the holder of such Junior Subordinated Debenture shall thereafter look, as
a general unsecured creditor, only to Lincoln for payment thereof.
REDEMPTION
Unless otherwise indicated in the applicable Prospectus Supplement, Junior
Subordinated Debentures will not be subject to any sinking fund.
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Unless otherwise indicated in the applicable Prospectus Supplement, Lincoln
may, at its option, redeem the Junior Subordinated Debentures of any series in
whole at any time or in part from time to time. Junior Subordinated Debentures
in denominations larger than $25 may be redeemed in part but only in integral
multiples of $25. Except as otherwise specified in the applicable Prospectus
Supplement, the redemption price for any Junior Subordinated Debenture so
redeemed shall equal any accrued and unpaid interest thereon to the redemption
date, plus the principal amount thereof.
Except as otherwise specified in the applicable Prospectus Supplement, if a
Debenture Tax Event (as defined below) in respect of a series of Junior
Subordinated Debentures shall occur and be continuing, Lincoln may, at its
option, redeem such series of Junior Subordinated Debentures in whole (but not
in part) at any time within 90 days of the occurrence of such Debenture Tax
Event, at a redemption price equal to 100% of the principal amount of such
Junior Subordinated Debentures then outstanding plus accrued and unpaid
interest to the date fixed for redemption.
"Debenture Tax Event" means the receipt by Lincoln of an opinion of counsel
experienced in such matters to the effect that, as a result of any amendment
to, or change (including any announced prospective change) in, the laws (or
any regulations thereunder) of the United States or any political subdivision
or taxing authority thereof or therein, or as a result of any official
administrative pronouncement or judicial decision interpreting or applying
such laws or regulations, which amendment or change is effective or which
pronouncement or decision is announced on or after the date of issuance of the
applicable series of Junior Subordinated Debentures under the Indenture, there
is more than an insubstantial risk that interest payable by Lincoln on such
series of Junior Subordinated Debentures is not, or within 90 days of the date
of such opinion will not be, deductible by Lincoln, in whole or in part, for
United States Federal income tax purposes.
Notice of any redemption will be mailed at least 30 days but not more than
60 days before the redemption date to each Holder of Junior Subordinated
Debentures to be redeemed at its registered address. Unless Lincoln defaults
in payment of the redemption price, on and after the redemption date interest
ceases to accrue on such Junior Subordinated Debentures or portions thereof
called for redemption.
OPTION TO EXTEND INTEREST PAYMENT DATE
If provided in the applicable Prospectus Supplement, Lincoln shall have the
right at any time and from time to time during the term of any series of
Junior Subordinated Debentures to defer payment of interest for such number of
consecutive interest payment periods as may be specified in the applicable
Prospectus Supplement (each, an "Extension Period"), subject to the terms,
conditions and covenants, if any, specified in such Prospectus Supplement,
provided that such Extension Period may not extend beyond the Stated Maturity
of such series of Junior Subordinated Debentures. Certain United States
Federal income tax consequences and special considerations applicable to any
such Junior Subordinated Debentures will be described in the applicable
Prospectus Supplement.
RESTRICTIONS ON CERTAIN PAYMENTS
Lincoln will also covenant, as to each series of Junior Subordinated
Debentures, that it will not, and will not permit any subsidiary of Lincoln
to, (i) declare or pay any dividends or distributions on, or redeem, purchase,
acquire, or make a liquidation payment with respect to, any of Lincoln's
capital stock or (ii) make any payment of principal, interest or premium, if
any, on or repay or repurchase or redeem any debt securities of Lincoln
(including other Junior Subordinated Debentures) that rank pari passu with or
junior in interest to the Junior Subordinated Debentures or make any guarantee
payments with respect to any guarantee by Lincoln of the debt securities of
any subsidiary of Lincoln if such guarantee ranks pari passu or junior in
interest to the Junior Subordinated Debentures (other than (a) dividends or
distributions in common stock of Lincoln, (b) redemptions or purchases of any
rights pursuant to Lincoln's Rights Plan, or any successor to such Rights
Plan, and the declaration of a dividend of such rights or the issuance of
stock under such plans in the future, (c) payments under any Guarantee and (d)
purchases of common stock related to the issuance of common stock under
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any of Lincoln's benefit plans for its directors, officers or employees) if at
such time (i) there shall have occurred any event of which Lincoln has actual
knowledge that (a) with the giving of notice or the lapse of time, or both,
would constitute an "Event of Default" under the Indenture with respect to the
Junior Subordinated Debentures of such series and (b) in respect of which
Lincoln shall not have taken reasonable steps to cure, (ii) if such Junior
Subordinated Debentures are held by an Issuer of a series of Related Preferred
Securities, Lincoln shall be in default with respect to its payment of any
obligations under the Guarantee relating to such Related Preferred Securities
or (iii) Lincoln shall have given notice of its selection of an Extension
Period as provided in the Indenture with respect to the Junior Subordinated
Debentures of such series and shall not have rescinded such notice, or such
Extension Period, or any extension thereof, shall be continuing.
MODIFICATION OF INDENTURE
From time to time Lincoln and the Debenture Trustee may, without the consent
of the holders of any series of Junior Subordinated Debentures, amend, waive
or supplement the Indenture for specified purposes, including, among other
things, curing ambiguities, defects or inconsistencies (provided that any such
action does not materially adversely affect the interest of the holders of any
series of Junior Subordinated Debentures or, in the case of Corresponding
Junior Subordinated Debentures, the holders of the Related Preferred
Securities so long as they remain outstanding) and qualifying, or maintaining
the qualification of, the Indenture under the Trust Indenture Act. The
Indenture contains provisions permitting Lincoln and the Debenture Trustee,
with the consent of the holders of not less than a majority in principal
amount of each outstanding series of Junior Subordinated Debentures affected,
to modify the Indenture in a manner affecting the rights of the holders of
such series of the Junior Subordinated Debentures; provided, that no such
modification may, without the consent of the holder of each outstanding Junior
Subordinated Debenture so affected, (i) change the Stated Maturity of any
series of Junior Subordinated Debentures, or reduce the principal amount
thereof, or reduce the rate or extend the time of payment of interest thereon
(except such extension as is contemplated hereby) or (ii) reduce the
percentage of principal amount of Junior Subordinated Debentures of any
series, the holders of which are required to consent to any such modification
of the Indenture, provided that, in the case of Corresponding Junior
Subordinated Debentures, so long as any of the Related Preferred Securities
remain outstanding, no such modification may be made that adversely affects
the holders of such Preferred Securities in any material respect, and no
termination of the Indenture may occur, and no waiver of any Debenture Event
of Default or compliance with any covenant under the Indenture may be
effective, without the prior consent of the holders of at least a majority of
the aggregate liquidation preference of such Related Preferred Securities
unless and until the principal of the Corresponding Junior Subordinated
Debentures and all accrued and unpaid interest thereon have been paid in full
and certain other conditions are satisfied.
In addition, Lincoln and the Debenture Trustee may execute, without the
consent of any holder of Junior Subordinated Debentures, any supplemental
Indenture for the purpose of creating any new series of Junior Subordinated
Debentures.
DEBENTURE EVENTS OF DEFAULT
The Indenture provides that any one or more of the following described
events with respect to a series of Junior Subordinated Debentures that has
occurred and is continuing constitutes a "Debenture Event of Default" with
respect to such series of Junior Subordinated Debentures:
(i) failure for 30 days to pay any interest on such series of the Junior
Subordinated Debentures, when due (subject to the deferral of any due date
in the case of an Extension Period); or
(ii) failure to pay any principal or premium, if any, on such series of
Junior Subordinated Debentures when due whether at maturity, upon
redemption by declaration or otherwise; or
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(iii) failure to observe or perform in any material respect certain other
covenants contained in the Indenture for 90 days after written notice to
Lincoln from the Debenture Trustee or the holders of at least 25% in
aggregate outstanding principal amount of such series of outstanding Junior
Subordinated Debentures; or
(iv) certain events in bankruptcy, insolvency or reorganization of
Lincoln.
The holders of a majority in aggregate outstanding principal amount of such
series of Junior Subordinated Debentures have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Debenture Trustee. The Debenture Trustee or the holders of not less than 25%
in aggregate outstanding principal amount of such series of Junior
Subordinated Debentures may declare the principal due and payable immediately
upon a Debenture Event of Default, and, in the case of Corresponding Junior
Subordinated Debentures, should the Debenture Trustee or such holders of such
Corresponding Junior Subordinated Debentures fail to make such declaration,
the holders of at least 25% in aggregate liquidation preference of the Related
Preferred Securities shall have such right. The holders of a majority in
aggregate outstanding principal amount of such series of Junior Subordinated
Debentures may annul such declaration and waive the default if the default
(other than the non-payment of the principal of such series of Junior
Subordinated Debentures which has become due solely by such acceleration) has
been cured and a sum sufficient to pay all matured installments of interest
and principal due otherwise than by acceleration has been deposited with the
Debenture Trustee. In the case of Corresponding Junior Subordinated
Debentures, should the holders of such Corresponding Junior Subordinated
Debentures fail to annul such declaration and waive such default, the holders
of a majority in aggregate liquidation preference of the Related Preferred
Securities shall have such right.
A holder of Related Preferred Securities may institute a legal proceeding
directly against Lincoln under the Indenture on behalf of the Issuer for
enforcement of payment to the Issuer of the principal of or interest on the
Corresponding Junior Subordinated Debentures on or after the respective due
dates specified in such Junior Subordinated Debentures. The holders of the
Preferred Securities would not be able to exercise directly any remedies
available to the holder of the Corresponding Junior Subordinated Debentures
unless the Property Trustee or the Debenture Trustee, acting for the benefit
of the Property Trustee, fails to do so for 60 days. In such event, the
holders of at least 25% in aggregate liquidation preference of the outstanding
Preferred Securities would have such right to institute proceedings.
The holders of a majority in aggregate outstanding principal amount of the
Junior Subordinated Debentures affected thereby may, on behalf of the holders
of all the Junior Subordinated Debentures, waive any past default, except a
default in the payment of principal or interest (unless such default has been
cured and a sum sufficient to pay all matured installments of interest and
principal due otherwise than by acceleration has been deposited with the
Debenture Trustee) or a default in respect of a covenant or provision which
under the Indenture cannot be modified or amended without the consent of the
holder of each outstanding Junior Subordinated Debenture. In the case of
Corresponding Junior Subordinated Debentures, should the holders of such
Corresponding Junior Subordinated Debentures fail to annul such declaration
and waive such default, the holders of a majority in aggregate liquidation
preference of the Related Preferred Securities shall have such right. Lincoln
is required to file annually with the Debenture Trustee a certificate as to
whether or not Lincoln is in compliance with all the conditions and covenants
applicable to it under the Indenture.
In case a Debenture Event of Default shall occur and be continuing as to a
series of Corresponding Junior Subordinated Debentures, the Property Trustee
will have the right to declare the principal of and the interest on such
Corresponding Junior Subordinated Debentures, and any other amounts payable
under the Indenture, to be forthwith due and payable and to enforce its other
rights as a creditor with respect to such Corresponding Junior Subordinated
Debentures.
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CONSOLIDATION, MERGER, SALE OF ASSETS AND OTHER TRANSACTIONS
The Indenture provides that Lincoln shall not consolidate with or merge into
any other Person or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, and no Person shall consolidate
with or merge into Lincoln or convey, transfer or lease its properties and
assets substantially as an entirety to Lincoln, unless (i) in case Lincoln
consolidates with or merges into another Person or conveys or transfers its
properties and assets substantially as an entirety to any Person, the
successor Person is organized under the laws of the United States or any state
or the District of Columbia, and such successor Person expressly assumes
Lincoln's obligations on the Junior Subordinated Debentures issued under the
Indenture; (ii) immediately after giving effect thereto, no Debenture Event of
Default, and no event which, after notice or lapse of time or both, would
become a Debenture Event of Default, shall have happened and be continuing;
(iii) in the case of Corresponding Junior Subordinated Debentures, such
transaction is permitted under the related Trust Agreement or Guarantee and
does not give rise to any breach or violation of the related Trust Agreement
and Guarantee, and (iv) certain other conditions as prescribed in the
Indenture are met.
The general provisions of the Indenture do not afford holders of the Junior
Subordinated Debentures protection in the event of a highly leveraged or other
transaction involving Lincoln that may adversely affect holders of the Junior
Subordinated Debentures.
SATISFACTION AND DISCHARGE
The Indenture provides that when, among other things, all Junior
Subordinated Debentures not previously delivered to the Debenture Trustee for
cancellation (i) have become due and payable or (ii) will become due and
payable at their Stated Maturity within one year, and Lincoln deposits or
causes to be deposited with the Debenture Trustee trust funds, in trust, for
the purpose and in an amount in the currency or currencies in which the Junior
Subordinated Debentures are payable sufficient to pay and discharge the entire
indebtedness on the Junior Subordinated Debentures not previously delivered to
the Debenture Trustee for cancellation, for the principal (and premium, if
any) and interest to the date of the deposit or to the Stated Maturity, as the
case may be, then the Indenture will cease to be of further effect (except as
to Lincoln's obligations to pay all other sums due pursuant to the Indenture
and to provide the officers' certificates and opinions of counsel described
therein), and Lincoln will be deemed to have satisfied and discharged the
Indenture.
CONVERSION OR EXCHANGE
If and to the extent indicated in the applicable Prospectus Supplement, the
Junior Subordinated Debentures of any series may be convertible or
exchangeable into Preferred Securities or other securities. The specific terms
on which Junior Subordinated Debentures of any series may be so converted or
exchanged will be set forth in the applicable Prospectus Supplement. Such
terms may include provisions for conversion or exchange, either mandatory, at
the option of the holder, or at the option of Lincoln, in which case the
number of shares of Preferred Securities or other securities to be received by
the Holders of Junior Subordinated Debentures would be calculated as of a time
and in the manner stated in the applicable Prospectus Supplement.
SUBORDINATION
In the Indenture, Lincoln has covenanted and agreed that any Junior
Subordinated Debentures issued thereunder will be subordinate and junior in
right of payment to all Senior Debt to the extent provided in the Indenture.
Upon any payment or distribution of assets to creditors upon any liquidation,
dissolution, winding up, reorganization, assignment for the benefit of
creditors, marshaling of assets or any bankruptcy, insolvency, debt
restructuring or similar proceedings in connection with any insolvency or
bankruptcy proceeding of Lincoln, the holders of Senior Debt will first be
entitled to receive payment in full of principal of (and premium, if any) and
interest, if any, on such Senior Debt before the holders of Junior
Subordinated Debentures or, in the case of Corresponding Junior Subordinated
Debentures,
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the Property Trustee on behalf of the holders, will be entitled to receive or
retain any payment in respect of the principal of (and premium, if any) or
interest, if any, on the Junior Subordinated Debentures.
In the event of the acceleration of the maturity of any Junior Subordinated
Debentures, the holders of all Senior Debt outstanding at the time of such
acceleration will first be entitled to receive payment in full of all amounts
due thereon (including any amounts due upon acceleration) before the holders
of Junior Subordinated Debentures will be entitled to receive or retain any
payment in respect of the principal of (or premium, if any) or interest, if
any, on the Junior Subordinated Debentures.
No payments on account of principal (or premium, if any) or interest, if
any, in respect of the Junior Subordinated Debentures may be made if there
shall have occurred and be continuing a default in any payment with respect to
Senior Debt, or an event of default with respect to any Senior Debt resulting
in the acceleration of the maturity thereof, or if any judicial proceeding
shall be pending with respect to any such default.
"Debt" means with respect to any Person, whether recourse is to all or a
portion of the assets of such Person and whether or not contingent, (i) every
obligation of such Person for money borrowed; (ii) every obligation of such
Person evidenced by bonds, debentures, notes or other similar instruments,
including obligations incurred in connection with the acquisition of property,
assets or businesses; (iii) every reimbursement obligation of such Person with
respect to letters of credit, bankers' acceptances or similar facilities
issued for the account of such Person; (iv) every obligation of such Person
issued or assumed as the deferred purchase price of property or services (but
excluding trade accounts payable or accrued liabilities arising in the
ordinary course of business); (v) every capital lease obligation of such
Person; and (vi) every obligation of the type referred to in clauses
(i) through (v) of another Person and all dividends of another Person the
payment of which, in either case, such Person has guaranteed or is responsible
or liable, directly or indirectly, as obligor or otherwise.
"Senior Debt" means the principal of (and premium, if any) and interest, if
any (including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to Lincoln whether or not such claim
for post-petition interest is allowed in such proceeding), on Debt, whether
incurred on or prior to the date of the Indenture or thereafter incurred,
unless, in the instrument creating or evidencing the same or pursuant to which
the same is outstanding, it is provided that such obligations are not superior
in right of payment to the Junior Subordinated Debentures or to other Debt
which is pari passu with, or subordinated to, the Junior Subordinated
Debentures; provided, however, that Senior Debt shall not be deemed to include
(i) any Debt of Lincoln which when incurred and without respect to any
election under Section 1111(b) of the Bankruptcy Code, was without recourse to
Lincoln, (ii) any Debt of Lincoln to any of its subsidiaries, (iii) Debt to
any employee of Lincoln, (iv) any liability for taxes and (v) indebtedness or
monetary obligations to trade creditors or assumed by Lincoln or any of its
subsidiaries in the ordinary course of business in connection with the
obtaining of materials or services.
Lincoln is a non-operating holding company and almost all of the operating
assets of Lincoln are owned by such subsidiaries. Lincoln relies primarily on
dividends from such subsidiaries to meet its obligations for payment of
principal and interest on its outstanding debt obligations and corporate
expenses. Accordingly, the Junior Subordinated Debentures will be effectively
subordinated to all existing and future liabilities of Lincoln's subsidiaries,
including liabilities under contracts of insurance and annuities written by
Lincoln's insurance subsidiaries. Holders of Junior Subordinated Debentures
should look only to the assets of Lincoln for payments of interest and
principal and premium, if any.
The Indenture places no limitation on the amount of additional Senior Debt
that may be incurred by Lincoln. Lincoln expects from time to time to incur
additional indebtedness constituting Senior Debt.
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The Indenture provides that the foregoing subordination provisions, insofar
as they relate to any particular issue of Junior Subordinated Debentures, may
be changed prior to such issuance. Any such change would be described in the
applicable Prospectus Supplement.
GOVERNING LAW
The Indenture and the Junior Subordinated Debentures will be governed by and
construed in accordance with the laws of the State of New York.
INFORMATION CONCERNING THE DEBENTURE TRUSTEE
The Debenture Trustee shall have and be subject to all the duties and
responsibilities specified with respect to an indenture trustee under the
Trust Indenture Act. Subject to such provisions, the Debenture Trustee is
under no obligation to exercise any of the powers vested in it by the
Indenture at the request of any holder of Junior Subordinated Debentures,
unless offered reasonable indemnity by such holder against the costs, expenses
and liabilities which might be incurred thereby. The Debenture Trustee is not
required to expend or risk its own funds or otherwise incur personal financial
liability in the performance of its duties if the Debenture Trustee reasonably
believes that repayment or adequate indemnity is not reasonably assured to it.
CORRESPONDING JUNIOR SUBORDINATED DEBENTURES
The Corresponding Junior Subordinated Debentures may be issued in one or
more series of Junior Subordinated Debentures under the Indenture with terms
corresponding to the terms of a series of Related Preferred Securities. In
that event, concurrently with the issuance of each Issuer's Preferred
Securities, such Issuer will invest the proceeds thereof and the consideration
paid by Lincoln for the Common Securities in a series of Corresponding Junior
Subordinated Debentures issued by Lincoln to such Issuer. Each series of
Corresponding Junior Subordinated Debentures will be in the principal amount
equal to the aggregate stated Liquidation Amount of the Related Preferred
Securities and the Common Securities of such Issuer and will rank pari passu
with all other series of Junior Subordinated Debentures. Holders of the
Related Preferred Securities for a series of Corresponding Junior Subordinated
Debentures will have the rights in connection with modifications to the
Indenture or upon occurrence of Debenture Events of Default described under
"--Modification of Indenture" and "--Debenture Events of Default," unless
provided otherwise in the Prospectus Supplement for such Related Preferred
Securities.
If a Special Event in respect of an Issuer of Related Preferred Securities
shall occur and be continuing, Lincoln may, at its option, redeem the
Corresponding Junior Subordinated Debentures at any time within 90 days of the
occurrence of such Special Event, in whole but not in part, subject to the
provisions of the Indenture. The redemption price for any Corresponding Junior
Subordinated Debentures shall be equal to 100% of the principal amount of such
Corresponding Junior Subordinated Debentures then outstanding plus accrued and
unpaid interest to the date fixed for redemption. For so long as the
applicable Issuer is the holder of all the outstanding series of Corresponding
Junior Subordinated Debentures, the proceeds of any such redemption will be
used by the Issuer to redeem the corresponding Trust Securities in accordance
with their terms. Lincoln may not redeem a series of Corresponding Junior
Subordinated Debentures in part unless all accrued and unpaid interest has
been paid in full on all outstanding Corresponding Junior Subordinated
Debentures of such series for all interest periods terminating on or prior to
the Redemption Date.
Lincoln will covenant in the Indenture as to each series of Corresponding
Junior Subordinated Debentures, that if and so long as (i) the Issuer of the
related series of Trust Securities is the holder of all such Corresponding
Junior Subordinated Debentures, (ii) a Tax Event in respect of such Issuer has
occurred and is continuing and (iii) Lincoln has elected, and has not revoked
such election, to pay Additional Sums (as defined under "Description of
Preferred Securities--Redemption or Exchange") in respect of such Trust
Securities, Lincoln will pay to such Issuer such Additional Sums. Lincoln will
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also covenant, as to each series of Corresponding Junior Subordinated
Debentures, (i) to maintain directly or indirectly 100% ownership of the
Common Securities of the Issuer to which Corresponding Junior Subordinated
Debentures have been issued, provided that certain successors which are
permitted pursuant to the Indenture may succeed to Lincoln's ownership of the
Common Securities, (ii) not to voluntarily terminate, wind-up or liquidate any
Issuer, except (a) in connection with a distribution of Corresponding Junior
Subordinated Debentures to the holders of the Preferred Securities in
liquidation of such Issuer, or (b) in connection with certain mergers,
consolidations or amalgamations permitted by the related Trust Agreement and
(iii) to use its reasonable efforts, consistent with the terms and provisions
of the related Trust Agreement, to cause such Issuer to remain classified as a
grantor trust and not as an association taxable as a corporation for United
States Federal income tax purposes.
DESCRIPTION OF PREFERRED SECURITIES
Pursuant to the terms of the Trust Agreement for each Issuer, the Issuer
Trustees on behalf of such Issuer will issue the Preferred Securities and the
Common Securities. The Preferred Securities of a particular issue will
represent preferred beneficial interests in the Issuer and the holders thereof
will be entitled to a preference in certain circumstances with respect to
Distributions and amounts payable on redemption or liquidation over the Common
Securities of such Issuer, as well as other benefits as described in the
corresponding Trust Agreement. This summary of certain provisions of the
Preferred Securities and each Trust Agreement does not purport to be complete
and is subject to, and is qualified in its entirety by reference to, all the
provisions of each Trust Agreement, including the definitions therein of
certain terms, and the Trust Indenture Act. Wherever particular defined terms
of a Trust Agreement (as amended or supplemented from time to time) are
referred to herein or in a Prospectus Supplement, such defined terms are
incorporated herein or therein by reference. The form of the Trust Agreement
has been filed as an exhibit to the Registration Statement of which this
Prospectus forms a part. Each of the Issuers is a legally separate entity and
the assets of one are not available to satisfy the obligations of any of the
others.
GENERAL
The Preferred Securities of an Issuer will rank pari passu, and payments
will be made thereon pro rata, with the Common Securities of that Issuer
except as described under "--Subordination of Common Securities." Legal title
to the Corresponding Junior Subordinated Debentures will be held by the
Property Trustee in trust for the benefit of the holders of the related
Preferred Securities and Common Securities. Each Guarantee Agreement executed
by Lincoln for the benefit of the holders of an Issuer's Preferred Securities
(the "Guarantee" for such Preferred Securities) will be a guarantee on a
subordinated basis with respect to the related Preferred Securities but will
not guarantee payment of Distributions or amounts payable on redemption or
liquidation of such Preferred Securities when the related Issuer does not have
funds on hand available to make such payments. See "Description of
Guarantees."
DISTRIBUTIONS
Each Issuer's Preferred Securities represent preferred beneficial interests
in the applicable Issuer, and the Distributions on each Preferred Security
will be payable at a rate specified in the Prospectus Supplement for such
Preferred Securities. The amount of Distributions payable for any period will
be computed on the basis of a 360-day year of twelve 30-day months unless
otherwise specified in the applicable Prospectus Supplement. Distributions to
which holders of Preferred Securities are entitled will accumulate additional
Distributions at the rate per annum if and as specified in the applicable
Prospectus Supplement. The term "Distributions" as used herein includes any
such additional Distributions unless otherwise stated.
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Distributions on the Preferred Securities will be cumulative, will
accumulate from the date of original issuance and will be payable on such
dates as specified in the applicable Prospectus Supplement. In the event that
any date on which Distributions are payable on the Preferred Securities is not
a Business Day (as defined below), payment of the Distribution payable on such
date will be made on the next succeeding day that is a Business Day (and
without any interest or other payment in respect to any such delay) except
that, if such Business Day is in the next succeeding calendar year, payment of
such Distribution shall be made on the immediately preceding Business Day, in
each case with the same force and effect as if made on such date (each date on
which Distributions are payable in accordance with the foregoing, a
"Distribution Date"). A "Business Day" shall mean any day other than a
Saturday or a Sunday, or a day on which banking institutions in The City of
New York are authorized or required by law or executive order to remain closed
or a day on which the corporate trust office of the Property Trustee or the
Debenture Trustee (as defined herein) is closed for business.
If provided in the applicable Prospectus Supplement, Lincoln has the right
under the Indenture, pursuant to which it will issue the Corresponding Junior
Subordinated Debentures, to defer the payment of interest at any time or from
time to time on any series of the Corresponding Junior Subordinated Debentures
for a period which will be specified in such Prospectus Supplement relating to
such series (each, an "Extension Period"), provided that no Extension Period
may extend beyond the Stated Maturity of the Corresponding Junior Subordinated
Debentures. As a consequence of any such extension, Distributions on the
corresponding Preferred Securities would be deferred (but would continue to
accumulate additional Distributions thereon at the rate per annum set forth in
the Prospectus Supplement for such Preferred Securities) by the Issuer of such
Preferred Securities during any such Extension Period. During such Extension
Period Lincoln may not, and may not permit any subsidiary of Lincoln to, (i)
declare or pay any dividends or distributions on, or redeem, purchase, acquire
or make a liquidation payment with respect to, any of Lincoln's capital stock
or (ii) make any payment of principal, interest or premium, if any, on or
repay, repurchase or redeem any debt securities of Lincoln that rank pari
passu with or junior in interest to the Corresponding Junior Subordinated
Debentures or make any guarantee payments with respect to any guarantee by
Lincoln of debt securities of any subsidiary of Lincoln if such guarantee
ranks pari passu or junior in interest to the Corresponding Junior
Subordinated Debentures (other than (a) dividends or distributions in common
stock of Lincoln, (b) redemptions or purchases of any rights pursuant to
Lincoln's Rights Plan, or any successor to such Rights Plan, and the
declaration of a dividend of such rights or the issuance of stock under stock
plans in the future, (c) payments under any Guarantee and (d) purchasers of
common stock related to the issuance of common stock under any of Lincoln's
benefit plans for its directors, officers or employees).
The revenue of each Issuer available for distribution to holders of its
Preferred Securities will be limited to payments under the Corresponding
Junior Subordinated Debentures in which the Issuer will invest the proceeds
from the issuance and sale of its Trust Securities. See "Description of Junior
Subordinated Debentures--Corresponding Junior Subordinated Debentures." If
Lincoln does not make interest payments on such Corresponding Junior
Subordinated Debentures, the Property Trustee will not have funds available to
pay Distributions on the Related Preferred Securities. The payment of
Distributions (if and to the extent the Issuer has funds legally available for
the payment of such Distributions and cash sufficient to make such payments)
is guaranteed by Lincoln on a limited basis as set forth herein under
"Description of Guarantees."
Distributions on the Preferred Securities will be payable to the holders
thereof as they appear on the register of such Issuer on the relevant record
dates, which, as long as the Preferred Securities remain in book-entry form,
will be one Business Day prior to the relevant Distribution Date. Subject to
any applicable laws and regulations and the provisions of the applicable Trust
Agreement, each such payment will be made as described under "Book-Entry
Issuance." In the event any Preferred Securities are not in book-entry form,
the relevant record date for such Preferred Securities shall be the date at
least 15 days prior to the relevant Distribution Date, as specified in the
applicable Prospectus Supplement.
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REDEMPTION OR EXCHANGE
Mandatory Redemption. Upon the repayment or redemption, in whole or in part,
of any Corresponding Junior Subordinated Debentures, whether at maturity or
upon earlier redemption as provided in the Indenture, the proceeds from such
repayment or redemption shall be applied by the Property Trustee to redeem a
Like Amount (as defined below) of the Trust Securities, upon not less than 30
nor more than 60 days notice, at a redemption price (the "Redemption Price")
equal to the aggregate liquidation preference of such Trust Securities plus
accumulated and unpaid Distributions thereon to the date of redemption (the
"Redemption Date") and the related amount of the premium, if any, paid by
Lincoln upon the concurrent redemption of such Corresponding Junior
Subordinated Debentures. See "Description of Junior Subordinated Debentures--
Optional Redemption." If less than all of any series of Corresponding Junior
Subordinated Debentures are to be repaid or redeemed on a Redemption Date,
then the proceeds from such repayment or redemption shall be allocated to the
redemption pro rata of the related Preferred Securities and the Common
Securities. The amount of premium, if any, paid by Lincoln upon the redemption
of all or any part of any series of any Corresponding Junior Subordinated
Debentures to be repaid or redeemed on a Redemption Date shall be allocated to
the redemption pro rata of the related Preferred Securities and the Common
Securities.
Lincoln will have the right to redeem any series of Corresponding Junior
Subordinated Debentures (i) in whole at any time or in part from time to time,
subject to the conditions described under "Description of Junior Subordinated
Debentures--Redemption," (ii) at any time, in whole (but not in part), upon
the occurrence of a Tax Event or an Investment Company Event (each as defined
below, a "Special Event") and subject to the further conditions described
under "Description of Junior Subordinated Debentures--Redemption," or (iii) as
may be otherwise specified in the applicable Prospectus Supplement.
Special Event Redemption or Distribution of Corresponding Junior
Subordinated Debentures. If a Special Event in respect of a series of
Preferred Securities and Common Securities shall occur and be continuing,
Lincoln has the right to redeem the Corresponding Junior Subordinated
Debentures in whole (but not in part) and thereby cause a mandatory redemption
of such Preferred Securities and Common Securities in whole (but not in part)
at the Redemption Price within 90 days following the occurrence of such
Special Event. At any time, Lincoln has the right to terminate the related
Issuer and, after satisfaction of the liabilities of creditors of such Issuer
as provided by applicable law, cause such Corresponding Junior Subordinated
Debentures to be distributed to the holders of such Preferred Securities and
Common Securities in liquidation of the Issuer. If Lincoln does not elect
either option described above, the applicable series of Preferred Securities
will remain outstanding and, in the event a Tax Event has occurred and is
continuing, Additional Sums (as defined below) may be payable on the
Corresponding Junior Subordinated Debentures.
Extension of Maturity of Corresponding Junior Subordinated Debentures. If
provided in the applicable Prospectus Supplement, Lincoln shall have the right
to extend or shorten the maturity of any series of Corresponding Junior
Subordinated Debentures at the time that Lincoln exercises its right to elect
to terminate the related Issuer and cause such Corresponding Junior
Subordinated Debentures to be distributed to the holders of such Preferred
Securities and Common Securities in liquidation of the Issuer, provided that
it can extend the maturity only if certain conditions specified in the
applicable Prospectus Supplement are met at the time such election is made and
at the time of such extension.
"Additional Sums" means the additional amounts as may be necessary in order
that the amount of Distributions then due and payable by an Issuer on the
outstanding Preferred Securities and Common Securities of the Issuer shall not
be reduced as a result of any additional taxes, duties and other governmental
charges to which such Issuer has become subject as a result of a Tax Event.
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"Investment Company Event" means the receipt by the applicable Issuer of an
opinion of counsel experienced in such matters to the effect that, as a result
of the occurrence of a change in law or regulation or a change in
interpretation or application of law or regulation by any legislative body,
court, governmental agency or regulatory authority (a "Change in 1940 Act
Law"), the applicable Issuer is or will be considered an "investment company"
that is required to be registered under the Investment Company Act of 1940, as
amended (the "Investment Company Act"), which Change in 1940 Act Law becomes
effective on or after the date of original issuance of the series of Preferred
Securities issued by the Issuer.
"Like Amount" means (i) with respect to a redemption of any series of Trust
Securities, Trust Securities of such series having a Liquidation Amount (as
defined below) equal to that portion of the principal amount of Corresponding
Junior Subordinated Debentures to be contemporaneously redeemed in accordance
with the Indenture, allocated to the Common Securities and to the Preferred
Securities based upon the relative Liquidation Amounts of such classes and the
proceeds of which will be used to pay the Redemption Price of such Trust
Securities, and (ii) with respect to a distribution of Corresponding Junior
Subordinated Debentures to holders of any series of Trust Securities in
connection with a dissolution or liquidation of the related Issuer,
Corresponding Junior Subordinated Debentures having a principal amount equal
to the Liquidation Amount of the Trust Securities of the holder to whom such
Corresponding Junior Subordinated Debentures are distributed. "Liquidation
Amount" means the stated amount of $25 per Trust Security.
"Tax Event" means the receipt by the applicable Issuer of an opinion of
counsel experienced in such matters to the effect that, as a result of any
amendment to, or change (including any announced prospective change) in, the
laws (or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein, or as a result of any
official administrative pronouncement or judicial decision interpreting or
applying such laws or regulations, which amendment or change is effective or
which pronouncement or decision is announced on or after the date of issuance
of the Preferred Securities under the Trust Agreement, there is more than an
insubstantial risk that (i) the Issuer is, or will be within 90 days of the
date of such opinion, subject to United States Federal income tax with respect
to income received or accrued on the corresponding series of Corresponding
Junior Subordinated Debentures, (ii) interest payable by Lincoln on such
series of Corresponding Junior Subordinated Debentures is not, or within 90
days of the date of such opinion, will not be, deductible by Lincoln, in whole
or in part, for United States Federal income tax purposes, or (iii) the
applicable Issuer is, or will be within 90 days of the date of such opinion,
subject to more than a de minimis amount of other taxes, duties or other
governmental charges.
After the liquidation date fixed for any distribution of Corresponding
Junior Subordinated Debentures for any series of Preferred Securities (i) such
series of Preferred Securities will no longer be deemed to be outstanding,
(ii) The Depository Trust Company ("DTC") or its nominee, as the record holder
of such series of Preferred Securities, will receive a registered global
certificate or certificates representing the Corresponding Junior Subordinated
Debentures to be delivered upon such distribution and (iii) any certificates
representing such series of Preferred Securities not held by DTC or its
nominee will be deemed to represent the Corresponding Junior Subordinated
Debentures having a principal amount equal to the stated liquidation
preference of such series of Preferred Securities, and bearing accrued and
unpaid interest in an amount equal to the accrued and unpaid Distributions on
such series of Preferred Securities until such certificates are presented to
the Administrative Trustees or their agent for transfer or reissuance.
There can be no assurance as to the market prices for the Preferred
Securities or the Corresponding Junior Subordinated Debentures that may be
distributed in exchange for Preferred Securities if a dissolution and
liquidation of an Issuer were to occur. Accordingly, the Preferred Securities
that an investor may purchase, or the Corresponding Junior Subordinated
Debentures that the investor may receive on dissolution and liquidation of an
Issuer, may trade at a discount to the price that the investor paid to
purchase the Preferred Securities offered hereby.
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REDEMPTION PROCEDURES
Preferred Securities redeemed on each Redemption Date shall be redeemed at
the Redemption Price with the applicable proceeds from the contemporaneous
redemption of the Corresponding Junior Subordinated Debentures. Redemptions of
the Preferred Securities shall be made and the Redemption Price shall be
payable on each Redemption Date only to the extent that the related Issuer has
funds on hand available for the payment of such Redemption Price. See also "--
Subordination of Common Securities."
If an Issuer gives a notice of redemption in respect of its Preferred
Securities, then, by 12:00 noon, New York City time, on the Redemption Date,
to the extent funds are available, the Property Trustee will deposit
irrevocably with DTC funds sufficient to pay the applicable Redemption Price
and will give DTC irrevocable instructions and authority to pay the Redemption
Price to the holders of such Preferred Securities. See "Book-Entry Issuance."
If such Preferred Securities are no longer in book-entry form, the Property
Trustee, to the extent funds are available, will irrevocably deposit with the
paying agent for such Preferred Securities funds sufficient to pay the
applicable Redemption Price and will give such paying agent irrevocable
instructions and authority to pay the Redemption Price to the holders thereof
upon surrender of their certificates evidencing such Preferred Securities.
Notwithstanding the foregoing, Distributions payable on or prior to the
Redemption Date for any Preferred Securities called for redemption shall be
payable to the holders of such Preferred Securities on the relevant record
dates for the related Distribution Dates. If notice of redemption shall have
been given and funds deposited as required, then upon the date of such
deposit, all rights of the holders of such Preferred Securities so called for
redemption will cease, except the right of the holders of such Preferred
Securities to receive the Redemption Price, but without interest on such
Redemption Price, and such Preferred Securities will cease to be outstanding.
In the event that any date fixed for redemption of Preferred Securities is not
a Business Day, then payment of the Redemption Price payable on such date will
be made on the next succeeding day which is a Business Day (and without any
interest or other payment in respect of any such delay), except that, if such
Business Day falls in the next calendar year, such payment will be made on the
immediately preceding Business Day. In the event that payment of the
Redemption Price in respect of Preferred Securities called for redemption is
improperly withheld or refused and not paid either by the Issuer or by Lincoln
pursuant to the Guarantee as described under "Description of Guarantees",
Distributions on such Preferred Securities will continue to accrue at the then
applicable rate, from the Redemption Date originally established by the Issuer
for such Preferred Securities to the date such Redemption Price is actually
paid, in which case the actual payment date will be the date fixed for
redemption for purposes of calculating the Redemption Price.
Subject to applicable law (including, without limitation, United States
Federal securities law), Lincoln or its subsidiaries may at any time and from
time to time purchase outstanding Preferred Securities by tender, in the open
market or by private agreement.
Payment of the Redemption Price on the Preferred Securities and any
distribution of Corresponding Junior Subordinated Debentures to holders of
Preferred Securities shall be made to the applicable recordholders thereof as
they appear on the register for such Preferred Securities on the relevant
record date, which shall be one Business Day prior to the relevant Redemption
Date or liquidation date, as applicable; provided, however, that in the event
that any Preferred Securities are not in book-entry form, the relevant record
date for such Preferred Securities shall be a date at least 15 days prior to
the Redemption Date or liquidation date, as applicable, as specified in the
applicable Prospectus Supplement.
If less than all of the Preferred Securities and Common Securities issued by
an issuer are to be redeemed on a Redemption Date, then the aggregate
Liquidation Amount of such Preferred Securities and Common Securities to be
redeemed shall be allocated pro rata to the Preferred Securities and the
Common Securities based upon the relative Liquidation Amounts of such classes.
The particular
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Preferred Securities to be redeemed shall be selected on a pro rata basis not
more than 60 days prior to the Redemption Date by the Property Trustee from
the outstanding Preferred Securities not previously called for redemption, by
such method as the Property Trustee shall deem fair and appropriate and which
may provide for the selection for redemption of portions (equal to $25 or an
integral multiple of $25 in excess thereof) of the Liquidation Amount of
Preferred Securities of a denomination larger than $25. The Property Trustee
shall promptly notify the trust registrar in writing of the Preferred
Securities selected for redemption and, in the case of any Preferred
Securities selected for partial redemption, the Liquidation Amount thereof to
be redeemed. For all purposes of each Trust Agreement, unless the context
otherwise requires, all provisions relating to the redemption of Preferred
Securities shall relate, in the case of any Preferred Securities redeemed or
to be redeemed only in part, to the portion of the aggregate Liquidation
Amount of Preferred Securities which has been or is to be redeemed.
Notice of any redemption will be mailed at least 30 days but not more than
60 days before the Redemption Date to each Holder of Trust Securities to be
redeemed at its registered address. Unless Lincoln defaults in payment of the
Redemption Price on the Corresponding Junior Subordinated Debentures, on and
after the Redemption Date interest ceases to accrue on such Junior
Subordinated Debentures or portions thereof (and distributions cease to accrue
on the Related Preferred Securities or portions thereof) called for
redemption.
SUBORDINATION OF COMMON SECURITIES
Payment of Distributions on, and the Redemption Price of, each Issuer's
Preferred Securities and Common Securities, as applicable, shall be made pro
rata based on the Liquidation Amount of such Preferred Securities and Common
Securities; provided, however, that if on any Distribution Date or Redemption
Date a Debenture Event of Default shall have occurred and be continuing, no
payment of any Distribution on, or Redemption Price of, any of the Issuer's
Common Securities, and no other payment on account of the redemption,
liquidation or other acquisition of such Common Securities, shall be made
unless payment in full in cash of all accumulated and unpaid Distributions on
all of the Issuer's outstanding Preferred Securities for all Distribution
periods terminating on or prior thereto, or in the case of payment of the
Redemption Price the full amount of such Redemption Price on all of the
Issuer's outstanding Preferred Securities then called for redemption, shall
have been made or provided for, and all funds available to the Property
Trustee shall first be applied to the payment in full in cash of all
Distributions on, or Redemption Price of, the Issuer's Preferred Securities
then due and payable.
In the case of any Event of Default resulting from a Debenture Event of
Default, Lincoln as holder of such Issuer's Common Securities will be deemed
to have waived any right to act with respect to any such Event of Default
under the applicable Trust Agreement until the effect of all such Events of
Default with respect to such Preferred Securities have been cured, waived or
otherwise eliminated. Until any such Events of Default under the applicable
Trust Agreement with respect to the Preferred Securities have been so cured,
waived or otherwise eliminated, the Property Trustee shall act solely on
behalf of the holders of such Preferred Securities and not on behalf of
Lincoln as holder of the Issuer's Common Securities, and only the holders of
such Preferred Securities will have the right to direct the Property Trustee
to act on their behalf.
LIQUIDATION DISTRIBUTION UPON TERMINATION
Pursuant to each Trust Agreement, each Issuer shall automatically terminate
upon expiration of its term and shall terminate on the first to occur of: (i)
certain events of bankruptcy, dissolution or liquidation of Lincoln; (ii) the
distribution of a Like Amount of the Corresponding Junior Subordinated
Debentures to the holders of its Trust Securities, if Lincoln, as Depositor,
has given written direction to the Property Trustee to terminate such Issuer
(which direction is optional and wholly within the discretion of Lincoln, as
Depositor); (iii) the redemption of all of the Issuer's Trust Securities
following
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a Special Event; (iv) redemption of all of the Issuer's Preferred Securities
as described under "Description of Preferred Securities--Redemption or
Exchange--Mandatory Redemption"; and (v) the entry of an order for the
dissolution of the Issuer by a court of competent jurisdiction.
If an early termination occurs as described in clause (i), (ii) or (v)
above, the Issuer shall be liquidated by the Issuer Trustees as expeditiously
as the Issuer Trustees determine to be possible by distributing, after
satisfaction of liabilities to creditors of such Issuer as provided by
applicable law, to the holders of such Trust Securities a Like Amount of the
Corresponding Junior Subordinated Debentures, unless such distribution is
determined by the Property Trustee not to be practical, in which event such
holders will be entitled to receive out of the assets of the Issuer available
for distribution to holders, after satisfaction of liabilities to creditors of
such Issuer as provided by applicable law, an amount equal to, in the case of
holders of Preferred Securities, the aggregate of the Liquidation Amount plus
accrued and unpaid Distributions thereon to the date of payment (such amount
being the "Liquidation Distribution"). If such Liquidation Distribution can be
paid only in part because such Issuer has insufficient assets available to pay
in full the aggregate Liquidation Distribution, then the amounts payable
directly by such Issuer on its Preferred Securities shall be paid on a pro
rata basis. The holder(s) of such Issuer's Common Securities will be entitled
to receive distributions upon any such liquidation pro rata with the holders
of its Preferred Securities, except that if a Debenture Event of Default has
occurred and is continuing, the Preferred Securities shall have a priority
over the Common Securities. A supplemental Indenture may provide that if an
early termination occurs as described in clause (v) above, the Corresponding
Junior Subordinated Debentures may be subject to optional redemption in whole
(but not in part).
EVENTS OF DEFAULT; NOTICE
Any one of the following events constitutes an "Event of Default" under each
Trust Agreement (an "Event of Default") with respect to the Preferred
Securities issued thereunder (whatever the reason for such Event of Default
and whether it shall be voluntary or involuntary or be effected by operation
of law or pursuant to any judgment, decree or order of any court or any order,
rule or regulation of any administrative or governmental body):
(i) the occurrence of a Debenture Event of Default under the Indenture
(see "Description of Junior Subordinated Debentures--Debenture Events of
Default"); or
(ii) default by the Property Trustee in the payment of any Distribution
when it becomes due and payable, and continuation of such default for a
period of 30 days; or
(iii) default by the Property Trustee in the payment of any Redemption
Price of any Trust Security when it becomes due and payable; or
(iv) default in the performance, or breach, in any material respect, of
any covenant or warranty of the Issuer Trustees in such Trust Agreement
(other than a covenant or warranty a default in the performance of which or
the breach of which is dealt with in clause (ii) or (iii) above), and
continuation of such default or breach for a period of 60 days after there
has been given, by registered or certified mail, to the defaulting Issuer
Trustee or Trustees by the holders of at least 25% in aggregate liquidation
preference of the outstanding Preferred Securities of the applicable
Issuer, a written notice specifying such default or breach and requiring it
to be remedied and stating that such notice is a "Notice of Default" under
such Trust Agreement; or
(v) the occurrence of certain events of bankruptcy or insolvency with
respect to the Property Trustee and the failure by Lincoln to appoint a
successor Property Trustee within 60 days thereof.
Within five Business Days after the occurrence of any Event of Default
actually known to the Property Trustee, the Property Trustee shall transmit
notice of such Event of Default to the holders of such Issuer's Preferred
Securities, the Administrative Trustees and Lincoln, as Depositor, unless such
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Event of Default shall have been cured or waived. Lincoln, as Depositor, and
the Administrative Trustees are required to file annually with the Property
Trustee a certificate as to whether or not they are in compliance with all the
conditions and covenants applicable to them under each Trust Agreement.
If a Debenture Event of Default has occurred and is continuing, the
Preferred Securities shall have a preference over the Common Securities upon
termination of each Issuer as described above. See""--Liquidation Distribution
Upon Termination." The existence of an Event of Default does not entitle the
holders of Preferred Securities to accelerate the maturity thereof.
REMOVAL OF ISSUER TRUSTEES
Unless a Debenture Event of Default shall have occurred and be continuing,
any Issuer Trustee may be removed at any time by the holder of the Common
Securities. If a Debenture Event of Default has occurred and is continuing,
the Property Trustee and the Delaware Trustee may be removed at such time by
the holders of a majority in Liquidation Amount of the outstanding Preferred
Securities. In no event will the holders of the Preferred Securities have the
right to vote to appoint, remove or replace the Administrative Trustees, which
voting rights are vested exclusively in Lincoln as the holder of the Common
Securities. No resignation or removal of an Issuer Trustee and no appointment
of a successor trustee shall be effective until the acceptance of appointment
by the successor trustee in accordance with the provisions of the applicable
Trust Agreement.
CO-TRUSTEES AND SEPARATE PROPERTY TRUSTEE
Unless an Event of Default shall have occurred and be continuing, at any
time or times, for the purpose of meeting the legal requirements of the Trust
Indenture Act or of any jurisdiction in which any part of the Trust Property
may at the time be located, Lincoln, as the holder of the Common Securities,
and the Administrative Trustees shall have power to appoint one or more
persons either to act as a co-trustee, jointly with the Property Trustee, of
all or any part of such Trust Property, or to act as separate trustee of any
such property, in either case with such powers as may be provided in the
instrument of appointment, and to vest in such person or persons in such
capacity any property, title, right or power deemed necessary or desirable,
subject to the provisions of the applicable Trust Agreement. In case a
Debenture Event of Default has occurred and is continuing, the Property
Trustee alone shall have power to make such appointment.
MERGER OR CONSOLIDATION OF ISSUER TRUSTEES
Any corporation into which the Property Trustee, the Delaware Trustee or any
Administrative Trustee that is not a natural person may be merged or converted
or with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which such Trustee shall be a party, or
any corporation succeeding to all or substantially all the corporate trust
business of such Trustee, shall be the successor of such Trustee under each
Trust Agreement, provided such corporation shall be otherwise qualified and
eligible.
MERGERS, CONSOLIDATIONS, AMALGAMATIONS OR REPLACEMENTS OF THE ISSUERS
An Issuer may not merge with or into, consolidate, amalgamate, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other Person, except as
described below. An Issuer may, at the request of Lincoln, with the consent of
the Administrative Trustees and without the consent of the holders of the
Preferred Securities, merge with or into, consolidate, amalgamate, or be
replaced by or convey, transfer or lease its properties and assets
substantially as an entirety to a trust organized as such under the laws of
any State; provided, that (i) such successor entity either (a) expressly
assumes all of the obligations of such Issuer with respect to the Preferred
Securities or (b) substitutes for the Preferred Securities other securities
having substantially the same terms as the Preferred Securities (the
"Successor Securities") so long as the Successor Securities rank the same as
the Preferred Securities rank in priority with respect to distributions and
payments upon liquidation, redemption and otherwise, (ii) Lincoln expressly
appoints
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a trustee of such successor entity possessing the same powers and duties as
the Property Trustee as the holder of the Corresponding Junior Subordinated
Debentures, (iii) the Successor Securities are listed, or any Successor
Securities will be listed upon notification of issuance, on any national
securities exchange or other organization on which the Preferred Securities
are then listed, if any, (iv) such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not cause the Preferred
Securities (including any Successor Securities) to be downgraded by any
nationally recognized statistical rating organization, (v) such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease does
not adversely affect the rights, preferences and privileges of the holders of
the Preferred Securities (including any Successor Securities) in any material
respect, (vi) such successor entity has a purpose identical to that of the
Issuer, (vii) prior to such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease, Lincoln has received an opinion from
independent counsel to the Issuer experienced in such matters to the effect
that (a) such merger, consolidation, amalgamation, replacement, conveyance,
transfer or lease does not adversely affect the rights, preferences and
privileges of the holders of the Preferred Securities (including any Successor
Securities) in any material respect, and (b) following such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease,
neither the Issuer nor such successor entity will be required to register as
an investment company under the Investment Company Act and (viii) Lincoln or
any permitted successor or assignee owns all of the Common Securities of such
successor entity and guarantees the obligations of such successor entity under
the Successor Securities at least to the extent provided by the Guarantee.
Notwithstanding the foregoing, an Issuer shall not, except with the consent of
holders of 100% in Liquidation Amount of the Preferred Securities,
consolidate, amalgamate, merge with or into, or be replaced by or convey,
transfer or lease its properties and assets substantially as an entirety to
any other entity or permit any other entity to consolidate, amalgamate, merge
with or into, or replace it if such consolidation, amalgamation, merger,
replacement, conveyance, transfer or lease would cause the Issuer or the
successor entity to be classified as other than a grantor trust for United
States Federal income tax purposes.
VOTING RIGHTS; AMENDMENT OF EACH TRUST AGREEMENT
Except as provided below and under "Description of Guarantees--Amendments
and Assignment" and as otherwise required by law and the applicable Trust
Agreement, the holders of the Preferred Securities will have no voting rights.
Each Trust Agreement may be amended from time to time by Lincoln and the
Issuer Trustees, without the consent of the holders of the Preferred
Securities (i) to cure any ambiguity, correct or supplement any provisions in
such Trust Agreement that may be inconsistent with any other provision, or to
make any other provisions with respect to matters or questions arising under
such Trust Agreement, which shall not be inconsistent with the other
provisions of such Trust Agreement, or (ii) to modify, eliminate or add to any
provisions of such Trust Agreement to such extent as shall be necessary to
ensure that the Issuer will be classified for United States Federal income tax
purposes as a grantor trust at all times that any Trust Securities are
outstanding or to ensure that the Issuer will not be required to register as
an "investment company" under the Investment Company Act; provided, however,
that in the case of clause (i), such action shall not adversely affect in any
material respect the interests of any holder of Trust Securities, and any
amendments of such Trust Agreement shall become effective when notice thereof
is given to the holders of Trust Securities. Each Trust Agreement may be
amended by the Issuer Trustees and Lincoln with (i) the consent of holders
representing not less than a majority (based upon Liquidation Amounts) of the
outstanding Trust Securities, and (ii) receipt by the Issuer Trustees of an
opinion of counsel to the effect that such amendment or the exercise of any
power granted to the Issuer Trustees in accordance with such amendment will
not affect the Issuer's status as a grantor trust for United States Federal
income tax purposes or the Issuer's exemption from status as an "investment
company" under the Investment Company Act, provided that without the consent
of each holder of Trust Securities, such Trust Agreement may not be amended to
(i) change the amount or timing of any Distribution on the Trust Securities or
otherwise
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adversely affect the amount of any Distribution required to be made in respect
of the Trust Securities as of a specified date or (ii) restrict the right of a
holder of Trust Securities to institute suit for the enforcement of any such
payment on or after such date.
So long as any Corresponding Junior Subordinated Debentures are held by the
Property Trustee, the Issuer Trustees shall not (i) direct the time, method
and place of conducting any proceeding for any remedy available to the
Debenture Trustee, or executing any trust or power conferred on the Property
Trustee with respect to such Corresponding Junior Subordinated Debentures,
(ii) waive any past default that is waivable under Section 513 of the
Indenture, (iii) exercise any right to rescind or annul a declaration that the
principal of all the Junior Subordinated Debentures shall be due and payable
or (iv) consent to any amendment, modification or termination of the Indenture
or such Corresponding Junior Subordinated Debentures, where such consent shall
be required, without, in each case, obtaining the prior approval of the
holders of a majority in aggregate Liquidation Amount of all outstanding
Preferred Securities; provided, however, that where a consent under the
Indenture would require the consent of each holder of Corresponding Junior
Subordinated Debentures affected thereby, no such consent shall be given by
the Property Trustee without the prior consent of each holder of the
corresponding Preferred Securities. The Issuer Trustees shall not revoke any
action previously authorized or approved by a vote of the holders of the
Preferred Securities except by subsequent vote of the holders of the Preferred
Securities. The Property Trustee shall notify each holder of Preferred
Securities of any notice of default with respect to the Corresponding Junior
Subordinated Debentures. In addition to obtaining the foregoing approvals of
the holders of the Preferred Securities, prior to taking any of the foregoing
actions, the Issuer Trustees shall obtain an opinion of counsel experienced in
such matters to the effect that the Issuer will not be classified as a
corporation for United States Federal income tax purposes on account of such
action.
Any required approval of holders of Preferred Securities may be given at a
meeting of holders of Preferred Securities convened for such purpose or
pursuant to written consent. The Property Trustee will cause a notice of any
meeting at which holders of Preferred Securities are entitled to vote, or of
any matter upon which action by written consent of such holders is to be
taken, to be given to each holder of record of Preferred Securities in the
manner set forth in each Trust Agreement.
No vote or consent of the holders of Preferred Securities will be required
for an Issuer to redeem and cancel its Preferred Securities in accordance with
the applicable Trust Agreement.
Notwithstanding that holders of Preferred Securities are entitled to vote or
consent under any of the circumstances described above, any of the Preferred
Securities that are owned by Lincoln, the Issuer Trustees or any affiliate of
Lincoln or any Issuer Trustees, shall, for purposes of such vote or consent,
be treated as if they were not outstanding.
GLOBAL PREFERRED SECURITIES
The Preferred Securities of a series may be issued in whole or in part in
the form of one or more Global Preferred Securities that will be deposited
with, or on behalf of, the Depositary identified in the Prospectus Supplement
relating to such series. Unless otherwise indicated in the applicable
Prospectus Supplement for such series, the Depositary will be DTC. Global
Preferred Securities may be issued only in fully registered form and in either
temporary or permanent form. Unless and until it is exchanged in whole or in
part for the individual Preferred Securities represented thereby, a Global
Preferred Security may not be transferred except as a whole by the Depositary
for such Global Preferred Security to a nominee of such Depositary or by a
nominee of such Depositary to such Depositary or another nominee of such
Depositary or by the Depositary or any nominee to a successor Depositary or
any nominee of such successor.
The specific terms of the depositary arrangement with respect to a series of
Preferred Securities will be described in the Prospectus Supplement relating
to such series. Lincoln anticipates that the following provisions will
generally apply to depositary arrangements.
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Upon the issuance of a Global Preferred Security, and the deposit of such
Global Preferred Security with or on behalf of the Depositary, the Depositary
for such Global Preferred Security or its nominee will credit, on its book-
entry registration and transfer system, the respective aggregate Liquidation
Amounts of the individual Preferred Securities represented by such Global
Preferred Securities to the accounts of Participants. Such accounts shall be
designated by the dealers, underwriters or agents with respect to such
Preferred Securities or by Lincoln if such Preferred Securities are offered
and sold directly by Lincoln. Ownership of beneficial interests in a Global
Preferred Security will be limited to Participants or persons that may hold
interests through Participants. Ownership of beneficial interests in such
Global Preferred Security will be shown on, and the transfer of that ownership
will be effected only through, records maintained by the applicable Depositary
or its nominee (with respect to interests of Participants) and the records of
Participants (with respect to interests of persons who hold through
Participants). The laws of some states require that certain purchasers of
securities take physical delivery of such securities in definitive form. Such
limits and such laws may impair the ability to transfer beneficial interests
in a Global Preferred Security.
So long as the Depositary for a Global Preferred Security, or its nominee,
is the registered owner of such Global Preferred Security, such Depositary or
such nominee, as the case may be, will be considered the sole owner or holder
of the Preferred Securities represented by such Global Preferred Security for
all purposes under the Indenture governing such Preferred Securities. Except
as provided below, owners of beneficial interests in a Global Preferred
Security will not be entitled to have any of the individual Preferred
Securities of the series represented by such Global Preferred Security
registered in their names, will not receive or be entitled to receive physical
delivery of any such Preferred Securities of such series in definitive form
and will not be considered the owners or holders thereof under the Indenture.
Payments of principal of (and premium, if any) and interest on individual
Preferred Securities represented by a Global Preferred Security registered in
the name of a Depositary or its nominee will be made to the Depositary or its
nominee, as the case may be, as the registered owner of the Global Preferred
Security representing such Preferred Securities. None of Lincoln, the Property
Trustee, any Paying Agent, or the Securities Registrar for such Preferred
Securities will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests of the Global Preferred Security representing such Preferred
Securities or for maintaining, supervising or reviewing any records relating
to such beneficial ownership interests.
Lincoln expects that the Depositary for a series of Preferred Securities or
its nominee, upon receipt of any payment of Liquidation Amount, premium or
Distributions in respect of a permanent Global Preferred Security representing
any of such Preferred Securities, immediately will credit Participants'
accounts with payments in amounts proportionate to their respective beneficial
interest in the aggregate Liquidation Amount of such Global Preferred Security
for such Preferred Securities as shown on the records of such Depositary or
its nominee. Lincoln also expects that payments by Participants to owners of
beneficial interests in such Global Preferred Security held through such
Participants will be governed by standing instructions and customary
practices, as is now the case with securities held for the accounts of
customers in bearer form or registered in "street name." Such payments will be
the responsibility of such Participants.
Unless otherwise specified in the applicable Prospectus Supplement, if a
Depositary for a series of Preferred Securities is at any time unwilling,
unable or ineligible to continue as depositary and a successor depositary is
not appointed by Lincoln within 90 days, Lincoln will issue individual
Preferred Securities of such series in exchange for the Global Preferred
Security representing such series of Preferred Securities. In addition,
Lincoln may at any time and in its sole discretion, subject to any limitations
described in the Prospectus Supplement relating to such Preferred Securities,
determine not to have any Preferred Securities of such series represented by
one or more Global Preferred Securities and, in such event, will issue
individual Preferred Securities of such series in exchange for
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the Global Preferred Security or Securities representing such series of
Preferred Securities. Further, if Lincoln so specifies with respect to the
Preferred Securities of a series, an owner of a beneficial interest in a
Global Preferred Security representing Preferred Securities of such series
may, on terms acceptable to Lincoln, the Property Trustee and the Depositary
for such Global Preferred Security, receive individual Preferred Securities of
such series in exchange for such beneficial interests, subject to any
limitations described in the Prospectus Supplement relating to such Preferred
Securities. In any such instance, an owner of a beneficial interest in a
Global Preferred Security will be entitled to physical delivery of individual
Preferred Securities of the series represented by such Global Preferred
Security equal in principal amount to such beneficial interest and to have
such Preferred Securities registered in its name. Individual Preferred
Securities of such series so issued will be issued in denominations, unless
otherwise specified by Lincoln, of $25 and integral multiples thereof.
PAYMENT AND PAYING AGENCY
Payments in respect of the Preferred Securities shall be made to the
Depositary, which shall credit the relevant accounts at the Depositary on the
applicable Distribution Dates or, if any Issuer's Preferred Securities are not
held by the Depositary, such payments shall be made by check mailed to the
address of the holder entitled thereto as such address shall appear on the
Register. Unless otherwise specified in the applicable Prospectus Supplement,
the paying agent (the "Paying Agent") shall initially be the Property Trustee
and any co-paying agent chosen by the Property Trustee and acceptable to the
Administrative Trustees and Lincoln. The Paying Agent shall be permitted to
resign as Paying Agent upon 30 days' written notice to the Property Trustee
and Lincoln. In the event that the Property Trustee shall no longer be the
Paying Agent, the Administrative Trustees shall appoint a successor (which
shall be a bank or trust company acceptable to the Administrative Trustees and
Lincoln) to act as Paying Agent.
REGISTRAR AND TRANSFER AGENT
Unless otherwise specified in the applicable Prospectus Supplement, the
Property Trustee will act as registrar and transfer agent for the Preferred
Securities.
Registration of transfers of Preferred Securities will be effected without
charge by or on behalf of each Issuer, but upon payment of any tax or other
governmental charges that may be imposed in connection with any transfer or
exchange. The Issuers will not be required to register or cause to be
registered the transfer of their Preferred Securities after such Preferred
Securities have been called for redemption.
INFORMATION CONCERNING THE PROPERTY TRUSTEE
The Property Trustee, other than during the occurrence and continuance of an
Event of Default, undertakes to perform only such duties as are specifically
set forth in each Trust Agreement and, after such Event of Default, must
exercise the same degree of care and skill as a prudent person would exercise
or use in the conduct of his or her own affairs. Subject to this provision,
the Property Trustee is under no obligation to exercise any of the powers
vested in it by the applicable Trust Agreement at the request of any holder of
Preferred Securities unless it is offered reasonable indemnity against the
costs, expenses and liabilities that might be incurred thereby. If no Event of
Default has occurred and is continuing and the Property Trustee is required to
decide between alternative causes of action, construe ambiguous provisions in
the applicable Trust Agreement or is unsure of the application of any
provision of the applicable Trust Agreement, and the matter is not one on
which holders of Preferred Securities are entitled under such Trust Agreement
to vote, then the Property Trustee shall take such action as is directed by
Lincoln and if not so directed, shall take such action as it deems advisable
and in the best interests of the holders of the Trust Securities and will have
no liability except for its own bad faith, negligence or willful misconduct.
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MISCELLANEOUS
The Administrative Trustees are authorized and directed to conduct the
affairs of and to operate the Issuers in such a way that no Issuer will be
deemed to be an "investment company" required to be registered under the
Investment Company Act or classified as an association taxable as a
corporation for United States Federal income tax purposes and so that the
Corresponding Junior Subordinated Debentures will be treated as indebtedness
of Lincoln for United States Federal income tax purposes. In this connection,
Lincoln and the Administrative Trustees are authorized to take any action, not
inconsistent with applicable law, the certificate of trust of each Issuer or
each Trust Agreement, that Lincoln and the Administrative Trustees determine
in their discretion to be necessary or desirable for such purposes, as long as
such action does not materially adversely affect the interests of the holders
of the related Preferred Securities.
Holders of the Preferred Securities have no preemptive or similar rights.
No Issuer may borrow money or issue debt or mortgage or pledge any of its
assets.
BOOK-ENTRY ISSUANCE
DTC will act as securities depositary for all of the Preferred Securities
and the Junior Subordinated Debentures, unless otherwise referred to in the
Prospectus Supplement relating to an offering of Preferred Securities or
Junior Subordinated Debentures. The Preferred Securities and the Junior
Subordinated Debentures will be issued only as fully-registered securities
registered in the name of Cede & Co. (DTC's nominee). One or more fully-
registered global certificates will be issued for the Preferred Securities of
each Issuer and the Junior Subordinated Debentures, representing in the
aggregate the total number of such Issuer's Preferred Securities or aggregate
principal balance of Junior Subordinated Debentures, respectively, and will be
deposited with DTC.
DTC is a limited purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law,
a member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Exchange Act. DTC
holds securities that its Participants deposit with DTC. DTC also facilitates
the settlement among Participants of securities transactions, such as
transfers and pledges, in deposited securities through electronic computerized
book-entry changes in Participants' accounts, thereby eliminating the need for
physical movement of securities certificates. Direct Participants include
securities brokers and dealers, banks, trust companies, clearing corporations
and certain other organizations ("Direct Participants"). DTC is owned by a
number of its Direct Participants and by the New York Stock Exchange, Inc.,
the American Stock Exchange, Inc. and the National Association of Securities
Dealers, Inc. Access to the DTC system is also available to others such as
securities brokers and dealers, banks and trust companies that clear through
or maintain custodial relationships with Direct Participants, either directly
or indirectly ("Indirect Participants"). The rules applicable to DTC and its
Participants are on file with the Commission.
Purchases of Preferred Securities or Junior Subordinated Debentures within
the DTC system must be made by or through Direct Participants, which will
receive a credit for the Preferred Securities or Junior Subordinated
Debentures on DTC's records. The ownership interest of each actual purchaser
of each Preferred Security and each Junior Subordinated Debenture ("Beneficial
Owner") is in turn to be recorded on the Direct and Indirect Participants'
records. Beneficial Owners will not receive written confirmation from DTC of
their purchases, but Beneficial Owners are expected to receive written
confirmations providing details of the transactions, as well as periodic
statements of their holdings, from the Direct or Indirect Participants through
which the Beneficial Owners purchased Preferred Securities or Junior
Subordinated Debentures. Transfers of ownership interests in the Preferred
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Securities or Junior Subordinated Debentures are to be accomplished by entries
made on the books of Participants acting on behalf of Beneficial Owners.
Beneficial Owners will not receive certificates representing their ownership
interests in Preferred Securities or Junior Subordinated Debentures, except in
the event that use of the book-entry system for the Preferred Securities of
such Issuer or Junior Subordinated Debentures is discontinued.
DTC has no knowledge of the actual Beneficial Owners of the Preferred
Securities or Junior Subordinated Debentures; DTC's records reflect only the
identity of the Direct Participants to whose accounts such Preferred
Securities or Junior Subordinated Debentures are credited, which may or may
not be the Beneficial Owners. The Participants will remain responsible for
keeping account of their holdings on behalf of their customers.
Conveyance of notices and other communications buy DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners and the voting
rights of Direct Participants, Indirect Participants and Beneficial Owners
will be governed by arrangements among them, subject to any statutory or
regulatory requirements as may be in effect from time to time.
Redemption notices shall be sent to Cede & Co. as the registered holder of
the Preferred Securities or Junior Subordinated Debentures. If less than all
of an Issuer's Preferred Securities or the Junior Subordinated Debentures are
being redeemed, DTC's current practice is to determine by lot the amount of
the interest of each Direct Participant to be redeemed.
Although voting with respect to the Preferred Securities or the Junior
Subordinated Debentures is limited to the holders of record of the Preferred
Securities or Junior Subordinated Debentures, in those instances in which a
vote is required, neither DTC nor Cede & Co. will itself consent or vote with
respect to Preferred Securities or Junior Subordinated Debentures. Under its
usual procedures, DTC would mail an omnibus proxy (the "Omnibus Proxy") to the
relevant Trustee as soon as possible after the record date. The Omnibus Proxy
assigns Cede & Co.'s consenting or voting rights to those Direct Participants
to whose accounts such Preferred Securities or Junior Subordinated Debentures
are credited on the record date (identified in a listing attached to the
Omnibus Proxy).
Distribution payments on the Preferred Securities or the Junior Subordinated
Debentures will be made by the relevant Trustee to DTC. DTC's practice is to
credit Direct Participants' accounts on the relevant payment date in
accordance with their respective holdings shown on DTC's records unless DTC
has reason to believe that it will not receive payments on such payment date.
Payments by Participants to Beneficial Owners will be governed by standing
instructions and customary practices and will be the responsibility of such
Participant and not of DTC, the relevant Trustee, the Issuer thereof or
Lincoln, subject to any statutory or regulatory requirements as may be in
effect from time to time. Payment of Distributions to DTC is the
responsibility of the relevant Trustee, disbursement of such payments to
Direct Participants is the responsibility of DTC, and disbursements of such
payments to the Beneficial Owners is the responsibility of Direct and Indirect
Participants.
DTC may discontinue providing its services as securities depositary with
respect to any of the Preferred Securities or the Junior Subordinated
Debentures at any time by giving reasonable notice to the relevant Trustee and
Lincoln. In the event that a successor securities depositary is not obtained,
definitive Preferred Security or Junior Subordinated Debenture certificates
representing such Preferred Securities or Junior Subordinated Debentures are
required to be printed and delivered. Lincoln, at its option, may decide to
discontinue use of the system of book-entry transfers through DTC (or a
successor depositary). After a Debenture Event of Default, the holders of a
majority in liquidation preference of Preferred Securities or aggregate
principal amount of Junior Subordinated Debentures may determine to
discontinue the system of book-entry transfers through DTC. In any such event,
definitive certificates for such Preferred Securities or Junior Subordinated
Debentures will be printed and delivered.
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The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that the Issuers and Lincoln believe to be
accurate, but the Issuers and Lincoln assume no responsibility for the
accuracy thereof. Neither the Issuers nor Lincoln has any responsibility for
the performance by DTC or its Participants of their respective obligations as
described herein or under the rules and procedures governing their respective
operations.
DESCRIPTION OF GUARANTEES
A Guarantee will be executed and delivered by Lincoln concurrently with the
issuance by each Issuer of its Preferred Securities for the benefit of the
holders from time to time of such Preferred Securities. The First National
Bank of Chicago will act as indenture trustee ("Guarantee Trustee") under each
Guarantee for the purposes of compliance with the Trust Indenture Act and each
Guarantee will be qualified as an Indenture under the Trust Indenture Act.
This summary of certain provisions of the Guarantees does not purport to be
complete and is subject to, and qualified in its entirety by reference to, all
of the provisions of each Guarantee Agreement, including the definitions
therein of certain terms, and the Trust Indenture Act. The form of the
Guarantee has been filed as an exhibit to the Registration Statement of which
this Prospectus forms a part. Reference in this summary to Preferred
Securities means that Issuer's Preferred Securities to which a Guarantee
relates. The Guarantee Trustee will hold each Guarantee for the benefit of the
holders of the related Issuer's Preferred Securities.
GENERAL
Lincoln will irrevocably agree to pay in full on a subordinated basis, to
the extent set forth herein, the Guarantee Payments (as defined below) to the
holders of the Preferred Securities, as and when due, regardless of any
defense, right of set-off or counterclaim that such Issuer may have or assert
other than the defense of payment. The following payments with respect to the
Preferred Securities, to the extent not paid by or on behalf of the related
Issuer (the "Guarantee Payments"), will be subject to the Guarantee: (i) any
accumulated and unpaid Distributions required to be paid on such Preferred
Securities, to the extent that such Issuer has funds on hand available
therefor at such time, (ii) the Redemption Price with respect to any Preferred
Securities called for redemption to the extent that such Issuer has funds on
hand available therefor at such time, or (iii) upon a voluntary or involuntary
dissolution, winding up or liquidation of such Issuer (unless the
Corresponding Junior Subordinated Debentures are distributed to holders of
such Preferred Securities), the lesser of (a) the Liquidation Distribution and
(b) the amount of assets of such Issuer remaining available for distribution
to holders of Preferred Securities. Lincoln's obligation to make a Guarantee
Payment may be satisfied by direct payment of the required amounts by Lincoln
to the holders of the applicable Preferred Securities or by causing the Issuer
to pay such amounts to such holders.
Each Guarantee will be an irrevocable guarantee on a subordinated basis of
the related Issuer's obligations under the Preferred Securities, but will
apply only to the extent that such related Issuer has funds sufficient to make
such payments, and is not a guarantee of collection.
If Lincoln does not make interest payments on the Corresponding Junior
Subordinated Debentures held by the Issuer, the Issuer will not be able to pay
Distributions on the Preferred Securities and will not have funds legally
available therefor. Each Guarantee will rank subordinate and junior in right
of payment to all Senior Debt of Lincoln. See "--Status of Guarantee." Lincoln
is a non-operating holding company and almost all of the operating assets of
Lincoln and its consolidated subsidiaries are owned by such subsidiaries.
Lincoln relies primarily on dividends from such subsidiaries to meet its
obligations for payment of principal and interest on its outstanding debt
obligations and corporate expenses. Accordingly, Lincoln's obligations under
the Guarantees will be effectively subordinated to all existing and future
liabilities of Lincoln's subsidiaries, and claimants should look only to the
assets of Lincoln
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for payments thereunder. The payment of dividends by Lincoln's insurance
company subsidiaries is limited under the insurance holding company laws in
which such subsidiaries are domiciled. See "Lincoln National Corporation."
Except as otherwise provided in the applicable Prospectus Supplement, the
Guarantees do not limit the incurrence or issuance of other secured or
unsecured debt of Lincoln, whether under the Indenture, any other indenture
that Lincoln may enter into in the future or otherwise. See the Prospectus
Supplement relating to any offering of Preferred Securities.
Lincoln has, through the applicable Guarantee, the applicable Trust
Agreement, the Junior Subordinated Debentures, the Indenture and the Expense
Agreement, taken together, fully, irrevocably and unconditionally guaranteed
all of the Issuer's obligations under the Preferred Securities. No single
document standing alone or operating in conjunction with fewer than all of the
other documents constitutes such guarantee. It is only the combined operation
of these documents that has the effect of providing a full, irrevocable and
unconditional guarantee of the Issuer's obligations under the Preferred
Securities. See "Relationship Among the Preferred Securities, the Junior
Subordinated Debentures and the Guarantee."
STATUS OF THE GUARANTEES
Each Guarantee will constitute an unsecured obligation of Lincoln and will
rank subordinate and junior in right of payment to all Senior Debt.
Each Guarantee will rank pari passu with all other Guarantees issued by
Lincoln. Each Guarantee will constitute a guarantee of payment and not of
collection (i.e., the guaranteed party may institute a legal proceeding
directly against the Guarantor to enforce its rights under the Guarantee
without first instituting a legal proceeding against any other person or
entity). Each Guarantee will be held for the benefit of the holders of the
related Preferred Securities. Each Guarantee will not be discharged except by
payment of the Guarantee Payments in full to the extent not paid by the Issuer
or upon distribution to the holders of the Preferred Securities of the
Corresponding Junior Subordinated Debentures. None of the Guarantees places a
limitation on the amount of additional Senior Debt that may be incurred by
Lincoln. Lincoln expects from time to time to incur additional indebtedness
constituting Senior Debt.
AMENDMENTS AND ASSIGNMENT
Except with respect to any changes which do not materially adversely affect
the rights of holders of the related Preferred Securities (in which case no
vote will be required), no Guarantee may be amended without the prior approval
of the holders of not less than a majority of the aggregate Liquidation Amount
of such outstanding Preferred Securities. The manner of obtaining any such
approval will be as set forth under "Description of the Preferred Securities--
Voting Rights; Amendment of Each Trust Agreement." All guarantees and
agreements contained in each Guarantee shall bind the successors, assigns,
receivers, trustees and representatives of Lincoln and shall inure to the
benefit of the holders of the related Preferred Securities then outstanding.
EVENTS OF DEFAULT
An event of default under each Guarantee will occur upon the failure of
Lincoln to perform any of its payment or other obligations thereunder. The
holders of not less than a majority in aggregate Liquidation Amount of the
related Preferred Securities have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Guarantee
Trustee in respect of such Guarantee or to direct the exercise of any trust or
power conferred upon the Guarantee Trustee under such Guarantee.
Any holder of the Preferred Securities may institute a legal proceeding
directly against Lincoln to enforce its rights under such Guarantee without
first instituting a legal proceeding against the Issuer, the Guarantee Trustee
or any other person or entity.
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Lincoln, as guarantor, is required to file annually with the Guarantee
Trustee a certificate as to whether or not Lincoln is in compliance with all
the conditions and covenants applicable to it under the Guarantee.
INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The Guarantee Trustee, other than during the occurrence and continuance of a
default by Lincoln in performance of any Guarantee, undertakes to perform only
such duties as are specifically set forth in each Guarantee and, after default
with respect to any Guarantee, must exercise the same degree of care and skill
as a prudent person would exercise or use in the conduct of his or her own
affairs. Subject to this provision, the Guarantee Trustee is under no
obligation to exercise any of the powers vested in it by any Guarantee at the
request of any holder of any Preferred Securities unless it is offered
reasonable indemnity against the costs, expenses and liabilities that might be
incurred thereby.
TERMINATION OF THE GUARANTEES
Each Guarantee will terminate and be of no further force and effect upon
full payment of the Redemption Price of the related Preferred Securities, upon
full payment of the amounts payable upon liquidation of the related Issuer or
upon distribution of Corresponding Junior Subordinated Debentures to the
holders of the related Preferred Securities. Each Guarantee will continue to
be effective or will be reinstated, as the case may be, if at any time any
holder of the related Preferred Securities must restore payment of any sums
paid under such Preferred Securities or such Guarantee.
GOVERNING LAW
Each Guarantee will be governed by and construed in accordance with the laws
of the State of New York.
THE EXPENSE AGREEMENT
Pursuant to the Expense Agreement entered into by Lincoln under each Trust
Agreement (the "Expense Agreement"), Lincoln will irrevocably and
unconditionally guarantee to each person or entity to whom the Issuer becomes
indebted or liable, the full payment of any costs, expenses or liabilities of
the Issuer, other than obligations of the Issuer to pay to the holders of any
Preferred Securities or other similar interests in the Issuer of the amounts
due such holders pursuant to the terms of the Preferred Securities or such
other similar interests, as the case may be.
RELATIONSHIP AMONG THE PREFERRED SECURITIES, THE CORRESPONDING JUNIOR
SUBORDINATED DEBENTURES AND THE GUARANTEES
Payments of Distributions and other amounts due on the Preferred Securities
(to the extent the Issuer has funds available for the payment of such
Distributions) are irrevocably guaranteed by Lincoln as and to the extent set
forth under "Description of Guarantees." Taken together, Lincoln's obligations
under each series of Junior Subordinated Debentures, the Indenture, the
related Trust Agreement, the related Expense Agreement, and the related
Guarantee provide, in the aggregate, a full, irrevocable and unconditional
guarantee of payments of distributions and other amounts due on the related
series of Preferred Securities. No single document standing alone or operating
in conjunction with fewer than all of the other documents constitutes such
guarantee. It is only the combined operation of these documents that has the
effect of providing a full, irrevocable and unconditional guarantee of the
Issuer's obligations under the Preferred Securities. If and to the extent that
Lincoln does not make payments on any series of Corresponding Junior
Subordinated Debentures, such Issuer will not pay Distributions or other
amounts due on its Preferred Securities. The Guarantees do not cover payment
of Distributions when the related Issuer does not have sufficient funds to pay
such Distributions. In such event, the remedy of a holder of a series of
Preferred Securities is to institute a legal proceeding directly against
Lincoln under the Indenture on behalf of such Issuer for enforcement of
payment to such Issuer of principal of or interest on the Related Preferred
Securities. The obligations of Lincoln under each Guarantee are subordinate
and junior in right of payment to all Senior Debt of Lincoln.
33
<PAGE>
As long as payments of interest and other payments are made when due on each
series of Corresponding Junior Subordinated Debentures, such payments will be
sufficient to cover Distributions and other payments due on the related
Preferred Securities, primarily because (i) the aggregate principal amount of
each series of Corresponding Junior Subordinated Debentures will be equal to
the sum of the aggregate stated Liquidation Amount of the Related Preferred
Securities and related Common Securities; (ii) the interest rate and interest
and other payment dates on each series of Corresponding Junior Subordinated
Debentures will match the Distribution rate and Distribution and other payment
dates for the related Preferred Securities; (iii) Lincoln shall pay for all
and any costs, expenses and liabilities of such Issuer except the Issuer's
obligations to holders of its Preferred Securities under such Preferred
Securities; and (iv) each Trust Agreement further provides that the Issuer
will not engage in any activity that is not consistent with the limited
purposes of such Issuer.
Notwithstanding anything to the contrary in the Indenture, Lincoln has the
right to set-off any payment it is otherwise required to make thereunder with
and to the extent Lincoln has theretofore made, or is concurrently on the date
of such payment making, a payment under the related Guarantee.
A holder of any related Preferred Security may institute a legal proceeding
directly against Lincoln to enforce its rights under the related Guarantee
without first instituting a legal proceeding against the Guarantee Trustee,
the related Issuer or any other person or entity.
A default or event of default under any Senior Debt of Lincoln would not
constitute a default or Event of Default. However, in the event of payment
defaults under, or acceleration of, Senior Debt of Lincoln, the subordination
provisions of the Indenture provide that no payments may be made in respect of
the Corresponding Junior Subordinated Debentures until such Senior Debt has
been paid in full or any payment default thereunder has been cured or waived.
Failure to make required payments on any series of Corresponding Junior
Subordinated Debentures would constitute an Event of Default.
Each Issuer's Preferred Securities evidence a beneficial interest in such
Issuer, and each Issuer exists for the sole purpose of issuing its Preferred
Securities and Common Securities and investing the proceeds thereof in
Corresponding Junior Subordinated Debentures. A principal difference between
the rights of a holder of a Preferred Security and a holder of a Corresponding
Junior Subordinated Debenture is that a holder of a Corresponding Junior
Subordinated Debenture is entitled to receive from Lincoln the principal
amount of and interest accrued on Corresponding Junior Subordinated Debentures
held, while a holder of Preferred Securities is only entitled to receive
Distributions from such Issuer (or from Lincoln under the applicable
Guarantee) if and to the extent such Issuer has funds available for the
payment of such Distributions.
Upon any voluntary or involuntary termination, winding-up or liquidation of
any Issuer involving the liquidation of the Corresponding Junior Subordinated
Debentures, the holders of the related Preferred Securities will be entitled
to receive, out of assets held by such Issuer, the Liquidation Distribution in
cash. See "Description of Preferred Securities--Liquidation Distribution Upon
Termination." Upon any voluntary or involuntary liquidation or bankruptcy of
Lincoln, the Property Trustee, as holder of the Corresponding Junior
Subordinated Debentures, would be a subordinated creditor of Lincoln,
subordinated in right of payment to all Senior Debt, but entitled to receive
payment in full of principal and interest, before any stockholders of Lincoln
receive payments or distributions. Since Lincoln is the guarantor under each
Guarantee and has agreed to pay for all costs, expenses and liabilities of
each Issuer (other than the Issuer's obligations to the holders of its
Preferred Securities), the positions of a holder of such Preferred Securities
and a holder of such Corresponding Junior Subordinated Debentures relative to
other creditors and to stockholders of Lincoln in the event of liquidation or
bankruptcy of Lincoln are expected to be substantially the same.
34
<PAGE>
PLAN OF DISTRIBUTION
The Junior Subordinated Debentures or the Preferred Securities may be sold
in a public offering to or through underwriters or dealers designated from
time to time. Lincoln and each Issuer may sell its Junior Subordinated
Debentures or Preferred Securities as soon as practicable after effectiveness
of the Registration Statement of which this Prospectus is a part. The names of
any underwriters or dealers involved in the sale of the Junior Subordinated
Debentures or Preferred Securities in respect of which this Prospectus is
delivered, the amount or number of Junior Subordinated Debentures and
Preferred Securities to be purchased by any such underwriters and any
applicable commissions or discounts will be set forth in the Prospectus
Supplement.
Underwriters may offer and sell Junior Subordinated Debentures or Preferred
Securities at a fixed price or prices, which may be changed, or from time to
time at market prices prevailing at the time of sale, at prices related to
such prevailing market prices or at negotiated prices. In connection with the
sale of Preferred Securities, underwriters may be deemed to have received
compensation from Lincoln and/or the applicable Issuer in the form of
underwriting discounts or commissions and may also receive commissions.
Underwriters may sell Junior Subordinated Debentures or Preferred Securities
to or through dealers, and such dealers may receive compensation in the form
of discounts, concessions or commissions from the underwriters.
Any underwriting compensation paid by Lincoln and/or the applicable Issuer
to underwriters in connection with the offering of Junior Subordinated
Debentures or Preferred Securities, and any discounts, concessions or
commissions allowed by such underwriters to participating dealers, will be
described in a Prospectus Supplement. Underwriters and dealers participating
in the distribution of Junior Subordinated Debentures or Preferred Securities
may be deemed to be underwriters, and any discounts and commissions received
by them and any profit realized by them on resale of such Junior Subordinated
Debentures or Preferred Securities may be deemed to be underwriting discounts
and commissions, under the Securities Act. Underwriters and dealers may be
entitled, under agreement with Lincoln and the applicable Issuer, to
indemnification against and contribution toward certain civil liabilities,
including liabilities under the Securities Act, and to reimbursement by
Lincoln for certain expenses.
In connection with the offering of the Preferred Securities of any Issuer,
such Issuer may grant to the underwriters an option to purchase additional
Preferred Securities to cover over-allotments, if any, at the initial public
offering price (with an additional underwriting commission), as may be set
forth in the accompanying Prospectus Supplement. If such Issuer grants any
over-allotment option, the terms of such over-allotment option will be set
forth in the Prospectus Supplement for such Preferred Securities.
Underwriters and dealers may engage in transactions with, or perform
services for, Lincoln and/or the applicable Issuer and/or any of their
affiliates in the ordinary course of business.
The Junior Subordinated Debentures and the Preferred Securities will be new
issues of securities and will have no established trading market. Any
underwriters to whom Junior Subordinated Debentures or Preferred Securities
are sold for public offering and sale may make a market in such Junior
Subordinated Debentures and Preferred Securities, but such underwriters will
not be obligated to do so and may discontinue any market making at any time
without notice. Such Junior Subordinated Debentures or Preferred Securities
may or may not be listed on a national securities exchange or the Nasdaq
National Market. No assurance can be given as to the liquidity of or the
existence of trading markets for any Junior Subordinated Debentures or
Preferred Securities.
35
<PAGE>
VALIDITY OF SECURITIES
Unless otherwise indicated in the applicable Prospectus Supplement, certain
legal matters will be passed upon for Lincoln and the Issuers by Sonnenschein
Nath & Rosenthal, 8000 Sears Tower, Chicago, Illinois 60606, counsel to
Lincoln and for the Issuers by Richards, Layton & Finger, special Delaware
counsel to the Issuers. The validity of the Guarantees and the Junior
Subordinated Debentures will be passed upon for the Underwriters by Sullivan &
Cromwell, New York, New York. Sonnenshein Nath & Rosenthal and Sullivan &
Cromwell will rely on (i) the opinion of Richards, Layton & Finger as to
matters of Delaware law and (ii) the opinion of Jack D. Hunter, Esq.,
Executive Vice President and General Counsel of Lincoln, as to matters of
Indiana law. As of May , 1996, Mr. Hunter beneficially owned shares of
Common Stock of Lincoln, 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 shares of Common Stock, which options are currently
exercisable except for options to acquire: shares in .
EXPERTS
The consolidated financial statements and schedules of Lincoln National
Corporation and subsidiaries appearing in Lincoln National Corporation's
Annual Report (Form 10-K) for the year ended December 31, 1995, 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.
36
<PAGE>
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- -------------------------------------------------------------------------------
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRE-
SENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS SUPPLEMENT OR THE
PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROSPECTUS SUPPLEMENT AND
THE PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN
OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES DESCRIBED IN THIS PRO-
SPECTUS SUPPLEMENT AND THE PROSPECTUS OR AN OFFER TO SELL OR THE SOLICITATION
OF AN OFFER TO BUY SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR
SOLICITATION IS UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT
AND THE PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES,
CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF LINCOLN
NATIONAL CORPORATION SINCE THE DATE HEREOF OR THAT THE INFORMATION CONTAINED
HEREIN OR THEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
-----------
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Risk Factors............................................................. S-4
Lincoln National Capital I............................................... S-8
Lincoln National Corporation............................................. S-8
Recent Developments...................................................... S-10
Ratio of Earnings to Fixed Charges....................................... S-11
Use of Proceeds.......................................................... S-11
Capitalization........................................................... S-12
Accounting Treatment..................................................... S-12
Selected Financial Information........................................... S-13
Certain Terms of Series A QUIPS.......................................... S-14
Certain Terms of Series A QUIDS.......................................... S-16
Certain Federal Income Tax Consequences.................................. S-19
Underwriting............................................................. S-22
Validity of Securities................................................... S-23
PROSPECTUS
Available Information.................................................... 3
Incorporation of Certain Documents by Reference.......................... 4
Lincoln National Corporation............................................. 5
The Issuers.............................................................. 5
Use of Proceeds.......................................................... 6
Description of Junior Subordinated Debentures............................ 6
Description of Preferred Securities...................................... 17
Book-Entry Issuance...................................................... 29
Description of Guarantees................................................ 31
Relationship Among the Preferred Securities, the Corresponding Junior
Subordinated Debentures and the Guarantees.............................. 33
Plan of Distribution..................................................... 35
Validity of Securities................................................... 36
Experts.................................................................. 36
</TABLE>
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PREFERRED SECURITIES
LINCOLN NATIONAL CAPITAL I
% CUMULATIVE QUARTERLY
INCOME PREFERRED SECURITIES,
SERIES A (QUIPS SM)
GUARANTEED TO THE EXTENT THE SERIES A
ISSUER HAS FUNDS AS SET FORTH
HEREIN BY
LINCOLN NATIONAL
CORPORATION
-----------
LOGO
-----------
GOLDMAN, SACHS & CO.
BEAR, STEARNS & CO. INC.
A.G. EDWARDS & SONS, INC.
MERRILL LYNCH & CO.
SMITH BARNEY INC.
REPRESENTATIVES OF THE UNDERWRITERS
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<PAGE>
PART II.
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
<TABLE>
<S> <C>
Registration fee under the Securities Act of 1933, as amended..... $172,414
Blue Sky fees and expenses (including counsel fees)............... *
Fees of rating agencies........................................... *
Trustees' fee and expenses........................................ *
Printing and engraving............................................ *
Accounting services............................................... *
Legal fees of Registrant's counsel................................ *
Miscellaneous..................................................... *
--------
Total........................................................... $ *
========
</TABLE>
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*To be filed by amendment.
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 Lincoln and of other entities, including partnerships,
trusts and employee benefit plans, who serve in such capacities at the request
of Lincoln, 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 Lincoln's best interests or if such conduct was not
in their official capacity, that the same was at least not opposed to
Lincoln'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 Lincoln to insure its liability on behalf of the directors,
officers, employees and agents so indemnified and the Law does not exclude any
other rights in indemnification and advancement of expenses provided in
Lincoln's Articles of Incorporation, Bylaws, or resolutions of its board of
directors or its shareholders.
The Bylaws of Lincoln provide for the indemnification of its officers,
directors and employees against reasonable expenses, including settlements,
that may be incurred by them in connection with the defense of any action,
suit or proceeding to which they are made or threatened to be made parties so
long as (i) the individual's conduct was in good faith, (ii) he reasonably
believed that the conduct was in the Company's best interests (or for non-
corporate acts, not against the best interest of the Company), and (iii) in
the case of criminal proceedings, the individual either had reason to believe
the conduct was lawful, or no reasonable cause to believe it was unlawful. In
the case of directors, a determination as to whether indemnification or
reimbursement is proper shall be made by a majority of disinterested
directors, a committee of the board of directors or special counsel selected
by the board of directors. In the case of individuals who are not directors,
such determination shall be made by the
II-1
<PAGE>
chief executive officer of Lincoln or, if the chief executive officer so
directs, in the manner it would be made if the individual were a director of
Lincoln.
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 Lincoln pursuant to the foregoing provisions, Lincoln 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 Lincoln of expenses incurred or
paid by a director, officer or controlling person of Lincoln 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, Lincoln 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.
Lincoln maintains directors' and officers' liability insurance with an
annual aggregate limit of $50,000,000 for the current policy period, subject
to a $1,000,000 deductible at the corporate level, for each wrongful act where
corporate reimbursement is available to any director or officer.
Reference is made to the Underwriting Agreement which is filed as Exhibit 1
to this Registration Statement.
Under the Trust Agreement, Lincoln will agree to indemnify each of the
Trustees of the Issuer or any predecessor Trustee for the Issuer, and to hold
the Trustee harmless against, any loss, damage, claims, liability or expense
incurred without negligence or bad faith on its part, arising out of or in
connection with the acceptance or administration of the Trust Agreements,
including the costs and expenses of defending itself against any claim or
liability in connection with the exercise or performance of any of its powers
or duties under the Trust Agreements.
II-2
<PAGE>
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
-------
<C> <S>
1 Form of Underwriting Agreement*
4(a) Articles of Incorporation of Lincoln National Corporation, as amended
(incorporated by reference to Exhibit 4(a) to Lincoln's Form S-3/A
(File No. 33-55379) filed with the Commission on September 15, 1994)
4(b) By-laws, as amended (incorporated by reference to Exhibit 3(b) to
Lincoln's Form 10-K (File No. 1-6028) for fiscal year ended December
31, 1991)
4(c) Rights Agreement, dated November 7, 1986 (incorporated by reference to
Exhibit 4(e) to Lincoln's Form 10-K for the fiscal year ended December
31, 1994)
4(d) Indenture of LNC dated as of January 15, 1987 (Commission File No. 33-
22658) (incorporated by reference to Exhibit 4(a) of Lincoln's Form
10-K for the year ended December 31, 1994)
4(e) First Supplemental Indenture dated as of July 1, 1992, to Indenture of
LNC dated as of January 15, 1987 (incorporated by reference to Annex B
and Annex C of Lincoln's Form 8-K filed with the Commission on July 7,
1992)
4(f) First Supplemental Indenture dated as of July 1, 1992, to Indenture of
LNC dated as of January 15, 1987 (incorporated by reference to Annex B
and Annex D of Lincoln's Form 8-K filed with the Commission on July 7,
1992)
4(g) Indenture of LNC dated as of September 15, 1994, between LNC and The
Bank of New York, as Trustee (incorporated by reference to Exhibit No.
4(c) of Lincoln's S-3/A (File No. 33-55379), filed with the Commission
on September 15, 1994)
4(h) Form of Junior Subordinated Indenture, dated as of May 1, 1996,
between Lincoln and The First National Bank of Chicago, as Debenture
Trustee
4(i) Certificate of Trust of Lincoln National Capital I
4(j) Trust Agreement of Lincoln National Capital I
4(k) Certificate of Trust of Lincoln National Capital II
4(l) Trust Agreement of Lincoln National Capital II
4(m) Certificate of Trust of Lincoln National Capital III
4(n) Trust Agreement of Lincoln National Capital III
4(o) Form of Amended and Restated Trust Agreement (Agreements for Lincoln
National Capital I, Lincoln National Capital II and Lincoln National
Capital III are substantially identical except for names and dates)
4(p) Form of Preferred Security Certificate for Lincoln National Capital I,
Lincoln National Capital II and Lincoln National Capital III (included
as Exhibit D of Exhibit 4(o))
4(q) Form of Guarantee Agreement (Agreements for Lincoln National Capital
I, Lincoln National Capital II and Lincoln National Capital III are
substantially identical except for names and dates)
5(a) Opinion of counsel as to legality of the Junior Subordinated
Debentures and the Guarantees to be issued by Lincoln*
5(b) Opinion of special Delaware counsel as to legality of the Preferred
Securities to be issued by Lincoln National Capital I, Lincoln
National Capital II and Lincoln National Capital III*
8 Opinion of counsel as to certain federal income tax matters*
12 Computation of ratio of earnings to fixed charges (incorporated by
reference to Exhibit 12 of Lincoln's Form 10-Q for the three months
ended March 31, 1996)
</TABLE>
II-3
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
-------
<C> <S>
23(a) Consents of auditors
23(b) Consent of Counsel to Lincoln*
23(c) Consent of Special Delaware Counsel*
24 Power of Attorney (see signature page)
25(a) Form T-1 Statement of Eligibility of The First Chicago National Bank
to act as trustee under the Junior Subordinated Indenture
25(b) Form T-1 Statement of Eligibility of The First Chicago National Bank
to act as trustee under the Amended and Restated Trust Agreement of
Lincoln National Capital I
25(c) Form T-1 Statement of Eligibility of The First Chicago National Bank
to act as trustee under the Amended and Restated Trust Agreement of
Lincoln National Capital II
25(d) Form T-1 Statement of Eligibility of The First Chicago National Bank
to act as trustee under the Amended and Restated Trust Agreement of
Lincoln National Capital III
25(e) Form T-1 Statement of Eligibility of The First Chicago National Bank
under the Guarantee for the benefit of the holders of Preferred
Securities of Lincoln National Capital I
25(f) Form T-1 Statement of Eligibility of The First Chicago National Bank
under the Guarantee for the benefit of the holders of Preferred
Securities of Lincoln National Capital II
25(g) Form T-1 Statement of Eligibility of The First Chicago National Bank
under the Guarantee for the benefit of the holders of Preferred
Securities of Lincoln National Capital III
</TABLE>
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*To be filed by amendment.
ITEM 17. UNDERTAKINGS
Each of the undersigned Registrants, hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, as amended, each
filing of a 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.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of
each Registrant pursuant to the provisions described under Item 15 above, or
otherwise, each Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by each Registrant of expenses incurred or paid by a director, officer
of controlling person of each 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, each
Registrant will, unless in the opinion of its counsel the matter has been
settled by the 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.
II-4
<PAGE>
Each of the undersigned Registrants hereby also 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 thereto) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in this Registration Statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective 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 paragraphs (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 a 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) to provide to the underwriter at the closing specified in the
underwriting agreement certificates in such denominations and registered in
such names as required by the underwriter to permit prompt delivery to each
purchaser.
(5) That, for the purposes of determining any liability under the
Securities Act of 1933:
(i) The information omitted from the form of prospectus filed as part
of this Registration Statement in reliance upon Rule 430A and contained
in the form of prospectus filed by the Registration pursuant to Rule
424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to
be part of this Registration Statement as of the time it was declared
effective.
(ii) 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.
II-5
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED,
LINCOLN NATIONAL CORPORATION 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 20TH DAY OF MAY, 1996.
Lincoln National Corporation
(Registrant)
Richard C. Vaughan
By: _________________________________
Executive Vice President
(Principal 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, AS AMENDED, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE 20TH DAY OF MAY, 1996.
SIGNATURE TITLE
Ian M. Rolland Chairman, Chief Executive Officer &
- ------------------------------------- Director (Principal Executive
Director)
Robert A. Anker President, Chief Operating Officer &
- ------------------------------------- Director
Richard C. Vaughan Executive Vice President (Principal
- ------------------------------------- Financial Officer)
Donald L. Van Wyngarden Second Vice President & Controller
- ------------------------------------- (Principal Accounting Officer)
II-6
<PAGE>
SIGNATURE TITLE
J. Patrick Barrett Director
- -------------------------------------
Thomas D. Bell, Jr. Director
- -------------------------------------
Daniel R. Efroymson Director
- -------------------------------------
Harry L. Kavetas Director
- -------------------------------------
M. Leanne Lachman Director
- -------------------------------------
Leo J. McKernan Director
- -------------------------------------
Earl L. Neal Director
- -------------------------------------
Roel Pieper Director
- -------------------------------------
John M. Pietruski Director
- -------------------------------------
Jill S. Ruckelshaus Director
- -------------------------------------
Gordon A. Walker Director
- -------------------------------------
Gilbert R. Whitaker, Jr. Director
- -------------------------------------
II-7
<PAGE>
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, LINCOLN NATIONAL
CAPITAL I CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS
ALL 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, AND STATE OF INDIANA ON
THE 20TH DAY OF MAY, 1996.
Lincoln National Capital I
By: Lincoln National Corporation, as
Depositor
Janet C. Whitney
By: ____________________________________
Vice President and Treasurer
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, LINCOLN NATIONAL
CAPITAL II CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS
ALL 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, AND STATE OF INDIANA ON
THE 20TH DAY OF MAY, 1996.
Lincoln National Capital II
By: Lincoln National Corporation, as
Depositor
Janet C. Whitney
By: ____________________________________
Vice President and Treasurer
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, LINCOLN NATIONAL
CAPITAL III CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS
ALL 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, AND STATE OF INDIANA ON
THE 20TH DAY OF MAY, 1996.
Lincoln National Capital III
By: Lincoln National Corporation, as
Depositor
Janet C. Whitney
By: ____________________________________
Vice President and Treasurer
II-8
<PAGE>
- --------------------------------------------------------------------------------
LINCOLN NATIONAL CORPORATION
TO
THE FIRST NATIONAL BANK OF CHICAGO
TRUSTEE
-------------------------------------
JUNIOR SUBORDINATED INDENTURE
DATED AS OF MAY 1, 1996
-------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
LINCOLN NATIONAL CAPITAL I
CERTAIN SECTIONS OF THIS TRUST AGREEMENT RELATING TO
SECTIONS 310 THROUGH 318 OF THE
TRUST INDENTURE ACT OF 1939:
<TABLE>
<CAPTION>
TRUST
INDENTURE TRUST
ACT AGREEMENT
SECTION SECTION
- --------- --------------
<C> <S> <C>
(S) 310 (a) (1)................................................ 8.7
(a) (2)................................................ 8.7
(a) (3)................................................ 8.9
(a) (4)................................................ 2.7(a)(ii)
(b).................................................... 8.8
(S) 311 (a).................................................... 8.13
(b).................................................... 8.13
(S) 312 (a).................................................... 5.7
(b).................................................... 5.7
(c).................................................... 5.7
(S) 313 (a).................................................... 8.14(a)
(a) (4)................................................ 8.14(b)
(b).................................................... 8.14(b)
(c).................................................... 10.8
(d).................................................... 8.14(c)
(S) 314 (a).................................................... 8.15
(b).................................................... Not Applicable
(c) (1)................................................ 8.16
(c) (2)................................................ 8.16
(c) (3)................................................ Not Applicable
(d).................................................... Not Applicable
(e).................................................... 1.1, 8.16
(S) 315 (a).................................................... 8.1(a), 8.3(a)
(b).................................................... 8.1, 10.8
(c).................................................... 8.1(a)
(d).................................................... 8.1, 8.3
(e).................................................... Not Applicable
(S) 316 (a).................................................... Not Applicable
(a) (1) (A)............................................ Not Applicable
(a) (1) (B)............................................ Not Applicable
(a) (2)................................................ Not Applicable
(b).................................................... Not Applicable
(c).................................................... 6.7
(S) 317 (a) (1)................................................ Not Applicable
(a) (2)................................................ Not Applicable
(b).................................................... 5.9
(S) 318 (a).................................................... 10.10
</TABLE>
- --------
Note: This reconciliation and tie sheet shall not, for any purpose, be deemed
to be a part of the Trust Agreeement.
i
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<C> <S> <C>
ARTICLE I. DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION...... 1
Section 1.1. Definitions........................................... 1
Section 1.2. Compliance Certificate and Opinions................... 7
Section 1.3. Forms of Documents Delivered to Trustee............... 7
Section 1.4. Acts of Holders....................................... 7
Section 1.5. Notices, Etc. to Trustee and Company.................. 8
Section 1.6. Notice to Holders; Waiver............................. 8
Section 1.7. Conflict with Trust Indenture Act..................... 9
Section 1.8. Effect of Headings and Table of Contents.............. 9
Section 1.9. Successors and Assigns................................ 9
Section 1.10. Separability Clause................................... 9
Section 1.11. Benefits of Indenture................................. 9
Section 1.12. Governing Law......................................... 9
Section 1.13. Non-Business Days..................................... 9
ARTICLE II. SECURITY FORMS.............................................. 9
Section 2.1. Forms Generally....................................... 10
Section 2.2. Form of Face of Security.............................. 10
Section 2.3. Form of Reverse of Security........................... 12
Section 2.4. Additional Provisions Required in Global Security..... 14
Section 2.5. Form of Trustee's Certificate of Authentication....... 15
ARTICLE III. THE SECURITIES............................................. 15
Section 3.1. Title and Terms....................................... 15
Section 3.2. Denominations......................................... 16
Section 3.3. Execution, Authentication, Delivery and Dating........ 16
Section 3.4. Temporary Securities.................................. 18
Section 3.5. Registration, Transfer and Exchange................... 18
Section 3.6. Mutilated, Destroyed, Lost and Stolen Securities...... 19
Section 3.7. Payment of Interest; Interest Rights Preserved........ 19
Section 3.8. Persons Deemed Owners................................. 20
Section 3.9. Cancellation.......................................... 21
Section 3.10. Computation of Interest............................... 21
Section 3.11. Deferrals of Interest Payment Dates................... 21
Section 3.12. Right of Set-Off...................................... 21
Section 3.13. Agreed Tax Treatment.................................. 22
Extension of Stated Maturity; Adjustment of Stated
Section 3.14. Maturity Upon an Exchange............................. 22
Section 3.15. CUSIP Numbers......................................... 22
ARTICLE IV. SATISFACTION AND DISCHARGE.................................. 22
Section 4.1. Satisfaction and Discharge of Indenture............... 22
Section 4.2. Application of Trust Money............................ 23
Satisfaction, Discharge and Defeasance of Securities
Section 4.3. of Any Series......................................... 23
ARTICLE V. REMEDIES..................................................... 24
Section 5.1. Events of Default..................................... 24
Section 5.2. Acceleration of Maturity; Rescission and Annulment.... 25
Collection of Indebtedness and Suits for Enforcement
Section 5.3. by Trustee............................................ 26
Section 5.4. Trustee May File Proofs of Claim...................... 26
Trustee May Enforce Claim Without Possession of
Section 5.5. Securities............................................ 27
Section 5.6. Application of Money Collected........................ 27
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
PAGE
----
<C> <S> <C>
Section 5.7. Limitation on Suits................................... 27
Unconditional Right of Holders to Receive Principal,
Section 5.8. Premium and Interest.................................. 28
Section 5.9. Restoration of Rights and Remedies.................... 28
Section 5.10. Rights and Remedies Cumulative........................ 28
Section 5.11. Delay or Omission Not Waiver.......................... 28
Section 5.12. Control by Holders.................................... 29
Section 5.13. Waiver of Past Defaults............................... 29
Section 5.14. Undertaking for Costs................................. 29
Section 5.15. Waiver of Stay or Extension Laws...................... 30
ARTICLE VI. THE TRUSTEE................................................. 30
Section 6.1. Certain Duties and Responsibilities................... 30
Section 6.2. Notice of Defaults.................................... 30
Section 6.3. Certain Rights of Trustee............................. 31
Not Responsible for Recitals or Issuance of
Section 6.4. Securities............................................ 31
Section 6.5. May Hold Securities................................... 31
Section 6.6. Money Held in Trust................................... 32
Section 6.7. Compensation and Reimbursement........................ 32
Section 6.8. Disqualification; Conflicting Interests............... 32
Section 6.9. Corporate Trustee Required; Eligibility............... 32
Section 6.10. Resignation and Removal; Appointment of Successor..... 33
Section 6.11. Acceptance of Appointment by Successor................ 34
Merger, Conversion, Consolidation or Succession to
Section 6.12. Business.............................................. 34
Section 6.13. Preferential Collection of Claims Against Company..... 35
Section 6.14. Appointment of Authenticating Agent................... 35
ARTICLE VII. HOLDER'S LISTS AND REPORTS BY TRUSTEE AND COMPANY.......... 36
Company to Furnish Trustee Names and Addresses of
Section 7.1. Holders............................................... 36
Preservation of Information, Communications to
Section 7.2. Holders............................................... 36
Section 7.3. Reports by Trustee.................................... 36
Section 7.4. Reports by Company.................................... 37
ARTICLE VIII. CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE...... 37
Section 8.1. Company May Consolidate, Etc., Only on Certain Terms.. 37
Section 8.2. Successor Corporation Substituted..................... 37
ARTICLE IX. SUPPLEMENTAL INDENTURES..................................... 38
Section 9.1. Supplemental Indentures without Consent of Holders.... 38
Section 9.2. Supplemental Indentures with Consent of Holders....... 39
Section 9.3. Execution of Supplemental Indentures.................. 39
Section 9.4. Effect of Supplemental Indentures..................... 40
Section 9.5. Conformity with Trust Indenture Act................... 40
Section 9.6. Reference in Securities to Supplemental Indentures.... 40
ARTICLE X. COVENANTS.................................................... 40
Section 10.1. Payment of Principal, Premium and Interest............ 40
Section 10.2. Maintenance of Office or Agency....................... 40
Section 10.3. Money for Security Payments to be Held in Trust....... 40
Section 10.4. Payment of Taxes and Other Claims..................... 41
Section 10.5. Statement as to Compliance............................ 42
Section 10.6. Waiver of Certain Covenants........................... 42
Section 10.7. Additional Sums....................................... 42
</TABLE>
ii
<PAGE>
<TABLE>
<CAPTION>
PAGE
----
<C> <S> <C>
ARTICLE XI. REDEMPTION OF SECURITIES.................................... 43
Section 11.1. Applicability of This Article........................ 43
Section 11.2. Election to Redeem; Notice to Trustee................ 43
Section 11.3. Selection of Securities to be Redeemed............... 43
Section 11.4. Notice of Redemption................................. 43
Section 11.5. Deposit of Redemption Price.......................... 44
Section 11.6. Payment of Securities Called for Redemption.......... 44
Section 11.7. Company's Right of Redemption........................ 44
ARTICLE XII. SINKING FUNDS.............................................. 45
Section 12.1. Applicability of Article............................. 45
Satisfaction of Sinking Fund Payments with
Section 12.2. Securities........................................... 45
Section 12.3. Redemption of Securities for Sinking Fund............ 45
ARTICLE XIII. SUBORDINATION OF SECURITIES............................... 46
Section 13.1. Securities Subordinate to Senior Debt................ 46
Section 13.2. Payment Over of Proceeds Upon Dissolution, Etc....... 47
Prior Payment to Senior Debt Upon Acceleration of
Section 13.3. Securities........................................... 47
Section 13.4. No Payment When Senior Debt in Default............... 48
Section 13.5. Payment Permitted If No Default...................... 48
Section 13.6. Subrogation to Rights of Holders of Senior Debt...... 49
Section 13.7. Provisions Solely to Define Relative Rights.......... 49
Section 13.8. Trustee to Effectuate Subordination.................. 49
Section 13.9. No Waiver of Subordination Provisions................ 49
Section 13.10. Notice to Trustee.................................... 49
Reliance on Judicial Order or Certificate of
Section 13.11. Liquidating Agent.................................... 50
Section 13.12. Trustee Not Fiduciary for Holders of Senior Debt..... 50
Rights of Trustee as Holder of Senior Debt;
Section 13.13. Preservation of Trustee's Rights..................... 50
Section 13.14. Article Applicable to Paying Agents.................. 50
Section 13.15. Certain Conversions or Exchanges Deemed Payment...... 50
</TABLE>
iii
<PAGE>
JUNIOR SUBORDINATED INDENTURE, dated as of May 1, 1996, between LINCOLN
NATIONAL CORPORATION, an Indiana corporation (hereinafter called the
"Company") having its principal office at 200 East Berry Street, Fort Wayne,
Indiana 46802-2706, and The First National Bank of Chicago, a national banking
corporation, as Trustee (hereinafter called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this Indenture
to provide for the issuance from time to time of its unsecured junior
subordinated debt securities in series (hereinafter called the "Securities")
of substantially the tenor hereinafter provided, including, without
limitation, Securities issued to evidence loans made to the Company of the
proceeds from the issuance from time to time by one or more business trusts
(each a "Lincoln Trust," and, collectively, the "Lincoln Trusts") of preferred
trust interests in such Trusts (the "Preferred Securities") and common
interests in such Trusts (the "Common Securities"and, collectively with the
Preferred Securities, the "Trust Securities"), and to provide the terms and
conditions upon which the Securities are to be authenticated, issued and
delivered.
All things necessary to make the Securities, when executed by the Company
and authenticated and delivered hereunder and duly issued by the Company, the
valid obligations of the Company, and to make this Indenture a valid agreement
of the Company, in accordance with their and its terms, have been done.
NOW THEREFORE, THIS INDENTURE WITNESSETH: For and in consideration of the
premises and the purchase of the Securities by the Holders thereof, it is
mutually covenanted and agreed, for the equal and proportionate benefit of all
Holders of the Securities or of any series thereof, as follows:
ARTICLE I. DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.1. Definitions.
For all purposes of this Indenture, except as otherwise expressly provided
or unless the context otherwise requires:
(1) The terms defined in this Article have the meanings assigned to them
in this Article, and include the plural as well as the singular;
(2) All other terms used herein which are defined in the Trust Indenture
Act, either directly or by reference therein, have the meanings assigned to
them therein;
(3) All accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting
principles, and the term "generally accepted accounting principles" with
respect to any computation required or permitted hereunder shall mean such
accounting principles which are generally accepted at the date or time of
such computation; provided, that when two or more principles are so
generally accepted, it shall mean that set of principles consistent with
those in use by the Company; and
(4) The words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
Certain terms, used principally in Article Six, are defined in that Article.
"Act" when used with respect to any Holder has the meaning specified in
Section 1.4.
"Additional Interest" means the interest, if any, that shall accrue on any
interest on the Securities of any series the payment of which has not been
made on the applicable Interest Payment Date and which shall accrue at the
rate per annum specified or determined as specified in such Security.
"Additional Sums" has the meaning specified in Section 10.7.
<PAGE>
"Additional Taxes" means the sum of any additional taxes, duties and other
governmental charges to which a Lincoln Trust has become subject from time to
time as a result of a Tax Event.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person; provided, however, that an Affiliate of
the Company shall not be deemed to include any Lincoln Trust to which
Securities have been issued. For the purposes of this definition, "control"
when used with respect to any specified Person means the power to direct the
management and policies of such Person, directly or indirectly, whether
through the ownership of voting securities, by contract or otherwise; and the
terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Authenticating Agent" means any Person authorized by the Trustee pursuant
to Section 6.14 to act on behalf of the Trustee to authenticate Securities of
one or more series.
"Board of Directors" means either the board of directors of the Company or
any committee of that board duly authorized to act hereunder.
"Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Company to have been duly adopted by the
Board of Directors, or such committee of the Board of Directors or officers of
the Company to which authority to act on behalf of the Board of Directors has
been delegated, and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day" means any day other than (i) a Saturday or Sunday, (ii) a day
on which banking institutions in the City of New York are authorized or
required by law or executive order to remain closed or (iii) a day on which
the Corporate Trust Office of the Trustee, or, with respect to the Securities
of a series issued to a Lincoln Trust, the principal office of the Property
Trustee under the related Trust Agreement, is closed for business.
"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Securities Exchange Act of 1934, or if at
any time after the execution of this instrument such Commission is not
existing and performing the duties now assigned to it under the Trust
Indenture Act, then the body performing such duties on such date.
"Common Securities" has the meaning specified in the first recital of this
Indenture.
"Common Stock" means the common stock, without par value, of the Company.
"Company" means the Person named as the "Company" in the first paragraph of
this instrument until a successor corporation shall have become such pursuant
to the applicable provisions of this Indenture, and thereafter "Company" shall
mean such successor corporation.
"Company Request" and "Company Order" mean, respectively, the written
request or order signed in the name of the Company by the Chairman, Chief
Executive Officer, President or a Vice President, and by the Treasurer, and
Assistant Treasurer, the Controller, the Secretary or an Assistant Secretary
of the Company, and delivered to the Trustee.
"Corporate Trust Office" means the principal office of the Trustee at which
at any particular time its corporate trust business shall be administered.
"corporation" includes a corporation, association, company, joint-stock
company or business trust.
"Current Value" has the meaning specified in Section 11.7.
2
<PAGE>
"Debt" means, with respect to any Person, whether recourse is to all or a
portion of the assets of such Person and whether or not contingent, (i) every
obligation of such Person for money borrowed; (ii) every obligation of such
Person evidenced by bonds, debentures, notes or other similar instruments,
including obligations incurred in connection with the acquisition of property,
assets or businesses; (iii) every reimbursement obligation of such Person with
respect to letters of credit, bankers' acceptances or similar facilities
issued for the account of such Person; (iv) every obligation of such Person
issued or assumed as the deferred purchase price of property or services (but
excluding trade accounts payable or accrued liabilities arising in the
ordinary course of business); (v) every capital lease obligation of such
Person; and (vi) every obligation of the type referred to in clauses (i)
through (v) of another Person and all dividends of another Person the payment
of which, in either case, such Person has guaranteed or is responsible or
liable for, directly or indirectly, as obligor or otherwise.
"Defaulted Interest" has the meaning specified in Section 3.7.
"Depository" means, with respect to the Securities of any series issuable or
issued in whole or in part in the form of one or more Global Securities, the
Person designated as Depository by the Company pursuant to Section 3.1 with
respect to such series (or any successor thereto).
"Discount Security" means any security which provides for an amount less
than the principal amount thereof to be due and payable upon a declaration of
acceleration of the Maturity thereof pursuant to Section 5.2.
"Dollar" means the currency of the United States of America that, as at the
time of payment, is legal tender for the payment of public and private debts.
"Event of Default" unless otherwise specified in the supplemental indenture
creating a series of Securities has the meaning specified in Article Five.
"Extension Period" has the meaning specified in Section 3.11.
"Foreign Currency" means any currency issued by the government of one or
more countries other than the United States of America or by any recognized
confederation or association of such governments.
"Global Security" means a Security in the form prescribed in Section 2.4
evidencing all or part of a series of Securities, issued to the Depository or
its nominee for such series, and registered in the name of such Depository or
its nominee.
"Government Obligations" means, with respect to the Securities of any
series, securities which are (i) direct obligations of the United States of
America or (ii) obligations of a Person controlled or supervised by and acting
as an agency or instrumentality of the United States of America the payment of
which is unconditionally guaranteed by the United States of America and which,
in either case, are full faith and credit obligations of the United States of
America and are not callable or redeemable at the option of the issuer thereof
and shall also include a depository receipt issued by a bank (as defined in
Section 3(a)(2) of the Securities Act of 1933, as amended) as custodian with
respect to any such Government Obligation or a specific payment of interest on
or principal of any such Government Obligation held by such custodian for the
account of the holder of such depository receipt; provided that (except as
required by law) such custodian is not authorized to make any deduction from
the amount payable to the holder of such depository receipt from any amount
received by the custodian in respect of the Government Obligation or the
specific payment of interest on or principal of the Government Obligation
evidenced by such depository receipt.
"Holder" means a Person in whose name a Security is registered in the
Securities Register.
"Junior Subordinated Payment" has the meaning specified in Section 13.2.
"Indenture" means this instrument as originally executed or as it may from
time to time be supplemented or amended by one or more indentures supplemental
hereto entered into pursuant to the applicable provisions hereof and shall
include the terms of each particular series of Securities established as
contemplated by Section 3.1.
3
<PAGE>
"Interest Payment Date" means as to each series of Securities the Stated
Maturity of an installment of interest on such Securities.
"Interest Rate" means the rate of interest specified or determined as
specified in each Security as being the rate of interest payable on such
Security.
"Investment Company Event" means, in respect of a Lincoln Trust, the receipt
by a Lincoln Trust of an Opinion of Counsel, rendered by a law firm
experienced in such matters,to the effect that, as a result of the occurrence
of a change in law or regulation or a change in interpretation or application
of law or regulation by any legislative body, court, governmental agency or
regulatory authority (a "Change in 1940 Act Law") such Lincoln Trust is or
will be considered an investment company that is required to be registered
under the 1940 Act, which Change in 1940 Act Law becomes effective on or after
the date of original issuance of the Preferred Securities of such Lincoln
Trust.
"Lien" means any mortgage, pledge, lien, security interest or other
encumbrance.
"Lincoln Guarantee" means the guarantee by the Company of distributions on
the Preferred Securities of a Lincoln Trust to the extent provided in the
Guarantee Agreement, substantially in the form attached hereto as Annex C, or
substantially in such form as may be specified as contemplated by Section 3.1
with respect to the Securities of any series, in each case as amended from
time to time.
"Lincoln Trust" has the meaning specified in the first recital of this
Indenture.
"Maturity" when used with respect to any Security means the date on which
the principal of such Security becomes due and payable as therein or herein
provided, whether at the Stated Maturity or by declaration of acceleration,
call for redemption or otherwise.
"1940 Act" means the Investment Company Act of 1940, as amended.
"Notice of Default" has the meaning specified in Section 5.1(3).
"Officers' Certificate" means a certificate signed by the Chairman and Chief
Executive Officer, President or a Vice President, and by the Treasurer, an
Assistant Treasurer, the Controller, the Secretary or an Assistant Secretary
of the Company, and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be counsel
for the Company.
"Original Issue Date" means the date of issuance specified as such in each
Security.
"Outstanding" means, when used in reference to any Securities, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:
(i) Securities theretofore canceled by the Trustee or delivered to the
Trustee for cancellation;
(ii) Securities for whose payment money in the necessary amount has been
theretofore deposited with the Trustee or any Paying Agent in trust for the
Holders of such Securities; and
(iii) Securities in substitution for or in lieu of which other Securities
have been authenticated and delivered or which have been paid pursuant to
Section 3.6, unless proof satisfactory to the Trustee is presented that any
such Securities are held by Holders in whose hands such Securities are
valid, binding and legal obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Securities
owned by the Company or any other obligor upon the Securities or any Affiliate
of the Company or
4
<PAGE>
such other obligor shall be disregarded and deemed not to be Outstanding,
except that, in determining whether the Trustee shall be protected in relying
upon any such request, demand, authorization, direction, notice, consent or
waiver, only Securities which the Trustee knows to be so owned shall be so
disregarded. Securities so owned which have been pledged in good faith may be
regarded as Outstanding if the pledgee establishes to the satisfaction of the
Trustee the pledgee's right so to act with respect to such Securities and that
the pledgee is not the Company or any other obligor upon the Securities or any
Affiliate of the Company or such other obligor. Upon the written request of
the Trustee, the Company shall furnish to the Trustee promptly an Officers'
Certificate listing and identifying all Securities, if any, known by the
Company to be owned or held by or for the account of the Company, or any other
obligor on the Securities or any Affiliate of the Company or such obligor,
and, subject to the provisions of Section 6.1, the Trustee shall be entitled
to accept such Officers' Certificate as conclusive evidence of the facts
therein set forth and of the fact that all Securities not listed therein are
Outstanding for the purpose of any such determination.
"Paying Agent" means the Trustee or any Person authorized by the Company to
pay the principal of or interest on any Securities on behalf of the Company.
"Person" means any individual, corporation, partnership, joint venture,
association, trust, unincorporated organization or government or any agency or
political subdivision thereof.
"Place of Payment" means, with respect to the Securities of any series, the
place or places where the principal of (and premium, if any) and interest on
the Securities of such series are payable pursuant to Sections 3.1 and 3.11.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by
such particular Security; and, for the purposes of this definition, any
security authenticated and delivered under Section 3.6 in lieu of a lost,
destroyed or stolen Security shall be deemed to evidence the same debt as the
lost, destroyed or stolen Security.
"Preferred Securities" has the meaning specified in the first recital of
this Indenture.
"Proceeding" has the meaning specified in Section 13.2.
"Property Trustee" means, in respect of any Lincoln Trust, the commercial
bank or trust company identified as the "Property Trustee" in the related
Trust Agreement, solely in its capacity as Property Trustee of such Lincoln
Trust under such Trust Agreement and not in its individual capacity, or its
successor in interest in such capacity, or any successor property trustee
appointed as therein provided.
"Redemption Date," when used with respect to any Security to be redeemed,
means the date fixed for such redemption by or pursuant to this Indenture.
"Regular Record Date" for the interest payable on any Interest Payment Date
with respect to the Securities of a series means, unless otherwise provided
pursuant to Section 3.1 with respect to Securities of a series, the date which
is fifteen days next preceding such Interest Payment Date (whether or not a
Business Day).
"Responsible Officer" when used with respect to the Trustee means any
officer of the Trustee assigned by the Trustee from time to time to administer
its corporate trust matters.
"Securities" or "Security" means any debt securities or debt security, as
the case may be, authenticated and delivered under this Indenture.
"Securities Register" and "Securities Registrar" have the respective
meanings specified in Section 3.5.
"Senior Debt" means the principal of (and premium, if any) and interest, if
any (including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to the Company whether or not
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such claim for post-petition interest is allowed in such proceeding), on Debt,
whether incurred on or prior to the date of this Indenture or thereafter
incurred, unless, in the instrument creating or evidencing the same or
pursuant to which the same is outstanding, it is provided that such
obligations are not superior in right of payment to the Securities or to other
Debt which is pari passu with, or subordinated to, the Securities, provided,
however, that Senior Debt shall not be deemed to include (a) any Debt of the
Company which, when incurred and without respect to any election under Section
1111(b) of the Bankruptcy Reform Act of 1978, was without recourse to the
Company, (b) any Debt of the Company to any of its Subsidiaries, (c) Debt to
any employee of the Company, (d) any liability for taxes, (e) Debt or other
monetary obligations to trade creditors created or assumed by the Company or
any of these Subsidiaries in the ordinary course of business in connection
with the obtaining of goods, materials or services and (f) the Securities.
"Special Event" means a Tax Event or an Investment Company Event.
"Special Record Date" for the payment of any Defaulted Interest means a date
fixed by the Trustee pursuant to Section 3.7.
"Stated Maturity" when used with respect to any Security or any installment
of principal thereof or interest thereon means the date specified pursuant to
the terms of such Security as the date on which the principal of such Security
or such installment of interest is due and payable.
"Subsidiary" means a corporation more than 50% of the outstanding voting
stock of which is owned, directly or indirectly, by the Company or by one or
more other Subsidiaries, or by the Company and one or more other Subsidiaries.
For purposes of this definition, "voting stock" means stock which ordinarily
has voting power for the election of directors, whether at all times or only
so long as no senior class of stock has such voting power by reason of any
contingency.
"Tax Event" means the receipt by a Lincoln Trust of an Opinion of Counsel
experienced in such matters to the effect that, as a result of any amendment
to, or change (including any announced prospective change) in, the laws (or
any regulations thereunder) of the United States or any political subdivision
or taxing authority thereof or therein or as a result of any official
administrative pronouncement or judicial decision interpreting or applying
such laws or regulations, which amendment or change is effective or which
pronouncement or decision is announced on or after the date of issuance of the
Preferred Securities of such Lincoln Trust, there is more than an
insubstantial risk that (i) the Lincoln Trust is, or will be within 90 days of
the date of such Opinion of Counsel, subject to United States Federal income
tax with respect to income received or accrued on the corresponding series of
Securities, (ii) interest payable by the Company on the corresponding series
of Securities is not, or within 90 days of the date of such Opinion of
Counsel, will not be, deductible, in whole or in part, for United States
Federal income tax purposes or (iii) the Lincoln Trust is, or will be within
90 days of the date of such Opinion of Counsel, subject to more than a de
minimis amount of other taxes, duties or other governmental charges.
"Trust Agreement" means the Trust Agreement substantially in the form
attached hereto as Annex A, as amended by the form of Amended and Restated
Trust Agreement substantially in the form attached hereto as Annex B, or
substantially in such form as may be specified as contemplated by Section 3.1
with respect to the Securities of any series, in each case as amended from
time to time.
"Trustee" means the Person named as the "Trustee" in the first paragraph of
this instrument until a successor Trustee shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Trustee" shall
mean or include each Person who is then a Trustee hereunder and, if at any
time there is more than one such Person, "Trustee" as used with respect to the
Securities of any series shall mean the Trustee with respect to Securities of
that series.
"Trust Indenture Act" means the Trust Indenture Act of 1939 (15 U.S.C.
(S)(S) 77aaa-77bbb), as amended and as in effect on the date as of this
Indenture, except as provided in Section 9.5.
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"Trust Securities" has the meaning specified in the first recital of this
Indenture.
"Vice President" when used with respect to the Company, means any duly
appointed vice president, whether or not designated by a number or a word or
words added before or after the title "vice president."
Section 1.2. Compliance Certificate and Opinions.
Upon any application or request by the Company to the Trustee to take any
action under any provision of this Indenture, the Company shall furnish to the
Trustee an Officers' Certificate stating that all conditions precedent
(including covenants, compliance with which constitutes a condition
precedent), if any, provided for in this Indenture relating to the proposed
action have been complied with and an Opinion of Counsel stating that in the
opinion of such counsel all such conditions precedent (including covenants
compliance with which constitute a condition precedent), if any, have been
complied with, except that in the case of any such application or request as
to which the furnishing of such documents is specifically required by any
provision of this Indenture relating to such particular application or
request, no additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture (other than the certificates provided
pursuant to Section 10.5) shall include:
(1) a statement that each individual signing such certificate or opinion
has read such covenant or condition and the definitions herein relating
thereto;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he has made
such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has
been complied with; and
(4) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
Section 1.3. Forms of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and
one or more other such Persons as to other matters, and any such Person may
certify or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or
representations with respect to matters upon which his certificate or opinion
is based are erroneous. Any such certificate or Opinion of Counsel may be
based, insofar as it relates to factual matters, upon a certificate or opinion
of, or representations by, an officer or officers of the Company stating that
the information with respect to such factual matters is in the possession of
the Company, unless such counsel knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect
to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions, or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Section 1.4. Acts of Holders.
(a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Indenture to be given to or taken by Holders
may be embodied in and evidenced by one or more instruments of substantially
similar tenor signed by such Holders in person or by an agent duly appointed
in writing; and, except as herein otherwise expressly provided, such action
shall become effective when such instrument or instruments is or are delivered
to the Trustee, and, where it is hereby expressly required, to the Company.
Such instrument
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or instruments (and the action embodied therein and evidenced thereby) are
herein sometimes referred to as the "Act" of the Holders signing such
instrument or instruments. Proof of execution of any such instrument or of a
writing appointing any such agent shall be sufficient for any purpose of this
Indenture and (subject to Section 6.1) conclusive in favor of the Trustee and
the Company, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such instrument
or writing may be proved by the affidavit of a witness of such execution or by
the certificate of any notary public or other officer authorized by law to
take acknowledgments of deeds, certifying that the individual signing such
instrument or writing acknowledged to him the execution thereof. Where such
execution is by a Person acting in other than his individual capacity, such
certificate or affidavit shall also constitute sufficient proof of his
authority.
(c) The fact and date of the execution by any Person of any such instrument
or writing, or the authority of the Person executing the same, may also be
proved in any other manner which the Trustee deems sufficient and in
accordance with such reasonable rules as the Trustee may determine.
(d) The ownership of Securities shall be proved by the Securities Register.
(e) Any request, demand, authorization, direction, notice, consent, waiver
or other action by the Holder of any Security shall bind every future Holder
of the same Security and the Holder of every Security issued upon the transfer
thereof or in exchange therefor or in lieu thereof in respect of anything done
or suffered to be done by the Trustee or the Company in reliance thereon,
whether or not notation of such action is made upon such Security.
(f) The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders entitled to take any action under this
Indenture by vote or consent. Except as otherwise provided herein, such record
date shall be the later of 30 days prior to the first solicitation of such
consent or vote or the date of the most recent list of Securityholders
furnished to the Trustee pursuant to Section 7.1 prior to such solicitation.
If a record date is fixed, those persons who were Securityholders at such
record date (or their duly designated proxies), and only those persons, shall
be entitled to take such action by vote or consent or to revoke any vote or
consent previously given, whether or not such persons continue to be Holders
after such record date, provided, however, that unless such vote or consent is
obtained from the Holders (or their duly designated proxies) of the requisite
principal amount of Outstanding Securities prior to the date which is the
120th day after such record date, any such vote or consent previously given
shall automatically and without further action by any Holder be cancelled and
of no further effect.
Section 1.5. Notices, Etc. to Trustee and Company.
Any request, demand, authorization, direction, notice, consent, waiver or
Act of Holders or other document provided or permitted by this Indenture to be
made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be sufficient for
every purpose hereunder if made, given, furnished or filed in writing to or
with the Trustee at its Corporate Trust office, or
(2) the Company by the Trustee or by any Holder shall be sufficient for
every purpose (except as otherwise provided in Section 5.1 hereof)
hereunder if in writing and mailed, first class, postage prepaid, to the
Company addressed to it at the address of its principal office specified in
the first paragraph of this instrument or at any other address previously
furnished in writing to the Trustee by the Company.
Section 1.6. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly
provided) if in writing and mailed, first class postage prepaid, to each
Holder affected by such event, at the address of such Holder as it appears in
the Securities Register, not later than the latest date, and not earlier than
the earliest date, prescribed for the giving of such notice. In any case where
notice to Holders is given by mail, neither the failure to mail such notice,
nor any defect in any notice so mailed, to any
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particular Holder shall affect the sufficiency of such notice with respect to
other Holders. Where this Indenture provides for notice in any manner, such
notice may be waived in writing by the Person entitled to receive such notice,
either before or after the event, and such waiver shall be the equivalent of
such notice. Waivers of notice by Holders shall be filed with the Trustee, but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.
Section 1.7. Conflict with Trust Indenture Act.
If any provision of this Indenture limits, qualifies or conflicts with the
duties imposed by any of Sections 310 to 317, inclusive, of the Trust
Indenture Act through operation of Section 318(c) thereof, such imposed duties
shall control.
Section 1.8. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
Section 1.9. Successors and Assigns.
All covenants and agreements in this Indenture by the Company shall bind its
successors and assigns, whether so expressed or not.
Section 1.10. Separability Clause.
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
Section 1.11 Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied, shall
give to any Person, other than the parties hereto, any Paying Agent and their
successors and assigns, the holders of Senior Debt and the Holders of the
Securities, any benefit or any legal or equitable right, remedy or claim under
this Indenture.
Section 1.12. Governing Law.
This Indenture and the Securities shall be governed by and construed in
accordance with the laws of the State of New York.
Section 1.13. Non-Business Days.
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Security shall not be a Business Day, then (notwithstanding
any other provision of this Indenture or the Securities) payment of interest
or principal need not be made on such date, but may be made on the next
succeeding Business Day (and no interest shall accrue for the period from and
after such Interest Payment Date, Redemption Date or Stated Maturity, as the
case may be, until such next succeeding Business Day except that, if such
Business Day is in the next succeeding calendar year, such payment shall be
made on the immediately preceding Business Day (in each case with the same
force and effect as if made on the Interest Payment Date or Redemption Date or
at the Stated Maturity).
ARTICLE II. SECURITY FORMS
Section 2.1. Forms Generally.
The Securities of each series and the Trustee's certificate of
authentication shall be in substantially the forms set forth in this Article,
or in such other form or forms as shall be established by or pursuant to a
Board Resolution or in one or more indentures supplemental hereto, in each
case with such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Indenture and may have such
letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be
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<PAGE>
required to comply with applicable tax laws or the rules of any securities
exchange or as may, consistently herewith, be determined by the officers
executing such securities, as evidenced by their execution of the Securities.
If the form of Securities of any series is established by action taken
pursuant to a Board Resolution, a copy of an appropriate record of such action
shall be certified by the Secretary or an Assistant Secretary of the Company
and delivered to the Trustee at or prior to the delivery of the Company Order
contemplated by Section 3.3 with respect to the authentication and delivery of
such Securities.
The Trustee's certificates of authentication shall be substantially in the
form set forth in this Article.
The definitive Securities shall be printed, lithographed or engraved or
produced by any combination of these methods, if required by any securities
exchange on which the Securities may be listed, on a steel engraved border or
steel engraved borders or may be produced in any other manner permitted by the
rules of any securities exchange on which the Securities may be listed, all as
determined by the officers executing such Securities, as evidenced by their
execution of such securities.
Section 2.2. Form of Face of Security.
[If the Security is a Global Security, insert--This Security is a Global
Security within the meaning of the Indenture hereinafter referred to and is
registered in the name of The Depository Trust Company (the "Depository") or a
nominee of the Depository. This Security is exchangeable for Securities
registered in the name of a person other than the Depository or its nominee
only in the limited circumstances described in the Indenture and no transfer
of this Security (other than a transfer of this Security as a whole by the
Depository to a nominee of the Depository or by a nominee of the Depository to
the Depository or another nominee of the Depository) may be registered except
in limited circumstances.
Unless this Security is presented by an authorized representative of The
Depository Trust Company (55 Water Street, New York) to Lincoln National
Corporation or its agent for registration of transfer, exchange or payment,
and any Security issued is registered in the name of Cede & Co. or such other
name as requested by an authorized representative of The Depository Trust
Company and any payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL inasmuch as
the registered owner hereof, Cede & Co., has an interest herein.]
LINCOLN NATIONAL CORPORATION
(TITLE OF SECURITY)
No. $
LINCOLN NATIONAL CORPORATION, a corporation organized and existing under the
laws of Indiana (hereinafter called the "Company", which term includes any
successor corporation under the Indenture hereinafter referred to), for value
received, hereby promises to pay to , or registered assigns, the
principal sum of Dollars on , [; provided that the Company may (i)
change the maturity date upon the occurrence of an exchange of the Securities
for the Trust Securities subject to certain conditions set forth in Section
3.14 of the Indenture, which changed maturity date shall in no case be earlier
than , or later than , and (ii) extend the maturity date
subject to certain conditions specified in Section 3.14 of the Indenture,
which extended maturity date shall in no case be later than , ]. The
Company further promises to pay interest on said principal sum from ,
or from the most recent interest payment date (each such date, an "Interest
Payment Date") on which interest has been paid or duly provided for, [monthly]
[quarterly] [semi-annually] [if applicable, insert--(subject to deferral as
set forth herein)] in arrears on [insert applicable Interest Payment Dates] of
each year, commencing , , at the rate of % per annum, until the
principal hereof shall have become due and payable, [if applicable, insert--
plus Additional Interest, if any,] until the principal hereof is paid or duly
provided for or made available for payment [if applicable, insert--and on any
overdue principal and (without duplication and to the extent that payment of
such interest is enforceable under applicable law) on any overdue installment
of interest
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at the rate of % per annum, compounded [monthly] [quarterly] [semi-annually]
[annually]. The amount of interest payable for any period shall be computed on
the basis of twelve 30-day months and a 360-day year. The amount of interest
payable for any partial period shall be computed on the basis of the number of
days elapsed in a 360-day year of twelve 30-day months. In the event that any
date on which interest is payable on this Security is not a Business Day, then
a payment of the interest payable on such date will be made on the next
succeeding day which is a Business Day (and without any interest or other
payment in respect of any such delay), except that, if such Business Day is in
the next succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the same force and
effect as if made on the date the payment was originally payable. A "Business
Day" shall mean any day other than (i) a Saturday or Sunday, (ii) a day on
which banking institutions in the City of New York are authorized or required
by law or executive order to remain closed or (iii) a day on which the
Corporate Trust Office of the Trustee [if applicable, insert--, or the
principal office of the Property Trustee under the Trust Agreement hereinafter
referred to for [Lincoln Capital ,]] is closed for business. The interest
installment so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided in the Indenture, be paid to the
Person in whose name this Security (or one or more Predecessor Securities, as
defined in the Indenture) is registered at the close of business on the
Regular Record Date for such interest installment, which shall be the [[insert
definition of Regular Record Dates]. Any such interest installment not so
punctually paid or duly provided for shall forthwith cease to be payable to
the Holder on such Regular Record Date and may either be paid to the Person in
whose name this Security (or one or more Predecessor Securities) is registered
at the close of business on a Special Record Date for the payment of such
Defaulted Interest to be fixed by the Trustee, notice whereof shall be given
to Holders of Securities of this series not less than 10 days prior to such
Special Record Date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the
Securities of this series may be listed, and upon such notice as may be
required by such exchange, all as more fully provided in said Indenture.
[If applicable, insert--The Company shall have the right at any time during
the term of this Security, from time to time, to that payment of interest on
such Security for up to consecutive [monthly] [quarterly] [semi-annual]
interest payment periods with respect to each deferral period (each an
"Extension Period"), during which Extension Periods the Company shall have the
right to make partial payments of interest on any Interest Payment Date, and
at the end of which the Company shall pay all interest then accrued and unpaid
(together with Additional Interest thereon to the extent permitted by
applicable law); provided that during any such Extension Period, the Company
will not, and will not permit any Subsidiary of the Company to, (i) declare or
pay any dividends or distributions or redeem, purchase, acquire or make a
liquidation payment with respect to, any of the Company's outstanding capital
stock or (ii) make any payment of principal of, interest or premium, if any,
on or repay, repurchase or redeem any debt security of the Company that ranks
pari passu with or junior in interest to this Security or make any guarantee
payments with respect to any guarantee by the Company of the debt securities
of any subsidiaries of the Company if such guarantee ranks pari passu or
junior in interest to this Security (other than (a) dividends or distributions
in Common Stock of the Company, (b) redemptions or purchases of any rights
pursuant to the Company's Rights Plan, or any successor to such Rights Plan,
and the declaration of a dividend of such rights or the issuance of Stock
under such plans in the future, (c) payments under any Lincoln Guarantee (as
defined in the Indenture), and (d) purchases of Common Stock related to the
issuance of Common Stock under any of the Company's benefit plans for its
directors, officers or employees. Prior to the termination of any such
Extension Period, the Company may further extend the interest payment period,
provided that no Extension Period shall exceed consecutive [months]
[quarters] [semi-annual periods] or extend beyond the Maturity of this
Security. Upon the termination of any such Extension Period and upon the
payment of all accrued and unpaid interest and any Additional Interest then
due, the Company may elect to begin a new Extension Period, subject to the
above requirements. No interest shall be due and payable during an Extension
Period except at the end thereof. The Company shall give the Holder of this
Security and the Trustee notice of its election to begin any Extension Period
at least one Business Day prior to the Interest Payment Date [if applicable,
insert--or, with respect to the Securities issued to a Lincoln Trust, prior to
the earlier of (i) the date the Distributions on the Preferred Securities are
payable or (ii) the date the Administrative Trustees are required to give
notice to the New York Stock Exchange or other applicable self-regulatory
organization or to holders of such Preferred Securities of the record date or
the date such Distributions are payable, but in any event not less than one
Business Day prior to such record date].
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Payment of the principal of (and premium, if any) and interest on this
Security will be made at the office or agency of the Company maintained for
that purpose in the United States, in such coin or currency of the United
States of America as at the time of payment is legal tender for payment of
public and private debts [if applicable, insert--; provided, however, that at
the option of the Company payment of interest may be made (i) by check mailed
to the address of the Person entitled thereto as such address shall appear in
the Securities Register or (ii) by wire transfer in immediately available
funds at such place and to such account as may be designated by the Person
entitled thereto as specified in the Securities Register].
The indebtedness evidenced by this Security is, to the extent provided in
the Indenture, subordinate and subject in right of payments to the prior
payment in full of all Senior Debt, and this Security is issued subject to the
provisions of the Indenture with respect thereto. Each Holder of this
Security, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee on his behalf to take such
actions as may be necessary or appropriate to effectuate the subordination so
provided and (c) appoints the Trustee his attorney-in-fact for any and all
such purposes. Each Holder hereof, by his acceptance hereof, waives all notice
of the acceptance of the subordination provisions contained herein and in the
Indenture by each holder of Senior Debt, whether now outstanding or hereafter
incurred, and waives reliance by each such holder upon said provisions.
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated:
Lincoln National Corporation
By: _________________________________
[Chairman and Chief Executive
Officer, President or Vice
President]
Attest:
_____________________________________
[Secretary or Assistant Secretary]
Section 2.3. Form of Reverse of Security.
This Security is one of a duly authorized issue of securities of the Company
(herein called the "Securities"), issued and to be issued in one or more
series under a Junior Subordinated Indenture, dated as of May 1, 1996 (herein
called the "Indenture"), between the Company and The First National Bank of
Chicago, as Trustee (herein called the "Trustee", which term includes any
successor trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the
respective rights, limitations of rights, duties and immunities thereunder of
the Trustee, the Company and the Holders of the Securities, and of the terms
upon which the Securities are, and are to be, authenticated and delivered.
This Security is one of the series designated on the face hereof, [limited in
aggregate principal amount to $ ].
All terms used in this Security that are defined in the Indenture [if
applicable, insert--and in the Trust Agreement, dated , 1996, as amended
(the "Trust Agreement"), for [Lincoln Capital ,] among Lincoln National
Corporation, as Depositor, and the Trustees named therein, shall have the
meanings assigned to them in the Indenture [if applicable, insert--or the
Trust Agreement, as the case may be].
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[If applicable, insert--On or after , , the Company may at any
time, at its option, subject to the terms and conditions of Article Eleven of
the Indenture, redeem this Security in whole at any time or in part from time
to time, interest premium or penalty, at a redemption price equal to 100% of
the principal amount thereof plus the accrued and unpaid interest [if
applicable, insert--including Additional Interest, if any] to the date fixed
for redemption.
[If applicable, insert--If a Special Event in respect of a Lincoln Trust
shall occur and be continuing, the Company may, at its option, redeem this
Security within 90 days of the occurrence of such Special Event, in whole but
not in part, subject to the provisions of Section 11.7 and the other
provisions of Article Eleven of the Indenture, at a redemption price equal to
100% of the principal amount thereof plus accrued and unpaid interest,
including Additional Interest, if any, to the date fixed for redemption.]
In the event of redemption of this Security in part only, a new Security or
Securities of this series for the unredeemed portion hereof will be issued in
the name of the Holder hereof upon the cancellation hereof.
[If the Security is not a Discount Security,--If an Event of Default with
respect to Securities of this series shall occur and be continuing, the
principal of this Security may be declared due and payable in the manner, with
the effect and subject to the conditions provided in the Indenture.]
[If the Security is a Discount Security,--If an Event of Default with
respect to Securities of this series shall occur and be continuing, an amount
of principal of this Security may be declared due and payable in the manner,
with the effect and subject to the conditions provided in the Indenture. Such
amount shall be equal to [--insert formula for determining the amount]. Upon
payment (i) of the amount of principal so declared due and payable and (ii) of
interest on any overdue principal and overdue interest (in each case to the
extent that the payment of such interest shall be legally enforceable), all of
the Company's obligations in respect of the payment of the principal of and
interest, if any, on this Security shall terminate.]
The Indenture contains provisions for satisfaction, discharge and defeasance
at any time of the entire indebtedness of this Security upon compliance by the
Company with certain conditions set forth in the Indenture.
The Indenture permits, with certain exceptions as therein provided, the
Company and the Trustee at any time to enter into a supplemental indenture or
indentures for the purpose of modifying in any manner the rights and
obligations of the Company and of the Holders of the Securities, with the
consent of the Holders of not less than a majority in principal amount of the
Outstanding Securities of each series to be affected by such supplemental
indenture. The Indenture also contains provisions permitting Holders of
specified percentages in principal amount of the Securities of each series at
the time Outstanding, on behalf of the Holders of all Securities of such
series, to waive compliance by the Company with certain provisions of the
Indenture and certain past defaults under the Indenture and their
consequences. Any such consent or waiver by the Holder of this Security shall
be conclusive and binding upon such Holder and upon all future Holders of this
Security and of any Security issued upon the registration of transfer hereof
or in exchange herefor or in lieu hereof, whether or not notation of such
consent or waiver is made upon this Security.
If the Security is not a Discount Security,--As provided in and subject to
the provisions of the Indenture, if an Event of Default with respect to the
Securities of this series at the time Outstanding occurs and is continuing,
then and in every such case the Trustee or the Holders of not less than 25% in
principal amount of the Outstanding Securities of this series may declare the
principal amount of all the Securities of this series to be due and payable
immediately, by a notice in writing to the Company (and to the Trustee if
given by Holders), provided that, in the case of the Securities of this series
issued to a Lincoln Trust, if upon an Event of Default, the Trustee or the
Holders of not less than 25% in principal amount of the Outstanding Securities
of this series fails to declare the principal of all the Securities of this
series to be immediately due and payable, the holders of at least 25% in
aggregate liquidation amount of the corresponding series of Preferred
Securities then outstanding shall have such right by a notice in writing to
the Company and the Trustee; and upon any such declaration such principal
amount of and the accrued interest (including any Additional Interest) on all
the Securities of this series shall become immediately due and payable,
provided that the payment of principal and interest (including any
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Additional Interest) on such Securities shall remain subordinated to the
extend provided that the payment of principal and interest (including any
Additional Interest) on such Securities shall remain subordinated to the
extent provided in Article 13 of the Indenture.
[If the Security is a Discount Security,--As provided in and subject to the
provisions of the Indenture, if an Event of Default with respect to the
Securities of this series at the time Outstanding occurs and is continuing,
then and in every such case the Trustee or the Holders of not less than such
portion of the principal amount as may be specified in the terms of this
series of all the Securities of this series to be due and payable immediately,
by a notice in writing to the Company (and to the Trustee if given by
Holders), provided that, in the case of the Securities of this series issued
to a Lincoln Trust, if upon an Event of Default, the Trustee or the Holders of
not less than 25% in principal amount of the Outstanding Securities of this
series fails to declare the principal of all the Securities of this series to
be immediately due and payable, the holders of at least 25% in aggregate
liquidation amount of the corresponding series of Preferred Securities then
outstanding shall have such right by a notice in writing to the Company and
the Trustee; and upon any such declaration such specified amount of and the
accrued interest (including any Additional Interest) on all the Securities of
this series shall become immediately due and payable, provided that the
payment of principal and interest (including any Additional Interest) on such
Securities shall remain subordinated to the extent provided in Article
Thirteen of the Indenture.]
No reference herein to the Indenture and no provision of this Security or of
the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of (and premium, if any) and
interest on this Security at the times, place and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Security is registrable in the Securities
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company maintained under Section 10.2 of the Indenture
duly endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Securities Registrar duly executed by, the
Holder hereof or his attorney duly authorized in writing, and thereupon one or
more new Securities of this series, of authorized denominations and for the
same aggregate principal amount, will be issued to the designated transferee
or transferees. No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name this Security is registered as the owner hereof for all
purposes, whether or not this Security be overdue, and neither the Company,
the Trustee nor any such agent shall be affected by notice to the contrary.
The Securities of this series are issuable only in registered form without
coupons in denominations of $ and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set
forth, Securities of this series are exchangeable for a like aggregate
principal amount of Securities of such series of a different authorized
denomination, as requested by the Holder surrendering the same.
The Company and, by its acceptance of this Security or a beneficial interest
therein, the Holder of, and any Person that acquires a beneficial interest in,
this Security agree that for United States Federal, state and local tax
purposes it is intended that this Security constitute indebtedness.
THE INDENTURE AND THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS
OF LAWS PRINCIPLES THEREOF.
Section 2.4. Additional Provisions Required in Global Security.
Any Global Security issued hereunder shall, in addition to the provisions
contained in Sections 2.2 and 2.3, bear a legend in substantially the
following form:
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"This Security is a Global Security within the meaning of the Indenture
hereinafter referred to and is registered in the name of a Depositary or a
nominee of a Depositary. This Security is exchangeable for Securities
registered in the name of a person other than the Depositary or its nominee
only in the limited circumstances described in the Indenture and may not be
transferred except as a whole by the Depositary to a nominee of the Depositary
or by a nominee of the Depositary to the Depositary or another nominee of the
Depositary."
Section 2.5. Form of Trustee's Certificate of Authentication.
This is one of the Securities referred to in the within mentioned Indenture.
_____________________________________
as Trustee
By: _________________________________
Authorized officer
ARTICLE III. THE SECURITIES
Section 3.1. Title and Terms.
The aggregate principal amount of Securities which may be authenticated and
delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be
established in or pursuant to a Board Resolution, and set forth in an
Officers' Certificate, or established in one or more indentures supplemental
hereto, prior to the issuance of Securities of a series:
(a) the title of the securities of such series, which shall distinguish
the Securities of the series from all other Securities;
(b) the limit, if any, upon the aggregate principal amount of the
Securities of such series which may be authenticated and delivered under
this Indenture (except for Securities authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other
Securities of the series pursuant to Section 3.4, 3.5, 3.6, 9.6 or 11.6);
provided, however, that the authorized aggregate principal amount of such
series may be increased above such amount by a Board Resolution to such
effect;
(c) the Stated Maturity or Maturities on which the principal of the
Securities of such series is payable or the method of determination
thereof;
(d) the rate or rates, if any, at which the Securities of such series
shall bear interest, if any, the rate or rates and extent to which
Additional Interest, if any, shall be payable in respect of any Securities
of such series, the Interest Payment Dates on which such interest shall be
payable, the right, pursuant to Section 3.11 or as otherwise set forth
therein, of the Company to defer or extend an Interest Payment Date, and
the Regular Record Date for the interest payable on any Interest Payment
Date or the method by which any of the foregoing shall be determined;
(e) the place or places where the principal of (and premium, if any) and
interest on the Securities of such series shall be payable, the place or
places where the Securities of such series may be presented for
registration of transfer or exchange, and the place or places where notices
and demands to or upon the Company in respect of the Securities of such
series may be made;
(f) the period or periods within or the date or dates on which, if any,
the price or prices at which and the terms and conditions upon which the
Securities of such series may be redeemed, in whole or in part, at the
option of the Company;
(g) the obligation or the right, if any, of the Company to redeem, repay
or purchase the Securities of such series pursuant to any sinking fund,
amortization or analogous provisions, or at the option of a Holder thereof,
and the period or periods within which, the price or prices at which, the
currency or currencies (including currency unit or units) in which and the
other terms and conditions upon which Securities of the series shall be
redeemed, repaid or purchased, in whole or in part, pursuant to such
obligation;
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(h) the denominations in which any Securities of such series shall be
issuable, if other than denominations of $25 and any integral multiple
thereof;
(i) if other than Dollars, the currency or currencies (including currency
unit or units) in which the principal of (and premium, if any) and
interest, if any, on the Securities of the series shall be payable, or in
which the Securities of the series shall be denominated;
(j) the additions, modifications or deletions, if any, in the Events of
Default or covenants of the Company set forth herein with respect to the
Securities of such series;
(k) if other than the principal amount thereof, the portion of the
principal amount of Securities of such series that shall be payable upon
declaration of acceleration of the Maturity thereof;
(l) the additions or changes, if any, to this Indenture with respect to
the Securities of such series as shall be necessary to permit or facilitate
the issuance of the Securities of such series in bearer form, registrable
or not registrable as to principal, and with or without interest coupons;
(m) any index or indices used to determine the amount of payments of
principal of and premium, if any, on the Securities of such series or the
manner in which such amounts will be determined;
(n) the issuance of a temporary Global Security representing all of the
Securities of such series and exchange of such temporary Global Security
for definitive Securities of such series;
(o) whether the Securities of the series shall be issued in whole or in
part in the form of one or more Global Securities and, in such case, the
Depositary for such Global Securities, which Depositary shall be a clearing
agency registered under the Securities Exchange Act of 1934, as amended;
(p) the appointment of any Paying Agent or Agents for the Securities of
such series;
(q) the terms of any right to convert or exchange Securities of such
series into any other securities or property of the Company, and the
additions or changes, if any, to this Indenture with respect to the
Securities of such series to permit or facilitate such conversion or
exchange;
(r) the form or forms of the Trust Agreement, Amended and Restated Trust
Agreement and Guarantee Agreement, if different from the forms attached
hereto as Annexes A, B and C, respectively;
(s) the relative degree, if any, to which the Securities of the series
shall be senior to or be subordinated to other series of Securities in
right of payment, whether such other series of Securities are Outstanding
or not; and
(t) any other terms of the Securities of such series (which terms shall
not be inconsistent with the provisions of this Indenture).
All Securities of any one series shall be substantially identical except as
to denomination and except as may otherwise be provided herein or in or
pursuant to such Board Resolution and set forth in such Officers' Certificate
or in any such indenture supplemental hereto.
If any of the terms of the series are established by action taken pursuant
to a Board Resolution, a copy of an appropriate record of such action shall be
certified by the Secretary or an Assistant Secretary of the Company and
delivered to the Trustee at or prior to the delivery of the Officers'
Certificate setting forth the terms of the series.
Section 3.2. Denominations.
The Securities of each series shall be in registered form without coupons
and shall be issuable in denominations of $25 and any integral multiple
thereof, unless otherwise specified as contemplated by Section 3.1.
Section 3.3. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by its President
or one of its Vice Presidents under its corporate seal reproduced or impressed
thereon and attested by its Secretary or one of its Assistant Secretaries. The
signature of any of these officers on the Securities may be manual or
facsimile.
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Securities bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities. At any time and from time to
time after the execution and delivery of this Indenture, the Company may
deliver Securities executed by the Company to the Trustee for authentication.
Securities may be authenticated on original issuance from time to time and
delivered pursuant to such procedures acceptable to the Trustee ("Procedures")
as may be specified from time to time by Company Order. Procedures may
authorize authentication and delivery pursuant to oral instructions of the
Company or a duly authorized agent, which instructions shall be promptly
confirmed in writing.
Prior to the delivery of a Security in any such form to the Trustee for
authentication, the Company shall deliver to the Trustee the following:
(a) A Company Order requesting the Trustee's authentication and delivery
of all or a portion of the Securities of such series, and if less than all,
setting forth procedures for such authentication;
(b) The Board Resolution by or pursuant to which such form of Security
has been approved, and the Board Resolution, if any, by or pursuant to
which the terms of the Securities of such series have been approved, and,
if pursuant to a Board Resolution, an Officers' Certificate describing the
action taken;
(c) An Officers' Certificate dated the date such certificate is delivered
to the Trustee, stating that all conditions precedent provided for in this
Indenture relating to the authentication and delivery of Securities in such
form and with such terms have been complied with; and
(d) An Opinion of Counsel stating that (i) the form of such Securities
has been duly authorized and approved in conformity with the provisions of
this Indenture; (ii) the terms of such Securities have been duly authorized
and determined in conformity with the provisions of this Indenture, or, if
such terms are to be determined pursuant to Procedures, as defined above,
when so determined such terms shall have been duly authorized and
determined in conformity with the provisions of this Indenture; and (iii)
Securities in such form when completed by appropriate insertions and
executed and delivered by the Company to the Trustee for authentication in
accordance with this Indenture, authenticated and delivered by the Trustee
in accordance with this Indenture within the authorization as to aggregate
principal amount established from time to time by the Board of Directors
and sold in the manner specified in such Opinion of Counsel, will be the
legal, valid and binding obligations of the Company entitled to the
benefits of this Indenture, subject to applicable bankruptcy,
reorganization, insolvency and similar laws generally affecting creditors'
rights, to general equitable principles and except as enforcement thereof
may be limited by (A) requirements that a claim with respect to any
Securities denominated other than in Dollars (or a Foreign Currency or
currency unit judgment in respect of such claim) be converted into Dollars
at a rate of exchange prevailing on a date determined pursuant to
applicable law or (B) governmental authority to limit, delay or prohibit
the making of payments in Foreign Currencies or currency units or payments
outside the United States, and subject to such other qualifications as such
counsel shall conclude do not materially affect the rights of Holders of
such Securities;
provided, however, that the Trustee shall be entitled to receive the documents
referred to in Clauses (b), (c) and (d) above only at or prior to the first
request of the Company to the Trustee to authenticate Securities of such
series.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose, unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by the manual signature of one of its authorized
officers, and such certificate upon any Security shall be conclusive evidence,
and the only evidence, that such Security has been duly authenticated and
delivered hereunder.
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Section 3.4. Temporary Securities.
Pending the preparation of definitive Securities of any series, the Company
may execute, and upon Company Order the Trustee shall authenticate and
deliver, temporary Securities which are printed, lithographed, typewritten,
mimeographed or otherwise produced, in any denomination, substantially of the
tenor of the definitive Securities of such series in lieu of which they are
issued and with such appropriate insertions, omissions, substitutions and
other variations as the officers executing such Securities may determine, as
evidenced by their execution of such Securities.
If temporary Securities of any series are issued, the Company will cause
definitive Securities of such series to be prepared without unreasonable
delay. After the preparation of definitive Securities, the temporary
Securities shall be exchangeable for definitive Securities upon surrender of
the temporary Securities at the office or agency of the Company designated for
that purpose without charge to the Holder. Upon surrender for cancellation of
any one or more temporary Securities, the Company shall execute and the
Trustee shall authenticate and deliver in exchange therefor a like principal
amount of definitive Securities of the same series of authorized denominations
having the same Original Issue Date and Stated Maturity and having the same
terms as such temporary Securities. Until so exchanged, the temporary
Securities shall in all respects be entitled to the same benefits under this
Indenture as definitive Securities.
Section 3.5. Registration, Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust Office of the
Trustee a register in which, subject to such reasonable regulations as it may
prescribe, the Company shall provide for the registration of Securities and of
transfers of Securities. Such register is herein sometimes referred to as the
"Securities Register." The Trustee is hereby appointed "Securities Registrar"
for the purpose of registering Securities and transfers of Securities as
herein provided.
Upon surrender for registration of transfer of any Security at the office or
agency of the Company designated for that purpose the Company shall execute,
and the Trustee shall authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Securities of the same series of
any authorized denominations, of a like aggregate principal amount, of the
same Original Issue Date and Stated Maturity and having the same terms.
At the option of the Holder, Securities may be exchanged for other
Securities of the same series of any authorized denominations, of a like
aggregate principal amount, of the same Original Issue Date and Stated
Maturity and having the same terms, upon surrender of the Securities to be
exchanged at such office or agency. Whenever any securities are so surrendered
for exchange, the Company shall execute, and the Trustee shall authenticate
and deliver, the Securities which the Holder making the exchange is entitled
to receive.
All Securities issued upon any transfer or exchange of Securities shall be
the valid obligations of the Company, evidencing the same debt, and entitled
to the same benefits under this Indenture, as the Securities surrendered upon
such transfer or exchange.
Every Security presented or surrendered for transfer or exchange shall (if
so required by the Company or the Securities Registrar) be duly endorsed, or
be accompanied by a written instrument of transfer in form satisfactory to the
Company and the Securities Registrar, duly executed by the Holder thereof or
his attorney duly authorized in writing.
No service charge shall be made to a Holder for any transfer or exchange of
Securities, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection with
any transfer or exchange of Securities.
Notwithstanding any of the foregoing, any Global Security of a series shall
be exchangeable pursuant to this Section 3.5 for Securities registered in the
names of Persons other than the Depositary for such Security or its nominee
only if (i) such Depositary notifies the Company that it is unwilling or
unable to continue as
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Depositary for such Global Security or if at any time such Depositary ceases
to be a clearing agency registered under the Securities Exchange Act of 1934,
as amended, (ii) the Company executes and delivers to the Trustee a Company
Order that such Global Security shall be so exchangeable or (iii) there shall
have occurred and be continuing an Event of Default with respect to the
Securities of such series. Any Global Security that is exchangeable pursuant
to the preceding sentence shall be exchangeable for Securities registered in
such names as such Depositary shall direct.
Notwithstanding any other provision in this Indenture, a Global Security may
not be transferred except as a whole by the Depositary with respect to such
Global Security to a nominee of such Depositary or by a nominee of such
Depositary to such Depositary or another nominee of such Depositary.
Neither the Company nor the Trustee shall be required, pursuant to the
provisions of this Section, (a) to issue, transfer or exchange any Security of
any series during a period beginning at the opening of business 15 days before
the day of selection for redemption of Securities pursuant to Article Eleven
and ending at the close of business on the day of mailing of notice of
redemption or (b) to transfer or exchange any Security so selected for
redemption in whole or in part, except, in the case of any Security to be
redeemed in part, any portion thereof not to be redeemed.
Section 3.6. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security is surrendered to the Trustee together with such
security or indemnity as may be required by the Company or the Trustee to save
each of them harmless, the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a new Security of the same issue
and series of like tenor and principal amount, having the same Original Issue
Date and Stated Maturity and bearing the same Interest Rate as such mutilated
Security, and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and to the Trustee (i) evidence
to their satisfaction of the destruction, loss or theft of any Security, and
(ii) such security or indemnity as may be required by them to save each of
them harmless, then, in the absence of notice to the Company or the Trustee
that such Security has been acquired by a bona fide purchaser, the issuing
Company shall execute and upon its request the Trustee shall authenticate and
deliver, in lieu of any such destroyed, lost or stolen Security, a new
Security of the same issue and series of like tenor and principal amount,
having the same Original Issue Date and Stated Maturity and bearing the same
Interest Rate as such destroyed, lost or stolen Security, and bearing a number
not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has become or
is about to become due and payable, the Company in its discretion may, instead
of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses
(including the fees and expenses of the Trustee) connected therewith.
Every new Security issued pursuant to this Section in lieu of any destroyed,
lost or stolen Security shall constitute an original additional contractual
obligation of the Company, whether or not the destroyed, lost or stolen
Security shall be at any time enforceable by anyone, and shall be entitled to
all the benefits of this Indenture equally and proportionately with any and
all other Securities duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities.
Section 3.7. Payment of Interest; Interest Rights Preserved.
Interest on any Security of any series which is payable, and is punctually
paid or duly provided for, on any Interest Payment Date, shall be paid to the
Person in whose name that Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest in respect of Securities of such series, except that, unless
otherwise provided in the Securities of such series, interest payable
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on the Stated Maturity of a Security shall be paid to the Person to whom
principal is paid. The initial payment of interest on any Security of any
series which is issued between a Regular Record Date and the related Interest
Payment Date shall be payable as provided in such Security or in the Board
Resolution pursuant to Section 3.1 with respect to the related series of
Securities.
Any interest on any Security which is payable, but is not timely paid or
duly provided for, on any Interest Payment Date for Securities of such series
(herein called "Defaulted Interest"), shall forthwith cease to be payable to
the registered Holder on the relevant Regular Record Date by virtue of having
been such Holder, and such Defaulted Interest may be paid by the Company, at
its election in each case, as provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest to
the Persons in whose names the Securities of such series in respect of
which interest is in default (or their respective Predecessor Securities)
are registered at the close of business on a Special Record Date for the
payment of such Defaulted Interest, which shall be fixed in the following
manner. The Company shall notify the Trustee in writing of the amount of
Defaulted Interest proposed to be paid on each Security and the date of the
proposed payment, and at the same time the Company shall deposit with the
Trustee an amount of money equal to the aggregate amount proposed to be
paid in respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to the date of the
proposed payment, such money when deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as in this
Clause provided. Thereupon the Trustee shall fix a Special Record Date for
the payment of such Defaulted Interest which shall be not more than 15 days
and not less than 10 days prior to the date of the proposed payment and not
less than 10 days after the receipt by the Trustee of the notice of the
proposed payment. The Trustee shall promptly notify the Company of such
Special Record Date and, in the name and at the expense of the Company,
shall cause notice of the proposed payment of such Defaulted Interest and
the Special Record Date therefor to be mailed, first class, postage
prepaid, to each Holder of a Security of such series at the address of such
Holder as it appears in the Securities Register not less than 10 days prior
to such Special Record Date. The Trustee may, in its discretion, in the
name and at the expense of the Company, cause a similar notice to be
published at least once in a newspaper, customarily published in the
English language on each Business Day and of general circulation in the
Borough of Manhattan, The City of New York, but such publication shall not
be a condition precedent to the establishment of such Special Record Date.
Notice of the proposed payment of such Defaulted Interest and the Special
Record Date therefor having been mailed as aforesaid, such Defaulted
Interest shall be paid to the Persons in whose names the Securities of such
series (or their respective Predecessor Securities) are registered on such
Special Record Date and shall no longer be payable pursuant to the
following Clause (2).
(2) The Company may make payment of any Defaulted Interest in any other
lawful manner not inconsistent with the requirements of any securities
exchange on which the Securities of the series in respect of which interest
is in default may be listed and, upon such notice as may be required by
such exchange (or by the Trustee if the Securities are not listed), if,
after notice given by the Company to the Trustee of the proposed payment
pursuant to this Clause, such payment shall be deemed practicable by the
Trustee.
Subject to the foregoing provisions of this Section, each Security delivered
under this Indenture upon transfer of or in exchange for or in lieu of any
other Security shall carry the rights to interest accrued and unpaid, and to
accrue, which were carried by such other Security.
Section 3.8. Persons Deemed Owners.
The Company, the Trustee and any agent of the Company or the Trustee may
treat the Person in whose name any Security is registered as the owner of such
Security for the purpose of receiving payment of principal of and (subject to
Section 3.7) interest on such Security and for all other purposes whatsoever,
whether or not such Security be overdue, and neither the Company, the Trustee
nor any agent of the Company or the Trustee shall be affected by notice to the
contrary.
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Section 3.9. Cancellation.
All Securities surrendered for payment, redemption, transfer or exchange
shall, if surrendered to any Person other than the Trustee, be delivered to
the Trustee, and any such Securities and Securities surrendered directly to
the Trustee for any such purpose shall be promptly canceled by it. The Company
may at any time deliver to the Trustee for cancellation any Securities
previously authenticated and delivered hereunder which the Company may have
acquired in any manner whatsoever, and all Securities so delivered shall be
promptly canceled by the Trustee. No Securities shall be authenticated in lieu
of or in exchange for any Securities canceled as provided in this Section,
except as expressly permitted by this Indenture. All canceled Securities shall
be destroyed by the Trustee and the Trustee shall deliver to the Company a
certificate of such destruction.
Section 3.10. Computation of Interest.
Except as otherwise specified as contemplated by Section 3.1 for Securities
of any series, interest on the Securities of each series for any period shall
be computed on the basis of a 360-day year of twelve 30-day months and
interest on the Securities of each series for any partial period shall be
computed on the basis of the number of days elapsed in a 360-day year of
twelve 30-day months.
Section 3.11. Deferrals of Interest Payment Dates.
If specified as contemplated by Section 3.1 with respect to the Securities
of a particular series, the Company shall have the right, at any time during
the term of such series, from time to time to defer the payment of interest on
such Securities for such period or periods as may be specified as contemplated
by Section 3.1 (each, an "Extension Period") during which Extension Periods
the Company shall have the right to make partial payments of interest on any
Interest Payment Date. No Extension Period shall end on a date other than an
Interest Payment Date. At the end of any such Extension Period the Company
shall pay all interest then accrued and unpaid on the Securities (together
with Additional Interest thereon, if any, at the rate specified for the
Securities of such series to the extent permitted by applicable law),
provided, however, that during any such Extension Period, the Company shall
not, and shall cause any Subsidiary not to, (i) declare or pay any dividends
or distributions on, or redeem, purchase, acquire or make a liquidation
payment with respect to, any of the Company's capital stock, or (ii) make any
payment of principal, interest or premium, if any, on or repay, repurchase or
redeem any debt securities of the Company that rank pari passu with or junior
in interest to the Securities of such series or debt securities of any
Subsidiary of the Company that by their terms rank pari passu or junior in
interest to the securities of such series or make any guarantee payments with
respect to the foregoing (other than (a) dividends or distributions in common
stock of the Company (b) redemptions or purchases of any rights pursuant to
the Company's Rights Plan, or any successor to such Rights Plan, and the
declaration of a dividend of such rights or the issuance of stock under such
plans in the future, (c) payments under any Lincoln Guarantee), and (d)
purchases of Common Stock related to the issuance of Common Stock under any of
the Company's benefit plans for its directors, officers or employees. Prior to
the termination of any such Extension Period, the Company may further extend
the interest payment period, provided that no Extension Period shall exceed
the period or periods specified in such Securities or extend beyond the
Maturity of such Securities. Upon termination of any Extension Period and upon
the payment of all accrued and unpaid interest and any Additional Interest
then due on any Interest Payment Date, the Company may elect to begin a new
Extension Period, subject to the above requirements. No interest shall be due
and payable during an Extension Period, except at the end thereof. The Company
shall give the Holders of the Securities of such series and the Trustee notice
of its election to begin any such Extension Period at least one Business Day
prior to the Interest Payment Date or, with respect to the Securities of a
series issued to a Lincoln Trust, prior to the earlier of (i) the date the
Distributions on the Preferred Securities of such Lincoln Trust are payable or
(ii) the date the Administrative Trustees of such Lincoln Trust are required
to give notice to the New York Stock Exchange or other applicable self-
regulatory organization or to holders of such Preferred Securities of the
record date or the date such Distributions are payable, but in any event not
less than one Business Day prior to such record date.
The Trustee shall promptly give notice of the Company's election to begin
any such Extension Period to the Holders of the outstanding Securities of such
series.
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Section 3.12. Right of Set-Off.
With respect to the Securities of a series issued to a Lincoln Trust,
notwithstanding anything to the contrary in the Indenture, the Company shall
have the right to set-off any payment it is otherwise required to make
thereunder in respect of any such Security to the extent the Company has
theretofore made, or is concurrently on the date of such payment making, a
payment under the Lincoln Guarantee relating to such Security.
Section 3.13. Agreed Tax Treatment.
Each Security issued hereunder shall provide that the Company and, by its
acceptance of a Security or a beneficial interest therein, the Holder of, and
any Person that acquires a beneficial interest in, such Security agree that
for United States Federal, state and local tax purposes it is intended that
such Security constitute indebtedness.
Section 3.14. Extension of Stated Maturity; Adjustment of Stated Maturity
Upon an Exchange.
If specified as contemplated by Section 3.1 with respect to the Securities
of a particular series, the Company shall have the right to (a) change the
Maturity Date of the Securities of such series upon the liquidation of a
Lincoln Trust and the exchange of such Securities for the Preferred Securities
of such Lincoln Trust and (b) extend the Stated Maturity for the Securities of
such series; provided, that at time any election to extend the Maturity Date
is made and at the time of such extension, (i) the Company is not in
bankruptcy, otherwise insolvent or in liquidation, (ii) the Company is not in
default in the payment of any interest or principal on the Securities of such
series and no deferred interest payments thereon have accrued, (iii) the
applicable Lincoln Trust is not in arrears on payments of Distributions on the
Preferred Securities and no deferred Distributions thereon are accumulated,
(iv) the Securities are rated not less than BBB- by Standard & Poor's Ratings
Services or Baa3 by Moody's Investors Service, Inc. or the equivalent by any
other naturally recognized statistical rating organization and (v) the
extended Stated Maturity in no later than the 49th anniversary of the initial
issuance of the Preferred Securities of the applicable Lincoln Trust;
provided, however, that, if the Company exercises its right to liquidate the
Lincoln Trust and exchange the Securities of such series for the Preferred
Securities of such Lincoln Trust as specified in clause (a) above, any changed
Stated Maturity of the Securities of such series shall be no earlier than the
date that is five years after the issuance of the Preferred Securities and no
later than the date 30 years (plus an extended term of up to an additional 19
years if the above-referenced conditions are satisfied) after the date of the
initial issuance of the Preferred Securities of the applicable Lincoln Trust.
Section 3.15. CUSIP Numbers.
The Company in issuing the Securities may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use "CUSIP" numbers in
notices of redemption as a convenience to Holders; provided that any such
notice may state that no representation is made as to the correctness of such
numbers either as printed on the Securities or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Securities, and any such redemption shall not be
affected by any defect in or omission of such numbers.
ARTICLE IV. SATISFACTION AND DISCHARGE
Section 4.1. Satisfaction and Discharge of Indenture.
This Indenture shall cease to be of further effect (except as to (i) any
surviving rights of transfer, substitution and exchange of Securities, (ii)
rights hereunder of Holders to receive payments of principal of (and premium,
if any) and interest on the Securities and other rights, duties and
obligations of the Holders as beneficiaries hereof with respect to the
amounts, if any, deposited with the Trustee pursuant to this Article IV and
(iii) the rights and obligations of the Trustee hereunder), and the Trustee,
on demand of and at the expense of the Company, shall execute proper
instruments acknowledging satisfaction and discharge of this Indenture, when
(1) either
(A) all Securities theretofore authenticated and delivered (other
than (i) Securities which have been destroyed, lost or stolen and which
have been replaced or paid as provided in Section 3.6 and (ii)
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Securities for whose payment money has theretofore been deposited in
trust or segregated and held in trust by the Company and thereafter
repaid to the Company or discharged from such trust, as provided in
Section 10.3) have been delivered to the Trustee for cancellation; or
(B) all such Securities not theretofore delivered to the Trustee for
cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity within
one year of the date of deposit, and the Company, in the case of
Clause (i) or (ii) above, has deposited or caused to be deposited
with the Trustee as trust funds in trust for such purpose an amount
in the currency or currencies in which the Securities of such series
are payable sufficient to pay and discharge the entire indebtedness
on such Securities not theretofore delivered to the Trustee for
cancellation, for principal (and premium, if any) and interest
(including any Additional Interest) to the date of such deposit (in
the case of Securities which have become due and payable) or to the
Stated Maturity;
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers' Certificate and
an Opinion of Counsel each stating that all conditions precedent herein
provided for relating to the satisfaction and discharge of this Indenture
have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 6.7 and, if money
shall have been deposited with the Trustee pursuant to subclause (B) of clause
(1) of this Section, the obligations of the Trustee under Section 4.2 and the
last paragraph of Section 10.3 shall survive.
Section 4.2. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 10.3, all money
deposited with the Trustee pursuant to Section 4.1 or money or Government
Obligations deposited with the Trustee pursuant to Section 4.3, or received by
the Trustee in respect of Government Obligations deposited with the Trustee
pursuant to Section 4.3, shall be held in trust and applied by the Trustee, in
accordance with the provisions of the Securities and this Indenture, to the
payment, either directly or through any Paying Agent (including the Company
acting as its own Paying Agent) as the Trustee may determine, to the Persons
entitled thereto, of the principal (and premium, if any) and interest for the
payment of which such money or obligations have been deposited with or
received by the Trustee; provided, however, such moneys need not be segregated
from other funds except to the extent required by law.
Section 4.3. Satisfaction, Discharge and Defeasance of Securities of Any
Series.
Unless otherwise provided in the Board Resolution adopted pursuant to
Section 3.1 establishing the terms of the Securities of any series, the
Company shall be deemed to have paid and discharged the entire indebtedness on
all the Outstanding Securities of any such series and the Trustee, at the
expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of such indebtedness, when
(1) with respect to all Outstanding Securities of such series,
(A) the Company has irrevocably deposited or caused to be irrevocably
deposited with the Trustee as trust funds in trust for such purpose an
amount sufficient to pay and discharge the entire indebtedness on all
Outstanding Securities of such series for principal (and premium, if
any) and interest (including any Additional Interest) to the Stated
Maturity or any Redemption Date as contemplated by the penultimate
paragraph of this Section 4.3, as the case may be; or
(B) the Company has irrevocably deposited or caused to be irrevocably
deposited with the Trustee as obligations in trust for such purpose an
amount of Government Obligations as will, in the written opinion of
independent public accountants delivered to the Trustee, together with
predetermined and certain income to accrue thereon, without
consideration of any reinvestment thereof, be sufficient to
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pay and discharge when due the entire indebtedness on all Outstanding
Securities of such series for principal (and premium, if any) and
interest (including any Additional Interest) to the Stated Maturity or
any Redemption Date as contemplated by the penultimate paragraph of
this Section 4.3, as the case may be; and
(2) the Company has paid or caused to be paid all other sums payable with
respect to the Outstanding Securities of such series; and
(3) the Company has delivered to the Trustee an Officers' Certificate and
an Opinion of Counsel, each stating that all conditions precedent herein
provided for relating to the satisfaction and discharge of the entire
indebtedness on all Outstanding Securities of any such series have been
complied with.
Any deposits with the Trustee referred to in Section 4.3(i) above shall be
irrevocable and shall be made under the terms of an escrow trust agreement in
form and substance reasonably satisfactory to the Trustee. If any Outstanding
Securities of such series are to be redeemed prior to their Stated Maturity,
whether pursuant to any optional redemption provisions or in accordance with
any mandatory sinking fund requirement, the applicable escrow trust agreement
shall provide therefor and the Company shall make such arrangements as are
satisfactory to the Trustee for the giving of notice of redemption by the
Trustee in the name, and at the expense, of the Company. If the Securities of
such series are not to become due and payable at their Stated Maturity or upon
call for redemption within one year of the date of deposit, then the Company
shall give, not later than the date of such deposit, notice of such deposit to
the Holders of Securities of such series.
Upon the satisfaction of the conditions set forth in this Section 4.3 with
respect to all the Outstanding Securities of any series, the terms and
conditions of such series, including the terms and conditions with respect
thereto set forth in this Indenture, shall no longer be binding upon, or
applicable to, the Company; provided, that the Company shall not be discharged
from any payment obligations in respect of Securities of such series which are
deemed not to be Outstanding under clause (iii) of the definition thereof if
such obligations continue to be valid obligations of the Company under
applicable law.
ARTICLE V. REMEDIES
Section 5.1. Events of Default.
"Event of Default", wherever used herein with respect to the Securities of
any series, means any one of the following events (whatever the reason for
such Event of Default and whether it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment, decree or order of
any court or any order, rule or regulation of any administrative or
governmental body):
(1) default in the payment of any interest upon any Security of that
series, including any Additional Interest in respect thereof, when it
becomes due and payable, and continuance of such default for a period of 30
days (subject to the deferral of any due date in the case of an Extension
Period); or
(2) default in the payment of the principal of (or premium, if any, on)
any Security of that series at its Maturity; or
(3) default in the performance, or breach, in any material respect, of
any covenant or warranty of the Company in this Indenture (other than a
covenant or warranty a default in the performance of which or the breach of
which is elsewhere in this Section specifically dealt with), and
continuance of such default or breach for a period of 90 days after there
has been given, by registered or certified mail, to the Company by the
Trustee or to the Company and the Trustee by the Holders of at least 25% in
principal amount of the Outstanding Securities of that series a written
notice specifying such default or breach and requiring it to be remedied;
or
(4) the entry of a decree or order by a court having jurisdiction in the
premises adjudging the Company a bankrupt or insolvent, or approving as
properly filed a petition seeking reorganization, arrangement, adjustment
or composition of or in respect of the Company under any applicable Federal
or State bankruptcy, insolvency, reorganization or other similar law, or
appointing a receiver, liquidator, assignee,
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trustee, sequestrator (or other similar official) of the Company or of any
substantial part of its property or ordering the winding up or liquidation
of its affairs, and the continuance of any such decree or order unstayed
and in effect for a period of 60 consecutive days; or
(5) the institution by the Company of proceedings to be adjudicated a
bankrupt or insolvent, or the consent by it to the institution of
bankruptcy or insolvency proceedings against it, or the filing by it of a
petition or answer or consent seeking reorganization or relief under any
applicable Federal or State bankruptcy, insolvency, reorganization or other
similar law, or the consent by it to the filing of any such petition or to
the appointment of a receiver, liquidator, assignee, trustee, sequestrator
(or other similar official) of the Company or of any substantial part of
its property, or the making by it of an assignment for the benefit for
creditors, or the admission by it in writing of its inability to pay its
debts generally as they become due and its willingness to be adjudicated a
bankrupt, or the taking of corporate action by the Company in furtherance
of any such action; or
(6) any other Event of Default with respect to Securities of that series.
Section 5.2. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default with respect to Securities of any series at the time
Outstanding occurs and is continuing, then and in every such case the Trustee
or the Holders of not less than 25% in principal amount of the Outstanding
Securities of that series may declare the principal amount (or, if the
Securities of that series are Discount Securities, such portion of the
principal amount as may be specified in the terms of that series) of all the
Securities of that series to be due and payable immediately, by a notice in
writing to the Company (and to the Trustee if given by Holders), provided
that, in the case of the Securities of a series issued to a Lincoln Trust, if,
upon an Event of Default, the Trustee or the Holders of not less than 25% in
principal amount of the Outstanding Securities of that series fail to declare
the principal of all the Securities of that series to be immediately due and
payable, the holders of at least 25% in aggregate liquidation amount of the
corresponding series of Preferred Securities then outstanding shall have such
right by a notice in writing to the Company and the Trustee; and upon any such
declaration such principal amount (or specified amount) of and the accrued
interest (including any Additional Interest) on all the Securities of such
series shall become immediately due and payable, provided that the payment of
principal and interest (including any Additional Interest) on such Securities
shall remain subordinated to the extent provided in Article Thirteen.
At any time after such a declaration of acceleration with respect to
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in
this Article provided, the Holders of a majority in principal amount of the
Outstanding Securities of that series, by written notice to the Company and
the Trustee, may rescind and annul such declaration and its consequences if:
(1) the Company has paid or deposited with the Trustee a sum sufficient
to pay:
(A) all overdue installments of interest (including any Additional
Interest) on all Securities of that series,
(B) the principal of (and premium, if any, on) any Securities of that
series which have become due otherwise than by such declaration of
acceleration and interest thereon at the rate borne by the Securities,
and
(C) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel.
(2) all Events of Default with respect to Securities of that series,
other than the non-payment of the principal of Securities of that series
which has become due solely by such acceleration, have been cured or waived
as provided in Section 5.13.
The holders of a majority in aggregate outstanding principal amount of the
Securities of a series affected thereby may, on behalf of the holders of all
the Securities of such series, waive any past default, except a default in the
payment of principal or interest (unless such default has been cured and a sum
sufficient to pay all matured installments of interest and principal due
otherwise than by acceleration has been deposited with the Trustee) or a
default in respect of a covenant or provision which under this Indenture
cannot be modified or amended without
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the consent of the holder of each outstanding Security of such series and, in
the case of Securities of a series issued to a Lincoln Trust, should the
holders of such Securities fail to annul such declaration and waive such
default, the holders of a majority in aggregate liquidation preference of the
related series of Preferred Securities shall have such right.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
Upon receipt by the Trustee of written notice declaring such an
acceleration, or rescission and annulment thereof, with respect to Securities
of a series all or part of which is represented by a Global Security, a record
date shall be established for determining Holders of Outstanding Securities of
such series entitled to join in such notice, which record date shall be at the
close of business on the day the Trustee receives such notice. The Holders on
such record date, or their duly designated proxies, and only such Persons,
shall be entitled to join in such notice, whether or not such Holders remain
Holders after such record date; provided, that, unless such declaration of
acceleration, or rescission and annulment, as the case may be, shall have
become effective by virtue of the requisite percentage having joined in such
notice prior to the day which is 90 days after such record date, such notice
of declaration of acceleration, or rescission and annulment, as the case may
be, shall automatically and without further action by any Holder be canceled
and of no further effect. Nothing in this paragraph shall prevent a Holder, or
a proxy of a Holder, from giving, after expiration of such 90-day period, a
new written notice of declaration of acceleration, or rescission and annulment
thereof, as the case may be, that is identical to a written notice which has
been canceled pursuant to the proviso to the preceding sentence, in which
event a new record date shall be established pursuant to the provisions of
this Section 5.2.
Section 5.3. Collection of Indebtedness and Suits for Enforcement by
Trustee.
The Company covenants that if:
(1) default is made in the payment of any installment of interest
(including any Additional Interest) on any Security when such interest
becomes due and payable and such default continues for a period of 30 days,
or
(2) default is made in the payment of the principal of (and premium, if
any, on) any Security at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to the Trustee, for the
benefit of the Holders of such Securities, the whole amount then due and
payable on such Securities for principal, including any sinking fund payment
or analogous obligations (and premium, if any) and interest (including any
Additional Interest); and, in addition thereto, all amounts owing the Trustee
under Section 6.7.
If the Company fails to pay such amounts forthwith upon such demand, the
Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, and may
prosecute such proceeding to judgment or final decree, and may enforce the
same against the Company or any other obligor upon the Securities and collect
the moneys adjudged or decreed to be payable in the manner provided by law out
of the property of the Company or any other obligor upon the Securities,
wherever situated.
If an Event of Default with respect to Securities of any series occurs and
is continuing, the Trustee may in its discretion proceed to protect and
enforce its rights and the rights of the Holders of Securities of such series
by such appropriate judicial proceedings as the Trustee shall deem most
effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
Section 5.4. Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company or of such other obligor or their
creditors,
(a) the Trustee (irrespective of whether the principal of the Securities
of any series shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Trustee shall
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have made any demand on the Company for the payment of overdue principal
(and premium, if any) or interest (including any Additional Interest))
shall be entitled and empowered, by intervention in such proceeding or
otherwise,
(i) to file and prove a claim for the whole amount of principal (and
premium, if any) and interest (including any Additional Interest) owing
and unpaid in respect to the Securities and to file such other papers
or documents as may be necessary or advisable and to take any and all
actions as are authorized under the Trust Indenture Act in order to
have the claims of the Holders and any predecessor to the Trustee under
Section 6.7 and of the Holders allowed in any such judicial
proceedings; and
(ii) and in particular, the Trustee shall be authorized to collect
and receive any moneys or other property payable or deliverable on any
such claims and to distribute the same in accordance with Section 5.6;
and
(b) any custodian, receiver, assignee, trustee, liquidator, sequestrator
(or other similar official) in any such judicial proceeding is hereby
authorized by each Holder to make such payments to the Trustee for
distribution in accordance with Section 5.6, and in the event that the
Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Trustee any amount due to it and any predecessor
Trustee under Section 6.7.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Holder thereof, or to authorize the Trustee to
vote in respect of the claim of any Holder in any such proceeding; provided,
however, that the Trustee may, on behalf of the Holders, vote for the election
of a trustee in bankruptcy or similar official and be a member of a creditors'
or other similar committee.
Section 5.5. Trustee May Enforce Claim Without Possession of Securities.
All rights of action and claims under this Indenture or the Securities may
be prosecuted and enforced by the Trustee without the possession of any of the
Securities or the production thereof in any proceeding relating thereto, and
any such proceeding instituted by the Trustee shall be brought in its own name
as trustee of an express trust, and any recovery of judgment shall, after
provision for the payment of all the amounts owing the Trustee and any
predecessor Trustee under Section 6.7, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.
Section 5.6. Application of Money Collected.
Any money or property collected or to be applied by the Trustee with respect
to a series of Securities pursuant to this Article shall be applied in the
following order, at the date or dates fixed by the Trustee and, in case of the
distribution of such money or property on account of principal (or premium, if
any) or interest (including any Additional Interest), upon presentation of the
Securities and the notation thereon of the payment if only partially paid and
upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee and any predecessor
Trustee under Section 6.7;
SECOND: To the payment of the amounts then due and unpaid upon such
series of Securities for principal (and premium, if any) and interest
(including any Additional Interest), in respect of which or for the benefit
of which such money has been collected, ratably, without preference or
priority of any kind, according to the amounts due and payable on such
series of Securities for principal (and premium, if any) and interest
(including any Additional Interest), respectively; and
THIRD: The balance, if any, to the Person or Persons entitled thereto.
Section 5.7. Limitation on Suits.
No Holder of any Securities of any series shall have any right to institute
any proceeding, judicial or otherwise, with respect to this Indenture or for
the appointment of a receiver, assignee, trustee, liquidator, sequestrator (or
other similar official) or for any other remedy hereunder, unless:
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(1) such Holder has previously given written notice to the Trustee of a
continuing Event of Default with respect to the Securities of that series;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series shall have made written request to
the Trustee to institute proceedings in respect of such Event of Default in
its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice, request and
offer of indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has been given to
the Trustee during such 60-day period by the Holders of a majority in
principal amount of the Outstanding Securities of that series;
it being understood and intended that no one or more of such Holders shall
have any right in any manner whatever by virtue of, or by availing itself of,
any provision of this Indenture to affect, disturb or prejudice the rights of
any other Holders of Securities, or to obtain or to seek to obtain priority or
preference over any other of such Holders or to enforce any right under this
Indenture, except in the manner herein provided and for the equal and ratable
benefit of all such Holders.
Section 5.8. Unconditional Right of Holders to Receive Principal, Premium
and Interest.
Notwithstanding any other provision in this Indenture, the Holder of any
Security shall have the right which is absolute and unconditional to receive
payment of the principal of (and premium, if any) and (subject to Section 3.7)
interest (including any Additional Interest) on such Security on the
respective Stated Maturities expressed in such Security and to institute suit
for the enforcement of any such payment, and such right shall not be impaired
without the consent of such Holder. In the case of Securities of a series
issued to a Lincoln Trust, any holder of the corresponding series of Preferred
Securities shall have the right to institute suit on behalf of the respective
Lincoln Trust for the enforcement of any such payment to such trust.
Section 5.9. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to enforce any
right or remedy under this Indenture and such proceeding has been discontinued
or abandoned for any reason, or has been determined adversely to the Trustee
or to such Holder, then and in every such case the Company, the Trustee and
the Holders shall, subject to any determination in such proceeding, be
restored severally and respectively to their former positions hereunder, and
thereafter all rights and remedies of the Trustee and the Holders shall
continue as though no such proceeding had been instituted.
Section 5.10. Rights and Remedies Cumulative.
Except as otherwise provided in the last paragraph of Section 3.6, no right
or remedy herein conferred upon or reserved to the Trustee or to the Holders
is intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at
law or in equity or otherwise. The assertion or employment of any right or
remedy hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
Section 5.11. Delay or Omission Not Waiver.
Except as otherwise provided in the last paragraph of Section 3.6, no delay
or omission of the Trustee or of any Holder of any Security to exercise any
right or remedy accruing upon any Event of Default shall impair any such right
or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein.
Every right and remedy given by this Article or by law to the Trustee or to
the Holders may be exercised from time to time, and as often as may be deemed
expedient, by the Trustee or by the Holders, as the case may be.
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Section 5.12. Control by Holders.
The Holders of a majority in principal amount of the Outstanding Securities
of any series shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred on the Trustee, with respect to the
Securities of such series, provided that:
(1) such direction shall not be in conflict with any rule of law or with
this Indenture,
(2) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction, and
(3) subject to the provisions of Section 6.1, the Trustee shall have the
right to decline to follow such direction if the Trustee in good faith
shall, by a Responsible Officer or Officers of the Trustee, determine that
the proceeding so directed would be unjustly prejudicial to the Holders not
joining in any such direction or would involve the Trustee in personal
liability.
Upon receipt by the Trustee of any written notice directing the time, method
or place of conducting any such proceeding or exercising any such trust or
power, with respect to Securities of a series all or part of which is
represented by a Global Security, a record date shall be established for
determining Holders of Outstanding Securities of such series entitled to join
in such notice, which record date shall be at the close of business on the day
the Trustee receives such notice. The Holders on such record date, or their
duly designated proxies, and only such Persons, shall be entitled to join in
such notice, whether or not such Holders remain Holders after such record
date; provided, that, unless the Holders of a majority in principal amount of
the Outstanding Securities of such series shall have joined in such notice
prior to the day which is 90 days after such record date, such notice shall
automatically and without further action by any Holder be canceled and of no
further effect. Nothing in this paragraph shall prevent a Holder, or a proxy
of a Holder, from giving, after expiration of such 90-day period, a new notice
identical to a notice which has been canceled pursuant to the proviso to the
preceding sentence, in which event a new record date shall be established
pursuant to the provisions of this Section 5.12.
Section 5.13. Waiver of Past Defaults.
The Holders of not less than a majority in principal amount of the
Outstanding Securities of any series may on behalf of the Holders of all the
Securities of such series waive any past default hereunder and its
consequences with respect to such series except a default:
(1) in the payment of the principal of (or premium, if any) or interest
(including any Additional Interest) on any Security of such series, or
(2) in respect of a covenant or provision hereof which under Article Nine
cannot be modified or amended without the consent of the Holder of each
Outstanding Security of such series affected.
Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent
or other default or impair any right consequent thereon.
Section 5.14. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Security by his
acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any right or remedy
under this Indenture, or in any suit against the Trustee for any action taken
or omitted by it as Trustee, the filing by any party litigant in such suit of
an undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Holder, or group of Holders, holding in
the aggregate more than 10% in principal amount of the Outstanding Securities
of any series, or to any suit instituted by any Holder for the enforcement of
the payment of the principal of (or premium, if any) or interest (including
any Additional Interest) on any Security on or after the respective Stated
Maturities expressed in such Security.
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Section 5.15. Waiver of Usury, Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any usury, stay or extension law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture; and the Company (to the extent that it
may lawfully do so) hereby expressly waives all benefit or advantage of any
such law, and covenants that it will not hinder, delay or impede the execution
of any power herein granted to the Trustee, but will suffer and permit the
execution of every such power as though no such law had been enacted.
ARTICLE VI. THE TRUSTEE
Section 6.1. Certain Duties and Responsibilities.
(a) Except during the continuance of an Event of Default,
(1) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture, and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture; but in the case of any such certificates or opinions
which by any provisions hereof are specifically required to be
furnished to the Trustee, the Trustee shall be under a duty to examine
the same to determine whether or not they conform to the requirements
of this Indenture.
(b) In case an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as
a prudent person would exercise or use under the circumstances in the
conduct of his own affairs.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent
failure to act, or its own willful misconduct except that
(1) this Subsection shall not be construed to limit the effect of
Subsection (a) of this Section;
(2) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it shall be proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the
direction of Holders pursuant to Section 5.12 relating to the time,
method and place of conducting any proceeding for any remedy available
to the Trustee, or exercising any trust or power conferred upon the
Trustee, under this Indenture with respect to the Securities of such
series.
(d) No provision of this Indenture shall require the Trustee to expend or
risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of
its rights or powers, if there shall be reasonable grounds for believing
that repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it.
(e) Whether or not therein expressly so provided, every provision of this
Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of
this Section.
Section 6.2. Notice of Defaults.
Within 90 days after actual knowledge by a Responsible Officer of the
Trustee of the occurrence of any default hereunder with respect to the
Securities of any series, the Trustee shall transmit by mail to all Holders of
Securities of such series, as their names and addresses appear in the
Securities Register, notice of such default hereunder known to the Trustee,
unless such default shall have been cured or waived; provided, however, that,
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except in the case of a default in the payment of the principal of (or
premium, if any) or interest (including any Additional Interest) on any
Security of such series, the Trustee shall be protected in withholding such
notice if and so long as the board of directors, the executive committee or a
trust committee of directors and/or Responsible Officers of the Trustee in
good faith determines that the withholding of such notice is in the interests
of the Holders of Securities of such series; and provided, further, that, in
the case of any default of the character specified in Section 5.1(3), no such
notice to Holders of Securities of such series shall be given until at least
30 days after the occurrence thereof. For the purpose of this Section, the
term "default" means any event which is, or after notice or lapse of time or
both would become, an Event of Default with respect to Securities of such
series.
Section 6.3. Certain Rights of Trustee.
Subject to the provisions of Section 6.1:
(a) the Trustee may rely and shall be protected in acting or refraining
from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond,
debenture, Security or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors may be sufficiently evidenced by a
Board Resolution;
(c) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed) may, in the absence of bad
faith on its part, rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel and the advice of such counsel
or any Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction
of any of the Holders pursuant to this Indenture, unless such Holders shall
have offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which might be incurred by it in compliance
with such request or direction;
(f) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, indenture, Security or other paper or document, but the Trustee in
its discretion may make such inquiry or investigation into such facts or
matters as it may see fit, and, if the Trustee shall determine to make such
inquiry or investigation, it shall be entitled to examine the books,
records and premises of the Company, personally or by agent or attorney;
and
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder.
Section 6.4. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, except the Trustee's
certificates of authentication, shall be taken as the statements of the
Company, and the Trustee assumes no responsibility for their correctness. The
Trustee makes no representations as to the validity or sufficiency of this
Indenture or of the Securities. The Trustee shall not be accountable for the
use or application by the Company of the Securities or the proceeds thereof.
Section 6.5. May Hold Securities.
The Trustee, any Paying Agent, Securities Registrar or any other agent of
the Company, in its individual or any other capacity, may become the owner or
pledgee of Securities and, subject to Sections 6.8 and 6.13, may otherwise
deal with the Company with the same rights it would have if it were not
Trustee, Paying Agent, Securities Registrar or such other agent.
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Section 6.6. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated from
other funds except to the extent required by law. The Trustee shall be under
no liability for interest on any money received by it hereunder except as
otherwise agreed with the Company.
Section 6.7. Compensation and Reimbursement.
The Company agrees
(1) to pay to the Trustee from time to time reasonable compensation for
all services rendered by it hereunder in such amounts as the Company and
the Trustee shall agree from time to time (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee
of an express trust);
(2) to reimburse the Trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the reasonable
compensation and the expenses and disbursements of its agents and counsel),
except any such expense, disbursement or advance as may be attributable to
its negligence or bad faith; and
(3) to indemnify the Trustee for, and to hold it harmless against, any
loss, liability or expense (including the reasonable compensation and the
expenses and disbursements of its agents and counsel) incurred without
negligence or bad faith, arising out of or in connection with the
acceptance or administration of this trust or the performance of its duties
hereunder, including the costs and expenses of defending itself against any
claim or liability in connection with the exercise or performance of any of
its powers or duties hereunder. This indemnification shall survive the
termination of this Agreement.
To secure the Company's payment obligations in this Section, the Company and
the Holders agree that the Trustee shall have a lien prior to the Securities
on all money or property held or collected by the Trustee. Such lien shall
survive the satisfaction and discharge of this Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 5.1(4) or (5) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Reform Act of 1978 or a successor statute.
Section 6.8. Disqualification; Conflicting Interests.
The Trustee for the Securities of any series issued hereunder shall be
subject to the provisions of Section 310(b) of the Trust Indenture Act.
Nothing herein shall prevent the Trustee from filing with the Commission the
application referred to in the second to last paragraph of Section 301(b) of
the Trust Indenture Act.
Section 6.9. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be
(a) a corporation organized and doing business under the laws of the
United States of America or of any State, Territory or the District of
Columbia, authorized under such laws to exercise corporate trust powers and
subject to supervision or examination by Federal, State, Territorial or
District of Columbia authority, or
(b) a corporation or other Person organized and doing business under the
laws of a foreign government that is permitted to act as Trustee pursuant
to a rule, regulation or order of the Commission, authorized under such
laws to exercise corporate trust powers, and subject to supervision or
examination by authority of such foreign government or a political
subdivision thereof substantially equivalent to supervision or examination
applicable to United States institutional trustees,
in either case having a combined capital and surplus of at least $50,000,000,
subject to supervision or examination by Federal or State authority. If such
corporation publishes reports of condition at least annually, pursuant to law
or to the requirements of the aforesaid supervising or examining authority,
then, for the purposes
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of this Section, the combined capital and surplus of such corporation shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. If at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section, it shall resign
immediately in the manner and with the effect hereinafter specified in this
Article. Neither the Company nor any Person directly or indirectly
controlling, controlled by or under common control with the Company shall
serve as Trustee for the Securities of any series issued hereunder.
Section 6.10. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee under Section 6.11.
(b) The Trustee may resign at any time with respect to the Securities of one
or more series by giving written notice thereof to the Company. If an
instrument of acceptance by a successor Trustee shall not have been delivered
to the Trustee within 30 days after the giving of such notice of resignation,
the resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor Trustee with respect to the Securities of such
series.
(c) The Trustee may be removed at any time with respect to the Securities of
any series by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series, delivered to the Trustee and to the
Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 6.8 after written
request therefor by the Company or by any Holder who has been a bona fide
Holder of a Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section 6.9 and shall
fail to resign after written request therefor by the Company or by any such
Holder, or
(3) the Trustee shall become incapable of acting or shall be adjudged a
bankrupt or insolvent or a receiver of the Trustee or of its property shall
be appointed or any public officer shall take charge or control of the
Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation,
then, in any such case, (i) the Company by Board Resolution may remove the
Trustee, or (ii) subject to Section 5.14, any Holder who has been a bona fide
Holder of a Security for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for
the removal of the Trustee and the appointment of a successor Trustee.
(e) If the Trustee shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of Trustee for any cause with
respect to the Securities of one or more series, the Company, by a Board
Resolution, shall promptly appoint a successor Trustee with respect to the
Securities of that or those series. If, within one year after such
resignation, removal or incapability, or the occurrence of such vacancy, a
successor Trustee with respect to the Securities of any series shall be
appointed by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series delivered to the Company and the
retiring Trustee, the successor Trustee so appointed shall, forthwith upon its
acceptance of such appointment, become the successor Trustee with respect to
the Securities of such series and supersede the successor Trustee appointed by
the Company. If no successor Trustee with respect to the Securities of any
series shall have been so appointed by the Company or the Holders and accepted
appointment in the manner hereinafter provided, any Holder who has been a bona
fide Holder of a Security for at least six months may, subject to Section
5.14, on behalf of himself and all others similarly situated, petition any
court of competent jurisdiction for the appointment of a successor Trustee
with respect to the Securities of such series.
(f) The Company shall give notice of each resignation and each removal of
the Trustee with respect to the Securities of any series and each appointment
of a successor Trustee with respect to the Securities of any series by mailing
written notice of such event by first-class mail, postage prepaid, to the
Holders of Securities of such series as their names and addresses appear in
the Securities Register. Each notice shall include the name of the successor
Trustee with respect to the Securities of such series and the address of its
Corporate Trust Office.
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Section 6.11. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor Trustee with respect
to all Securities, every such successor Trustee so appointed shall execute,
acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or
removal of the retiring Trustee shall become effective and such successor
Trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts and duties of the retiring Trustee; but, on the
request of the Company or the successor Trustee, such retiring Trustee shall,
upon payment of its charges, execute and deliver an instrument transferring to
such successor Trustee all the rights, powers and trusts of the retiring
Trustee and shall duly assign, transfer and deliver to such successor Trustee
all property and money held by such retiring Trustee hereunder.
(b) In case of the appointment hereunder of a successor Trustee with respect
to the Securities of one or more (but not all) series, the Company, the
retiring Trustee and each successor Trustee with respect to the Securities of
one or more series shall execute and deliver an indenture supplemental hereto
wherein each successor Trustee shall accept such appointment and which (1)
shall contain such provisions as shall be necessary or desirable to transfer
and confirm to, and to vest in, each successor Trustee all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of
that or those series to which the appointment of such successor Trustee
relates, (2) if the retiring Trustee is not retiring with respect to all
Securities, shall contain such provisions as shall be deemed necessary or
desirable to confirm that all the rights, powers, trusts and duties of the
retiring Trustee with respect to the Securities of that or those series as to
which the retiring Trustee is not retiring shall continue to be vested in the
retiring Trustee, and (3) shall add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee, it being
understood that nothing herein or in such supplemental indenture shall
constitute such Trustees co-trustees of the same trust and that each such
Trustee shall be trustee of a trust or trusts hereunder separate and apart
from any trust or trusts hereunder administered by any other such Trustee and
upon the execution and delivery of such supplemental indenture the resignation
or removal of the retiring Trustee shall become effective to the extent
provided therein and each such successor Trustee, without any further act,
deed or conveyance, shall become vested with all the rights, powers, trusts,
and duties of the retiring Trustee with respect to the Securities of that or
those series to which the appointment of such successor Trustee relates; but,
on request of the Company or any successor Trustee, such retiring Trustee
shall duly assign, transfer and deliver to such successor Trustee all property
and money held by such retiring Trustee hereunder with respect to the
Securities of that or those series to which the appointment of such successor
Trustee relates.
(c) Upon request of any such successor Trustee, the Company shall execute
any and all instruments for more fully and certainly vesting in and confirming
to such successor Trustee all rights, powers and trusts referred to in
paragraph (a) or (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor Trustee shall be qualified and eligible under
this Article.
Section 6.12. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on
the part of any of the parties hereto. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may
adopt such authentication and deliver the Securities so authenticated, and in
case any Securities shall not have been authenticated, any successor to the
Trustee may authenticate such Securities either in the name of any predecessor
Trustee or in the
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name of such successor Trustee, and in all cases the certificate of
authentication shall have the full force which it is provided anywhere in the
Securities or in this Indenture that the certificate of the Trustee shall
have.
Section 6.13. Preferential Collection of Claims Against Company.
If and when the Trustee shall be or become a creditor of the Company (or any
other obligor upon the Securities), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims
against the Company (or any such other obligor).
Section 6.14. Appointment of Authenticating Agent.
The Trustee may appoint an Authenticating Agent or Agents with respect to
one or more series of Securities which shall be authorized to act on behalf of
the Trustee to authenticate Securities of such series issued upon original
issue and upon exchange, registration of transfer or partial redemption
thereof, and Securities so authenticated shall be entitled to the benefits of
this Indenture and shall be valid and obligatory for all purposes as if
authenticated by the Trustee hereunder. Wherever reference is made in this
Indenture to the authentication and delivery of Securities by the Trustee or
the Trustee's certificate of authentication, such reference shall be deemed to
include authentication and delivery on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent shall be acceptable to the
Company and shall at all times be a corporation organized and doing business
under the laws of the United States of America, or of any State, Territory or
the District of Columbia, authorized under such laws to act as Authenticating
Agent, having a combined capital and surplus of not less than $50,000,000 and
subject to supervision or examination by Federal or State authority. If such
Authenticating Agent publishes reports of condition at least annually,
pursuant to law or to the requirements of said supervising or examining
authority, then for the purposes of this Section the combined capital and
surplus of such Authenticating Agent shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. If at any time an Authenticating Agent shall cease to be eligible
in accordance with the provisions of this Section, such Authenticating Agent
shall resign immediately in the manner and with the effect specified in this
Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating
Agent shall be a party, or any corporation succeeding to all or substantially
all of the corporate trust business of an Authenticating Agent shall be the
successor Authenticating Agent hereunder, provided such corporation shall be
otherwise eligible under this Section, without the execution or filing of any
paper or any further act on the part of the Trustee or the Authenticating
Agent.
An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Company. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice
thereof to such Authenticating Agent and to the Company. Upon receiving such a
notice of resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall give notice of such
appointment in the manner provided in Section 1.6 to all Holders of Securities
of the series with respect to which such Authenticating Agent will serve. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the
provision of this Section.
The Trustee agrees to pay to each Authenticating Agent from time to time
reasonable compensation for its services under this Section, and the Trustee
shall be entitled to be reimbursed for such payments, subject to the
provisions of Section 6.7.
If an appointment with respect to one or more series is made pursuant to
this Section, the Securities of such series may have endorsed thereon, in
addition to the Trustee's certificate of authentication, an alternative
certificate of authentication in the following form:
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This is one of the Securities referred to in the within mentioned Indenture.
_____________________________________
_____________________________________
As Trustee
By: ________________________________;
As Authenticating Agent
By: ________________________________:
Authorized Officer
ARTICLE VII. HOLDER'S LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 7.1. Company to Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the Trustee:
(a) semi-annually, not more than 15 days after January 15 and July 15, a
list, in such form as the Trustee may reasonably require, of the names and
addresses of the Holders as of such January 1 and July 1, and
(b) at such other times as the Trustee may request in writing, within 30
days after the receipt by the Company of any such request, a list of
similar form and content as of a date not more than 15 days prior to the
time such list is furnished,
excluding from any such list names and addresses received by the Trustee in
its capacity as Securities Registrar.
Section 7.2. Preservation of Information, Communications to Holders.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 7.1 and the names and
addresses of Holders received by the Trustee in its capacity as Securities
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 7.1 upon receipt of a new list so furnished.
(b) The rights of Holders to communicate with other Holders with respect to
their rights under this Indenture or under the Securities, and the
corresponding rights and privileges of the Trustee, shall be as provided in
the Trust Indenture Act.
(c) Every Holder of Securities, by receiving and holding the same, agrees
with the Company and the Trustee that neither the Company nor the Trustee nor
any agent of either of them shall be held accountable by reason of the
disclosure of information as to the names and addresses of the Holders made
pursuant to the Trust Indenture Act.
Section 7.3. Reports by Trustee.
(a) The Trustee shall transmit to Holders such reports concerning the
Trustee and its actions under this Indenture as may be required pursuant to
the Trust Indenture Act, at the times and in the manner provided pursuant
thereto.
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(b) Reports so required to be transmitted at stated intervals of not more
than 12 months shall be transmitted no later than July 15 in each calendar
year, commencing with the first July 15 after the first issuance of Securities
under this Indenture.
(c) A copy of each such report shall, at the time of such transmission to
Holders, be filed by the Trustee with each stock exchange upon which the
Securities are listed and also with the Commission. The Company will notify
the Trustee whenever the Securities are listed on any stock exchange.
Section 7.4. Reports by Company.
The Company shall file with the Trustee and with the Commission, and
transmit to Holders, such information, documents and other reports, and such
summaries thereof, as may be required pursuant to the Trust Indenture Act at
the times and in the manner provided in the Trust Indenture Act; provided that
any such information, documents or reports required to be filed with the
Commission pursuant to Section 13 or Section 15(d) of the Securities Exchange
Act of 1934 shall be filed with the Trustee within 15 days after the same is
required to be filed with the Commission. Notwithstanding that the Company may
not be required to remain subject to the reporting requirements of Section 13
or 15(d) of the Securities Exchange Act of 1934, the Company shall continue to
file with the Commission and provide the Trustee and Holders with the annual
reports and the information, documents and other reports which are specified
in Sections 13 and 15(d) of the Securities Exchange Act of 1934. The Company
also shall comply with the other provisions of Trust Indenture Act Section
314(a).
ARTICLE VIII. CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
Section 8.1. Company May Consolidate, Etc., Only on Certain Terms.
The Company shall not consolidate with or merge into any other Person or
convey, transfer or lease its properties and assets substantially as an
entirety to any Person, and no Person shall consolidate with or merge into the
Company or convey, transfer or lease its properties and assets substantially
as an entirety to the Company, unless:
(1) in case the Company shall consolidate with or merge into another
Person or convey, transfer or lease its properties and assets substantially
as an entirety to any Person, the corporation formed by such consolidation
or into which the Company is merged or the Person which acquires by
conveyance or transfer, or which leases, the properties and assets of the
Company substantially as an entirety shall be a corporation, partnership or
trust organized and existing under the laws of the United States of America
or any State or the District of Columbia, and shall expressly assume, by an
indenture supplemental hereto, executed and delivered to the Trustee, in
form satisfactory to the Trustee, the due and punctual payment of the
principal of (and premium, if any) and interest (including any Additional
Interest) on all the Securities and the performance of every covenant of
this Indenture on the part of the Company to be performed or observed;
(2) immediately after giving effect to such transaction, no Event of
Default, and no event which, after notice or lapse of time, or both, would
become an Event of Default, shall have happened and be continuing;
(3) in the case of the Securities of a series issued to a Lincoln Trust,
such consolidation, merger, conveyance, transfer or lease is permitted
under the related Trust Agreement and Lincoln Guarantee and does not give
rise to any breach or violation of the related Trust Agreement or Lincoln
Guarantee; and
(4) the Company has delivered to the Trustee an Officers' Certificate and
an Opinion of Counsel each stating that such consolidation, merger,
conveyance, transfer or lease and any such supplemental indenture complies
with this Article and that all conditions precedent herein provided for
relating to such transaction have been complied with; and the Trustee,
subject to Section 6.1, may rely upon such Officers' Certificate and
Opinion of Counsel as conclusive evidence that such transaction complies
with this Section 8.1.
Section 8.2. Successor Corporation Substituted.
Upon any consolidation or merger by the Company with or into any other
Person, or any conveyance, transfer or lease by the Company of its properties
and assets substantially as an entirety to any Person in
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accordance with Section 8.1, the successor corporation formed by such
consolidation or into which the Company is merged or to which such conveyance,
transfer or lease is made shall succeed to, and be substituted for, and may
exercise every right and power of, the Company under this Indenture with the
same effect as if such successor Person had been named as the Company herein;
and in the event of any such conveyance, transfer or lease the Company shall
be discharged from all obligations and covenants under the Indenture and the
Securities and may be dissolved and liquidated.
Such successor Person may cause to be signed, and may issue either in its
own name or in the name of the Company, any or all of the Securities issuable
hereunder which theretofore shall not have been signed by the Company and
delivered to the Trustee; and, upon the order of such successor Person instead
of the Company and subject to all the terms, conditions and limitations in
this Indenture prescribed, the Trustee shall authenticate and shall deliver
any Securities which previously shall have been signed and delivered by the
officers of the Company to the Trustee for authentication pursuant to such
provisions and any Securities which such successor Person thereafter shall
cause to be signed and delivered to the Trustee on its behalf for the purpose
pursuant to such provisions. All the Securities so issued shall in all
respects have the same legal rank and benefit under this Indenture as the
Securities theretofore or thereafter issued in accordance with the terms of
this Indenture as though all of such Securities had been issued at the date of
the execution hereof.
In case of any such consolidation, merger, sale, conveyance or lease, such
changes in phraseology and form may be made in the Securities thereafter to be
issued as may be appropriate.
ARTICLE IX. SUPPLEMENTAL INDENTURES
Section 9.1. Supplemental Indentures without Consent of Holders.
Without the consent of any Holders, the Company, when authorized by a Board
Resolution, and the Trustee, at any time and from time to time, may enter into
one or more indentures supplemental hereto, in form satisfactory to the
Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the Company, and the
assumption by any such successor of the covenants of the Company herein and
in the Securities contained; or
(2) to convey, transfer, assign, mortgage or pledge any property to or
with the Trustee or to surrender any right or power herein conferred upon
the Company; or
(3) to establish the form or terms of Securities of any series as
permitted by Sections 2.1 or 3.1; or
(4) to add to the covenants of the Company for the benefit of the Holders
of all or any series of Securities (and if such covenants are to be for the
benefit of less than all series of Securities, stating that such covenants
are expressly being included solely for the benefit of such series) or to
surrender any right or power herein conferred upon the Company; or
(5) to add any additional Events of Default; or
(6) to change or eliminate any of the provisions of this Indenture,
provided that any such change or elimination shall become effective only
when there is no Security Outstanding of any series created prior to the
execution of such supplemental indenture which is entitled to the benefit
of such provision; or
(7) to cure any ambiguity, to correct or supplement any provision herein
which may be inconsistent with any other provision herein, or to make any
other provisions with respect to matters or questions arising under this
Indenture, provided that such action pursuant to this clause (7) shall not
materially adversely affect the interest of the Holders of Securities of
any series or, in the case of the Securities of a series issued to a
Lincoln Trust and for so long as any of the corresponding series of
Preferred Securities shall remain outstanding, the holders of such
Preferred Securities; or
(8) to evidence and provide for the acceptance of appointment hereunder
by a successor Trustee with respect to the Securities of one or more series
and to add to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, pursuant to the requirements of Section
6.11(b); or
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(9) to comply with the requirements of the Commission in order to effect
or maintain the qualification of this Indenture under the Trust Indenture
Act.
Section 9.2. Supplemental Indentures with Consent of Holders.
With the consent of the Holders of not less than a majority in principal
amount of the Outstanding Securities of each series affected by such
supplemental indenture, by Act of said Holders delivered to the Company and
the Trustee, the Company, when authorized by a Board Resolution, and the
Trustee may enter into an indenture or indentures supplemental hereto for the
purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of this Indenture or of modifying in any manner the
rights of the Holders of Securities of such series under this Indenture;
provided, however, that no such supplemental indenture shall, without the
consent of the Holder of each Outstanding Security affected thereby,
(1) except to the extent permitted by Section 3.11 or as otherwise
specified as contemplated by Section 3.1 with respect to the extension of
the interest payment period of the Securities of any series, change the
Stated Maturity of the principal of, or any installment of interest
(including any Additional Interest) on, any Security, or reduce the
principal amount thereof or the rate of interest thereon or reduce any
premium payable upon the redemption thereof, or reduce the amount of
principal of a Discount Security that would be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section
5.2, or change the place of payment where, or the coin or currency in
which, any Security or interest thereon is payable, or impair the right to
institute suit for the enforcement of any such payment on or after the
Stated Maturity thereof (or, in the case of redemption, on or after the
date fixed for redemption thereof), or
(2) reduce the percentage in principal amount of the Outstanding
Securities of any series, the consent of whose Holders is required for any
such supplemental indenture, or the consent of whose Holders is required
for any waiver (of compliance with certain provisions of this Indenture or
certain defaults hereunder and their consequences) provided for in this
Indenture, or
(3) modify any of the provisions of this Section, Section 5.13 or Section
10.5, except to increase any such percentage or to provide that certain
other provisions of this Indenture cannot be modified or waived without the
consent of the Holder of each Security affected thereby; or
(4) modify the provisions in Article Thirteen of this Indenture with
respect to the subordination of Outstanding Securities of any series in a
manner adverse to the Holders thereof;
provided that, in the case of the Securities of a series issued to a Lincoln
Trust, so long as any of the corresponding series of Preferred Securities
remains outstanding, no such amendment shall be made that adversely affects
the holders of such Preferred Securities, and no termination of this Indenture
shall occur, and no waiver of any Event of Default or compliance with any
covenant under this Indenture shall be effective, without the prior consent of
the holders of at least a majority of the aggregate liquidation preference of
such Preferred Securities then outstanding unless and until the principal (and
premium, if any) of the Securities of such series and all accrued and unpaid
interest (including any Additional Interest) thereon have been paid in full.
A supplemental indenture that changes or eliminates any covenant or other
provision of this Indenture that has expressly been included solely for the
benefit of one or more particular series of Securities, or which modifies the
rights of the Holders of Securities of such series with respect to such
covenant or other provision, shall be deemed not to affect the rights under
this Indenture of the Holders of Securities of any other series.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such Act shall approve the substance thereof.
Section 9.3. Execution of Supplemental Indentures.
In executing or accepting the additional trusts created by any supplemental
indenture permitted by this Article or the modifications thereby of the trusts
created by this Indenture, the Trustee shall be entitled to receive, and
(subject to Section 6.1) shall be fully protected in relying upon, an
Officers' Certificate and an Opinion of Counsel stating that the execution of
such supplemental indenture is authorized or permitted by this Indenture,
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and that all conditions precedent have been complied with. The Trustee may,
but shall not be obligated to, enter into any such supplemental indenture
which affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise.
Section 9.4. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article, this
Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every
Holder of Securities theretofore or thereafter authenticated and delivered
hereunder shall be bound thereby.
Section 9.5. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall conform
to the requirements of the Trust Indenture Act as then in effect.
Section 9.6. Reference in Securities to Supplemental Indentures.
Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Company, bear a notation in form approved by the Company as to any matter
provided for in such supplemental indenture. If the Company shall so
determine, new Securities of any series so modified as to conform, in the
opinion of the Company, to any such supplemental indenture may be prepared and
executed by the Company and authenticated and delivered by the Trustee in
exchange for Outstanding Securities of such series.
ARTICLE X. COVENANTS
Section 10.1. Payment of Principal, Premium and Interest.
The Company covenants and agrees for the benefit of each series of
securities that it will duly and punctually pay the principal of (and premium,
if any) and interest on the Securities of that series in accordance with the
terms of such Securities and this Indenture.
Section 10.2. Maintenance of Office or Agency.
The Company will maintain in each Place of Payment for any series, an office
or agency where Securities of that series may be presented or surrendered for
payment and an office or agency where Securities may be surrendered for
transfer or exchange and where notices and demands to or upon the Company in
respect of the Securities and this Indenture may be served. The Company
initially appoints the Trustee, acting through its Corporate Trust Office, as
its agent for said purposes. The Company will give prompt written notice to
the Trustee of any change in the location of any such office or agency. If at
any time the Company shall fail to maintain such office or agency or shall
fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office of the Trustee, and the Company hereby appoints the Trustee as its
agent to receive all such presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more other offices
or agencies where the Securities may be presented or surrendered for any or
all of such purposes, and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in each
Place of Payment for Securities of any series for such purposes. The Company
will give prompt written notice to the Trustee of any such designation and any
change in the location of any such office or agency.
Section 10.3. Money for Security Payments to be Held in Trust.
If the Company shall at any time act as its own Paying Agent with respect to
any series of Securities, it will, on or before each due date of the principal
of (and premium, if any) or interest on any of the Securities of such series,
segregate and hold in trust for the benefit of the Persons entitled thereto a
sum sufficient to pay the
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principal (and premium, if any) or interest so becoming due until such sums
shall be paid to such Persons or otherwise disposed of as herein provided, and
will promptly notify the Trustee of its failure so to act.
Whenever the Company shall have one or more Paying Agents, it will, prior to
10:00 a.m. New York City time on each due date of the principal of or interest
on any Securities, deposit with a Paying Agent a sum sufficient to pay the
principal (and premium, if any) or interest so becoming due, such sum to be
held in trust for the benefit of the Persons entitled to such principal and
premium (if any) or interest, and (unless such Paying Agent is the Trustee)
the Company will promptly notify the Trustee of its failure so to act.
The Company will cause each Paying Agent other than the Trustee to execute
and deliver to the Trustee an instrument in which such Paying Agent shall
agree with the Trustee, subject to the provisions of this Section, that such
Paying Agent will:
(1) hold all sums held by it for the payment of the principal of (and
premium, if any) or interest on Securities in trust for the benefit of the
Persons entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company (or any other
obligor upon the Securities) in the making of any payment of principal (and
premium, if any) or interest;
(3) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so
held in trust by such Paying Agent; and
(4) comply with the provisions of the Trust Indenture Act applicable to
it as a Paying Agent.
The Company may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, pay, or by Company
Order direct any Paying Agent to pay, to the Trustee all sums held in trust by
the Company or such Paying Agent, such sums to be held by the Trustee upon the
same trusts as those upon which such sums were held by the Company or such
Paying Agent; and, upon such payment by the Company or any Paying Agent to the
Trustee, such Paying Agent shall be released from all further liability with
respect to such money.
Any money deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of the principal of (and premium, if
any) or interest on any Security and remaining unclaimed for two years after
such principal (and premium, if any) or interest has become due and payable
shall (unless otherwise required by mandatory provision of applicable escheat
or abandoned or unclaimed property law) be paid on Company Request to the
Company, or (if then held by the Company) shall (unless otherwise required by
mandatory provision of applicable escheat or abandoned or unclaimed property
law) be discharged from such trust; and the Holder of such Security shall
thereafter, as an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease; provided, however, that the Trustee or such
Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in a newspaper published in
the English language, customarily published on each Business Day and of
general circulation in the Borough of Manhattan, the City of New York, notice
that such money remains unclaimed and that, after a date specified therein,
which shall not be less than 30 days from the date of such publication, any
unclaimed balance of such money then remaining will be repaid to the Company.
Section 10.4. Statement as to Compliance.
The Company shall deliver to the Trustee, within 120 days after the end of
each calendar year of the Company ending after the date hereof, an Officers'
Certificate covering the preceding calendar year, stating whether or not to
the best knowledge of the signers thereof the Company is in default in the
performance, observance or fulfillment of or compliance with any of the terms,
provisions, covenants and conditions of this Indenture, and if the Company
shall be in default, specifying all such defaults and the nature and status
thereof of which they may have knowledge. For the purpose of this Section
10.5, compliance shall be determined without regard to any grace period or
requirement of notice provided pursuant to the terms of this Indenture.
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Section 10.5. Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with any covenant
or condition as specified as contemplated by Section 3.1 with respect to the
Securities of any series, if before or after the time for such compliance the
Holders of at least a majority in principal amount of the Outstanding
Securities of such series shall, by Act of such Holders, either waive such
compliance in such instance or generally waive compliance with such covenant
or condition, but no such waiver shall extend to or affect such covenant or
condition except to the extent so expressly waived, and, until such waiver
shall become effective, the obligations of the Company in respect of any such
covenant or condition shall remain in full force and effect.
Section 10.6. Additional Sums.
In the case of the Securities of a series issued to a Lincoln Trust, except
as otherwise specified as contemplated by Section 3.1, in the event that (i) a
Lincoln Trust is the Holder of all of the Outstanding Securities of such
series, (ii) a Tax Event in respect of such Lincoln Trust shall have occurred
and be continuing and (iii) the Company shall not have (i) redeemed the
Securities of such series pursuant to Section 11.7(b) or (ii) terminated such
Lincoln Trust pursuant to Section 9.2(b) of the related Trust Agreement, the
Company shall pay to such Lincoln Trust (and its permitted successors or
assigns under the related Trust Agreement) for so long as such Lincoln Trust
(or its permitted successor or assignee) is the registered holder of any
Securities of such series, such additional amounts as may be necessary in
order that the amount of distributions (including any Additional Amounts (as
defined in the Trust Agreement)) then due and payable by such Lincoln Trust on
the related Preferred Securities and Common Securities that at any time remain
outstanding in accordance with the terms thereof shall not be reduced as a
result of any Additional Taxes (the "Additional Sums"). Whenever in this
Indenture or the Securities there is a reference in any context to the payment
of principal of or interest on the Securities, such mention shall be deemed to
include mention of the payments of the Additional Sums provided for in this
paragraph to the extent that, in such context, Additional Sums are, were or
would be payable in respect thereof pursuant to the provisions of this
paragraph and express mention of the payment of Additional Sums (if
applicable) in any provisions hereof shall not be construed as excluding
Additional Sums in those provisions hereof where such express mention is not
made, provided, however, that the extension of an interest payment period
pursuant to Section 3.11 or the Securities shall not extend the payment of any
Additional Sums that may be due and payable during such interest payment
period.
Section 10.7. Additional Covenants.
The Company covenants and agrees with each Holder of Securities of a series
issued to a Lincoln Trust that it will not, and it will not permit any
Subsidiary of the Company to, (a) declare or pay any dividends or
distributions on, or redeem purchase, acquire or make a liquidation payment
with respect to, any shares of the Company's capital stock, or (b) make any
payment of principal, interest or premium, if any, on or repay, repurchase or
redeem any debt securities of the Company (but not as to the Subsidiary) that
rank pari passu with or junior to the Securities of such series or make any
guarantee payments with respect to the foregoing (other than (a) dividends or
distributions in Common Stock of the Company, (b) redemptions or purchases of
any rights pursuant to the Company's Rights Plan, or any successor to such
Rights Plan, and the declaration of a dividend of such rights or the issuance
of stock under such plans in the future, (c) payments under any Lincoln
Guarantee, and (d) purchases of Common Stock related to the issuance of Common
Stock under any of the Company's benefit plans for its directors, officers or
employees) if at such time (i) there shall have occurred any event of which
the Company has actual knowledge that (a) with the giving of notice or the
lapse of time or both, would constitute an Event of Default hereunder and (b)
in respect of which the Company shall not have taken reasonable steps to cure,
(ii) the Company shall be in default with respect to its payment of any
obligations under the related Lincoln Guarantee or (iii) the Company shall
have given notice of its election to begin an Extension Period as provided
herein and shall not have rescinded such notice, or such period, or any
extension thereof, shall be continuing.
The Company also covenants with each Holder of Securities of a series issued
to a Lincoln Trust (i) to maintain directly or indirectly 100% ownership of
the Common Securities of such Lincoln Trust; provided, however, that any
permitted successor of the Company hereunder may succeed to the Company's
ownership of
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such Common Securities, (ii) not to voluntarily terminate, wind-up or
liquidate such Lincoln Trust, except (a) in connection with a distribution of
the Securities of such series to the holders of Preferred Securities in
liquidation of such Lincoln Trust or (b) in connection with certain mergers,
consolidations or amalgamations permitted by the related Trust Agreement and
(iii) to use its reasonable efforts, consistent with the terms and provisions
of such Trust Agreement, to cause such Lincoln Trust to remain classified as a
grantor trust and not an association taxable as a corporation for United
States federal income tax purposes.
ARTICLE XI. REDEMPTION OF SECURITIES
Section 11.1. Applicability of This Article.
Redemption of Securities (whether by operation of a sinking fund or
otherwise) as permitted or required by any form of Security issued pursuant to
this Indenture shall be made in accordance with such form of Security and this
Article; provided, however, that if any provision of any such form of Security
shall conflict with any provision of this Article, the provision of such form
of Security shall govern. Except as otherwise set forth in the form of
Security for such series, each Security shall be subject to partial redemption
only in the amount of $25 or, in the case of the Securities of a series issued
to a Lincoln Trust, $25, or integral multiples thereof.
Section 11.2. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities shall be evidenced by
or pursuant to a Board Resolution. In case of any redemption at the election
of the Company of less than all of the Securities of any particular series and
having the same terms, the Company shall, not less than 30 nor more than 60
days prior to the date fixed for redemption (unless a shorter notice shall be
satisfactory to the Trustee), notify the Trustee of such date and of the
principal amount of Securities of that series to be redeemed. In the case of
any redemption of Securities prior to the expiration of any restriction on
such redemption provided in the terms of such Securities, the Company shall
furnish the Trustee with an Officers' Certificate and an Opinion of Counsel
evidencing compliance with such restriction.
Section 11.3. Selection of Securities to be Redeemed.
If less than all the Securities of any series are to be redeemed (unless all
the Securities of such series and of a specified tenor are to be redeemed or
unless such redemption affects only a single Security), the particular
Securities to be redeemed shall be selected not more than 60 days prior to the
Redemption Date by the Trustee, from the Outstanding Securities of such series
not previously called for redemption, by such method as the Trustee shall deem
fair and appropriate and which may provide for the selection for redemption of
a portion of the principal amount of any Security of such series, provided
that the unredeemed portion of the principal amount of any Security shall be
in an authorized denomination (which shall not be less than the minimum
authorized denomination) for such Security. If less than all the Securities of
such series and of a specified tenor are to be redeemed (unless such
redemption affects only a single Security), the particular Securities to be
redeemed shall be selected not more than 60 days prior to the Redemption Date
by the Trustee, from the Outstanding Securities of such series and specified
tenor not previously called for redemption in accordance with the preceding
sentence.
The Trustee shall promptly notify the Company in writing of the Securities
selected for partial redemption and the principal amount thereof to be
redeemed. For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall
relate, in the case of any Security redeemed or to be redeemed only in part,
to the portion of the principal amount of such Security which has been or is
to be redeemed. If the Company shall so direct, Securities registered in the
name of the Company, any Affiliate or any Subsidiary thereof shall not be
included in the Securities selected for redemption.
Section 11.4. Notice of Redemption.
Notice of redemption shall be given by first-class mail, postage prepaid,
mailed not later than the thirtieth day, and not earlier than the sixtieth
day, prior to the date fixed for redemption, to each Holder of Securities to
be redeemed, at the address of such Holder as it appears in the Securities
Register.
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With respect to Securities of each series to be redeemed, each notice of
redemption shall state:
(a) the date fixed for redemption for Securities of such series;
(b) the redemption price at which Securities of such series are to be
redeemed;
(c) if less than all Outstanding Securities of such particular series and
having the same terms are to be redeemed, the identification (and, in the
case of partial redemption, the respective principal amounts) of the
particular Securities to be redeemed;
(d) that on the date fixed for redemption, the redemption price at which
such Securities are to be redeemed will become due and payable upon each
such Security or portion thereof, and that interest thereon, if any, shall
cease to accrue on and after said date;
(e) the place or places where such Securities are to be surrendered for
payment of the redemption price at which such Securities are to be
redeemed; and
(f) that the redemption is for a sinking fund, if such is the case.
Notice of redemption of Securities to be redeemed at the election of the
Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company and shall not be
irrevocable. The notice if mailed in the manner herein provided shall be
conclusively presumed to have been duly given, whether or not the Holder
receives such notice. In any case, a failure to give such notice by mail or
any defect in the notice to the Holder of any Security designated for
redemption as a whole or in part shall not affect the validity of the
proceedings for the redemption of any other Security.
Section 11.5. Deposit of Redemption Price.
Prior to 10:00 a.m. New York City time on the redemption date specified in
the notice of redemption given as provided in Section 11.4, the Company will
deposit with the Trustee or with one or more paying agents an amount of money
sufficient to redeem on the redemption date all the Securities so called for
redemption at the applicable redemption price.
Section 11.6. Payment of Securities Called for Redemption.
If any notice of redemption has been given as provided in Section 11.4, the
Securities or portion of Securities with respect to which such notice has been
given shall become due and payable on the date and at the place or places
stated in such notice at the applicable redemption price. On presentation and
surrender of such Securities at a place of payment in said notice specified,
the said securities or the specified portions thereof shall be paid and
redeemed by the Company at the applicable redemption price.
Upon presentation of any Security redeemed in part only, the Company shall
execute and the Trustee shall authenticate and deliver to the Holder thereof,
at the expense of the Company, a new Security or Securities of the same
series, of authorized denominations, in aggregate principal amount equal to
the unredeemed portion of the Security so presented and having the same
Original Issue Date, Stated Maturity and terms. If a Global Security is so
surrendered, such new Security will also be a new Global Security.
If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal of and premium, if any, on such Security
shall, until paid, bear interest from the Redemption Date at the rate
prescribed therefor in the Security.
Section 11.7. Company's Right of Redemption.
(a) Unless otherwise specified as contemplated by Section 3.1 with respect
to the Securities of a particular series and notwithstanding any additional
redemption rights that may be so specified, the Company may, at its option,
redeem the Securities of any series after their date of issuance in whole at
any time or in part from time to time, subject to the provisions of this
clause (a) and the other provisions of this Article XI. Unless otherwise
specified as contemplated by Section 3.1 with respect to the Securities of a
particular series, the redemption price for any Security so redeemed pursuant
to this clause (a) shall be equal to 100% of the principal amount of such
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Securities plus any accrued and unpaid interest, including any Additional
Interest, to the date fixed for redemption. The Company shall not redeem the
Securities in part unless all accrued and unpaid interest (including any
Additional Interest) has been paid in full on all Securities Outstanding for
all interest periods terminating on or prior to the date fixed for redemption.
(b) In the case of the Securities of a series issued to a Lincoln Trust,
except as otherwise specified as contemplated by Section 3.1, if a Special
Event in respect of such Lincoln Trust shall occur and be continuing, the
Company may, at its option, redeem the Securities of such series within 90
days of the occurrence of such Special Event, in whole but not in part,
subject to the provisions of this clause (b) and the other provisions of this
Article Eleven. The redemption price for any Security so redeemed pursuant to
this clause (b) shall be equal to 100% of the principal amount of such
Securities then Outstanding plus accrued and unpaid interest, including any
Additional Interest, to the date fixed for redemption.
ARTICLE XII. SINKING FUNDS
Section 12.1. Applicability of Article.
The provisions of this Article shall be applicable to any sinking fund for
the retirement of Securities of any series except as otherwise specified as
contemplated by Section 3.1 for such Securities.
The minimum amount of any sinking fund payment provided for by the terms of
any Securities of any series is herein referred to as a "mandatory sinking
fund payment", and any sinking fund payment in excess of such minimum amount
which is permitted to be made by the terms of such Securities of any series is
herein referred to as an "optional sinking fund payment". If provided for by
the terms of any Securities of any series, the cash amount of any sinking fund
payment may be subject to reduction as provided in Section 12.2. Each sinking
fund payment shall be applied to the redemption of Securities of any series as
provided for by the terms of such Securities.
Section 12.2. Satisfaction of Sinking Fund Payments with Securities.
In lieu of making all or any part of a mandatory sinking fund payment with
respect to any Securities of a series in cash, the Company may at its option,
at any time no more than 16 months and no less than 30 days prior to the date
on which such sinking fund payment is due, deliver to the Trustee Securities
of such series (together with the unmatured Coupons, if any, appertaining
thereto) theretofore purchased or otherwise acquired by the Company, except
Securities of such series that have been redeemed through the application of
mandatory or optional sinking fund payments pursuant to the terms of the
Securities of such series, accompanied by a Company Order instructing the
Trustee to credit such obligations and stating that the Securities of such
series were originally issued by the Company by way of bona fide sale or other
negotiation for value; provided that the Securities to be so credited have not
been previously so credited. The Securities to be so credited shall be
received and credited for such purpose by the Trustee at the redemption price
for such Securities, as specified in the Securities so to be redeemed, for
redemption through operation of the sinking fund and the amount of such
sinking fund payment shall be reduced accordingly.
Section 12.3. Redemption of Securities for Sinking Fund.
Not less than 60 days prior to each sinking fund payment date for any series
of Securities, the Company will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing sinking fund payment for
such Securities pursuant to the terms of such Securities, the portion thereof,
if any, which is to be satisfied by payment of cash in the currency in which
the Securities of such series are payable (except as provided pursuant to
Section 3.1) and the portion thereof, if any, which is to be satisfied by
delivering and crediting Securities pursuant to Section 12.2 and will also
deliver to the Trustee any Securities to be so delivered. Such Certificate
shall be irrevocable and upon its delivery the Company shall be obligated to
make the cash payment or payments therein referred to, if any, on or before
the succeeding sinking fund payment date. In the case of the failure of the
Company to deliver such Certificate (or, as required by this Indenture, the
Securities and coupons, if any, specified in such Certificate), the sinking
fund payment due on the succeeding sinking fund payment date
45
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for such series shall be paid entirely in cash and shall be sufficient to
redeem the principal amount of the Securities of such series subject to a
mandatory sinking fund payment without the right to deliver or credit
securities as provided in Section 12.2 and without the right to make the
optional sinking fund payment with respect to such series at such time.
Any sinking fund payment or payments (mandatory or optional) made in cash
plus any unused balance of any preceding sinking fund payments made with
respect to the Securities of any particular series shall be applied by the
Trustee (or by the Company if the Company is acting as its own Paying Agent)
on the sinking fund payment date on which such payment is made (or, if such
payment is made before a sinking fund payment date, on the sinking fund
payment date immediately following the date of such payment) to the redemption
of Securities of such series at the redemption price specified in such
Securities with respect to the sinking fund. Any sinking fund moneys not so
applied or allocated by the Trustee (or by the Company if the Company is
acting as its own Paying Agent, segregated and held in trust as provided in
Section 10.3) for such series and together with such payment (or such amount
so segregated) shall be applied in accordance with the provisions of this
Section 12.3. Any and all sinking fund moneys with respect to the Securities
of any particular series held by the Trustee (or if the Company is acting as
its own Paying Agent, segregated and held in trust as provided in Section
10.3) on the last sinking fund payment date with respect to Securities of such
series and not held for the payment or redemption of particular Securities of
such series shall be applied by the Trustee (or by the Company if the Company
is acting as its own Paying Agent), together with other moneys, if necessary,
to be deposited (or segregated) sufficient for the purpose, to the payment of
the principal of the Securities of such series at Maturity. The Trustee shall
select the Securities to be redeemed upon such sinking fund payment date in
the manner specified in Section 11.3 and cause notice of the redemption
thereof to be given in the name of and at the expense of the Company in the
manner provided in Section 11.4. Such notice having been duly given, the
redemption of such Securities shall be made upon the terms and in the manner
stated in Section 11.6. On or before each sinking fund payment date, the
Company shall pay to the Trustee (or, if the Company is acting as its own
Paying Agent, the Company shall segregate and hold in trust as provided in
Section 10.3) in cash a sum in the currency in which Securities of such series
are payable (except as provided pursuant to Section 3.1) equal to the
principal and any interest accrued to the redemption date for Securities or
portions thereof to be redeemed on such sinking fund payment date pursuant to
this Section 12.3.
Neither the Trustee nor the Company shall redeem any Securities of a series
with sinking fund moneys or mail any notice of redemption of Securities of
such series by operation of the sinking fund for such series during the
continuance of a default in payment of interest, if any, on any Securities of
such series or of any Event of Default (other than an Event of Default
occurring as a consequence of this paragraph) with respect to the Securities
of such series, except that if the notice of redemption shall have been
provided in accordance with the provisions hereof, the Trustee (or the Company
if the Company is then acting as its own Paying Agent) shall redeem such
Securities if cash sufficient for that purpose shall be deposited with the
Trustee (or segregated by the Company) for that purpose in accordance with the
terms of this Article Twelve. Except as aforesaid, any moneys in the sinking
fund for such series at the time when any such default or Event of Default
shall occur and any moneys thereafter paid into such sinking fund shall,
during the continuance of such default or Event of Default, be held as
security for the payment of the Securities and coupons, if any, of such
series; provided, however, that in case such default or Event of Default shall
have been cured or waived herein, such moneys shall thereafter be applied on
the next sinking fund payment date for the Securities of such series on which
such moneys may be applied pursuant to the provisions of this Section 12.3.
ARTICLE XIII. SUBORDINATION OF SECURITIES
Section 13.1. Securities Subordinate to Senior Debt.
The Company covenants and agrees, and each Holder of a Security, by its
acceptance thereof, likewise covenants and agrees, that, to the extent and in
the manner hereinafter set forth in this Article, the payment of the principal
of (and premium, if any) and interest (including any Additional Interest) on
each and all of the
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Securities are hereby expressly made subordinate and subject in right of
payment to the prior payment in full of all amounts then due and payable in
respect of all Senior Debt.
Section 13.2. Payment Over of Proceeds Upon Dissolution, Etc.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company (each such event, if any, herein
sometimes referred to as a "Proceeding"), then the holders of Senior Debt
shall be entitled to receive payment in full of principal of (and premium, if
any) and interest, if any, on such Senior Debt, or provision shall be made for
such payment in cash or cash equivalents or otherwise in a manner satisfactory
to the holders of Senior Debt, before the Holders of the Securities are
entitled to receive or retain any payment or distribution of any kind or
character, whether in cash, property or securities (including any payment or
distribution which may be payable or deliverable by reason of the payment of
any other Debt of the Company (including any series of the Securities)
subordinated to the payment of the Securities, such payment or distribution
being hereinafter referred to as a "Junior Subordinated Payment"), on account
of principal of (or premium, if any) or interest (including any Additional
Interest) on the Securities or on account of the purchase or other acquisition
of Securities by the Company or any Subsidiary and to that end the holders of
Senior Debt shall be entitled to receive, for application to the payment
thereof, any payment or distribution of any kind or character, whether in
cash, property or securities, including any Junior Subordinated Payment, which
may be payable or deliverable in respect of the Securities in any such
Proceeding.
In the event that, notwithstanding the foregoing provisions of this Section,
the Trustee or the Holder of any Security shall have received any payment or
distribution of assets of the Company of any kind or character, whether in
cash, property or securities, including any Junior Subordinated Payment,
before all Senior Debt is paid in full or payment thereof is provided for in
cash or cash equivalents or otherwise in a manner satisfactory to the holders
of Senior Debt, and if such fact shall, at or prior to the time of such
payment or distribution, have been made known to the Trustee or, as the case
may be, such Holder, then and in such event such payment or distribution shall
be paid over or delivered forthwith to the trustee in bankruptcy, receiver,
liquidating trustee, custodian, assignee, agent or other Person making payment
or distribution of assets of the Company for application to the payment of all
Senior Debt remaining unpaid, to the extent necessary to pay all Senior Debt
in full, after giving effect to any concurrent payment or distribution to or
for the holders of Senior Debt.
For purposes of this Article only, the words "any payment or distribution of
any kind or character, whether in cash, property or securities" shall not be
deemed to include shares of stock of the Company as reorganized or readjusted,
or securities of the Company or any other corporation provided for by a plan
of reorganization or readjustment which securities are subordinated in right
of payment to all then outstanding Senior Debt to substantially the same
extent as the Securities are so subordinated as provided in this Article. The
consolidation of the Company with, or the merger of the Company into, another
Person or the liquidation or dissolution of the Company following the sale of
all or substantially all of its properties and assets as an entirety to
another Person or the liquidation or dissolution of the Company following the
sale of all or substantially all of its properties and assets as an entirety
to another Person upon the terms and conditions set forth in Article Eight
shall not be deemed a Proceeding for the purposes of this Section if the
Person formed by such consolidation or into which the Company is merged or the
Person which acquires by sale such properties and assets as an entirety, as
the case may be, shall, as a part of such consolidation, merger, or sale
comply with the conditions set forth in Article Eight.
Section 13.3. Prior Payment to Senior Debt Upon Acceleration of Securities.
In the event that any Securities are declared due and payable before their
Stated Maturity, then and in such event the holders of the Senior Debt
outstanding at the time such Securities so become due and payable shall be
entitled to receive payment in full of all amounts due on or in respect of
such Senior Debt (including any amounts due upon acceleration), or provision
shall be made for such payment in cash or cash equivalents or otherwise in a
manner satisfactory to the holders of Senior Debt, before the Holders of the
Securities are entitled to receive any payment or distribution of any kind or
character, whether in cash, properties or securities (including any
47
<PAGE>
Junior Subordinated Payment) by the Company on account of the principal of (or
premium, if any) or interest (including any Additional Interest) on the
Securities or on account of the purchase or other acquisition of Securities by
the Company or any Subsidiary; provided, however, that nothing in this Section
shall prevent the satisfaction of any sinking fund payment in accordance with
this Indenture or as otherwise specified as contemplated by Section 3.1 for
the Securities of any series by delivering and crediting pursuant to Section
12.2 or as otherwise specified as contemplated by Section 3.1 for the
Securities of any series Securities which have been acquired (upon redemption
or otherwise) prior to such declaration of acceleration.
In the event that, notwithstanding the foregoing, the Company shall make any
payment to the Trustee or the Holder of any Security prohibited by the
foregoing provisions of this Section, and if such fact shall, at or prior to
the time of such payment, have been made known to the Trustee or, as the case
may be, such Holder, then and in such event such payment shall be paid over
and delivered forthwith to the Company.
The provisions of this Section shall not apply to any payment with respect
to which Section 13.2 would be applicable.
Section 13.4. No Payment When Senior Debt in Default.
(a) In the event and during the continuation of any default in the payment
of principal of (or premium, if any) or interest on any Senior Debt, or in the
event that any event of default with respect to any Senior Debt shall have
occurred and be continuing and shall have resulted in such Senior Debt
becoming or being declared due and payable prior to the date on which it would
otherwise have become due and payable, unless and until such event of default
shall have been cured or waived or shall have ceased to exist and such
acceleration shall have been rescinded or annulled, or (b) in the event any
judicial proceeding shall be pending with respect to any such default in
payment or such event or default, then no payment or distribution of any kind
or character, whether in cash, properties or securities (including any Junior
Subordinated Payment) shall be made by the Company on account of principal of
(or premium, if any) or interest (including any Additional Interest), if any,
on the Securities or on account of the purchase or other acquisition of
Securities by the Company or any Subsidiary; provided, however, that nothing
in this Section shall prevent the satisfaction of any sinking fund payment in
accordance with this Indenture or as otherwise specified as contemplated by
Section 3.1 for the Securities of any series by delivering and crediting
pursuant to Section 12.2 or as otherwise specified as contemplated by Section
3.1 for the Securities of any series Securities which have been acquired (upon
redemption or otherwise) prior to such default in payment or event of default.
In the event that, notwithstanding the foregoing, the Company shall make any
payment to the Trustee or the Holder of any Security prohibited by the
foregoing provisions of this Section, and if such fact shall, at or prior to
the time of such payment, have been made known to the Trustee or, as the case
may be, such Holder, then and in such event such payment shall be paid over
and delivered forthwith to the Company.
The provisions of this Section shall not apply to any payment with respect
to which Section 13.2 would be applicable.
Section 13.5. Payment Permitted If No Default.
Nothing contained in this Article or elsewhere in this Indenture or in any
of the Securities shall prevent (a) the Company, at any time except during the
pendency of any Proceeding referred to in Section 13.2 or under the conditions
described in Sections 13.3 and 13.4, from making payments at any time of
principal of (and premium, if any) or interest on the Securities, or (b) the
application by the Trustee of any money or Government Obligations deposited
with it hereunder to the payment of or on account of the principal of (and
premium, if any) or interest (including any Additional Interest) on the
Securities or the retention of such payment by the Holders, if, at the time of
such application by the Trustee, it did not have knowledge that such payment
would have been prohibited by the provisions of this Article.
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<PAGE>
Section 13.6. Subrogation to Rights of Holders of Senior Debt.
Subject to the payment in full of all Senior Debt, or the provision for such
payment in cash or cash equivalents or otherwise in a manner satisfactory to
the holders of Senior Debt, the Holders of the Securities shall be subrogated
to the extent of the payments or distributions made to the holders of such
Senior Debt pursuant to the provisions of this Article (equally and ratably
with the holders of all indebtedness of the Company which by its express terms
is subordinated to Senior Debt of the Company to substantially the same extent
as the Securities are subordinated to the Senior Debt and is entitled to like
rights of subrogation by reason of any payments or distributions made to
holders of such Senior Debt) to the rights of the holders of such Senior Debt
to receive payments and distributions of cash, property and securities
applicable to the Senior Debt until the principal of (and premium, if any) and
interest on the Securities shall be paid in full. For purposes of such
subrogation or assignment, no payments or distributions to the holders of the
Senior Debt of any cash, property or securities to which the Holders of the
Securities or the Trustee would be entitled except for the provisions of this
Article, and no payments over pursuant to the provisions of this Article to
the holders of Senior Debt by Holders of the Securities or the Trustee, shall,
as among the Company, its creditors other than holders of Senior Debt, and the
Holders of the Securities, be deemed to be a payment or distribution by the
Company to or on account of the Senior Debt.
Section 13.7. Provisions Solely to Define Relative Rights.
The provisions of this Article are and are intended solely for the purpose
of defining the relative rights of the Holders of the Securities on the one
hand and the holders of Senior Debt on the other hand. Nothing contained in
this Article or elsewhere in this Indenture or in the Securities is intended
to or shall (a) impair, as between the Company and the Holders of the
Securities, the obligations of the Company, which are absolute and
unconditional, to pay to the Holders of the Securities the principal of (and
premium, if any) and interest (including any Additional Interest) on the
Securities as and when the same shall become due and payable in accordance
with their terms; or (b) affect the relative rights against the Company of the
Holders of the Securities and creditors of the Company other than their rights
in relation to the holders of Senior Debt; or (c) prevent the Trustee or the
Holder of any Security from exercising all remedies otherwise permitted by
applicable law upon default under this Indenture including, without
limitation, filing and voting claims in any Proceeding, subject to the rights,
if any, under this Article of the holders of Senior Debt to receive cash,
property and securities otherwise payable or deliverable to the Trustee or
such Holder.
Section 13.8. Trustee to Effectuate Subordination.
Each Holder of a Security by his or her acceptance thereof authorizes and
directs the Trustee on his or her behalf to take such action as may be
necessary or appropriate to acknowledge or effectuate the subordination
provided in this Article and appoints the Trustee his or her attorney-in-fact
for any and all such purposes.
Section 13.9. No Waiver of Subordination Provisions.
No right of any present or future holder of any Senior Debt to enforce
subordination as herein provided shall at any time in any way be prejudiced or
impaired by any act or failure to act on the part of the Company or by any act
or failure to act, in good faith, by any such holder, or by any noncompliance
by the Company with the terms, provisions and covenants of this Indenture,
regardless of any knowledge thereof that any such holder may have or be
otherwise charged with.
Section 13.10. Notice to Trustee.
The Company shall give prompt written notice to the Trustee of any fact
known to the Company which would prohibit the making of any payment to or by
the Trustee in respect of the Securities. Notwithstanding the provisions of
this Article or any other provision of this Indenture, the Trustee shall not
be charged with knowledge of the existence of any facts which would prohibit
the making of any payment to or by the Trustee in respect of the Securities,
unless and until the Trustee shall have received written notice thereof from
the Company or a holder of Senior Debt or from any trustee, agent or
representative therefor (whether or not the facts contained in such notice are
true); provided, however, that if the Trustee shall not have received the
notice
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provided for in this Section at least two Business Days prior to the date upon
which by the terms hereof any monies may become payable for any purpose
(including, without limitation, the payment of the principal of (and premium,
if any) or interest (including any Additional Interest) on any Security),
then, anything herein contained to the contrary notwithstanding, the Trustee
shall have full power and authority to receive such monies and to apply the
same to the purpose for which they were received and shall not be affected by
any notice to the contrary which may be received by it within two Business
Days prior to such date.
Section 13.11. Reliance on Judicial Order or Certificate of Liquidating
Agent.
Upon any payment or distribution of assets of the Company referred to in
this Article, the Trustee, subject to the provisions of Article Six, and the
Holders of the Securities shall be entitled to rely upon any order or decree
entered by any court of competent jurisdiction in which such Proceeding is
pending, or a certificate of the trustee in bankruptcy, receiver, liquidating
trustee, custodian, assignee for the benefit of creditors, agent or other
Person making such payment or distribution, delivered to the Trustee or to the
Holders of Securities, for the purpose of ascertaining the Persons entitled to
participate in such payment or distribution, the holders of the Senior Debt
and other indebtedness of the Company, the amount thereof or payable thereon,
the amount or amounts paid or distributed thereon and all other facts
pertinent thereto or to this Article.
Section 13.12. Trustee Not Fiduciary for Holders of Senior Debt.
The Trustee, in its capacity as trustee under this Indenture, shall not be
deemed to owe any fiduciary duty to the holders of Senior Debt and shall not
be liable to any such holders if it shall in good faith mistakenly pay over or
distribute to Holders of Securities or to the Company or to any other Person
cash, property or securities to which any holders of Senior Debt shall be
entitled by virtue of this Article or otherwise.
Section 13.13. Rights of Trustee as Holder of Senior Debt; Preservation of
Trustee's Rights.
The Trustee in its individual capacity shall be entitled to all the rights
set forth in this Article with respect to any Senior Debt which may at any
time be held by it, to the same extent as any other holder of Senior Debt, and
nothing in this Indenture shall deprive the Trustee of any of its rights as
such holder.
Section 13.14. Article Applicable to Paying Agents.
In case at any time any Paying Agent other than the Trustee shall have been
appointed by the Company and be then acting hereunder, the term "Trustee" as
used in this Article shall in such case (unless the context otherwise
requires) be construed as extending to and including such Paying Agent within
its meaning as fully for all intents and purposes as if such Paying Agent were
named in this Article in addition to or in place of the Trustee.
Section 13.15. Certain Conversions or Exchanges Deemed Payment.
For the purposes of this Article only, (a) the issuance and delivery of
junior securities upon conversion or exchange of Securities shall not be
deemed to constitute a payment or distribution on account of the principal of
(or premium, if any) or interest (including any Additional Interest) on
Securities or on account of the purchase or other acquisition of Securities,
and (b) the payment, issuance or delivery of cash, property or securities
(other than junior securities) upon conversion or exchange of a Security shall
be deemed to constitute payment on account of the principal of such security.
For the purposes of this Section, the term "junior securities" means (i)
shares of any stock of any class of the Company and (ii) securities of the
Company which are subordinated in right of payment to all Senior Debt which
may be outstanding at the time of issuance or delivery of such securities to
substantially the same extent as, or to a greater extent than, the Securities
are so subordinated as provided in this Article.
* * * *
This instrument may be executed in any number of counterparts, each of which
so executed shall be deemed to be an original, but all such counterparts shall
together constitute but one and the same instrument.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly
executed, and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
LINCOLN NATIONAL CORPORATION
By: _________________________________
Attest:
_____________________________________
THE FIRST NATIONAL BANK OF CHICAGO
_____________________________________
as Property Trustee
By: _________________________________
51
<PAGE>
EXHIBIT 4(I)
CERTIFICATE OF TRUST
OF
LINCOLN NATIONAL CAPITAL I
This Certificate of Trust of Lincoln National Capital I (the "Trust"), dated
, 1996, is being duly executed and filed by the undersigned, as
trustees, to form a business trust under the Delaware Business Trust Act (12
Del. C. ((S)) 3801 et seq.).
1. Name. The name of the business trust being formed hereby is Lincoln
National Capital I.
2. Delaware Trustee. The name and business address of the trustee of the
Trust with a principal place of business in the State of Delaware are First
Chicago Delaware, Inc., 300 King Street, Wilmington, Delaware, 19801.
3. Effective Date. This Certificate of Trust shall be effective as of May
, 1996
In Witness Whereof, the undersigned, being the trustees of the Trust, have
executed this Certificate of Trust as of the date first above written.
The First National Bank of Chicago,
as Trustee
By: _________________________________
Name:
Title:
First Chicago Delaware, Inc., as
Trustee
By: _________________________________
Name:
Title:
, as Trustee
-------------------------------------
<PAGE>
TRUST AGREEMENT
This Trust Agreement, dated as of May 1, 1996, between Lincoln National
Corporation, an Indiana corporation, as "Depositor", Janet Whitney, The First
National Bank of Chicago, a national banking corporation, and First Chicago
Delaware Inc., a Delaware banking corporation, not in their individual
capacities but solely as "Trustees." The Depositor and the Trustees hereby
agree as follows:
1. The trust created hereby shall be known as Lincoln National Capital I,
in which name the Trustees, or the Depositor to the extent provided herein,
may conduct the business of the Trust, make and execute contracts, and sue
and be sued.
2. The Depositor hereby assigns, transfers, conveys and sets over to the
Trustees the sum of $10. The Trustees hereby acknowledge receipt of such
amount in trust from the Depositor, which amount shall constitute the
initial trust estate. The Trustees hereby declare that they will hold the
trust estate in trust for the Depositor. It is the intention of the parties
hereto that the Trust created hereby constitute a business trust under
Chapter 38 of Title 12 of the Delaware Code, 12 Del. C. (S)3801 et seq.
(the "Business Trust Act"), and that this document constitutes the
governing instrument of the Trust. The Trustees are hereby authorized and
directed to execute and file a certificate of trust with the Delaware
Secretary of State in accordance with the provisions of the Business Trust
Act.
3. The Depositor and the Trustees will enter into an amended and restated
Trust Agreement, satisfactory to each such party and substantially in the
form included as Exhibit 4(j) to the 1933 Act Registration Statement (as
defined below), to provide for the contemplated operation of the Trust
created hereby and the issuance of the Preferred Securities and Common
Securities referred to therein. Prior to the execution and delivery of such
amended and restated Trust Agreement, the Trustees shall not have any duty
or obligation hereunder or with respect to the trust estate, except as
otherwise required by applicable law or as may be necessary to obtain prior
to such execution and delivery of any licenses, consents or approvals
required by applicable law or otherwise.
4. The Depositor and the Trustees hereby authorize and direct the
Depositor, as the sponsor of the Trust, (i) to file with the Securities and
Exchange Commission (the "Commission") and execute, in each case on behalf
of the Trust, (a) the Registration Statement on Form S-3 (the "1933 Act
Registration Statement"), including any pre-effective or post-effective
amendments to such 1933 Act Registration Statement (including the
prospectus and the exhibits contained therein), relating to the
registration under the Securities Act of 1933, as amended, of the Preferred
Securities of the Trust and certain other securities and (b) a Registration
Statement on Form 8-A (the "1934 Act Registration Statement") (including
all pre-effective and post-effective amendments thereto) relating to the
registration of the Preferred Securities of the Trust under Section 12(b)
of the Securities Exchange Act of 1934, as amended; (ii) to file with the
New York Stock Exchange (the "Exchange") and execute on behalf of the Trust
a listing application and all other applications, statements, certificates,
agreements and other instruments as shall be necessary or desirable to
cause the Preferred Securities to be listed on the Exchange; (iii) to file
and execute on behalf of the Trust such applications, reports, surety
bonds, irrevocable consents, appointments of attorney for service of
process and other papers and documents as shall be necessary or desirable
to register the Preferred Securities under the securities or "Blue Sky"
laws, and to obtain any permits under the insurance laws of such
jurisdictions as the Depositor, on behalf of the Trust, may deem necessary
or desirable and (iv) to execute on behalf of the Trust one or more
Underwriting Agreements with one or more underwriters relating to the
offering of the Preferred Securities. In the event that any filing referred
to in clauses (i) through (iii) above is required by the rules and
regulations of the Commission, the New York Stock Exchange or any other
national stock exchange or state securities or blue sky laws, to be
executed on behalf of the Trust by the Trustees, in their capacities as
Trustees of the Trust, are hereby authorized and directed to join in any
such filing and to execute on behalf of the Trust any and all of the
foregoing, it being understood that The First National Bank of Chicago and
First Chicago Delaware Inc., in their capacities as Trustees of the Trust,
shall not be required to join in any such filing or execute on behalf of
the Trust any such document unless required by the rules and regulations of
the
<PAGE>
Commission, the New York Stock Exchange or any other national stock
exchange or state securities or blue sky laws. In connection with all of
the foregoing, the Depositor and each Trustee, solely in its capacity as
Trustee of the Trust, hereby constitutes and appoints Janet Whitney and
Walter Bonham, and each of them, as his, her or its, as the case may be,
true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for the Depositor or in the Depositor's
name, place and stead, in any and all capacities, to sign any and all
amendments (including post-effective amendments) to the 1933 Act
Registration Statement and the 1934 Act Registration Statement and to file
the same, with all exhibits thereto, and other documents in connection
therewith, with the Commission, granting unto said attorneys-in-fact and
agents full power and authority to do and perform each and every act and
thing requisite and necessary to be done in connection therewith, as fully
to all intents and purposes as the Depositor might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents
or any of them, or their respective substitute or substitutes, shall do or
cause to be done by virtue hereof.
5. This Trust Agreement may be executed in one or more counterparts.
6. The number of Trustees initially shall be three (3) and thereafter the
number of Trustees shall be such number as shall be fixed from time to time
by a written instrument signed by the Depositor which may increase or
decrease the number of Trustees; provided, however, that to the extent
required by the Business Trust Act, one Trustee shall either be a natural
person who is a resident of the State of Delaware or, if not a natural
person, an entity which has its principal place of business in the State of
Delaware and otherwise meets the requirements of applicable Delaware law.
Subject to the foregoing, the Depositor is entitled to appoint or remove
without cause any Trustee at any time. A Trustee may resign upon thirty
days' prior notice to the Depositor.
7. This Trust Agreement shall be governed by, and construed in accordance
with, the laws of the State of Delaware (without regard to conflict of laws
of principles).
In Witness Whereof, the parties hereto have caused this Trust Agreement to be
duly executed as of the day and year first above written.
Lincoln National Corporation, as
Depositor
By: _________________________________
Name:
Title:
Janet Whitney, not in her individual
capacity but solely as Trustee
-------------------------------------
The First National Bank of Chicago,
not in its individual capacity but
solely as Trustee
By: _________________________________
Name:
Title:
First Chicago Delaware Inc., not in
its individual capacity but solely
as Trustee
By: _________________________________
Name:
Title:
2
<PAGE>
EXHIBIT 4(K)
CERTIFICATE OF TRUST
OF
LINCOLN NATIONAL CAPITAL II
This Certificate of Trust of Lincoln National Capital I (the "Trust"), dated
, 1996, is being duly executed and filed by the undersigned, as
trustees, to form a business trust under the Delaware Business Trust Act (12
Del. C. ((S)) 3801 et seq.).
1. Name. The name of the business trust being formed hereby is Lincoln
National Capital II.
2. Delaware Trustee. The name and business address of the trustee of the
Trust with a principal place of business in the State of Delaware are First
Chicago Delaware, Inc., 300 King Street, Wilmington, Delaware, 19801.
3. Effective Date. This Certificate of Trust shall be effective as of May
, 1996
In Witness Whereof, the undersigned, being the trustees of the Trust, have
executed this Certificate of Trust as of the date first above written.
The First National Bank of Chicago,
as Trustee
By: _________________________________
Name:
Title:
First Chicago Delaware Inc., as
Trustee
By: _________________________________
Name:
Title:
, as
Trustee
By: _________________________________
Name:
Title:
<PAGE>
TRUST AGREEMENT
This Trust Agreement, dated as of May 1, 1996, between Lincoln National
Corporation, an Indiana corporation, as "Depositor", Janet Whitney, The First
National Bank of Chicago, a national banking corporation, and First Chicago
Delaware Inc., a Delaware banking corporation, not in their individual
capacities but solely as "Trustees." The Depositor and the Trustees hereby
agree as follows:
1. The trust created hereby shall be known as Lincoln National Capital
II, in which name the Trustees, or the Depositor to the extent provided
herein, may conduct the business of the Trust, make and execute contracts,
and sue and be sued.
2. The Depositor hereby assigns, transfers, conveys and sets over to the
Trustees the sum of $10. The Trustees hereby acknowledge receipt of such
amount in trust from the Depositor, which amount shall constitute the
initial trust estate. The Trustees hereby declare that they will hold the
trust estate in trust for the Depositor. It is the intention of the parties
hereto that the Trust created hereby constitute a business trust under
Chapter 38 of Title 12 of the Delaware Code, 12 Del. C. (S)3801 et seq.
(the "Business Trust Act"), and that this document constitutes the
governing instrument of the Trust. The Trustees are hereby authorized and
directed to execute and file a certificate of trust with the Delaware
Secretary of State in accordance with the provisions of the Business Trust
Act.
3. The Depositor and the Trustees will enter into an amended and restated
Trust Agreement, satisfactory to each such party and substantially in the
form included as Exhibit 4(l) to the 1933 Act Registration Statement (as
defined below), to provide for the contemplated operation of the Trust
created hereby and the issuance of the Preferred Securities and Common
Securities referred to therein. Prior to the execution and delivery of such
amended and restated Trust Agreement, the Trustees shall not have any duty
or obligation hereunder or with respect to the trust estate, except as
otherwise required by applicable law or as may be necessary to obtain prior
to such execution and delivery of any licenses, consents or approvals
required by applicable law or otherwise.
4. The Depositor and the Trustees hereby authorize and direct the
Depositor, as the sponsor of the Trust, (i) to file with the Securities and
Exchange Commission (the "Commission") and execute, in each case on behalf
of the Trust, (a) the Registration Statement on Form S-3 (the "1933 Act
Registration Statement"), including any pre-effective or post-effective
amendments to such 1933 Act Registration Statement (including the
prospectus and the exhibits contained therein), relating to the
registration under the Securities Act of 1933, as amended, of the Preferred
Securities of the Trust and certain other securities and (b) a Registration
Statement on Form 8-A (the "1934 Act Registration Statement") (including
all pre-effective and post-effective amendments thereto) relating to the
registration of the Preferred Securities of the Trust under Section 12(b)
of the Securities Exchange Act of 1934, as amended; (ii) to file with the
New York Stock Exchange (the "Exchange") and execute on behalf of the Trust
a listing application and all other applications, statements, certificates,
agreements and other instruments as shall be necessary or desirable to
cause the Preferred Securities to be listed on the Exchange; (iii) to file
and execute on behalf of the Trust such applications, reports, surety
bonds, irrevocable consents, appointments of attorney for service of
process and other papers and documents as shall be necessary or desirable
to register the Preferred Securities under the securities or "Blue Sky"
laws, and to obtain any permits under the insurance laws of such
jurisdictions as the Depositor, on behalf of the Trust, may deem necessary
or desirable and (iv) to execute on behalf of the Trust one or more
Underwriting Agreements with one or more underwriters relating to the
offering of the Preferred Securities. In the event that any filing referred
to in clauses (i) through (iii) above is required by the rules and
regulations of the Commission, the New York Stock Exchange or any other
national stock exchange or state securities or blue sky laws, to be
executed on behalf of the Trust by the Trustees, in their capacities as
Trustees of the Trust, are hereby authorized and directed to join in any
such filing and to execute on behalf of the Trust any and all of the
foregoing, it being understood that The First National Bank of Chicago and
First Chicago Delaware Inc., in their capacities as Trustees of the Trust,
shall not be required to join in any such filing or execute on behalf of
the Trust any such document unless required by the rules and regulations of
the
<PAGE>
Commission, the New York Stock Exchange or any other national stock
exchange or state securities or blue sky laws. In connection with all of
the foregoing, the Depositor and each Trustee, solely in its capacity as
Trustee of the Trust, hereby constitutes and appoints Janet Whitney and
Walter Bonham, and each of them, as his, her or its, as the case may be,
true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for the Depositor or in the Depositor's
name, place and stead, in any and all capacities, to sign any and all
amendments (including post-effective amendments) to the 1933 Act
Registration Statement and the 1934 Act Registration Statement and to file
the same, with all exhibits thereto, and other documents in connection
therewith, with the Commission, granting unto said attorneys-in-fact and
agents full power and authority to do and perform each and every act and
thing requisite and necessary to be done in connection therewith, as fully
to all intents and purposes as the Depositor might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents
or any of them, or their respective substitute or substitutes, shall do or
cause to be done by virtue hereof.
5. This Trust Agreement may be executed in one or more counterparts.
6. The number of Trustees initially shall be three (3) and thereafter the
number of Trustees shall be such number as shall be fixed from time to time
by a written instrument signed by the Depositor which may increase or
decrease the number of Trustees; provided, however, that to the extent
required by the Business Trust Act, one Trustee shall either be a natural
person who is a resident of the State of Delaware or, if not a natural
person, an entity which has its principal place of business in the State of
Delaware and otherwise meets the requirements of applicable Delaware law.
Subject to the foregoing, the Depositor is entitled to appoint or remove
without cause any Trustee at any time. A Trustee may resign upon thirty
days' prior notice to the Depositor.
7. This Trust Agreement shall be governed by, and construed in accordance
with, the laws of the State of Delaware (without regard to conflict of laws
of principles).
In Witness Whereof, the parties hereto have caused this Trust Agreement to be
duly executed as of the day and year first above written.
Lincoln National Corporation, as
Depositor
By: _________________________________
Name:
Title:
Janet Whitney, not in her individual
capacity but solely as Trustee
-------------------------------------
The First National Bank of Chicago,
not in its individual capacity but
solely as Trustee
By: _________________________________
Name:
Title:
First Chicago Delaware Inc., not in
its individual capacity but solely
as Trustee
By: _________________________________
Name:
Title:
2
<PAGE>
EXHIBIT 4(M)
CERTIFICATE OF TRUST
OF
LINCOLN NATIONAL CAPITAL III
This Certificate of Trust of Lincoln National Capital I (the "Trust"), dated
, 1996, is being duly executed and filed by the undersigned, as
trustees, to form a business trust under the Delaware Business Trust Act (12
Del. C. ((S)) 3801 et seq.).
1. Name. The name of the business trust being formed hereby is Lincoln
National Capital III.
2. Delaware Trustee. The name and business address of the trustee of the
Trust with a principal place of business in the State of Delaware are First
Chicago Delaware, Inc., 300 King Street, Wilmington, Delaware, 19801.
3. Effective Date. This Certificate of Trust shall be effective as of May
, 1996.
In Witness Whereof, the undersigned, being the trustees of the Trust, have
executed this Certificate of Trust as of the date first above written.
The First National Bank of Chicago,
as Trustee
By: _________________________________
Name:
Title:
First Chicago Delaware Inc., as
Trustee
By: _________________________________
Name:
Title:
, as Trustee
-------------------------------------
A-1
<PAGE>
TRUST AGREEMENT
This Trust Agreement, dated as of May 1, 1996, between Lincoln National
Corporation, an Indiana corporation, as "Depositor", Janet Whitney, The First
National Bank of Chicago, a national banking corporation, and First Chicago
Delaware Inc., a Delaware banking corporation, not in their individual
capacities but solely as "Trustees." The Depositor and the Trustees hereby
agree as follows:
1. The trust created hereby shall be known as Lincoln National Capital
III, in which name the Trustees, or the Depositor to the extent provided
herein, may conduct the business of the Trust, make and execute contracts,
and sue and be sued.
2. The Depositor hereby assigns, transfers, conveys and sets over to the
Trustees the sum of $10. The Trustees hereby acknowledge receipt of such
amount in trust from the Depositor, which amount shall constitute the
initial trust estate. The Trustees hereby declare that they will hold the
trust estate in trust for the Depositor. It is the intention of the parties
hereto that the Trust created hereby constitute a business trust under
Chapter 38 of Title 12 of the Delaware Code, 12 Del. C. (S)3801 et seq.
(the "Business Trust Act"), and that this document constitutes the
governing instrument of the Trust. The Trustees are hereby authorized and
directed to execute and file a certificate of trust with the Delaware
Secretary of State in accordance with the provisions of the Business Trust
Act.
3. The Depositor and the Trustees will enter into an amended and restated
Trust Agreement, satisfactory to each such party and substantially in the
form included as Exhibit 4(n) to the 1933 Act Registration Statement (as
defined below), to provide for the contemplated operation of the Trust
created hereby and the issuance of the Preferred Securities and Common
Securities referred to therein. Prior to the execution and delivery of such
amended and restated Trust Agreement, the Trustees shall not have any duty
or obligation hereunder or with respect to the trust estate, except as
otherwise required by applicable law or as may be necessary to obtain prior
to such execution and delivery of any licenses, consents or approvals
required by applicable law or otherwise.
4. The Depositor and the Trustees hereby authorize and direct the
Depositor, as the sponsor of the Trust, (i) to file with the Securities and
Exchange Commission (the "Commission") and execute, in each case on behalf
of the Trust, (a) the Registration Statement on Form S-3 (the "1933 Act
Registration Statement"), including any pre-effective or post-effective
amendments to such 1933 Act Registration Statement (including the
prospectus and the exhibits contained therein), relating to the
registration under the Securities Act of 1933, as amended, of the Preferred
Securities of the Trust and certain other securities and (b) a Registration
Statement on Form 8-A (the "1934 Act Registration Statement") (including
all pre-effective and post-effective amendments thereto) relating to the
registration of the Preferred Securities of the Trust under Section 12(b)
of the Securities Exchange Act of 1934, as amended; (ii) to file with the
New York Stock Exchange (the "Exchange") and execute on behalf of the Trust
a listing application and all other applications, statements, certificates,
agreements and other instruments as shall be necessary or desirable to
cause the Preferred Securities to be listed on the Exchange; (iii) to file
and execute on behalf of the Trust such applications, reports, surety
bonds, irrevocable consents, appointments of attorney for service of
process and other papers and documents as shall be necessary or desirable
to register the Preferred Securities under the securities or "Blue Sky"
laws, and to obtain any permits under the insurance laws of such
jurisdictions as the Depositor, on behalf of the Trust, may deem necessary
or desirable and (iv) to execute on behalf of the Trust one or more
Underwriting Agreements with one or more underwriters relating to the
offering of the Preferred Securities. In the event that any filing referred
to in clauses (i) through (iii) above is required by the rules and
regulations of the Commission, the New York Stock Exchange or any other
national stock exchange or state securities or blue sky laws, to be
executed on behalf of the Trust by the Trustees, in their capacities as
Trustees of the Trust, are hereby authorized and directed to join in any
such filing and to execute on behalf of the Trust any and all of the
foregoing, it being understood that The First National Bank of Chicago and
First Chicago Delaware Inc., in their capacities as Trustees of the Trust,
shall not be required to join in any such filing or execute on behalf of
the Trust any such document unless required by the rules and regulations of
the
<PAGE>
Commission, the New York Stock Exchange or any other national stock
exchange or state securities or blue sky laws. In connection with all of
the foregoing, the Depositor and each Trustee, solely in its capacity as
Trustee of the Trust, hereby constitutes and appoints Janet Whitney and
Walter Bonham, and each of them, as his, her or its, as the case may be,
true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for the Depositor or in the Depositor's
name, place and stead, in any and all capacities, to sign any and all
amendments (including post-effective amendments) to the 1933 Act
Registration Statement and the 1934 Act Registration Statement and to file
the same, with all exhibits thereto, and other documents in connection
therewith, with the Commission, granting unto said attorneys-in-fact and
agents full power and authority to do and perform each and every act and
thing requisite and necessary to be done in connection therewith, as fully
to all intents and purposes as the Depositor might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents
or any of them, or their respective substitute or substitutes, shall do or
cause to be done by virtue hereof.
5. This Trust Agreement may be executed in one or more counterparts.
6. The number of Trustees initially shall be three (3) and thereafter the
number of Trustees shall be such number as shall be fixed from time to time
by a written instrument signed by the Depositor which may increase or
decrease the number of Trustees; provided, however, that to the extent
required by the Business Trust Act, one Trustee shall either be a natural
person who is a resident of the State of Delaware or, if not a natural
person, an entity which has its principal place of business in the State of
Delaware and otherwise meets the requirements of applicable Delaware law.
Subject to the foregoing, the Depositor is entitled to appoint or remove
without cause any Trustee at any time. A Trustee may resign upon thirty
days' prior notice to the Depositor.
7. This Trust Agreement shall be governed by, and construed in accordance
with, the laws of the State of Delaware (without regard to conflict of laws
of principles).
In Witness Whereof, the parties hereto have caused this Trust Agreement to be
duly executed as of the day and year first above written.
Lincoln National Corporation, as
Depositor
By: _________________________________
Name:
Title:
Janet Whitney, not in her individual
capacity but solely as Trustee
-------------------------------------
The First National Bank of Chicago,
not in its individual capacity but
solely as Trustee
By: _________________________________
Name:
Title:
First Chicago Delaware Inc., not in
its individual capacity but solely
as Trustee
By: _________________________________
Name:
Title:
2
<PAGE>
EXHIBIT 4(O)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
AMENDED AND RESTATED
TRUST AGREEMENT
AMONG
LINCOLN NATIONAL CORPORATION, AS DEPOSITOR,
THE FIRST NATIONAL BANK OF CHICAGO,
AS PROPERTY TRUSTEE
FIRST CHICAGO DELAWARE, INC.,
AS DELAWARE TRUSTEE,
AND
THE ADMINISTRATIVE TRUSTEES NAMED HEREIN
DATED AS OF MAY 1, 1996
LINCOLN NATIONAL CAPITAL I
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<C> <S> <C>
ARTICLE I. Defined Terms.................................................. 1
Section 1.1. Definitions............................................ 1
ARTICLE II. Establishment of the Trust.................................... 8
Section 2.1. Name................................................... 8
Section 2.2. Office of the Delaware Trustee; Principal Place of 8
Business...............................................
Section 2.3. Initial Contribution of Trust Property; Organizational 8
Expenses...............................................
Section 2.4. Issuance of the Preferred Securities................... 8
Section 2.5. Issuance of the Common Securities; Subscription and
Purchase of Debentures................................. 9
Section 2.6. Declaration of Trust................................... 9
Section 2.7. Authorization to Enter into Certain Transactions....... 9
Section 2.8. Assets of Trust........................................ 11
Section 2.9. Title to Trust Property................................ 12
ARTICLE III. Payment Account.............................................. 12
Section 3.1. Payment Account........................................ 12
ARTICLE IV. Distributions; Redemption..................................... 12
Section 4.1. Distributions.......................................... 12
Section 4.2. Redemption............................................. 13
Section 4.3. Subordination of Common Securities..................... 14
Section 4.4. Payment Procedures..................................... 15
Section 4.5. Tax Returns and Reports................................ 15
Section 4.6. Payment of Taxes, Duties, Etc. of the Trust............ 15
Section 4.7. Payments under Indenture............................... 15
ARTICLE V. Trust Securities Certificates.................................. 15
Section 5.1. Initial Ownership...................................... 15
Section 5.2. The Trust Securities Certificates...................... 15
Section 5.3. Execution and Delivery of Trust Securities 16
Certificates...........................................
Section 5.4. Registration of Transfer and Exchange of Preferred 16
Securities Certificates................................
Section 5.5. Mutilated, Destroyed, Lost or Stolen Trust Securities 16
Certificates...........................................
Section 5.6. Persons Deemed Securityholders......................... 17
Section 5.7. Access to List of Securityholders' Names and Address... 17
Section 5.8. Maintenance of Office or Agency........................ 17
Section 5.9. Appointment of Paying Agent............................ 17
Section 5.10. Ownership of Common Securities by Depositor............ 18
Section 5.11. Book-Entry Preferred Securities Certificates; Common
Securities Certificate................................. 18
Section 5.12. Notices to Clearing Agency............................. 18
Section 5.13. Definitive Preferred Securities Certificates........... 19
Section 5.14. Rights of Securityholders.............................. 19
ARTICLE VI Acts of Securityholders; Meetings; Voting...................... 20
Section 6.1. Limitations on Voting Rights........................... 20
Section 6.2. Notice of Meetings..................................... 20
Section 6.3. Meetings of Preferred Securityholders.................. 21
Section 6.4. Voting Rights.......................................... 27
Section 6.5. Proxies, etc........................................... 27
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
PAGE
----
<C> <S> <C>
Section 6.6. Securityholder Action by Written Consent.............. 21
Section 6.7. Record Date for Voting and Other Purposes............. 21
Section 6.8. Acts of Securityholders............................... 22
Section 6.9. Inspection of Records................................. 22
ARTICLE VII. Representations and Warranties.............................. 23
Section 7.1. Representations and Warranties of the Bank, the
Property Trustee and the Delaware Trustee............. 23
Section 7.2. Representations and Warranties of Depositor........... 23
ARTICLE VIII. The Trustees............................................... 24
Section 8.1. Certain Duties and Responsibilities................... 24
Section 8.2 Certain Notices....................................... 25
Section 8.3. Certain Rights of Property Trustee.................... 25
Section 8.4. Not Responsible for Recitals or Issuance of 27
Securities............................................
Section 8.5. May Hold Securities................................... 27
Section 8.6. Compensation; Indemnity; Fees......................... 27
Section 8.7. Corporate Property Trustee Required; Eligibility of 27
Trustees..............................................
Section 8.8. Conflicting Interests................................. 28
Section 8.9. Co-Trustees and Separate Trustee...................... 28
Section 8.10. Resignation and Removal; Appointment of Successor..... 29
Section 8.11. Acceptance of Appointment by Successor................ 30
Section 8.12. Merger, Conversion, Consolidation or Succession to 31
Business..............................................
Section 8.13. Preferential Collection of Claims Against Depositor or 31
Trust.................................................
Section 8.14. Reports by Property Trustee........................... 31
Section 8.15. Reports to the Property Trustee....................... 32
Section 8.16. Evidence of Compliance with Conditions Precedent...... 32
Section 8.17. Number of Trustees.................................... 32
Section 8.18. Delegation of Power................................... 32
ARTICLE IX. Termination, Liquidation and Merger.......................... 32
Section 9.1. Termination Upon Expiration Date...................... 32
Section 9.2. Early Termination..................................... 33
Section 9.3. Termination........................................... 33
Section 9.4. Liquidation........................................... 33
Section 9.5. Mergers, Consolidations, Amalgamations or Replacements 34
of the Trust..........................................
ARTICLE X. Miscellaneous Provisions...................................... 35
Section 10.1. Limitation of Rights of Securityholders............... 35
Section 10.2. Amendment............................................. 35
Section 10.3. Separability.......................................... 36
Section 10.4. Governing Law......................................... 36
Section 10.5. Payments Due on Non-Business Day...................... 36
Section 10.6. Successors............................................ 36
Section 10.7. Headings.............................................. 36
Section 10.8. Reports, Notices and Demands.......................... 37
Section 10.9. Agreement Not to Petition............................. 37
Section 10.10. Trust Indenture Act; Conflict with Trust Indenture 37
Act...................................................
Section 10.11. Acceptance of Terms of Trust Agreement, Guarantee and 38
Indenture.............................................
</TABLE>
ii
<PAGE>
LINCOLN NATIONAL CAPITAL I
CERTAIN SECTIONS OF THIS TRUST AGREEMENT RELATING TO
SECTIONS 310 THROUGH 318 OF THE
TRUST INDENTURE ACT OF 1939:
<TABLE>
<CAPTION>
TUST INDENTURER TRUST
ACT AGREEMENT
SECTION SECTION
- --------------- --------------
<C> <S> <C>
((S)) 310 (a)(1)...................................... 8.7
(a)(2)...................................... 8.7
(a)(3)...................................... 8.9
(a)(4)...................................... 2.7(a)(ii)
(b)......................................... 8.8
((S)) 311 (a)...........................................8.13
(b)......................................... 8.13
((S)) 312 (a)......................................... 5.7
(b)......................................... 5.7
(c)......................................... 5.7
((S)) 313 (a)......................................... 8.14(a)
(a)(4)...................................... 8.14(b)
(b)......................................... 8.14(b)
(c)......................................... 10.8
(d)......................................... 8.14(c)
((S)) 314 (a)......................................... 8.15
(b)......................................... Not Applicable
(c)(1)...................................... 8.16
(c)(2)...................................... 8.16
(c)(3)...................................... Not Applicable
(d)......................................... Not Applicable
(e)......................................... 1.1, 8.16
((S)) 315 (a)......................................... 8.1(a), 8.3(a)
(b)......................................... 8.2, 10.8
(c)......................................... 8.1(a)
(d)......................................... 8.1, 8.3
(e)......................................... Not Applicable
((S)) 316 (a)......................................... Not Applicable
(a)(1)(A)................................... Not Applicable
(a)(1)(B)................................... Not Applicable
(a)(2)...................................... Not Applicable
(b)......................................... Not Applicable
(c)......................................... 6.7
((S)) 317 (a)(1)...................................... Not Applicable
(a)(2)...................................... Not Applicable
(b)......................................... 5.9
((S)) 318 (a)......................................... 10.10
</TABLE>
- --------
Note: This reconciliation and tie sheet shall not, for any purpose, be deemed
to be a part of the Trust Agreement.
iii
<PAGE>
Amended and Restated Trust Agreement, dated as of May 1, 1996, among (i)
Lincoln National Corporation, an Indiana corporation (including any successors
or assigns, the "Depositor"), (ii) The First National Bank of Chicago, a
national banking corporation, as property trustee, and First Chicago Delaware,
Inc., as Delaware trustee (in each such capacity, the "Property Trustee" and
"Delaware Trustee," respectively, and, in its separate corporate capacity and
not in its capacity as Property Trustee or Delaware Trustee, the "Bank"),
(iii) Janet Whitney, an individual, and Walt Bonham, an individual, each of
whose address is c/o Lincoln National Corporation, 200 East Berry Street, Fort
Wayne, Indiana 46802-2706 (each an "Administrative Trustee" and collectively
the "Administrative Trustees") (the Property Trustee, the Delaware Trustee and
the Administrative Trustees referred to collectively as the "Trustees") and
(iv) the several Holders, as hereinafter defined.
Witnesseth
Whereas, the Depositor and the Delaware Trustee have heretofore duly
declared and established a business trust pursuant to the Delaware Business
Trust Act by the entering into of that certain Trust Agreement, dated as of
May , 1996 (the "Original Trust Agreement"), and by the execution and filing
by the Delaware Trustee with the Secretary of State of the State of Delaware
of the Certificate of Trust, filed on May , 1996, attached as Exhibit A; and
Whereas, the Depositor and the Delaware Trustee desire to amend and restate
the Original Trust Agreement in its entirety as set forth herein to provide
for, among other things, (i) the issuance of the Common Securities by the
Trust to the Depositor, (ii) the issuance and sale of the Preferred Securities
by the Trust pursuant to the Underwriting Agreement, (iii) the acquisition by
the Trust from the Depositor of all of the right, title and interest in the
Debentures and (iv) the appointment of the Administrative Trustees;
Now Therefore, in consideration of the agreements and obligations set forth
herein and for other good and valuable consideration, the sufficiency of which
is hereby acknowledged, each party, for the benefit of the other parties and
for the benefit of the Securityholders, hereby amends and restates the
Original Trust Agreement in its entirety and agrees as follows:
ARTICLE I
Defined Terms
Section 1.1. Definitions.
For all purposes of this Trust Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to them
in this Article and include the plural as well as the singular;
(b) all other terms used herein that are defined in the Trust Indenture
Act, either directly or by reference therein, have the meanings assigned to
them therein;
(c) unless the context otherwise requires, any reference to an "Article"
or a "Section" refers to an Article or a Section, as the case may be, of
this Trust Agreement; and
(d) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Trust Agreement as a whole and not to any
particular Article, Section or other subdivision.
"Act" has the meaning specified in Section 6.8.
<PAGE>
"Additional Amount" means, with respect to Trust Securities of a given
Liquidation Amount and/or a given period, the amount of Additional Interest
(as defined in the Indenture) paid by the Depositor on a Like Amount of
Debentures for such period.
"Additional Sums" has the meaning specified in Section 10.7 of the
Indenture.
"Administrative Trustee" means each of Janet Whitney, and Walt Bonham,
solely in such Person's capacity as Administrative Trustee of the Trust formed
and continued hereunder and not in such Person's individual capacity, or such
Administrative Trustee's successor in interest in such capacity, or any
successor trustee appointed as herein provided.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Bank" has the meaning specified in the preamble to this Trust Agreement.
"Bankruptcy Event" means, with respect to any Person:
(a) the entry of a decree or order by a court having jurisdiction in the
premises judging such Person a bankrupt or insolvent, or approving as
properly filed a petition seeking reorganization, arrangement, adjudication
or composition of or in respect of such Person under any applicable Federal
or State bankruptcy, insolvency, reorganization or other similar law, or
appointing a receiver, liquidator, assignee, trustee, sequestrator (or
other similar official) of such Person or of any substantial part of its
property or ordering the winding up or liquidation of its affairs, and the
continuance of any such decree or order unstayed and in effect for a period
of 60 consecutive days; or
(b) the institution by such Person of proceedings to be adjudicated a
bankrupt or insolvent, or the consent by it to the institution of
bankruptcy or insolvency proceedings against it, or the filing by it of a
petition or answer or consent seeking reorganization or relief under any
applicable Federal or State bankruptcy, insolvency, reorganization or other
similar law, or the consent by it to the filing of any such petition or to
the appointment of a receiver, liquidator, assignee, trustee, sequestrator
(or similar official) of such Person or of any substantial part of its
property, or the making by it of an assignment for the benefit of
creditors, or the admission by it in writing of its inability to pay its
debts generally as they become due and its willingness to be adjudicated a
bankrupt, or the taking of corporate action by such Person in furtherance
of any such action.
"Bankruptcy Laws" has the meaning specified in Section 10.9.
"Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Depositor to have been duly adopted by the
Depositor's Board of Directors, or such committee of the Board of Directors or
officers of the Company to which authority to act on behalf of the Board of
Directors has been delegated, and to be in full force and effect on the date
of such certification, and delivered to the Trustees.
"Book-Entry Preferred Securities Certificates" means a beneficial interest
in the Preferred Securities Certificates, ownership and transfers of which
shall be made through book entries by a Clearing Agency as described in
Section 5.11.
"Business Day" means a day other than (a) a Saturday or Sunday, (b) a day on
which banking institutions in The City of New York are authorized or required
by law or executive order to remain closed, or (c) a day on which the Property
Trustee's Corporate Trust Office or the Corporate Trust Office of the
Debenture Trustee is closed for business.
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"Certificate Depository Agreement" means the agreement among the Trust, the
Depositor and The Depository Trust Company, as the initial Clearing Agency,
dated as of the Closing Date, relating to the Trust Securities Certificates,
substantially in the form attached as Exhibit B, as the same may be amended
and supplemented from time to time.
"Clearing Agency" means an organization registered as a "clearing agency"
pursuant to Section 17A of the Securities Exchange Act of 1934, as amended.
The Depository Trust Company will be the initial Clearing Agency.
"Clearing Agency Participant" means a broker, dealer, bank, other financial
institution or other Person for whom from time to time a Clearing Agency
effects book-entry transfers and pledges of securities deposited with the
Clearing Agency.
"Closing Date" means the First Time of Delivery as defined in the
Underwriting Agreement, which date is also the date of execution and delivery
of this Trust Agreement.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Securities Exchange Act of 1934, as
amended, or, if at any time after the execution of this instrument such
Commission is not existing and performing the duties now assigned to it under
the Trust Indenture Act, then the body performing such duties at such time.
"Common Security" means an undivided beneficial interest in the assets of
the Trust, having a Liquidation Amount of $25 and having the rights provided
therefor in this Trust Agreement, including the right to receive Distributions
and a Liquidation Distribution as provided herein.
"Common Securities Certificate" means a certificate evidencing ownership of
Common Securities, substantially in the form attached as Exhibit C.
"Corporate Trust Office" means the principal office of the Property Trustee
located in Wilmington, Delaware.
"Debenture Event of Default" means an "Event of Default" as defined in the
Indenture.
"Debenture Redemption Date" means, with respect to any Debentures to be
redeemed under the Indenture, the date fixed for redemption under the
Indenture.
"Debenture Tax Event" means a "Tax Event" as defined in the Indenture.
"Debenture Trustee" means The First National Bank of Chicago, a national
banking corporation organized and any successor thereto.
"Debentures" means the aggregate principal amount of the Depositor's %
Junior Subordinated Deferrable Interest Debentures, Series A, issued pursuant
to the Indenture.
"Definitive Preferred Securities Certificates" means either or both (as the
context requires) of (a) Preferred Securities Certificates issued as Book-
Entry Preferred Securities Certificate as provided in Section 5.11(a) and (b)
Preferred Securities Certificates issued in certificated, fully registered
form as provided in Section 5.13.
"Delaware Business Trust Act" means Chapter 38 of Title 12 of the Delaware
Code, 12 Del. C. ((S)) 3801, et seq., as it may be amended from time to time.
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"Delaware Trustee" means the commercial bank or trust company identified as
the "Delaware Trustee" in the preamble to this Trust Agreement solely in its
capacity as Delaware Trustee of the Trust formed and continued hereunder and
not in its individual capacity, or its successor in interest in such capacity,
or any successor trustee appointed as herein provided.
"Depositor" has the meaning specified in the preamble to this Trust
Agreement.
"Distribution Date" has the meaning specified in Section 4.1(a).
"Distributions" means amounts payable in respect of the Trust Securities as
provided in Section 4.1.
"Event of Default" means any one of the following events (whatever the
reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(a) the occurrence of a Debenture Event of Default; or
(b) default by the Property Trustee in the payment of any Distribution
when it becomes due and payable, and continuation of such default for a
period of 30 days; or
(c) default by the Property Trustee in the payment of any Redemption
Price of any Trust Security when it becomes due and payable; or
(d) default in the performance, or breach, in any material respect, of
any covenant or warranty of the Trustees in this Trust Agreement (other
than a covenant or warranty a default in the performance or breach of which
is dealt with in clause (b) or (c) above) and continuation of such default
or breach for a period of 60 days after there has been given, by registered
or certified mail, to the defaulting Trustee or Trustees by the Holders of
at least 25% in aggregate liquidation preference of the Outstanding
Preferred Securities a written notice specifying such default or breach and
requiring it to be remedied and stating that such notice is a "Notice of
Default" hereunder; or
(e) the occurrence of a Bankruptcy Event with respect to the Property
Trustee and the failure by the Depositor to appoint a successor Property
Trustee within 60 days thereof.
"Expense Agreement" means the Agreement as to Expenses and Liabilities
between the Depositor and the Trust, substantially in the form attached as
Exhibit D, as amended from time to time.
"Expiration Date" has the meaning specified in Section 9.1.
"First Time of Delivery" has the meaning specified in the Underwriting
Agreement.
"Grantor Trust Event" has the meaning specified in Section 9.2(b).
"Guarantee" means the Guarantee Agreement executed and delivered by the
Depositor and The First National Bank of Chicago, as trustee,
contemporaneously with the execution and delivery of this Trust Agreement, for
the benefit of the holders of the Preferred Securities, as amended from time
to time.
"Indenture" means the Junior Subordinated Indenture, dated as of May 1,
1996, between the Depositor and the Debenture Trustee, as trustee, as amended
or supplemented from time to time.
"Investment Company Event" means the receipt by the Trust of an Opinion of
Counsel, rendered by a law firm having a recognized national tax and
securities practice, to the effect that, as a result of the occurrence of a
change in law or regulation or a change in interpretation or application of
law or regulation by any legislative body, court, governmental agency or
regulatory authority (a "Change in 1940 Act Law"), to the effect that the
Trust is or will be considered an "investment company" that is required to be
registered under the 1940 Act, which Change in 1940 Act Law becomes effective
on or after the date of original issuance of the Preferred Securities under
this Trust Agreement.
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"Lien" means any lien, pledge, charge, encumbrance, mortgage, deed of trust,
adverse ownership interest, hypothecation, assignment, security interest or
preference, priority or other security agreement or preferential arrangement
of any kind or nature whatsoever.
"Like Amount" means (a) with respect to a redemption of Trust Securities,
Trust Securities having a Liquidation Amount equal to the principal amount of
Debentures to be contemporaneously redeemed in accordance with the Indenture
the proceeds of which will be used to pay the Redemption Price of such Trust
Securities, and (b) with respect to a distribution of Debentures to Holders of
Trust Securities in connection with a dissolution or liquidation of the Trust,
Debentures having a principal amount equal to the Liquidation Amount of the
Trust Securities of the Holder to whom such Debentures are distributed.
"Liquidation Amount" means the stated amount of $25 per Trust Security.
"Liquidation Date" means the date on which Debentures are to be distributed
to Holders of Trust Securities in connection with a termination and
liquidation of the Trust pursuant to Section 9.4(a).
"Liquidation Distribution" has the meaning specified in Section 9.4(d).
"1940 Act" means the Investment Company Act of 1940, as amended.
"Officers' Certificate" means a certificate signed by the Chairman and Chief
Executive Officer, President or a Vice President, and by the Treasurer, an
Associate Treasurer, an Assistant Treasurer, the Controller, the Secretary or
an Assistant Secretary, of the Depositor, and delivered to the appropriate
Trustee. One of the officers signing an Officers' Certificate given pursuant
to Section 8.16 shall be the principal executive, financial or accounting
officer of the Depositor. Any Officers' Certificate delivered with respect to
compliance with a condition or covenant provided for in this Trust Agreement
shall include:
(a) a statement that each officer signing the Officers' Certificate has
read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers'
Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such officer, such
condition or covenant has been complied with.
"Opinion of Counsel" means a written opinion of counsel, who may be counsel
for the Trust, the Property Trustee or the Depositor, but not an employee of
any thereof, and who shall be reasonably acceptable to the Property Trustee.
"Original Trust Agreement" has the meaning specified in the recitals to this
Trust Agreement.
"Outstanding", when used with respect to Preferred Securities, means, as of
the date of determination, all Preferred Securities theretofore executed and
delivered under this Trust Agreement, except:
(a) Preferred Securities theretofore cancelled by the Property Trustee or
delivered to the Property Trustee for cancellation;
(b) Preferred Securities for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Property Trustee
or any Paying Agent for the Holders of such Preferred Securities; provided
that, if such Preferred Securities are to be redeemed, notice of such
redemption has been duly given pursuant to this Trust Agreement; and
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(c) Preferred Securities which have been paid or in exchange for or in
lieu of which other Preferred Securities have been executed and delivered
pursuant to Sections 5.4, 5.5, 5.11 and 5.13;
provided, however, that in determining whether the Holders of the requisite
Liquidation Amount of the Outstanding Preferred Securities have given any
request, demand, authorization, direction, notice, consent or waiver
hereunder, Preferred Securities owned by the Depositor, any Trustee or any
Affiliate of the Depositor or any Trustee shall be disregarded and deemed not
to be Outstanding, except that (a) in determining whether any Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Preferred Securities that such Trustee knows
to be so owned shall be so disregarded and (b) the foregoing shall not apply
at any time when all of the outstanding Preferred Securities are owned by the
Depositor, one or more of the Trustees and/or any such Affiliate. Preferred
Securities so owned which have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the
Administrative Trustees the pledgee's right so to act with respect to such
Preferred Securities and that the pledgee is not the Depositor or any
Affiliate of the Depositor.
"Owner" means each Person who is the beneficial owner of a Book-Entry
Preferred Securities Certificate as reflected in the records of the Clearing
Agency or, if a Clearing Agency Participant is not the Owner, then as
reflected in the records of a Person maintaining an account with such Clearing
Agency (directly or indirectly, in accordance with the rules of such Clearing
Agency).
"Paying Agent" means any paying agent or co-paying agent appointed pursuant
to Section 5.9 and shall initially be the Bank.
"Payment Account" means a segregated non-interest-bearing corporate trust
account maintained by the Property Trustee with the Bank in its trust
department for the benefit of the Securityholders in which all amounts paid in
respect of the Debentures will be held and from which the Property Trustee
shall make payments to the Securityholders in accordance with Sections 4.1 and
4.2.
"Person" means any individual, corporation, partnership, joint venture,
trust, limited liability company or corporation, unincorporated organization
or government or any agency or political subdivision thereof.
"Preferred Security" means an undivided beneficial interest in the assets of
the Trust, having a Liquidation Amount of $25 and having the rights provided
therefor in this Trust Agreement, including the right to receive Distributions
and a Liquidation Distribution as provided herein.
"Preferred Securities Certificate" means a certificate evidencing ownership
of Preferred Securities, substantially in the form attached as Exhibit E.
"Property Trustee" means the commercial bank or trust company identified as
the "Property Trustee" in the preamble to this Trust Agreement solely in its
capacity as Property Trustee of the Trust heretofore formed and continued
hereunder and not in its individual capacity, or its successor in interest in
such capacity, or any successor property trustee appointed as herein provided.
"Redemption Date" means, with respect to any Trust Security to be redeemed,
the date fixed for such redemption by or pursuant to this Trust Agreement;
provided that each Debenture Redemption Date and the stated maturity of the
Debentures shall be a Redemption Date for a Like Amount of Trust Securities.
"Redemption Price" means, with respect to any Trust Security, the
Liquidation Amount of such Trust Security, plus accumulated and unpaid
Distributions to the Redemption Date, plus the related amount of the premium,
if any, paid by the Depositor upon the concurrent redemption of a Like Amount
of Debentures, allocated on a pro rata basis (based on Liquidation Amounts)
among the Trust Securities.
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"Relevant Trustee" shall have the meaning specified in Section 8.10.
"Second Time of Delivery" has the meaning specified in the Underwriting
Agreement.
"Securities Register" and "Securities Registrar" have the respective
meanings specified in Section 5.4.
"Securityholder" or "Holder" means a Person in whose name a Trust Security
or Securities is registered in the Securities Register; any such Person shall
be deemed to be a beneficial owner within the meaning of the Delaware Business
Trust Act.
"Special Event" has the meaning specified in Section 9.2(b).
"Tax Event" means the receipt by the Trust of an Opinion of Counsel
experienced in such matters to the effect that, as a result of any amendment
to, or change (including any announced prospective change) in, the laws (or
any regulations thereunder) of the United States or any political subdivision
or taxing authority thereof or therein, or as a result of any official
administrative pronouncement or judicial decision interpreting or applying
such laws or regulations, which amendment or change is effective or which
pronouncement or decision is announced on or after the date of issuance of the
Preferred Securities under this Trust Agreement, there is more than an
insubstantial risk that (i) the Trust is, or will be within 90 days after the
date of such Opinion of Counsel, subject to United States Federal income tax
with respect to income received or accrued on the Debentures, (ii) interest
payable by the Depositor on the Debentures is not, or within 90 days after the
date of such Opinion of Counsel, will not be, deductible by the Depositor, in
whole or in part, for United States Federal income tax purposes or (iii) the
Trust is, or will be within 90 days after the date of such Opinion of Counsel,
subject to more than a de minimis amount of other taxes, duties, assessments
or other governmental charges.
"Time of Delivery" means, collectively, the First Time of Delivery and the
Second Time of Delivery.
"Trust" means the Delaware business trust created and continued hereby and
identified on the cover page to this Trust Agreement.
"Trust Agreement" means this Amended and Restated Trust Agreement, as the
same may be modified, amended or supplemented in accordance with the
applicable provisions hereof, including all exhibits hereto, including, for
all purposes of this Trust Agreement and any such modification, amendment or
supplement, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this Trust Agreement and any such modification, amendment
or supplement, respectively.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in force at
the date as of which this instrument was executed; provided, however, that in
the event the Trust Indenture Act of 1939 is amended after such date, "Trust
Indenture Act" means, to the extent required by any such amendment, the Trust
Indenture Act of 1939 as so amended.
"Trust Property" means (a) the Debentures, (b) the rights of the Property
Trustee under the Guarantee, (c) any cash on deposit in, or owing to, the
Payment Account and (d) all proceeds and rights in respect of the foregoing
and any other property and assets for the time being held or deemed to be held
by the Property Trustee pursuant to the trusts of this Trust Agreement.
"Trust Security" means any one of the Common Securities or the Preferred
Securities.
"Trust Securities Certificate" means any one of the Common Securities
Certificates or the Preferred Securities Certificates.
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"Trustees" means, collectively, the Property Trustee, the Delaware Trustee
and the Administrative Trustees.
"Underwriting Agreement" means the Terms Agreement, dated as of
, among the Trust, the Depositor and the Underwriters
named therein incorporating the Underwriting Agreement Standard Provisions of
the Trust.
ARTICLE II.
Establishment of the Trust
Section 2.1. Name.
The Trust created and continued hereby shall be known as "Lincoln National
Capital I," as such name may be modified from time to time by the
Administrative Trustees following written notice to the Holders of Trust
Securities and the other Trustees, in which name the Trustees may conduct the
business of the Trust, make and execute contracts and other instruments on
behalf of the Trust and sue and be sued.
Section 2.2. Office of the Delaware Trustee; Principal Place of Business.
The address of the Delaware Trustee in the State of Delaware is c/o
, Attention: Corporate Trust
Administration, or such other address in the State of Delaware as the Delaware
Trustee may designate by written notice to the Securityholders and the
Depositor. The principal executive office of the Trust is c/o Lincoln National
Corporation, 200 East Berry Street, Fort Wayne, Indiana 46802-2706.
Section 2.3. Initial Contribution of Trust Property; Organizational
Expenses.
The Property Trustee acknowledges receipt in trust from the Depositor in
connection with the Original Trust Agreement of the sum of $10, which
constituted the initial Trust Property. The Depositor shall pay organizational
expenses of the Trust as they arise or shall, upon request of any Trustee,
promptly reimburse such Trustee for any such expenses paid by such Trustee.
The Depositor shall make no claim upon the Trust Property for the payment of
such expenses.
Section 2.4. Issuance of the Preferred Securities.
On , the Depositor, on behalf of the Trust and
pursuant to the Original Trust Agreement, executed and delivered the
Underwriting Agreement. Contemporaneously with the execution and delivery of
this Trust Agreement, an Administrative Trustee, on behalf of the Trust, shall
execute in accordance with Section 5.2 and deliver to the Underwriters named
in the Underwriting Agreement Preferred Securities Certificates, registered in
the name of the nominee of the initial Clearing Agency, in an aggregate amount
of Preferred Securities having an aggregate Liquidation Amount of
$ , against receipt of such aggregate purchase price of such Preferred
Securities of $ , which amount the Administrative Trustee shall
promptly deliver to the Property Trustee. If there is a Second Time of
Delivery, an Administrative Trustee, on behalf of the Trust, shall execute in
accordance with Section 5.2 and deliver to the Underwriters named in the
Underwriting Agreement Preferred Securities Certificates, registered in the
name of the nominee of the initial Clearing Agency, in an aggregate amount of
up to Preferred Securities having an aggregate Liquidation Amount of up
to $ , against receipt of 96.85% of the Liquidation Amount thereof, which
amount such Administrative Trustees shall promptly deliver to the Property
Trustee, on the date specified pursuant to the Underwriting Agreement.
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Section 2.5. Issuance of the Common Securities; Subscription and Purchase of
Debentures.
Contemporaneously with the execution and delivery of this Trust Agreement,
an Administrative Trustee, on behalf of the Trust, shall execute in accordance
with Section 502 and deliver to the Depositor Common Securities Certificates,
registered in the name of the Depositor, in an aggregate amount of Common
Securities having an aggregate Liquidation Amount of $ against
payment by the Depositor of such amount. Contemporaneously therewith, an
Administrative Trustee, on behalf of the Trust, shall subscribe to and
purchase from the Depositor Debentures, registered in the name of the Trust
and having an aggregate principal amount equal to $ , and, in
satisfaction of the purchase price for such Debentures, the Property Trustee,
on behalf of the Trust, shall deliver to the Depositor the sum of $ .
If there is a Second Time of Delivery, an Administrative Trustee, on behalf of
the Trust, shall execute in accordance with Section 5.2 and deliver to the
Depositor Common Securities Certificates, registered in the name of the
Depositor, in an aggregate amount of up to Common Securities
having an aggregate Liquidation Amount of up to $ against payment by
the Depositor of such amount. Contemporaneously therewith, an Administrative
Trustee, on behalf of the Trust, shall subscribe to and purchase from the
Depositor Debentures, registered in the name of the Trust and having an
aggregate principal amount of up to $ , and, in satisfaction of the
purchase price for such Debentures, the Property Trustee, on behalf of the
Trust, shall deliver to the Depositor the amount received from one of the
Administrative Trustees pursuant to the last sentence of Section 2.4.
Section 2.6. Declaration of Trust.
The exclusive purposes and functions of the Trust are (a) to issue and sell
Trust Securities and use the proceeds from such sale to acquire the
Debentures, and (b) to engage in those activities necessary, convenient or
incidental thereto. The Depositor hereby appoints the Trustees as trustees of
the Trust, to have all the rights, powers and duties to the extent set forth
herein, and the Trustees hereby accept such appointment. The Property Trustee
hereby declares that it will hold the Trust Property in trust upon and subject
to the conditions set forth herein for the benefit of the Securityholders. The
Administrative Trustees shall have all rights, powers and duties set forth
herein and in accordance with applicable law with respect to accomplishing the
purposes of the Trust. The Delaware Trustee shall not be entitled to exercise
any powers, nor shall the Delaware Trustee have any of the duties and
responsibilities, of the Property Trustee or the Administrative Trustees set
forth herein. The Delaware Trustee shall be one of the Trustees of the Trust
for the sole and limited purpose of fulfilling the requirements of Section
3807 of the Delaware Business Trust Act.
Section 2.7. Authorization to Enter into Certain Transactions.
(a) The Trustees shall conduct the affairs of the Trust in accordance with
the terms of this Trust Agreement. Subject to the limitations set forth in
paragraph (b) of this Section, and in accordance with the following provisions
(i) and (ii), the Administrative Trustees shall have the authority to enter
into all transactions and agreements determined by the Trustees to be
appropriate in exercising the authority, express or implied, otherwise granted
to the Trustees under this Trust Agreement, and to perform all acts in
furtherance thereof, including without limitation, the following:
(i) As among the Trustees, each Administrative Trustee shall have the
power and authority to act on behalf of the Trust with respect to the
following matters:
(A) the issuance and sale of the Trust Securities;
(B) to cause the Trust to enter into, and to execute, deliver and
perform on behalf of the Trust, the Expense Agreement and the
Certificate Depository Agreement and such other agreements as may be
necessary or desirable in connection with the purposes and function of
the Trust;
(C) assisting in the registration of the Preferred Securities under
the Securities Act of 1933, as amended, and under state securities or
blue sky laws, and the qualification of this Trust Agreement as a trust
indenture under the Trust Indenture Act;
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(D) assisting in the listing of the Preferred Securities upon such
securities exchange or exchanges as shall be determined by the
Depositor and the registration of the Preferred Securities under the
Securities Exchange Act of 1934, as amended, and the preparation and
filing of all periodic and other reports and other documents pursuant
to the foregoing;
(E) the sending of notices (other than notices of default) and other
information regarding the Trust Securities and the Debentures to the
Securityholders in accordance with this Trust Agreement;
(F) the appointment of a Paying Agent, authenticating agent and
Securities Registrar in accordance with this Trust Agreement;
(G) registering transfer of the Trust Securities in accordance with
this Trust Agreement;
(H) to the extent provided in this Trust Agreement, the winding up of
the affairs of and liquidation of the Trust and the preparation,
execution and filing of the certificate of cancellation with the
Secretary of State of the State of Delaware;
(I) unless otherwise determined by the Depositor, the Property
Trustee or the Administrative Trustees, or as otherwise required by the
Delaware Business Trust Act or the Trust Indenture Act, to execute on
behalf of the Trust (either acting alone or together with any or all of
the Administrative Trustees) any documents that the Administrative
Trustees have the power to execute pursuant to this Trust Agreement;
and
(J) the taking of any action incidental to the foregoing as the
Trustees may from time to time determine is necessary or advisable to
give effect to the terms of this Trust Agreement for the benefit of the
Securityholders (without consideration of the effect of any such action
on any particular Securityholder).
(ii) As among the Trustees, the Property Trustee shall have the power,
duty and authority to act on behalf of the Trust with respect to the
following matters:
(A) the establishment of the Payment Account;
(B) the receipt of the Debentures;
(C) the collection of interest, principal and any other payments made
in respect of the Debentures in the Payment Account;
(D) the distribution of amounts owed to the Securityholders in
respect of the Trust Securities;
(E) the exercise of all of the rights, powers and privileges of a
holder of the Debentures;
(F) the sending of notices of default and other information regarding
the Trust Securities and the Debentures to the Securityholders in
accordance with this Trust Agreement;
(G) the distribution of the Trust Property in accordance with the
terms of this Trust Agreement;
(H) to the extent provided in this Trust Agreement, the winding up of
the affairs of and liquidation of the Trust and the preparation,
execution and filing of the certificate of cancellation with the
Secretary of State of the State of Delaware;
(I) after an Event of Default the taking of any action incidental to
the foregoing as the Property Trustee may from time to time determine
is necessary or advisable to give effect to the terms of this Trust
Agreement and protect and conserve the Trust Property for the benefit
of the Securityholders (without consideration of the effect of any such
action on any particular Securityholder);
(J) registering transfers of the Trust Securities in accordance with
this Trust Agreement; and
(K) except as otherwise provided in this Section 2.7(a)(ii), the
Property Trustee shall have none of the duties, liabilities, powers or
the authority of the Administrative Trustees set forth in Section
2.7(a)(i).
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(b) So long as this Trust Agreement remains in effect, the Trust (or the
Trustees acting on behalf of the Trust) shall not undertake any business,
activities or transaction except as expressly provided herein or contemplated
hereby. In particular, the Trustees shall not (i) acquire any investments or
engage in any activities not authorized by this Trust Agreement, (ii) sell,
assign, transfer, exchange, mortgage, pledge, set-off or otherwise dispose of
any of the Trust Property or interests therein, including to Securityholders,
except as expressly provided herein, (iii) take any action that would cause
the Trust to fail or cease to qualify as a "grantor trust" for United States
Federal income tax purposes, (iv) incur any indebtedness for borrowed money or
issue any other debt or (v) take or consent to any action that would result in
the placement of a Lien on any of the Trust Property. The Administrative
Trustees shall defend all claims and demands of all Persons at any time
claiming any Lien on any of the Trust Property adverse to the interest of the
Trust or the Securityholders in their capacity as Securityholders.
(c) In connection with the issue and sale of the Preferred Securities, the
Depositor shall have the right and responsibility to assist the Trust with
respect to, or effect on behalf of the Trust, the following (and any actions
taken by the Depositor in furtherance of the following prior to the date of
this Trust Agreement are hereby ratified and confirmed in all respects):
(i) the preparation and filing by the Trust with the Commission and the
execution on behalf of the Trust of a registration statement on the
appropriate form in relation to the Preferred Securities, including any
amendments thereto;
(ii) the determination of the States in which to take appropriate action
to qualify or register for sale all or part of the Preferred Securities and
the determination of any and all such acts, other than actions which must
be taken by or on behalf of the Trust, and the advice to the Trustees of
actions they must take on behalf of the Trust, and the preparation for
execution and filing of any documents to be executed and filed by the Trust
or on behalf of the Trust, as the Depositor deems necessary or advisable in
order to comply with the applicable laws of any such States;
(iii) the preparation for filing by the Trust and execution on behalf of
the Trust of an application to the New York Stock Exchange or any other
national stock exchange or the Nasdaq National Market for listing upon
notice of issuance of any Preferred Securities;
(iv) the preparation for filing by the Trust with the Commission and the
execution on behalf of the Trust of a registration statement on Form 8-A
relating to the registration of the Preferred Securities under Section
12(b) or 12(g) of the Exchange Act, including any amendments thereto;
(v) the negotiation of the terms of, and the execution and delivery of,
the Underwriting Agreement providing for the sale of the Preferred
Securities; and
(vi) the taking of any other actions necessary or desirable to carry out
any of the foregoing activities.
(d) Notwithstanding anything herein to the contrary, the Administrative
Trustees are authorized and directed to conduct the affairs of the Trust and
to operate the Trust so that the Trust will not be deemed to be an "investment
company" required to be registered under the Investment Company Act of 1940,
as amended, or taxed as a corporation for United States Federal income tax
purposes and so that the Debentures will be treated as indebtedness of the
Depositor for United States Federal income tax purposes. In this connection,
the Depositor and the Administrative Trustees are authorized to take any
action, not inconsistent with applicable law, the Certificate of Trust or this
Trust Agreement, that each of the Depositor and the Administrative Trustees
determines in their discretion to be necessary or desirable for such purposes,
as long as such action does not adversely affect in any material respect the
interests of the holders of the Preferred Securities.
Section 2.8. Assets of Trust.
The assets of the Trust shall consist of the Trust Property.
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Section 2.9. Title to Trust Property.
Legal title to all Trust Property shall be vested at all times in the
Property Trustee (in its capacity as such) and shall be held and administered
by the Property Trustee for the benefit of the Securityholders in accordance
with this Trust Agreement.
ARTICLE III.
Payment Account
Section 3.1. Payment Account.
(a) On or prior to the Closing Date, the Property Trustee shall establish
the Payment Account. The Property Trustee and any agent of the Property
Trustee shall have exclusive control and sole right of withdrawal with respect
to the Payment Account for the purpose of making deposits in and withdrawals
from the Payment Account in accordance with this Trust Agreement. All monies
and other property deposited or held from time to time in the Payment Account
shall be held by the Property Trustee in the Payment Account for the exclusive
benefit of the Securityholders and for distribution as herein provided,
including (and subject to) any priority of payments provided for herein.
(b) The Property Trustee shall deposit in the Payment Account, promptly upon
receipt, all payments of principal of or interest on, and any other payments
or proceeds with respect to, the Debentures. Amounts held in the Payment
Account shall not be invested by the Property Trustee pending distribution
thereof.
ARTICLE IV.
Distributions; Redemption
Section 4.1. Distributions.
(a) Distributions on the Trust Securities shall be cumulative, and will
accumulate whether or not there are funds of the Trust available for the
payment of Distributions. Distributions shall accrue from , ,
and, except in the event that the Depositor exercises its right to defer the
payment of interest on the Debentures pursuant to the Indenture, shall be
payable quarterly in arrears on March 31, June 30, September 30 and December
31 of each year, commencing on June 30, 1996. If any date on which a
Distribution is otherwise payable on the Trust Securities is not a Business
Day, then the payment of such Distribution shall be made on the next
succeeding day that is a Business Day (and without any interest or other
payment in respect of any such delay) except that, if such Business Day is in
the next succeeding calendar year, payment of such Distribution shall be made
on the immediately preceding Business Day, in each case with the same force
and effect as if made on such date (each date on which distributions are
payable in accordance with this Section 4.1(a), a "Distribution Date").
(b) The Trust Securities represent undivided beneficial interests in the
Trust Property, and, as a practical matter, the Distributions on the Trust
Securities shall be payable at a rate of % per annum of the Liquidation
Amount of the Trust Securities. The amount of Distributions payable for any
full period shall be computed on the basis of a 360-day year of twelve 30-day
months. The amount of Distributions for any partial period shall be computed
on the basis of the number of days elapsed in a 360-day year of twelve 30-day
months. The amount of Distributions payable for any period shall include the
Additional Amounts, if any.
(c) Distributions on the Trust Securities shall be made by the Property
Trustee from the Payment Account and shall be payable on each Distribution
Date only to the extent that the Trust has funds then on hand and available in
the Payment Account for the payment of such Distributions.
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(d) Distributions on the Trust Securities with respect to a Distribution
Date shall be payable to the Holders thereof as they appear on the Securities
Register for the Trust Securities on the relevant record date, which shall be
one Business Day prior to such Distribution Date; provided, however, that in
the event that the Preferred Securities do not remain in book-entry-only form,
the relevant record date shall be the date 15 days prior to the relevant
Distribution Date.
Section 4.2. Redemption.
(a) On each Debenture Redemption Date and on the stated maturity of the
Debentures, the Trust will be required to redeem a Like Amount of Trust
Securities at the Redemption Price.
(b) Notice of redemption shall be given by the Property Trustee by first-
class mail, postage prepaid, mailed not less than 30 nor more than 60 days
prior to the Redemption Date to each Holder of Trust Securities to be
redeemed, at such Holder's address appearing in the Security Register. All
notices of redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price;
(iii) the CUSIP number;
(iv) if less than all the Outstanding Trust Securities are to be
redeemed, the identification and the total Liquidation Amount of the
particular Trust Securities to be redeemed; and
(v) that on the Redemption Date the Redemption Price will become due and
payable upon each such Trust Security to be redeemed and that distributions
thereon will cease to accrue on and after said date.
(c) The Trust Securities redeemed on each Redemption Date shall be redeemed
at the Redemption Price with the proceeds from the contemporaneous redemption
of Debentures. Redemptions of the Trust Securities shall be made and the
Redemption Price shall be payable on each Redemption Date only to the extent
that the Trust has funds then on hand and available in the Payment Account for
the payment of such Redemption Price.
(d) If the Property Trustee gives a notice of redemption in respect of any
Preferred Securities, then, by 12:00 noon, New York City time, on the
Redemption Date, subject to Section 4.2(c), the Property Trustee will, so long
as the Preferred Securities are in book-entry-only form, irrevocably deposit
with the Clearing Agency for the Preferred Securities funds sufficient to pay
the applicable Redemption Price and will give such Clearing Agency irrevocable
instructions and authority to pay the Redemption Price to the holders thereof.
If the Preferred Securities are no longer in book-entry-only form, the
Property Trustee, subject to Section 4.2(c), will irrevocably deposit with the
Paying Agent funds sufficient to pay the applicable Redemption Price and will
give the Paying Agent irrevocable instructions and authority to pay the
Redemption Price to the Holders thereof upon surrender of their Preferred
Securities Certificates. Notwithstanding the foregoing, Distributions payable
on or prior to the Redemption Date for any Trust Securities called for
redemption shall be payable to the Holders of such Trust Securities as they
appear on the Register for the Trust Securities on the relevant record dates
for the related Distribution Dates. If notice of redemption shall have been
given and funds deposited as required, then upon the date of such deposit, all
rights of Securityholders holding Trust Securities so called for redemption
will cease, except the right of such Securityholders to receive the Redemption
Price and any Distribution payable on or prior to the Redemption Date, but
without interest, and such Securities will cease to be outstanding. In the
event that any date on which any Redemption Price is payable is not a Business
Day, then payment of the Redemption Price payable on such date will be made on
the next succeeding day that is a Business Day (and without any interest or
other payment in respect of any such delay), except that, if such Business Day
falls in the next calendar year, such payment will be made on the immediately
preceding Business Day, in each case, with the same force
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and effect as if made on such date. In the event that payment of the
Redemption Price in respect of any Trust Securities called for redemption is
improperly withheld or refused and not paid either by the Trust or by the
Depositor pursuant to the Guarantee, Distributions on such Trust Securities
will continue to accrue, at the then applicable rate, from the Redemption Date
originally established by the Trust for such Trust Securities to the date such
Redemption Price is actually paid, in which case the actual payment date will
be the date fixed for redemption for purposes of calculating the Redemption
Price.
(e) Payment of the Redemption Price on the Trust Securities shall be made to
the recordholders thereof as they appear on the Securities Register for the
Trust Securities on the relevant record date, which shall be one Business Day
prior to the relevant Redemption Date; provided, however, that in the event
that the Preferred Securities do not remain in book-entry-only form, the
relevant record date shall be the date fifteen days prior to the relevant
Redemption Date.
(f) Subject to Section 4.3(a), if less than all the Outstanding Trust
Securities are to be redeemed on a Redemption Date, then the aggregate
Liquidation Amount of Trust Securities to be redeemed shall be allocated on a
pro rata basis (based on Liquidation Amounts) among the Common Securities and
the Preferred Securities. The particular Preferred Securities to be redeemed
shall be selected on a pro rata basis (based upon Liquidation Amounts) not
more than 60 days prior to the Redemption Date by the Property Trustee from
the Outstanding Preferred Securities not previously called for redemption, by
such method (including, without limitation, by lot) as the Property Trustee
shall deem fair and appropriate and which may provide for the selection for
redemption of portions (equal to $25 or an integral multiple of $25 in excess
thereof) of the Liquidation Amount of Preferred Securities of a denomination
larger than $25. The Property Trustee shall promptly notify the Security
Registrar in writing of the Preferred Securities selected for redemption and,
in the case of any Preferred Securities selected for partial redemption, the
Liquidation Amount thereof to be redeemed. For all purposes of this Trust
Agreement, unless the context otherwise requires, all provisions relating to
the redemption of Preferred Securities shall relate, in the case of any
Preferred Securities redeemed or to be redeemed only in part, to the portion
of the Liquidation Amount of Preferred Securities that has been or is to be
redeemed.
Section 4.3. Subordination of Common Securities.
(a) Payment of Distributions (including Additional Amounts, if applicable)
on, and the Redemption Price of, the Trust Securities, as applicable, shall be
made, subject to Section 4.2(f), pro rata among the Common Securities and the
Preferred Securities based on the Liquidation Amount of the Trust Securities;
provided, however, that if on any Distribution Date or Redemption Date any
Event of Default resulting from a Debenture Event of Default shall have
occurred and be continuing, no payment of any Distribution (including
Additional Amounts, if applicable) on, or Redemption Price of, any Common
Security, and no other payment on account of the redemption, liquidation or
other acquisition of Common Securities, shall be made unless payment in full
in cash of all accumulated and unpaid Distributions (including Additional
Amounts, if applicable) on all Outstanding Preferred Securities for all
Distribution periods terminating on or prior thereto, or in the case of
payment of the Redemption Price the full amount of such Redemption Price on
all Outstanding Preferred Securities, shall have been made or provided for,
and all funds immediately available to the Property Trustee shall first be
applied to the payment in full in cash of all Distributions (including
Additional Amounts, if applicable) on, or the Redemption Price of, Preferred
Securities then due and payable.
(b) In the case of the occurrence of any Event of Default resulting from any
Debenture Event of Default, the Holder of Common Securities will be deemed to
have waived any right to act with respect to any such Event of Default under
this Trust Agreement until the effect of all such Events of Default with
respect to the Preferred Securities have been cured, waived or otherwise
eliminated. Until any such Event of Default under this Trust Agreement with
respect to the Preferred Securities has been so
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cured, waived or otherwise eliminated, the Property Trustee shall act solely
on behalf of the Holders of the Preferred Securities and not the Holder of the
Common Securities, and only the Holders of the Preferred Securities will have
the right to direct the Property Trustee to act on their behalf.
Section 4.4. Payment Procedures.
Payments of Distributions (including Additional Amounts, if applicable) in
respect of the Preferred Securities shall be made by check mailed to the
address of the Person entitled thereto as such address shall appear on the
Securities Register or, if the Preferred Securities are held by a Clearing
Agency, such Distributions shall be made to the Clearing Agency in immediately
available funds, which shall credit the relevant Persons' accounts at such
Clearing Agency on the applicable distribution dates. Payments in respect of
the Common Securities shall be made in such manner as shall be mutually agreed
between the Property Trustee and the Common Securityholder.
Section 4.5. Tax Returns and Reports.
The Administrative Trustees shall prepare (or cause to be prepared), at the
Depositor's expense, and file all United States Federal, state and local tax
and information returns and reports required to be filed by or in respect of
the Trust. In this regard, the Administrative Trustees shall (a) prepare and
file (or cause to be prepared and filed) the appropriate Internal Revenue
Service Form required to be filed in respect of the Trust in each taxable year
of the Trust and (b) prepare and furnish (or cause to be prepared and
furnished) to each Securityholder the appropriate Internal Revenue Service
form required to be provided on such form. The Administrative Trustees shall
provide the Depositor and the Property Trustee with a copy of all such returns
and reports promptly after such filing or furnishing. The Trustees shall
comply with United States Federal withholding and backup withholding tax laws
and information reporting requirements with respect to any payments to
Securityholders under the Trust Securities.
Section 4.6. Payment of Taxes, Duties, Etc. of the Trust.
Upon receipt under the Debentures of Additional Sums, the Property Trustee
shall promptly pay any taxes, duties or governmental charges of whatsoever
nature (other than withholding taxes) imposed on the Trust by the United
States or any other taxing authority.
Section 4.7. Payments under Indenture.
Any amount payable hereunder to any Holder of Preferred Securities (and any
Owner with respect thereto) shall be reduced by the amount of any
corresponding payment such Holder (and Owner) has directly received pursuant
to Section 5.8 of the Indenture.
ARTICLE V.
Trust Securities Certificates
Section 5.1. Initial Ownership.
Upon the formation of the Trust and the contribution by the Depositor
pursuant to Section 2.3 and until the issuance of the Trust Securities, and at
any time during which no Trust Securities are outstanding, the Depositor shall
be the sole beneficial owner of the Trust.
Section 5.2. The Trust Securities Certificates.
The Preferred Securities Certificates shall be issued in minimum
denominations of $25 Liquidation Amount and integral multiples of $25 in
excess thereof, and the Common Securities Certificates shall be issued in
denominations of $25 Liquidation Amount and integral multiples thereof. The
Trust Securities Certificates shall be executed on behalf of the Trust by
manual signature of at least one Administrative Trustee. Trust Securities
Certificates bearing the manual signatures of individuals who
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were, at the time when such signatures shall have been affixed, authorized to
sign on behalf of the Trust, shall be validly issued and entitled to the
benefits of this Trust Agreement, notwithstanding that such individuals or any
of them shall have ceased to be so authorized prior to the delivery of such
Trust Securities Certificates or did not hold such offices at the date of
delivery of such Trust Securities Certificates. A transferee of a Trust
Securities Certificate shall become a Securityholder, and shall be entitled to
the rights and subject to the obligations of a Securityholder hereunder, upon
due registration of such Trust Securities Certificate in such transferee's
name pursuant to Sections 5.4, 5.11 and 5.13.
Section 5.3. Execution and Delivery of Trust Securities Certificates.
At each Time of Delivery, the Administrative Trustees shall cause Trust
Securities Certificates, in an aggregate Liquidation Amount as provided in
Sections 2.4 and 2.5, to be executed on behalf of the Trust and delivered to
or upon the written order of the Depositor, signed by its chairman of the
board, its president, any executive vice president or any vice president,
treasurer or assistant treasurer or controller without further corporate
action by the Depositor, in authorized denominations.
Section 5.4. Registration of Transfer and Exchange of Preferred Securities
Certificates.
The Depositor shall keep or cause to be kept, at the office or agency
maintained pursuant to Section 5.8, a register or registers for the purpose of
registering Trust Securities Certificates and transfers and exchanges of
Preferred Securities Certificates (the "Securities Register") in which, the
registrar designated by the Depositor (the "Securities Registrar"), subject to
such reasonable regulations as it may prescribe, shall provide for the
registration of Preferred Securities Certificates and Common Securities
Certificates (subject to Section 5.10 in the case of the Common Securities
Certificates) and registration of transfers and exchanges of Preferred
Securities Certificates as herein provided. The Bank shall be the initial
Securities Registrar.
Upon surrender for registration of transfer of any Preferred Securities
Certificate at the office or agency maintained pursuant to Section 5.8, the
Administrative Trustees or any one of them shall execute and deliver, in the
name of the designated transferee or transferees, one or more new Preferred
Securities Certificates in authorized denominations of a like aggregate
Liquidation Amount dated the date of execution by such Administrative Trustee
or Trustees.
The Securities Registrar shall not be required to register the transfer of
any Preferred Securities that have been called for redemption. At the option
of a Holder, Preferred Securities Certificates may be exchanged for other
Preferred Securities Certificates in authorized denominations of the same
class and of a like aggregate Liquidation Amount upon surrender of the
Preferred Securities Certificates to be exchanged at the office or agency
maintained pursuant to Section 5.8.
Every Preferred Securities Certificate presented or surrendered for
registration of transfer or exchange shall be accompanied by a written
instrument of transfer in form satisfactory to the Property Trustee and the
Securities Registrar duly executed by the Holder or his attorney duly
authorized in writing. Each Preferred Securities Certificate surrendered for
registration of transfer or exchange shall be cancelled and subsequently
disposed of by the Property Trustee in accordance with its customary practice.
No service charge shall be made for any registration of transfer or exchange
of Preferred Securities Certificates, but the Securities Registrar may require
payment of a sum sufficient to cover any tax or governmental charge that may
be imposed in connection with any transfer or exchange of Preferred Securities
Certificates.
Section 5.5. Mutilated, Destroyed, Lost or Stolen Trust Securities
Certificates.
If (a) any mutilated Trust Securities Certificate shall be surrendered to
the Securities Registrar, or if the Securities Registrar shall receive
evidence to its satisfaction of the destruction, loss or theft of any Trust
Securities Certificate and (b) there shall be delivered to the Securities
Registrar and the
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Administrative Trustees such security or indemnity as may be required by them
to save each of them harmless, then in the absence of notice that such Trust
Securities Certificate shall have been acquired by a bona fide purchaser, the
Administrative Trustees, or any one of them, on behalf of the Trust shall
execute and make available for delivery, in exchange for or in lieu of any
such mutilated, destroyed, lost or stolen Trust Securities Certificate, a new
Trust Securities Certificate of like class, tenor and denomination. In
connection with the issuance of any new Trust Securities Certificate under
this Section, the Administrative Trustees or the Securities Registrar may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection therewith. Any duplicate Trust
Securities Certificate issued pursuant to this Section shall constitute
conclusive evidence of an undivided beneficial interest in the assets of the
Trust, as if originally issued, whether or not the lost, stolen or destroyed
Trust Securities Certificate shall be found at any time.
Section 5.6. Persons Deemed Securityholders.
The Administrative Trustees or the Securities Registrar shall treat the
Person in whose name any Trust Securities Certificate shall be registered in
the Securities Register as the owner of such Trust Securities Certificate for
the purpose of receiving distributions and for all other purposes whatsoever,
and neither the Trustees nor the Securities Registrar shall be bound by any
notice to the contrary.
Section 5.7. Access to List of Securityholders' Names and Addresses.
Trust Securities Certificate, and each Owner shall be deemed to have agreed
not to hold the Depositor, the Property Trustee or the Administrative Trustees
accountable by reason of the disclosure of its name and address, regardless of
the source from which such information was derived.
Section 5.8. Maintenance of Office or Agency.
The Administrative Trustees shall maintain in Chicago, Illinois, an office
or offices or agency or agencies where Preferred Securities Certificates may
be surrendered for registration of transfer or exchange and where notices and
demands to or upon the Trustees in respect of the Trust Securities
Certificates may be served. The Administrative Trustees initially designate
the , as its principal corporate
trust office for such purposes. The Administrative Trustees shall give prompt
written notice to the Depositor and to the Securityholders of any change in
the location of the Securities Register or any such office or agency.
Section 5.9. Appointment of Paying Agent.
The Paying Agent shall make distributions to Securityholders from the
Payment Account and shall report the amounts of such distributions to the
Property Trustee and the Administrative Trustees. Any Paying Agent shall have
the revocable power to withdraw funds from the Payment Account for the purpose
of making the distributions referred to above. The Administrative Trustees may
revoke such power and remove the Paying Agent if such Trustees determine in
their sole discretion that the Paying Agent shall have failed to perform its
obligations under this Trust Agreement in any material respect. The Paying
Agent shall initially be the Bank, and any co-paying agent chosen by the Bank,
and acceptable to the Administrative Trustees and the Depositor. Any Person
acting as Paying Agent shall be permitted to resign as Paying Agent upon 30
days' written notice to the Administrative Trustees, the Property Trustee and
the Depositor. In the event that the Bank shall no longer be the Paying Agent
or a successor Paying Agent shall resign or its authority to act be revoked,
the Administrative Trustees shall appoint a successor that is acceptable to
the Property Trustee and the Depositor to act as Paying Agent (which shall be
a bank or trust company). The Administrative Trustees shall cause such
successor Paying Agent or any additional Paying Agent appointed by the
Administrative Trustees to execute and deliver to the Trustees an instrument
in which such successor Paying Agent or additional Paying Agent shall agree
with the Trustees that as Paying Agent, such successor Paying Agent or
additional Paying Agent will hold all sums, if any, held by it for payment to
the Securityholders in trust
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for the benefit of the Securityholders entitled thereto until such sums shall
be paid to such Securityholders. The Paying Agent shall return all unclaimed
funds to the Property Trustee and upon removal of a Paying Agent such Paying
Agent shall also return all funds in its possession to the Property Trustee.
The provisions of Sections 8.1, 8.3 and 8.6 herein shall apply to the Bank
also in its role as Paying Agent, for so long as the Bank shall act as Paying
Agent and, to the extent applicable, to any other paying agent appointed
hereunder. Any reference in this Agreement to the Paying Agent shall include
any co-paying agent unless the context requires otherwise.
Section 5.10. Ownership of Common Securities by Depositor.
At each Time of Delivery, the Depositor shall acquire and retain beneficial
and record ownership of the Common Securities. To the fullest extent permitted
by law, other than a transfer in connection with a consolidation or merger of
the Depositor into another corporation, or any conveyance, transfer or lease
by the Depositor of its properties and assets substantially as an entirety to
any Person, pursuant to Section 8.1 of the Indenture, any attempted transfer
of the Common Securities shall be void. The Administrative Trustees shall
cause each Common Securities Certificate issued to the Depositor to contain a
legend stating "THIS CERTIFICATE IS NOT TRANSFERABLE".
Section 5.11. Book-Entry Preferred Securities Certificates; Common
Securities Certificate.
(a) The Preferred Securities Certificates, upon original issuance, will be
issued in the form of a typewritten Preferred Securities Certificate or
Certificates representing Book-Entry Preferred Securities Certificates, to be
delivered to The Depository Trust Company, the initial Clearing Agency, by, or
on behalf of, the Trust. Such Preferred Securities Certificate or Certificates
shall initially be registered on the Securities Register in the name of Cede &
Co., the nominee of the initial Clearing Agency, and no beneficial owner will
receive a Definitive Preferred Securities Certificate representing such
beneficial owner's interest in such Preferred Securities, except as provided
in Section 5.13. Unless and until Definitive Preferred Securities Certificates
have been issued to beneficial owners pursuant to Section 5.13:
(i) the provisions of this Section 5.11(a) shall be in full force and
effect;
(ii) the Securities Registrar and the Trustees shall be entitled to deal
with the Clearing Agency for all purposes of this Trust Agreement relating
to the Book-Entry Preferred Securities Certificates (including the payment
of the Liquidation Amount of and Distributions on the Book-Entry Preferred
Securities and the giving of instructions or directions to Owners of Book-
Entry Preferred Securities) as the sole Holder of Book-Entry Preferred
Securities and shall have no obligations to the Owners thereof;
(iii) to the extent that the provisions of this Section 5.11 conflict
with any other provisions of this Trust Agreement, the provisions of this
Section 5.11 shall control; and
(iv) the rights of the Owners of the Book-Entry Preferred Securities
Certificates shall be exercised only through the Clearing Agency and shall
be limited to those established by law and agreements between such Owners
and the Clearing Agency and/or the Clearing Agency Participants. Pursuant
to the Certificate Depository Agreement, unless and until Definitive
Preferred Securities Certificates are issued pursuant to Section 5.13, the
initial Clearing Agency will make book-entry transfers among the Clearing
Agency Participants and receive and transmit payments on the Preferred
Securities to such Clearing Agency Participants.
(b) A single Common Securities Certificate representing the Common
Securities shall be issued to the Depositor in the form of a definitive Common
Securities Certificate.
Section 5.12. Notices to Clearing Agency.
To the extent that a notice or other communication to the Owners is required
under this Trust Agreement, unless and until Definitive Preferred Securities
Certificates shall have been issued to Owners pursuant to Section 5.13, the
Trustees shall give all such notices and communications specified herein to be
given to Owners to the Clearing Agency, and shall have no obligations to the
Owners.
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Section 5.13. Definitive Preferred Securities Certificates.
If (a) the Depositor advises the Trustees in writing that the Clearing
Agency is no longer willing or able to properly discharge its responsibilities
with respect to the Preferred Securities Certificates, and the Depositor is
unable to locate a qualified successor, (b) the Depositor at its option
advises the Trustees in writing that it elects to terminate the book-entry
system through the Clearing Agency or (c) after the occurrence of a Debenture
Event of Default, Owners of Preferred Securities Certificates representing
beneficial interests aggregating at least a majority of the Liquidation Amount
advise the Property Trustee in writing that the continuation of a book-entry
system through the Clearing Agency is no longer in the best interest of the
Owners of Preferred Securities Certificates, then the Property Trustee shall
notify the Clearing Agency and the Clearing Agency shall notify all Owners of
Preferred Securities Certificates and the other Trustees of the occurrence of
any such event and of the availability of the Definitive Preferred Securities
Certificates to Owners of such class or classes, as applicable, requesting the
same. Upon surrender to the Property Trustee of the typewritten Preferred
Securities Certificate or Certificates representing the Book Entry Preferred
Securities Certificates by the Clearing Agency, accompanied by registration
instructions, the Administrative Trustees, or any one of them, shall execute
the Definitive Preferred Securities Certificates in accordance with the
instructions of the Clearing Agency. Neither the Securities Registrar nor the
Trustees shall be liable for any delay in delivery of such instructions and
may conclusively rely on, and shall be protected in relying on, such
instructions. Upon the issuance of Definitive Preferred Securities
Certificates, the Trustees shall recognize the Holders of the Definitive
Preferred Securities Certificates as Securityholders. The Definitive Preferred
Securities Certificates shall be printed, lithographed or engraved or may be
produced in any other manner as is reasonably acceptable to the Administrative
Trustees, as evidenced by the execution thereof by the Administrative Trustees
or any one of them.
Section 5.14. Rights of Securityholders.
(a) The legal title to the Trust Property is vested exclusively in the
Property Trustee (in its capacity as such) in accordance with Section 2.9, and
the Securityholders shall not have any right or title therein other than the
undivided beneficial interest in the assets of the Trust conferred by their
Trust Securities and they shall have no right to call for any partition or
division of property, profits or rights of the Trust except as described
below. The Trust Securities shall be personal property giving only the rights
specifically set forth therein and in this Trust Agreement. The Trust
Securities shall have no preemptive or similar rights and when issued and
delivered to Securityholders against payment of the purchase price therefor
will be fully paid and nonassessable by the Trust. The Holders of the Trust
Securities, in their capacities as such, shall be entitled to the same
limitation of personal liability extended to stockholders of private
corporations for profit organized under the General Corporation Law of the
State of Delaware.
(b) For so long as any Preferred Securities remain Outstanding, if, upon a
Debenture Event of Default, the Debenture Trustee fails or the holders of not
less than 25% in principal amount of the outstanding Debentures fail to
declare the principal of all of the Debentures to be immediately due and
payable, the Holders of at least 25% in Liquidation Amount of the Preferred
Securities then Outstanding shall have such right by a notice in writing to
the Depositor and the Debenture Trustee; and upon any such declaration such
principal amount of and the accrued interest on all of the Debentures shall
become immediately due and payable, provided that the payment of principal and
interest on such Debentures shall remain subordinated to the extent provided
in the Indenture.
(c) For so long as any Preferred Securities remain Outstanding, if, upon a
Debenture Event of Default, the Debenture Trustee fails to exercise directly
any remedy available to the Holders of the Debentures for 60 days, the Holders
of at least 25% in Liquidation Amount of the Preferred Securities then
Outstanding shall, to the fullest extent permitted by law, have the right to
directly institute proceedings for enforcement of payment to such Holders of
principal amount of or interest on the Debentures having a principal amount
equal to the Liquidation Amount of the Preferred Securities of such Holders.
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ARTICLE VI.
Acts of Securityholders; Meetings; Voting
Section 6.1. Limitations on Voting Rights.
(a) Except as provided in this Section, in Sections 5.2, 8.10 and 10.2 and
in the Indenture and as otherwise required by law, no Holder of Preferred
Securities shall have any right to vote or in any manner otherwise control the
administration, operation and management of the Trust or the obligations of
the parties hereto, nor shall anything herein set forth, or contained in the
terms of the Trust Securities Certificates, be construed so as to constitute
the Securityholders from time to time as partners or members of an
association.
(b) So long as any Debentures are held by the Property Trustee, the Trustees
shall not (i) direct the time, method and place of conducting any proceeding
for any remedy available to the Debenture Trustee, or executing any trust or
power conferred on the Debenture Trustee with respect to such Debentures, (ii)
waive any past default which is waivable under Section 5.13 of the Indenture,
(iii) exercise any right to rescind or annul a declaration that the principal
of all the Debentures shall be due and payable or (iv) consent to any
amendment, modification or termination of the Indenture or the Debentures,
where such consent shall be required, without, in each case, obtaining the
prior approval of the Holders of at least a majority in Liquidation Amount of
all Outstanding Preferred Securities, provided, however, that where a consent
under the Indenture would require the consent of each Holder of Debentures
affected thereby, no such consent shall be given by the Property Trustee
without the prior written consent of each Holder of Preferred Securities. The
Trustees shall not revoke any action previously authorized or approved by a
vote of the Holders of Preferred Securities, except by a subsequent vote of
the Holders of Preferred Securities. The Property Trustee shall notify all
Holders of the Preferred Securities of any notice of default received from the
Debenture Trustee with respect to the Debentures. In addition to obtaining the
foregoing approvals of the Holders of the Preferred Securities, prior to
taking any of the foregoing actions, the Trustees shall, at the expense of the
Depositor, obtain an Opinion of Counsel experienced in such matters to the
effect that the Trust will not be classified as an association taxable as a
corporation for United States Federal income tax purposes on account of such
action.
(c) If any proposed amendment to the Trust Agreement provides for, or the
Trustees otherwise propose to effect, (i) any action that would adversely
affect in any material respect the powers, preferences or special rights of
the Preferred Securities, whether by way of amendment to the Trust Agreement
or otherwise, or (ii) the dissolution, winding-up or termination of the Trust,
other than pursuant to the terms of this Trust Agreement, then the Holders of
Outstanding Preferred Securities as a class will be entitled to vote on such
amendment or proposal and such amendment or proposal shall not be effective
except with the approval of the Holders of at least a majority in Liquidation
Amount of the Outstanding Preferred Securities. No amendment to this Trust
Agreement may be made if, as a result of such amendment, the Trust would be
classified as an association taxable as a corporation for United States
federal income tax purposes.
Section 6.2. Notice of Meetings.
Notice of all meetings of the Preferred Securityholders, stating the time,
place and purpose of the meeting, shall be given by the Property Trustee
pursuant to Section 10.8 to each Preferred Securityholder of record, at his
registered address, at least 15 days and not more than 90 days before the
meeting. At any such meeting, any business properly before the meeting may be
so considered whether or not stated in the notice of the meeting. Any
adjourned meeting may be held as adjourned without further notice.
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Section 6.3. Meetings of Preferred Securityholders.
No annual meeting of Securityholders is required to be held. The
Administrative Trustees, however, shall call a meeting of Securityholders to
vote on any matter upon the written request of the Preferred Securityholders
of record of 25% of the Preferred Securities (based upon their Liquidation
Amount) and the Administrative Trustees or the Property Trustee may, at any
time in their discretion, call a meeting of Preferred Securityholders to vote
on any matters as to which Preferred Securityholders are entitled to vote.
Preferred Securityholders of record of 50% of the Outstanding Preferred
Securities (based upon their Liquidation Amount), present in person or by
proxy, shall constitute a quorum at any meeting of Securityholders.
If a quorum is present at a meeting, an affirmative vote by the Preferred
Securityholders of record present, in person or by proxy, holding more than a
majority of the Preferred Securities (based upon their Liquidation Amount)
held by the Preferred Securityholders of record present, either in person or
by proxy, at such meeting shall constitute the action of the Securityholders,
unless this Trust Agreement requires a greater number of affirmative votes.
Section 6.4. Voting Rights.
Securityholders shall be entitled to one vote for each $25 of Liquidation
Amount represented by their Trust Securities in respect of any matter as to
which such Securityholders are entitled to vote.
Section 6.5. Proxies, etc.
At any meeting of Securityholders, any Securityholder entitled to vote
thereat may vote by proxy, provided that no proxy shall be voted at any
meeting unless it shall have been placed on file with the Administrative
Trustees, or with such other officer or agent of the Trust as the
Administrative Trustees may direct, for verification prior to the time at
which such vote shall be taken. Pursuant to a resolution of the Property
Trustee, proxies may be solicited in the name of the Property Trustee or one
or more officers of the Property Trustee. Only Securityholders of record shall
be entitled to vote. When Trust Securities are held jointly by several
persons, any one of them may vote at any meeting in person or by proxy in
respect of such Trust Securities, but if more than one of them shall be
present at such meeting in person or by proxy, and such joint owners or their
proxies so present disagree as to any vote to be cast, such vote shall not be
received in respect of such Trust Securities. A proxy purporting to be
executed by or on behalf of a Securityholder shall be deemed valid unless
challenged at or prior to its exercise, and the burden of proving invalidity
shall rest on the challenger. No proxy shall be valid more than three years
after its date of execution.
Section 6.6. Securityholder Action by Written Consent.
Any action which may be taken by Securityholders at a meeting may be taken
without a meeting if Securityholders holding more than a majority of all
Outstanding Trust Securities (based upon their Liquidation Amount) entitled to
vote in respect of such action (or such larger proportion thereof as shall be
required by any express provision of this Trust Agreement) shall consent to
the action in writing.
Section 6.7. Record Date for Voting and Other Purposes.
For the purposes of determining the Securityholders who are entitled to
notice of and to vote at any meeting or by written consent, or to participate
in any distribution on the Trust Securities in respect of which a record date
is not otherwise provided for in this Trust Agreement, or for the purpose of
any other action, the Administrative Trustees may from time to time fix a
date, not more than 90 days prior to the date of any meeting of
Securityholders or the payment of a distribution or other action, as the case
may be, as a record date for the determination of the identity of the
Securityholders of record for such purposes.
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Section 6.8. Acts of Securityholders.
Any request, demand, authorization, direction, notice, consent, waiver or
other action provided or permitted by this Trust Agreement to be given, made
or taken by Securityholders or Owners may be embodied in and evidenced by one
or more instruments of substantially similar tenor signed by such
Securityholders or Owners in person or by an agent duly appointed in writing;
and, except as otherwise expressly provided herein, such action shall become
effective when such instrument or instruments are delivered to an
Administrative Trustee. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as
the "Act" of the Securityholders or Owners signing such instrument or
instruments. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this Trust
Agreement and (subject to Section 8.1) conclusive in favor of the Trustees, if
made in the manner provided in this Section.
The fact and date of the execution by any Person of any such instrument or
writing may be proved by the affidavit of a witness of such execution or by a
certificate of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such
instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which any Trustee receiving the same deems sufficient.
The ownership of Preferred Securities shall be proved by the Securities
Register.
Any request, demand, authorization, direction, notice, consent, waiver or
other Act of the Securityholder of any Trust Security shall bind every future
Securityholder of the same Trust Security and the Securityholder of every
Trust Security issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof in respect of anything done, omitted or suffered
to be done by the Trustees or the Trust in reliance thereon, whether or not
notation of such action is made upon such Trust Security.
Without limiting the foregoing, a Securityholder entitled hereunder to take
any action hereunder with regard to any particular Trust Security may do so
with regard to all or any part of the Liquidation Amount of such Trust
Security or by one or more duly appointed agents each of which may do so
pursuant to such appointment with regard to all or any part of such
liquidation amount.
If any dispute shall arise between the Securityholders and the
Administrative Trustees or among such Securityholders or Trustees with respect
to the authenticity, validity or binding nature of any request, demand,
authorization, direction, consent, waiver or other Act of such Securityholder
or Trustee under this Article VI, then the determination of such matter by the
Property Trustee shall be conclusive with respect to such matter.
A Securityholder may institute a legal proceeding directly against the
Depositor under the Guarantee to enforce its rights under the Guarantee
without first instituting a legal proceeding against the Guarantee Trustee (as
defined in the Guarantee), the Trust or any person or entity.
Section 6.9. Inspection of Records.
Upon reasonable notice to the Administrative Trustees and the Property
Trustee, the records of the Trust shall be open to inspection by
Securityholders during normal business hours for any purpose reasonably
related to such Securityholder's interest as a Securityholder.
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ARTICLE VII.
Representations and Warranties
Section 7.1. Representations and Warranties of the Bank, the Property
Trustee and the Delaware Trustee.
The Bank, the Property Trustee and the Delaware Trustee, each severally on
behalf of and as to itself, hereby represents and warrants for the benefit of
the Depositor and the Securityholders that:
(a) the Bank is a Delaware banking corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware;
(b) the Bank has full corporate power, authority and legal right to
execute, deliver and perform its obligations under this Trust Agreement and
has taken all necessary action to authorize the execution, delivery and
performance by it of this Trust Agreement;
(c) this Trust Agreement has been duly authorized, executed and delivered
by the Bank and constitutes the valid and legally binding agreement of the
Bank enforceable against it in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors'
rights and to general equity principles;
(d) the execution, delivery and performance by the Bank of this Trust
Agreement has been duly authorized by all necessary corporate or other
action on the part of the Bank, the Property Trustee and the Delaware
Trustee and does not require any approval of stockholders of the Bank and
such execution, delivery and performance will not (i) violate the Bank's
Charter or By-laws, (ii) violate any provision of, or constitute, with or
without notice or lapse of time, a default under, or result in the creation
or imposition of, any Lien on any properties included in the Trust Property
pursuant to the provisions of, any indenture, mortgage, credit agreement,
license or other agreement or instrument to which the Property Trustee, the
Bank or the Delaware Trustee is a party or by which it is bound, or (iii)
violate any law, governmental rule or regulation of the United States or
the State of Delaware, as the case may be, governing the banking or trust
powers of the Bank, the Property Trustee or the Delaware Trustee (as
appropriate in context) or any order, judgment or decree applicable to the
Property Trustee, the Bank or the Delaware Trustee;
(e) neither the authorization, execution or delivery by the Bank of this
Trust Agreement nor the consummation of any of the transactions by the
Bank, the Property Trustee, or the Delaware Trustee (as appropriate in
context) contemplated herein or therein requires the consent or approval
of, the giving of notice to, the registration with or the taking of any
other action with respect to any governmental authority or agency under any
existing Federal law governing the banking or trust powers of the Bank, the
Property Trustee or the Delaware Trustee, as the case may be, under the
laws of the United States or the State of Delaware;
(f) there are no proceedings pending or, to the best of each of the
Bank's, the Property Trustee's and the Delaware Trustee's knowledge,
threatened against or affecting the Bank, the Property Trustee or the
Delaware Trustee in any court or before any governmental authority, agency
or arbitration board or tribunal which, individually or in the aggregate,
would materially and adversely affect the Trust or would question the
right, power and authority of the Bank, the Property Trustee or the
Delaware Trustee, as the case may be, to enter into or perform its
obligations as one of the Trustees under this Trust Agreement.
Section 7.2. Representations and Warranties of Depositor.
The Depositor hereby represents and warrants for the benefit of the
Securityholders that:
(a) the Trust Securities Certificates issued at each Time of Delivery on
behalf of the Trust have been duly authorized and will have been, duly and
validly executed, issued and delivered by
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the Trustees pursuant to the terms and provisions of, and in accordance
with the requirements of, this Trust Agreement and the Securityholders will
be, as of each such date, entitled to the benefits of this Trust Agreement;
and
(b) there are no taxes, fees or other governmental charges payable by the
Trust (or the Trustees on behalf of the Trust) under the laws of the State
of Delaware or any political subdivision thereof in connection with the
execution, delivery and performance by the Bank, the Property Trustee or
the Delaware Trustee, as the case may be, of this Trust Agreement.
ARTICLE VIII.
The Trustees
Section 8.1. Certain Duties and Responsibilities.
(a) The duties and responsibilities of the Trustees shall be as provided by
this Trust Agreement and, in the case of the Property Trustee, by the Trust
Indenture Act. Notwithstanding the foregoing, no provision of this Trust
Agreement shall require the Trustees to expend or risk their own funds or
otherwise incur any financial liability in the performance of any of their
duties hereunder, or in the exercise of any of their rights or powers, if they
shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to
it. Whether or not therein expressly so provided, every provision of this
Trust Agreement relating to the conduct or affecting the liability of or
affording protection to the Trustees shall be subject to the provisions of
this Section. Nothing in this Trust Agreement shall be construed to release
the Property Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct. To the extent that,
at law or in equity, an Administrative Trustee has duties (including fiduciary
duties) and liabilities relating thereto to the Trust or to the
Securityholders, such Administrative Trustee shall not be liable to the Trust
or to any Securityholder for such Trustee's good faith reliance on the
provisions of this Trust Agreement. The provisions of this Trust Agreement, to
the extent that they restrict the duties and liabilities of the Administrative
Trustees otherwise existing at law or in equity, are agreed by the Depositor
and the Securityholders to replace such other duties and liabilities of the
Administrative Trustees.
(b) All payments made by the Property Trustee or a Paying Agent in respect
of the Trust Securities shall be made only from the revenue and proceeds from
the Trust Property and only to the extent that there shall be sufficient
revenue or proceeds from the Trust Property to enable the Property Trustee or
a Paying Agent to make payments in accordance with the terms hereof. Each
Securityholder, by its acceptance of a Trust Security, agrees that it will
look solely to the revenue and proceeds from the Trust Property to the extent
legally available for distribution to it as herein provided and that the
Trustees are not personally liable to it for any amount distributable in
respect of any Trust Security or for any other liability in respect of any
Trust Security. This Section 8.1(b) does not limit the liability of the
Trustees expressly set forth elsewhere in this Trust Agreement or, in the case
of the Property Trustee, in the Trust Indenture Act.
(c) No provision of this Trust Agreement shall be construed to relieve the
Property Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
(i) the Property Trustee shall not be liable for any error of judgment
made in good faith by an authorized officer of the Property Trustee, unless
it shall be proved that the Property Trustee was negligent in ascertaining
the pertinent facts;
(ii) the Property Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
direction of the Holders of not less than a majority in Liquidation Amount
of the Trust Securities relating to the time, method and place of
conducting
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any proceeding for any remedy available to the Property Trustee, or
exercising any trust or power conferred upon the Property Trustee under
this Trust Agreement;
(iii) the Property Trustee's sole duty with respect to the custody, safe
keeping and physical preservation of the Debentures and the Payment Account
shall be to deal with such Property in a similar manner as the Property
Trustee deals with similar property for its own account, subject to the
protections and limitations on liability afforded to the Property Trustee
under this Trust Agreement and the Trust Indenture Act;
(iv) the Property Trustee shall not be liable for any interest on any
money received by it except as it may otherwise agree with the Depositor;
and money held by the Property Trustee need not be segregated from other
funds held by it except in relation to the Payment Account maintained by
the Property Trustee pursuant to Section 3.1 and except to the extent
otherwise required by law; and
(v) the Property Trustee shall not be responsible for monitoring the
compliance by the Administrative Trustees or the Depositor with their
respective duties under this Trust Agreement, nor shall the Property
Trustee be liable for the default or misconduct of the Administrative
Trustees or the Depositor.
Section 8.2. Certain Notices.
Within five Business Days after the occurrence of any Event of Default
actually known to the Property Trustee, the Property Trustee shall transmit,
in the manner and to the extent provided in Section 10.8, notice of such Event
of Default to the Securityholders, the Administrative Trustees and the
Depositor, unless such Event of Default shall have been cured or waived.
Within five Business Days after the receipt of notice of the Depositor's
exercise of its right to deter the payment of interest on the Debentures
pursuant to the Indenture, the Administrative Trustee shall transmit, in the
manner and to the extent provided in Section 10.8, notice of such exercise to
the Securityholders and the Property Trustee, unless such exercise shall have
been revoked.
Section 8.3. Certain Rights of Property Trustee.
Subject to the provisions of Section 8.1:
(a) the Property Trustee may rely and shall be protected in acting or
refraining from acting in good faith upon any resolution, Opinion of
Counsel, certificate, written representation of a Holder or transferee,
certificate of auditors or any other certificate, statement, instrument,
opinion, report, notice, request, consent, order, appraisal, bond,
debenture, note, other evidence of indebtedness or other paper or document
believed by it to be genuine and to have been signed or presented by the
proper party or parties;
(b) if (i) in performing its duties under this Trust Agreement the
Property Trustee is required to decide between alternative courses of
action or (ii) in construing any of the provisions of this Trust Agreement
the Property Trustee finds the same ambiguous or inconsistent with any
other provisions contained herein or (iii) the Property Trustee is unsure
of the application of any provision of this Trust Agreement, then, except
as to any matter as to which the Preferred Securityholders are entitled to
vote under the terms of this Trust Agreement, the Property Trustee shall
deliver a notice to the Depositor requesting written instructions of the
Depositor as to the course of action to be taken and the Property Trustee
shall take such action, or refrain from taking such action, as the Property
Trustee shall be instructed in writing to take, or to refrain from taking,
by the Depositor; provided, however, that if the Property Trustee does not
receive such instructions of the Depositor within ten Business Days after
it has delivered such notice, or such reasonably shorter period of time set
forth in such notice (which to the extent practicable shall not be less
than two Business Days), it may, but shall be under no duty to, take or
refrain from taking
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such action not inconsistent with this Trust Agreement as it shall deem
advisable and in the best interests of the Securityholders, in which event
the Property Trustee shall have no liability except for its own bad faith,
negligence or willful misconduct;
(c) any direction or act of the Depositor or the Administrative Trustees
contemplated by this Trust Agreement shall be sufficiently evidenced by an
Officers' Certificate;
(d) whenever in the administration of this Trust Agreement, the Property
Trustee shall deem it desirable that a matter be established before
undertaking, suffering or omitting any action hereunder, the Property
Trustee (unless other evidence is herein specifically prescribed) may, in
the absence of bad faith on its part, request and rely upon an Officers'
Certificate which, upon receipt of such request, shall be promptly
delivered by the Depositor or the Administrative Trustees;
(e) the Property Trustee shall have no duty to see to any recording,
filing or registration of any instrument (including any financing or
continuation statement or any filing under tax or securities laws) or any
rerecording, refiling or reregistration thereof;
(f) the Property Trustee may consult with counsel (which counsel may be
counsel to the Depositor or any of its Affiliates, and may include any of
its employees) and the advice of such counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon and in
accordance with such advice, such counsel may be counsel to the Depositor
or any of its Affiliates, and may include any of its employees; the
Property Trustee shall have the right at any time to seek instructions
concerning the administration of this Trust Agreement from any court of
competent jurisdiction;
(g) the Property Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Trust Agreement at the request or
direction of any of the Securityholders pursuant to this Trust Agreement,
unless such Securityholders shall have offered to the Property Trustee
reasonable security or indemnity against the costs, expenses and
liabilities which might be incurred by it in compliance with such request
or direction;
(h) the Property Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
bond, debenture, note or other evidence of indebtedness or other paper or
document, unless requested in writing to do so by one or more
Securityholders, but the Property Trustee may make such further inquiry or
investigation into such facts or matters as it may see fit;
(i) the Property Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
its agents or attorneys, provided that the Property Trustee shall be
responsible for its own negligence or recklessness with respect to
selection of any agent or attorney appointed by it hereunder;
(j) whenever in the administration of this Trust Agreement the Property
Trustee shall deem it desirable to receive instructions with respect to
enforcing any remedy or right or taking any other action hereunder the
Property Trustee (i) may request instructions from the Holders of the Trust
Securities which instructions may only be given by the Holders of the same
proportion in Liquidation Amount of the Trust Securities as would be
entitled to direct the Property Trustee under the terms of the Trust
Securities in respect of such remedy, right or action, (ii) may refrain
from enforcing such remedy or right or taking such other action until such
instructions are received, and (iii) shall be protected in acting in
accordance with such instructions; and
(k) except as otherwise expressly provided by this Trust Agreement, the
Property Trustee shall not be under any obligation to take any action that
is discretionary under the provisions of this Trust Agreement.
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No provision of this Trust Agreement shall be deemed to impose any duty or
obligation on the Property Trustee to perform any act or acts or exercise any
right, power, duty or obligation conferred or imposed on it, in any
jurisdiction in which it shall be illegal, or in which the Property Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts, or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Property Trustee
shall be construed to be a duty.
Section 8.4. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Trust Securities Certificates shall
be taken as the statements of the Trust, and the Trustees do not assume any
responsibility for their correctness. The Trustees shall not be accountable
for the use or application by the Depositor of the proceeds of the Debentures.
Section 8.5. May Hold Securities.
Except as provided in the definition of the term "Outstanding" in Article I,
any Trustee or any other agent of any Trustee or the Trust, in its individual
or any other capacity, may become the owner or pledgee of Trust Securities
and, subject to Sections 8.8 and 8.13, may otherwise deal with the Trust with
the same rights it would have if it were not a Trustee or such other agent.
Section 8.6. Compensation; Indemnity; Fees.
The Depositor agrees:
(a) to pay to the Trustees from time to time reasonable compensation for
all services rendered by them hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee
of an express trust);
(b) except as otherwise expressly provided herein, to reimburse the
Trustees upon request for all reasonable expenses, disbursements and
advances incurred or made by the Trustees in accordance with any provision
of this Trust Agreement (including the reasonable compensation and the
expenses and disbursements of its agents and counsel), except any such
expense, disbursement or advance as may be attributable to its negligence
or bad faith; and
(c) to indemnify each of the Trustees or any predecessor Trustee for, and
to hold the Trustees harmless against, any loss, damage, claims, liability,
penalty or expense incurred without negligence or bad faith on its part,
arising out of or in connection with the acceptance or administration of
this Trust Agreement, including the costs and expenses of defending itself
against any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder.
No Trustee may claim any lien or charge on any Trust Property as a result of
any amount due pursuant to this Section 8.6.
Section 8.7. Corporate Property Trustee Required; Eligibility of Trustees.
(a) There shall at all times be a Property Trustee hereunder with respect to
the Trust Securities. The Property Trustee shall be a Person that is eligible
pursuant to the Trust Indenture Act to act as such and has a combined capital
and surplus of at least $50,000,000. If any such Person publishes reports of
condition at least annually, pursuant to law or to the requirements of its
supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such Person shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. If at any time the Property Trustee with respect to the Trust
Securities shall cease to be eligible in accordance with the provisions of
this Section, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
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(b) There shall at all times be one or more Administrative Trustees
hereunder with respect to the Trust Securities. Each Administrative Trustee
shall be either a natural person who is at least 21 years of age or a legal
entity that shall act through one or more persons authorized to bind that
entity.
(c) There shall at all times be a Delaware Trustee with respect to the Trust
Securities. The Delaware Trustee shall either be (i) a natural person who is
at least 21 years of age and a resident of the State of Delaware or (ii) a
legal entity with its principal place of business in the State of Delaware and
that otherwise meets the requirements of applicable Delaware law that shall
act through one or more persons authorized to bind such entity.
Section 8.8. Conflicting Interests.
If the Property Trustee has or shall acquire a conflicting interest within
the meaning of the Trust Indenture Act, the Property Trustee shall either
eliminate such interest or resign, to the extent and in the manner provided
by, and subject to the provisions of, the Trust Indenture Act and this Trust
Agreement.
Section 8.9. Co-Trustees and Separate Trustee.
Unless an Event of Default shall have occurred and be continuing, at any
time or times, for the purpose of meeting the legal requirements of the Trust
Indenture Act or of any jurisdiction in which any part of the Trust Property
may at the time be located, the Depositor and the Administrative Trustees, by
agreed action of the majority of such Trustees, shall have power to appoint,
and upon the written request of the Administrative Trustees, the Depositor
shall for such purpose join with the Administrative Trustees in the execution,
delivery, and performance of all instruments and agreements necessary or
proper to appoint, one or more Persons approved by the Property Trustee either
to act as co-trustee, jointly with the Property Trustee, of all or any part of
such Trust Property, or to the extent required by law to act as separate
trustee of any such property, in either case with such powers as may be
provided in the instrument of appointment, and to vest in such Person or
Persons in the capacity aforesaid, any property, title, right or power deemed
necessary or desirable, subject to the other provisions of this Section. If
the Depositor does not join in such appointment within 15 days after the
receipt by it of a request so to do, or in case a Debenture Event of Default
has occurred and is continuing, the Property Trustee alone shall have power to
make such appointment. Any co-trustee or separate trustee appointed pursuant
to this Section shall either be (i) a natural person who is at least 21 years
of age and a resident of the United States or (ii) a legal entity with its
principal place of business in the United States that shall act through one or
more persons authorized to bind such entity.
Should any written instrument from the Depositor be required by any co-
trustee or separate trustee so appointed for more fully confirming to such co-
trustee or separate trustee such property, title, right, or power, any and all
such instruments shall, on request, be executed, acknowledged and delivered by
the Depositor.
Every co-trustee or separate trustee shall, to the extent permitted by law,
but to such extent only, be appointed subject to the following terms, namely:
(a) The Trust Securities shall be executed and delivered and all rights,
powers, duties, and obligations hereunder in respect of the custody of
securities, cash and other personal property held by, or required to be
deposited or pledged with, the Trustees specified hereunder, shall be
exercised, solely by such Trustees and not by such co-trustee or separate
trustee.
(b) The rights, powers, duties, and obligations hereby conferred or
imposed upon the Property Trustee in respect of any property covered by
such appointment shall be conferred or imposed upon and exercised or
performed by the Property Trustee or by the Property Trustee and such co-
trustee or separate trustee jointly, as shall be provided in the instrument
appointing such co-trustee or separate trustee, except to the extent that
under any law of any jurisdiction in which any
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particular act is to be performed, the Property Trustee shall be
incompetent or unqualified to perform such act, in which event such rights,
powers, duties and obligations shall be exercised and performed by such co-
trustee or separate trustee.
(c) The Property Trustee at any time, by an instrument in writing
executed by it, with the written concurrence of the Depositor, may accept
the resignation of or remove any co-trustee or separate trustee appointed
under this Section, and, in case a Debenture Event of Default has occurred
and is continuing, the Property Trustee shall have power to accept the
resignation of, or remove, any such co-trustee or separate trustee without
the concurrence of the Depositor. Upon the written request of the Property
Trustee, the Depositor shall join with the Property Trustee in the
execution, delivery and performance of all instruments and agreements
necessary or proper to effectuate such resignation or removal. A successor
to any co-trustee or separate trustee so resigned or removed may be
appointed in the manner provided in this Section.
(d) No co-trustee or separate trustee hereunder shall be personally
liable by reason of any act or omission of the Property Trustee or any
other trustee hereunder.
(e) The Property Trustee shall not be liable by reason of any act of a
co-trustee or separate trustee.
(f) Any Act of Holders delivered to the Property Trustee shall be deemed
to have been delivered to each such co-trustee and separate trustee.
Section 8.10. Resignation and Removal; Appointment of Successor.
No resignation or removal of any Trustee (the "Relevant Trustee") and no
appointment of a successor Trustee pursuant to this Article shall become
effective until the acceptance of appointment by the successor Trustee in
accordance with the applicable requirements of Section 8.11.
Subject to the immediately preceding paragraph, the Relevant Trustee may
resign at any time with respect to the Trust Securities by giving written
notice thereof to the Securityholders. If the instrument of acceptance by the
successor Trustee required by Section 8.11 shall not have been delivered to
the Relevant Trustee within 30 days after the giving of such notice of
resignation, the Relevant Trustee may petition, at the expense of the Company,
any court of competent jurisdiction for the appointment of a successor
Relevant Trustee with respect to the Trust Securities.
Unless a Debenture Event of Default shall have occurred and be continuing,
any Trustee may be removed at any time by Act of the Common Securityholder. If
a Debenture Event of Default shall have occurred and be continuing, the
Property Trustee or the Delaware Trustee, or both of them, may be removed at
such time by Act of the Holders of a majority in Liquidation Amount of the
Preferred Securities, delivered to the Relevant Trustee (in its individual
capacity and on behalf of the Trust). An Administrative Trustee may be removed
by the Common Securityholder at any time.
If any Trustee shall resign, be removed or become incapable of acting as
Trustee, or if a vacancy shall occur in the office of any Trustee for any
cause, at a time when no Debenture Event of Default shall have occurred and be
continuing, the Common Securityholder, by Act of the Common Securityholder
delivered to the retiring Trustee, shall promptly appoint a successor Trustee
or Trustees with respect to the Trust Securities and the Trust, and the
retiring Trustee shall comply with the applicable requirements of Section
8.11. If the Property Trustee or the Delaware Trustee shall resign, be removed
or become incapable of continuing to act as the Property Trustee or the
Delaware Trustee, as the case may be, at a time when a Debenture Event of
Default shall have occurred and be continuing, the Preferred Securityholders,
by Act of the Securityholders of a majority in Liquidation Amount of the
Preferred Securities then Outstanding delivered to the retiring Relevant
Trustee, shall promptly appoint a successor Relevant Trustee or Trustees with
respect to the Trust Securities and the Trust, and such successor Trustee
shall comply with the applicable requirements of Section 8.11.
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If an Administrative Trustee shall resign, be removed or become incapable of
acting as Administrative Trustee, at a time when a Debenture Event of Default
shall have occurred and be continuing, the Common Securityholder by Act of the
Common Securityholder delivered to the Administrative Trustee shall promptly
appoint a successor Administrative Trustee or Administrative Trustees with
respect to the Trust Securities and the Trust, and such successor
Administrative Trustee or Trustees shall comply with the applicable
requirements of Section 8.11. If no successor Relevant Trustee with respect to
the Trust Securities shall have been so appointed by the Common Securityholder
or the Preferred Securityholders and accepted appointment in the manner
required by Section 8.11, any Securityholder who has been a Securityholder of
Trust Securities for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for
the appointment of a successor Relevant Trustee with respect to the Trust
Securities.
The Property Trustee shall give notice of each resignation and each removal
of a Trustee and each appointment of a successor Trustee to all
Securityholders in the manner provided in Section 10.8 and shall give notice
to the Depositor. Each notice shall include the name of the successor Relevant
Trustee and the address of its Corporate Trust Office if it is the Property
Trustee.
Notwithstanding the foregoing or any other provision of this Trust
Agreement, in the event any Administrative Trustee or a Delaware Trustee who
is a natural person dies or becomes, in the opinion of the Depositor,
incompetent or incapacitated, the vacancy created by such death, incompetence
or incapacity may be filled by (a) the unanimous act of remaining
Administrative Trustees if there are at least two of them or (b) otherwise by
the Depositor (with the successor in each case being a Person who satisfies
the eligibility requirement for Administrative Trustees set forth in Section
8.7).
Section 8.11. Acceptance of Appointment by Successor.
In case of the appointment hereunder of a successor Trustee such successor
Trustee so appointed shall execute, acknowledge and deliver to the Trust and
to the retiring Trustee an instrument accepting such appointment, and
thereupon the resignation or removal of the retiring Trustee shall become
effective and such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee; but, on the request of the Depositor or the successor
Trustee, such retiring Trustee shall, upon payment of its charges, execute and
deliver an instrument transferring to such successor Trustee all the rights,
powers and trusts of the retiring Trustee and if the Property Trustee is the
resigning Trustee shall duly assign, transfer and deliver to the successor
Trustee all property and money held by such retiring Property Trustee
hereunder.
In case of the appointment hereunder of a successor Relevant Trustee with
respect to the Trust Securities and the Trust, the retiring Relevant Trustee
and each successor Relevant Trustee with respect to the Trust Securities shall
execute and deliver an amendment hereto wherein each successor Relevant
Trustee shall accept such appointment and which (a) shall contain such
provisions as shall be necessary or desirable to transfer and confirm to, and
to vest in, each successor Relevant Trustee all the rights, powers, trusts and
duties of the retiring Relevant Trustee with respect to the Trust Securities
and the Trust and (b) shall add to or change any of the provisions of this
Trust Agreement as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Relevant Trustee, it
being understood that nothing herein or in such amendment shall constitute
such Relevant Trustees co-trustees of the same trust and that each such
Relevant Trustee shall be trustee of a trust or trusts hereunder separate and
apart from any trust or trusts hereunder administered by any other such
Relevant Trustee and upon the execution and delivery of such amendment the
resignation or removal of the retiring Relevant Trustee shall become effective
to the extent provided therein and each such successor Relevant Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Relevant Trustee with
respect to the Trust Securities and the Trust; but, on request of the Trust or
any successor Relevant Trustee such retiring Relevant Trustee shall duly
assign, transfer and deliver to
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such successor Relevant Trustee all Trust Property, all proceeds thereof and
money held by such retiring Relevant Trustee hereunder with respect to the
Trust Securities and the Trust.
Upon request of any such successor Relevant Trustee, the Trust shall execute
any and all instruments for more fully and certainly vesting in and confirming
to such successor Relevant Trustee all such rights, powers and trusts referred
to in the first or second preceding paragraph, as the case may be.
No successor Relevant Trustee shall accept its appointment unless at the
time of such acceptance such successor Relevant Trustee shall be qualified and
eligible under this Article.
Section 8.12. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Property Trustee or the Delaware Trustee may
be merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to which
such Relevant Trustee shall be a party, or any corporation succeeding to all
or substantially all the corporate trust business of such Relevant Trustee,
shall be the successor of such Relevant Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto.
Section 8.13. Preferential Collection of Claims Against Depositor or Trust.
If and when the Property Trustee or the Delaware Trustee shall be or become
a creditor of the Depositor or the Trust (or any other obligor upon the
Debentures or the Trust Securities), the Property Trustee or the Delaware
Trustee, as the case may be, shall be subject to and shall take all actions
necessary in order to comply with the provisions of the Trust Indenture Act
regarding the collection of claims against the Depositor or Trust (or any such
other obligor).
Section 8.14. Reports by Property Trustee.
(a) Not later than July 15 of each year commencing with July 15, 1997, the
Property Trustee shall transmit to all Securityholders in accordance with
Section 10.8, and to the Depositor, a brief report dated as of such December
31 with respect to:
(i) its eligibility under Section 8.7 or, in lieu thereof, if to the best
of its knowledge it has continued to be eligible under said Section, a
written statement to such effect;
(ii) a statement that the Property Trustee has complied with all of its
obligations under this Trust Agreement during the twelve-month period (or,
in the case of the initial report, the period since the Closing Date)
ending with such December 31 or, if the Property Trustee has not complied
in any material respect with such obligations, a description of such
noncompliance; and
(iii) any change in the property and funds in its possession as Property
Trustee since the date of its last report and any action taken by the
Property Trustee in the performance of its duties hereunder which it has
not previously reported and which in its opinion materially affects the
Trust Securities.
(b) In addition the Property Trustee shall transmit to Securityholders such
reports concerning the Property Trustee and its actions under this Trust
Agreement as may be required pursuant to the Trust Indenture Act at the times
and in the manner provided pursuant thereto.
(c) A copy of each such report shall, at the time of such transmission to
Holders, be filed by the Property Trustee with each national stock exchange,
the Nasdaq National Market or such other interdealer quotation system or self-
regulatory organization upon which the Trust Securities are listed or traded,
with the Commission and with the Depositor.
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Section 8.15. Reports to the Property Trustee.
The Deositor and the Administrative Trustees on behalf of the Trust shall
provide to the Property Trustee such documents, reports and information as
required by Section 314 of the Trust Indenture Act (if any) and the compliance
certificate required by Section 314(a) of the Trust Indenture Act in the form,
in the manner and at the times required by Section 314 of the Trust Indenture
Act.
Section 8.16. Evidence of Compliance with Conditions Precedent.
Each of the Depositor and the Administrative Trustees on behalf of the Trust
shall provide to the Property Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Trust Agreement that relate
to any of the matters set forth in Section 314 (c) of the Trust Indenture Act.
Any certificate or opinion required to be given by an officer pursuant to
Section 314(c)(1) of the Trust Indenture Act shall be given in the form of an
Officers' Certificate.
Section 8.17 Number of Trustees.
(a) The number of Trustees shall be four, provided that the Holder of all of
the Common Securities by written instrument may increase or decrease the
number of Administrative Trustees. The Property Trustee and the Delaware
Trustee may be the same person.
(b) If a Trustee ceases to hold office for any reason and the number of
Administrative Trustees is not reduced pursuant to Section 8.17(a), or if the
number of Trustees is increased pursuant to Section 8.17(a), a vacancy shall
occur. The vacancy shall be filled with a Trustee appointed in accordance with
Section 8.10.
(c) The death, resignation, retirement, removal, bankruptcy, incompetence or
incapacity to perform the duties of a Trustee shall not operate to annul the
Trust. Whenever a vacancy in the number of Administrative Trustees shall
occur, until such vacancy is filled by the appointment of an Administrative
Trustee in accordance with Section 8.10, the Administrative Trustees in
office, regardless of their number (and notwithstanding any other provision of
this Agreement), shall have all the powers granted to the Administrative
Trustees and shall discharge all the duties imposed upon the Administrative
Trustees by this Trust Agreement.
Section 8.18. Delegation of Power.
(a) Any Administrative Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 his or
her power for the purpose of executing any documents contemplated in Section
2.7(a), including any registration statement or amendment thereto filed with
the Commission, or making any other governmental filing; and
(b) The Administrative Trustees shall have power to delegate from time to
time to such of their number or to the Depositor the doing of such things and
the execution of such instruments either in the name of the Trust or the names
of the Administrative Trustees or otherwise as the Administrative Trustees may
deem expedient, to the extent such delegation is not prohibited by applicable
law or contrary to the provisions of the Trust, as set forth herein.
ARTICLE IX.
Termination, Liquidation and Merger
Section 9.1. Termination Upon Expiration Date.
Unless earlier terminated, the Trust shall automatically terminate on
December 31, 2051 (the "Expiration Date"), following the distribution of the
Trust Property in accordance with Section 9.4.
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Section 9.2. Early Termination.
The first to occur of any of the following events is an "Early Termination
Event":
(a) the occurrence of a Bankruptcy Event in respect of, or the
dissolution or liquidation of, the Depositor;
(b) the written direction to the Property Trustee from the Depositor at
any time (which direction is optional and wholly within the discretion of
the Depositor) to terminate the Trust and distribute Debentures to
Securityholders in exchange for the Preferred Securities.
(c) the redemption of all of the Preferred Securities in connection with
the redemption of all the Debentures; and
(d) the entry of an order for dissolution of the Trust by a court of
competent jurisdiction.
Section 9.3. Termination.
The respective obligations and responsibilities of the Trustees and the
Trust created and continued hereby shall terminate upon the latest to occur of
the following: (a) the distribution by the Property Trustee to Securityholders
upon the liquidation of the Trust pursuant to Section 9.4, or upon the
redemption of all of the Trust Securities pursuant to Section 4.2, of all
amounts required to be distributed hereunder upon the final payment of the
Trust Securities; (b) the payment of any expenses owed by the Trust; and (c)
the discharge of all administrative duties of the Administrative Trustees,
including the performance of any tax reporting obligations with respect to the
Trust or the Securityholders.
Section 9.4. Liquidation.
(a) If an Early Termination Event specified in clause (a), (b) or (d) of
Section 9.2 occurs or upon the Expiration Date, the Trust shall be liquidated
by the Trustees as expeditiously as the Trustees determine to be possible by
distributing, after satisfaction of liabilities to creditors of the Trust as
provided by applicable law, to each Securityholder a Like Amount of
Debentures, subject to Section 9.4(d). Notice of liquidation shall be given by
the Property Trustee by first-class mail, postage prepaid mailed not later
than 30 nor more than 60 days prior to the Liquidation Date to each Holder of
Trust Securities at such Holder's address appearing in the Securities
Register. All notices of liquidation shall:
(i) state the Liquidation Date;
(ii) state that from and after the Liquidation Date, the Trust Securities
will no longer be deemed to be Outstanding and any Trust Securities
Certificates not surrendered for exchange will be deemed to represent a
Like Amount of Debentures; and
(iii) provide such information with respect to the mechanics by which
Holders may exchange Trust Securities Certificates for Debentures, or if
Section 9.4(d) applies receive a Liquidation Distribution, as the
Administrative Trustees or the Property Trustee shall deem appropriate.
(b) Except where Section 9.2(c) or 9.4(d) applies, in order to effect the
liquidation of the Trust and distribution of the Debentures to
Securityholders, the Property Trustee shall establish a record date for such
distribution (which shall be not more than 45 days prior to the Liquidation
Date) and, either itself acting as exchange agent or through the appointment
of a separate exchange agent, shall establish such procedures as it shall deem
appropriate to effect the distribution of Debentures in exchange for the
Outstanding Trust Securities Certificates.
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(c) Except where Section 9.2(c) or 9.4(d) applies, after the Liquidation
Date, (i) the Trust Securities will no longer be deemed to be Outstanding,
(ii) certificates representing a Like Amount of Debentures will be issued to
holders of Trust Securities Certificates, upon surrender of such certificates
to the Administrative Trustees or their agent for exchange, (iii) the
Depositor shall use its reasonable efforts to have the Debentures listed on
the New York Stock Exchange or on such other exchange, interdealer quotation
system or self-regulatory organization as the Preferred Securities are then
listed, (iv) any Trust Securities Certificates not so surrendered for exchange
will be deemed to represent a Like Amount of Debentures, accruing interest at
the rate provided for in the Debentures from the last Distribution Date on
which a Distribution was made on such Trust Securities Certificates until such
certificates are so surrendered (and until such certificates are so
surrendered, no payments of interest or principal will be made to Holders of
Trust Securities Certificates with respect to such Debentures) and (v) all
rights of Securityholders holding Trust Securities will cease, except the
right of such Securityholders to receive Debentures upon surrender of Trust
Securities Certificates.
(d) In the event that, notwithstanding the other provisions of this Section
9.4, whether because of an order for dissolution entered by a court of
competent jurisdiction or otherwise, distribution of the Debentures in the
manner provided herein is determined by the Property Trustee not to be
practical, the Trust Property shall be liquidated, and the Trust shall be
dissolved, wound-up or terminated, by the Property Trustee in such manner as
the Property Trustee determines. In such event, on the date of the
dissolution, winding-up or other termination of the Trust, Securityholders
will be entitled to receive out of the assets of the Trust available for
distribution to Securityholders, after satisfaction of liabilities to
creditors of the Trust as provided by applicable law, an amount equal to the
Liquidation Amount per Trust Security plus accumulated and unpaid
Distributions thereon to the date of payment (such amount being the
"Liquidation Distribution"). If, upon any such dissolution, winding up or
termination, the Liquidation Distribution can be paid only in part because the
Trust has insufficient assets available to pay in full the aggregate
Liquidation Distribution, then, subject to the next succeeding sentence, the
amounts payable by the Trust on the Trust Securities shall be paid on a pro
rata basis (based upon Liquidation Amounts). The holder of the Common
Securities will be entitled to receive Liquidation Distributions upon any such
dissolution, winding-up or termination pro rata (determined as aforesaid) with
Holders of Preferred Securities, except that, if a Debenture Event of Default
has occurred and is continuing, the Preferred Securities shall have a priority
over the Common Securities.
Section 9.5. Mergers, Consolidations, Amalgamations or Replacements of the
Trust.
The Trust may not merge with or into, consolidate, amalgamate, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other body, except pursuant
to this Section 9.5. At the request of the Depositor, with the consent of the
Administrative Trustees and without the consent of the holders of the
Preferred Securities, the Trust may merge with or into, consolidate,
amalgamate, or be replaced by or convey, transfer or lease its properties and
assets substantially as an entirety to a trust organized as such under the
laws of any State; provided, that (i) such successor entity either (a)
expressly assumes all of the obligations of the Trust with respect to the
Preferred Securities or (b) substitutes for the Preferred Securities other
securities having substantially the same terms as the Preferred Securities
(the "Successor Securities") so long as the Successor Securities rank the same
as the Preferred Securities rank in priority with respect to distributions and
payments upon liquidation, redemption and otherwise, (ii) the Depositor
expressly appoints a trustee of such successor entity possessing the same
powers and duties as the Property Trustee as the holder of the Debentures,
(iii) the Successor Securities are listed or traded, or any Successor
Securities will be listed upon notification of issuance, on any national
securities exchange or other organization on which the Preferred Securities
are then listed or traded, if any, (iv) such merger, consolidation,
amalgamation, replacement, conveyance, transfer or lease does not cause the
Preferred Securities (including any Successor Securities) to be downgraded by
any nationally recognized statistical rating organization, (v) such merger,
consolidation, amalgamation, replacement,
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conveyance, transfer or lease does not adversely affect the rights,
preferences and privileges of the holders of the Preferred Securities
(including any Successor Securities) in any material respect, (vi) such
successor entity has a purpose identical to that of the Trust, (vii) prior to
such merger, consolidation, amalgamation, replacement, conveyance, transfer or
lease, the Depositor has received an Opinion of Counsel to the effect that (a)
such merger, consolidation, amalgamation, replacement, conveyance, transfer or
lease does not adversely affect the rights, preferences and privileges of the
holders of the Preferred Securities (including any Successor Securities) in
any material respect, and (b) following such merger, consolidation,
amalgamation, replacement, conveyance, transfer or lease, neither the Trust
nor such successor entity will be required to register as an investment
company under the 1940 Act and (viii) the Depositor owns all of the Common
Securities of such successor entity and guarantees the obligations of such
successor entity under the Successor Securities at least to the extent
provided by the Guarantee. Notwithstanding the foregoing, the Trust shall not,
except with the consent of holders of 100% in Liquidation Amount of the
Preferred Securities, consolidate, amalgamate, merge with or into, or be
replaced by or convey, transfer or lease its properties and assets
substantially as an entirety to any other entity or permit any other entity to
consolidate, amalgamate, merge with or into, or replace it if such
consolidation, amalgamation, merger, replacement, conveyance, transfer or
lease would cause the Trust or the successor entity to be classified as other
than a grantor trust for United States Federal income tax purposes.
ARTICLE X.
Miscellaneous Provisions
Section 10.1. Limitation of Rights of Securityholders.
The death or incapacity of any person having an interest, beneficial or
otherwise, in Trust Securities shall not operate to terminate this Trust
Agreement, nor entitle the legal representatives or heirs of such person or
any Securityholder for such person, to claim an accounting, take any action or
bring any proceeding in any court for a partition or winding up of the
arrangements contemplated hereby, nor otherwise affect the rights, obligations
and liabilities of the parties hereto or any of them.
Section 10.2. Amendment.
(a) This Trust Agreement may be amended from time to time by the Trustees
and the Depositor, without the consent of any Securityholders, (i) to cure any
ambiguity, correct or supplement any provision herein which may be
inconsistent with any other provision herein, or to make any other provisions
with respect to matters or questions arising under this Trust Agreement, which
shall not be inconsistent with the other provisions of this Trust Agreement,
or (ii) to modify, eliminate or add to any provisions of this Trust Agreement
to such extent as shall be necessary to ensure that the Trust will be
classified for United States Federal income tax purposes as a grantor trust at
all times that any Trust Securities are outstanding or to ensure that the
Trust will not be required to register as an investment company under the 1940
Act; provided, however, that in the case of clause (i), such action shall not
adversely affect in any material respect the interests of any Securityholder,
and any amendments of this Trust Agreement shall become effective when notice
thereof is given to the Securityholders.
(b) Except as provided in Section 10.2(c) hereof, any provision of this
Trust Agreement may be amended by the Trustees and the Depositor with (i) the
consent of Trust Securityholders representing not less than a majority (based
upon Liquidation Amounts) of the Trust Securities then Outstanding and (ii)
receipt by the Trustees of an Opinion of Counsel to the effect that such
amendment or the exercise of any power granted to the Trustees in accordance
with such amendment will not affect the Trust's status as a grantor trust for
United States Federal income tax purposes or the Trust's exemption from status
of an investment company under the 1940 Act.
(c) In addition to and notwithstanding any other provision in this Trust
Agreement, without the consent of each affected Securityholder (such consent
being obtained in accordance with Section 6.3
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or 6.6 hereof), this Trust Agreement may not be amended to (i) change the
amount or timing of any Distribution on the Trust Securities or otherwise
adversely affect the amount of any Distribution required to be made in respect
of the Trust Securities as of a specified date or (a) restrict the right of a
Securityholder to institute suit for the enforcement of any such payment on or
after such date; notwithstanding any other provision herein, without the
unanimous consent of the Securityholders (such consent being obtained in
accordance with Section 6.3 or 6.6 hereof), this paragraph (c) of this Section
10.2 may not be amended.
(d) Notwithstanding any other provisions of this Trust Agreement, no Trustee
shall enter into or consent to any amendment to this Trust Agreement which
would cause the Trust to fail or cease to qualify for the exemption from
status of an investment company under the 1940 Act or fail or cease to be
classified as a grantor trust for United States Federal income tax purposes.
(e) Notwithstanding anything in this Trust Agreement to the contrary,
without the consent of the Depositor, this Trust Agreement may not be amended
in a manner which imposes any additional obligation on the Depositor.
(f) In the event that any amendment to this Trust Agreement is made, the
Administrative Trustees shall promptly provide to the Depositor a copy of such
amendment.
(g) Neither the Property Trustee nor the Delaware Trustee shall be required
to enter into any amendment to this Trust Agreement which affects its own
rights, duties or immunities under this Trust Agreement. The Property Trustee
shall be entitled to receive an Opinion of Counsel and an Officers'
Certificate stating that any amendment to this Trust Agreement is in
compliance with this Trust Agreement.
Section 10.3. Separability.
In case any provision in this Trust Agreement or in the Trust Securities
Certificates shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way
be affected or impaired thereby.
Section 10.4. Governing Law.
This Trust Agreement and the rights and obligations of each of the
Securityholders, the Trust and the Trustees with respect to this Trust
Agreement and the Trust Securities shall be construed in accordance with and
governed by the laws of the State of Delaware.
Section 10.5. Payments Due on Non-Business Day.
If the date fixed for any payment on any Trust Security shall be a day that
is not a Business Day, then such payment need not be made on such date but may
be made on the next succeeding day that is a Business Day (except as otherwise
provided in Sections 4.1(a) and 4.2(d)), with the same force and effect as
though made on the date fixed for such payment, and no interest shall accrue
thereon for the period after such date.
Section 10.6. Successors.
This Trust Agreement shall be binding upon and shall inure to the benefit of
any successor to the Depositor, the Trust or the Relevant Trustee, including
any successor by operation of law. Except in connection with a consolidation,
merger or sale involving the Depositor that is permitted under Article Eight
of the Indenture and pursuant to which the assignee agrees in writing to
perform the Depositor's obligations hereunder, the Depositor shall not assign
its obligations hereunder.
Section 10.7. Headings.
The Article and Section headings are for convenience only and shall not
affect the construction of this Trust Agreement.
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Section 10.8. Reports, Notices and Demands.
Any report, notice, demand or other communication which by any provision of
this Trust Agreement is required or permitted to be given or served to or upon
any Securityholder or the Depositor may be given or served in writing by
deposit thereof, first-class postage prepaid, in the United States mail, hand
delivery or facsimile transmission, in each case, addressed, (a) in the case
of a Preferred Securityholder, to such Preferred Securityholder as such
Securityholder's name and address may appear on the Securities Register; and
(b) in the case of the Common Securityholder or the Depositor, to Lincoln
National Corporation, 200 East Berry Street, Fort Wayne, Indiana 46802-2706,
Attention: Treasurer, facsimile no.: (219) 455 . Any notice to Preferred
Securityholders shall also be given to such owners as have, within two years
preceding the giving of such notice, filed their names and addresses with the
Property Trustee for that purpose. Such notice, demand or other communication
to or upon a Securityholder shall be deemed to have been sufficiently given or
made, for all purposes, upon hand delivery, mailing or transmission.
Any notice, demand or other communication which by any provision of this
Trust Agreement is required or permitted to be given or served to or upon the
Trust, the Property Trustee or the Administrative Trustees shall be given in
writing addressed (until another address is published by the Trust) as
follows: (a) with respect to the Property Trustee to The First National Bank
of Chicago, Attention: Corporate Trust Department; (b) with respect to the
Delaware Trustee, to First Chicago Delaware Inc., Delaware, Attention:
Corporate Trust Department; and (c) with respect to the Administrative
Trustees, to them at the address above for notices to the Depositor, marked
"Attention Administrative Trustees of Lincoln National Capital I." Such
notice, demand or other communication to or upon the Trust or the Property
Trustee shall be deemed to have been sufficiently given or made only upon
actual receipt of the writing by the Trust or the Property Trustee.
Section 10.9 Agreement Not to Petition.
Each of the Trustees and the Depositor agree for the benefit of the
Securityholders that, until at least one year and one day after the Trust has
been terminated in accordance with Article IX, they shall not file, or join in
the filing of, a petition against the Trust under any bankruptcy, insolvency,
reorganization or other similar law (including, without limitation, the United
States Bankruptcy Code) (collectively, "Bankruptcy Laws") or otherwise join in
the commencement of any proceeding against the Trust under any Bankruptcy Law.
In the event the Depositor takes action in violation of this Section 10.9, the
Property Trustee agrees, for the benefit of Securityholders, that at the
expense of the Depositor, it shall file an answer with the bankruptcy court or
otherwise properly contest the filing of such petition by the Depositor
against the Trust or the commencement of such action and raise the defense
that the Depositor has agreed in writing not to take such action and should be
stopped and precluded therefrom and such other defenses, if any, as counsel
for the Trustee or the Trust may assert. The provisions of this Section 10.9
shall survive the termination of this Trust Agreement.
Section 10.10 Trust Indenture Act; Conflict with Trust Indenture Act.
(a) This Trust Agreement is subject to the provisions of the Trust Indenture
Act that are required to be part of this Trust Agreement and shall, to the
extent applicable, be governed by such provisions.
(b) The Property Trustee shall be the only Trustee which is a trustee for
the purposes of the Trust Indenture Act.
(c) If any provision hereof limits, qualifies or conflicts with another
provision hereof which is required to be included in this Trust Agreement by
any of the provisions of the Trust Indenture Act, such required provision
shall control. If any provision of this Trust Agreement modifies or excludes
any provision of the Trust Indenture Act which may be so modified or excluded,
the latter provision shall be deemed to apply to this Trust Agreement as so
modified or excluded, as the case may be.
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(d) The application of the Trust Indenture Act to this Trust Agreement shall
not affect the nature of the Securities as equity securities representing
undivided beneficial interests in the assets of the Trust.
Section 10.11 Acceptance of Terms of Trust Agreement, Guarantee and
Indenture.
THE RECEIPT AND ACCEPTANCE OF A TRUST SECURITY OR ANY INTEREST THEREIN BY OR
ON BEHALF OF A SECURITYHOLDER OR ANY BENEFICIAL OWNER, WITHOUT ANY SIGNATURE
OR FURTHER MANIFESTATION OF ASSENT, SHALL CONSTITUTE THE UNCONDITIONAL
ACCEPTANCE BY THE SECURITYHOLDER AND ALL OTHERS HAVING A BENEFICIAL INTEREST
IN SUCH TRUST SECURITY OF ALL THE TERMS AND PROVISIONS OF THIS TRUST AGREEMENT
AND AGREEMENT TO THE SUBORDINATION PROVISIONS AND OTHER TERMS OF THE GUARANTEE
AND THE INDENTURE, AND SHALL CONSTITUTE THE AGREEMENT OF THE TRUST, SUCH
SECURITYHOLDER AND SUCH OTHERS THAT THE TERMS AND PROVISIONS OF THIS TRUST
AGREEMENT SHALL BE BINDING, OPERATIVE AND EFFECTIVE AS BETWEEN THE TRUST AND
SUCH SECURITYHOLDER AND SUCH OTHERS.
Lincoln National Corporation
By:__________________________________
Name:
Title:
The First National Bank of Chicago
-------------------------------------
as Property Trustee
First Chicago Delaware Inc.
-------------------------------------
as Delaware Trustee
By:__________________________________
Name:
Title:
-------------------------------------
as Administrative Trustee
-------------------------------------
as Administrative Trustee
38
<PAGE>
EXHIBIT A
CERTIFICATE OF TRUST
OF
LINCOLN NATIONAL CAPITAL I
This Certificate of Trust of Lincoln National Capital I (the "Trust"), dated
, 1996, is being duly executed and filed by the undersigned, as
trustees, to form a business trust under the Delaware Business Trust Act (12
Del. C. ((S)) 3801 et seq.).
1. Name. The name of the business trust being formed hereby is Lincoln
National Capital I.
2. Delaware Trustee. The name and business address of the trustee of the
Trust with a principal place of business in the State of Delaware are First
Chicago Delaware, Inc., , Delaware, Attention: Corporate Trust
Department.
3. Effective Date. This Certificate of Trust shall be effective as of its
filing.
In Witness Whereof, the undersigned, being the sole trustee of the Trust,
has executed this Certificate of Trust as of the date first above written.
-------------------------------------
,
as Trustee
By: _________________________________
Name:
Title:
A-1
<PAGE>
EXHIBIT B
,
The Depository Trust Company,
55 Water Street, 49th Floor,
New York, New York 10041-0099
Attention:
General Counsel's Office
Re: Lincoln National Capital I % Cumulative Quarterly Income Preferred
Securities, Series A
Ladies and Gentlemen:
The purpose of this letter is to set forth certain matters relating to the
issuance and deposit with The Depository Trust Company ("DTC") of the Lincoln
National Capital I % Cumulative Quarterly Income Preferred Securities,
Series A (the "Preferred Securities"), of Lincoln National Capital I, a
Delaware business trust (the "Issuer"), formed pursuant to a Trust Agreement
between Lincoln National Corporation ("Lincoln") and , as
Trustee. The payment of distributions on the Preferred Securities, and
payments due upon liquidation of Issuer or redemption of the Preferred
Securities, to the extent the Issuer has funds available for the payment
thereof are guaranteed by Lincoln to the extent set forth in a Guarantee
Agreement dated , by Lincoln with respect to the Preferred
Securities. Lincoln and the Issuer propose to sell the Preferred Securities to
certain Underwriters (the "Underwriters") pursuant to an Underwriting
Agreement dated , 1996 by and among the Underwriters, the Issuer
and Lincoln dated , , and the Underwriters wish to take
delivery of the Preferred Securities through DTC. is acting as
transfer agent and registrar with respect to the Preferred Securities (the
"Transfer Agent and Registrar").
To induce DTC to accept the Preferred Securities as eligible for deposit at
DTC, and to act in accordance with DTC's rules with respect to the Preferred
Securities, the Issuer, the Transfer Agent and Registrar and DTC agree among
each other as follows:
1. Prior to the closing of the sale of the Preferred Securities to the
Underwriters, which is expected to occur on or about , ,
there shall be deposited with DTC one or more global certificates
(individually and collectively, the "Global Certificate") registered in the
name of DTC's Preferred Securities nominee, Cede & Co., representing an
aggregate of Preferred Securities and bearing the following
legend:
Unless this certificate is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC"), to Issuer
or its agent for registration of transfer, exchange, or payment, and
any certificate issued is registered in the name of Cede & Co. or in
such other name as is requested by an authorized representative of DTC
(and any payment is made to Cede & Co. or to such other entity as is
requested by an authorized representative of DTC), ANY TRANSFER,
PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an
interest herein.
2. The Amended and Restated Trust Agreement of the Issuer provides for
the voting by holders of the Preferred Securities under certain limited
circumstances. The Issuer shall establish a record date for such purposes
and shall, to the extent possible, give DTC notice of such record date not
less than 15 calendar days in advance of such record date.
B-1
<PAGE>
3. In the event of a stock split, conversion, recapitalization,
reorganization or any other similar transaction resulting in the
cancellation of all or any part of the Preferred Securities outstanding,
the Issuer or the Transfer Agent and Registrar shall send DTC a notice of
such event at least 5 business days prior to the effective date of such
event.
4. In the event of distribution on, or an offering or issuance of rights
with respect to, the Preferred Securities outstanding, the Issuer or the
Transfer Agent and Registrar shall send DTC a notice specifying: (a) the
amount of and conditions, if any, applicable to the payment of any such
distribution or any such offering or issuance of rights; (b) any applicable
expiration or deadline date, or any date by which any action on the part of
the holders of Preferred Securities is required; and (c) the date any
required notice is to be mailed by or on behalf of the Issuer to holders of
Preferred Securities or published by or on behalf of the Issuer (whether by
mail or publication, the "Publication Date"). Such notice shall be sent to
DTC by a secure means (e.g., legible telecopy, registered or certified
mail, overnight delivery) in a timely manner designed to assure that such
notice is in DTC's possession no later than the close of business on the
business day before the Publication Date. The Issuer or the Transfer Agent
and Registrar will forward such notice either in a separate secure
transmission for each CUSIP number or in a secure transmission of multiple
CUSIP numbers (if applicable) that includes a manifest or list of each
CUSIP number submitted in that transmission. (The party sending such notice
shall have a method to verify subsequently the use of such means and the
timeliness of such notice.) The Publication Date shall be not less than 30
calendar days nor more than 60 calendar days prior to the payment of any
such distribution or any such offering or issuance of rights with respect
to the Preferred Securities. After establishing the amount of payment to be
made on the Preferred Securities, the Issuer or the Transfer Agent and
Registrar will notify DTC's Dividend Department of such payment 5 business
days prior to payment date. Notices to DTC's Dividend Department by
telecopy shall be sent to (212) 709-1723. Such notices by mail or by any
other means shall be sent to:
Manager, Announcements
Dividend Department
The Depository Trust Company
7 Hanover Square, 23rd Floor
New York, New York 10004-2695
The Issuer or the Transfer Agent and Registrar shall confirm DTC's
receipt of such telecopy by telephoning the Dividend Department at (212)
709-1270.
5. In the event of a redemption by the Issuer of the Preferred
Securities, notice specifying the terms of the redemption and the
Publication Date of such notice shall be sent by the Issuer or the Transfer
Agent and Registrar to DTC not less than 30 calendar days prior to such
event by a secure means in the manner set forth in paragraph 4. Such
redemption notice shall be sent to DTC's Call Notification Department at
(516) 227-4164 or (516) 227-4190, and receipt of such notice shall be
confirmed by telephoning (516) 227-4070. Notice by mail or by any other
means shall be sent to:
Call Notification Department
The Depository Trust Company
711 Stewart Avenue
Garden City, New York 11530-4719
6. In the event of any invitation to tender the Preferred Securities,
notice specifying the terms of the tender and the Publication Date of such
notice shall be sent by the Issuer or the Transfer Agent and Registrar to
DTC by a secure means and in a timely manner as described in paragraph 4.
Notices to DTC pursuant to this paragraph and notices of other corporate
actions (including mandatory tenders, exchanges and capital changes) shall
be sent, unless notification to another
B-2
<PAGE>
department is expressly provided for herein, by telecopy to DTC's
Reorganization Department at (212) 709-1093 or (212) 709-1094 and receipt
of such notice shall be confirmed by telephoning (212) 709-6884, or by mail
or any other means to:
Manager, Reorganization Department
Reorganization Window
The Depository Trust Company
7 Hanover Square, 23rd Floor
New York, New York 10004-2695
7. All notices and payment advices sent to DTC shall contain the CUSIP
number or numbers of the Preferred Securities and the accompanying
designation of the Preferred Securities, which, as of the date of this
letter, is "Lincoln National Capital I % Cumulative Quarterly Income
Preferred Securities, Series A.
8. Distribution payments or other cash payments with respect to the
Preferred Securities evidenced by the Global Certificate shall be received
by Cede & Co., as nominee of DTC, or its registered assigns in next day
funds on each payment date (or in accordance with existing arrangements
between the Issuer or the Transfer Agent and Registrar and DTC). Such
payments shall be made payable to the order of Cede & Co., and shall be
addressed as follows:
NDFS Redemption Department
The Depository Trust Company
7 Hanover Square, 23rd Floor
New York, New York 10004-2695
9. DTC may by prior written notice direct the Issuer and the Transfer
Agent and Registrar to use any other telecopy number or address of DTC as
the number or address to which notices or payments may be sent.
10. In the event of a conversion, redemption, or any other similar
transaction (e.g., tender made and accepted in response to the Issuer's or
the Transfer Agent and Registrar's invitation) necessitating a reduction in
the aggregate number of Preferred Securities outstanding evidenced by
Global Certificates, DTC, in its discretion: (a) may request the Issuer or
the Transfer Agent and Registrar to issue and countersign a new Global
Certificate; or (b) may make an appropriate notation on the Global
Certificate indicating the date and amount of such reduction.
11. DTC may discontinue its services as a securities depositary with
respect to the Preferred Securities at any time by giving at least 90 days'
prior written notice to the Issuer and the Transfer Agent and Registrar (at
which time DTC will confirm with the Issuer or the Transfer Agent and
Registrar the aggregate number of Preferred Securities deposited with it)
and discharging its responsibilities with respect thereto under applicable
law. Under such circumstances, the Issuer may determine to make alternative
arrangements for book-entry settlement for the Preferred Securities, make
available one or more separate global certificates evidencing Preferred
Securities to any Participant having Preferred Securities credited to its
DTC account, or issue definitive Preferred Securities to the beneficial
holders thereof, and in any such case, DTC agrees to cooperate fully with
the Issuer and the Transfer Agent and Registrar, and to return the Global
Certificate, duly endorsed for transfer as directed by the Issuer or the
Transfer Agent and Registrar, together with any other documents of transfer
reasonably requested by the Issuer or the Transfer Agent and Registrar.
12. In the event that the Issuer determines that beneficial owners of
Preferred Securities shall be able to obtain definitive Preferred
Securities, the Issuer or the Transfer Agent and Registrar shall notify DTC
of the availability of certificates. In such event, the Issuer or the
Transfer Agent and Registrar shall issue, transfer and exchange
certificates in appropriate amounts, as required by DTC and others, and DTC
agrees to cooperate fully with the Issuer and the Transfer Agent and
Registrar and to return the Global Certificate, duly endorsed for transfer
as directed by the
B-3
<PAGE>
Issuer or the Transfer Agent and Registrar, together with any other
documents of transfer reasonably requested by the Issuer or the Transfer
Agent and Registrar.
13. This letter may be executed in any number of counterparts, each of
which when so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
Nothing herein shall be deemed to require the Transfer Agent and Registrar
to advance funds on behalf of Lincoln National Capital I.
Very truly yours,
Lincoln National Capital I
(As Issuer)
[Name of Trustee]
By:__________________________________
Administrative Trustee
By:__________________________________
Name:
Title:
-------------------------------------
(As Transfer Agent and Registrar)
By:__________________________________
Name:
Title:
Received and Accepted:
The Depository Trust Company
By:__________________________________
Authorized Officer
B-4
<PAGE>
EXHIBIT C
THIS CERTIFICATE IS NOT TRANSFERABLE
CERTIFICATE NUMBER NUMBER OF COMMON SECURITIES
C-1
CERTIFICATE EVIDENCING COMMON SECURITIES
OF
LINCOLN NATIONAL CAPITAL I
% COMMON SECURITIES
(LIQUIDATION AMOUNT $25 PER COMMON SECURITY)
Lincoln National Capital I, a statutory business trust formed under the laws
of the State of Delaware (the "Trust"), hereby certifies that Lincoln National
Corporation (the "Holder") is the registered owner of ( ) common
securities of the Trust representing beneficial interests of the Trust and
designated the % Common Securities (liquidation amount $25 per Common
Security) (the "Common Securities"). In accordance with Section 5.10 of the
Trust Agreement (as defined below) the Common Securities are not transferable
and any attempted transfer hereof shall be void. The designations, rights,
privileges, restrictions, preferences and other terms and provisions of the
Common Securities are set forth in, and this certificate and the Common
Securities represented hereby are issued and shall in all respects be subject
to the terms and provisions of, the Amended and Restated Trust Agreement of
the Trust dated as of , , as the same may be amended from
time to time (the "Trust Agreement") including the designation of the terms of
the Common Securities as set forth therein. The Trust will furnish a copy of
the Trust Agreement to the Holder without charge upon written request to the
Trust at its principal place of business or registered office.
Upon receipt of this certificate, the Holder is bound by the Trust Agreement
and is entitled to the benefits thereunder.
In Witness Whereof, one of the Administrative Trustees of the Trust has
executed this certificate this day of , .
Lincoln National Capital I
By: _________________________________
Name:
Administrative Trustee
C-1
<PAGE>
EXHIBIT D
AGREEMENT AS TO EXPENSES AND LIABILITIES
Agreement dated as of 1996, between Lincoln National
Corporation, an Indiana corporation ("Lincoln"), and Lincoln National Capital
I, a Delaware business trust (the "Trust").
Whereas, the Trust intends to issue its Common Securities (the "Common
Securities") to and receive Debentures from Lincoln and to issue and sell
% Cumulative Quarterly Income Preferred Securities (the "Preferred
Securities") with such powers, preferences and special rights and restrictions
as are set forth in the Amended and Restated Trust Agreement of the Trust
dated as of , 1996 as the same may be amended from time to time
(the "Trust Agreement");
Whereas, Lincoln will directly or indirectly own all of the Common
Securities of the Trust and will issue the Debentures;
Now, Therefore, in consideration of the purchase by each holder of the
Preferred Securities, which purchase Lincoln hereby agrees shall benefit
Lincoln and which purchase Lincoln acknowledges will be made in reliance upon
the execution and delivery of this Agreement, Lincoln and Trust hereby agree
as follows:
ARTICLE I
Section 1.1. Guarantee by Lincoln.
Subject to the terms and conditions hereof, Lincoln hereby irrevocably and
unconditionally guarantees to each person or entity to whom the Trust is now
or hereafter becomes indebted or liable (the "Beneficiaries") the full
payment, when and as due, of any and all Obligations (as hereinafter defined)
to such Beneficiaries. As used herein, "Obligations" means any costs, expenses
or liabilities of the Trust, other than obligations of the Trust to pay to
holders of any Preferred Securities or other similar interests in the Trust
the amounts due such holders pursuant to the terms of the Preferred Securities
or such other similar interests, as the case may be. This Agreement is
intended to be for the benefit of, and to be enforceable by, all such
Beneficiaries, whether or not such Beneficiaries have received notice hereof.
Section 1.2. Term of Agreement.
This Agreement shall terminate and be of no further force and effect upon
the later of (a) the date on which full payment has been made of all amounts
payable to all holders of all the Preferred Securities (whether upon
redemption, liquidation, exchange or otherwise) and (b) the date on which
there are no Beneficiaries remaining; provided, however, that this Agreement
shall continue to be effective or shall be reinstated, as the case may be, if
at any time any holder of Preferred Securities or any Beneficiary must restore
payment of any sums paid under the Preferred Securities, under any Obligation,
under the Guarantee Agreement dated the date hereof by Lincoln and The First
National Bank of Chicago as guarantee trustee or under this Agreement for any
reason whatsoever. This Agreement is continuing, irrevocable, unconditional
and absolute.
Section 1.3. Waiver of Notice.
Lincoln hereby waives notice of acceptance of this Agreement and of any
Obligation to which it applies or may apply, and Lincoln hereby waives
presentment, demand for payment, protest, notice of nonpayment, notice of
dishonor, notice of redemption and all other notices and demands.
D-1
<PAGE>
Section 1.4. No Impairment.
The obligations, covenants, agreements and duties of Lincoln under this
Agreement shall in no way be affected or impaired by reason of the happening
from time to time of any of the following:
(a) the extension of time for the payment by the Trust of all or any
portion of the Obligations or for the performance of any other obligation
under, arising out of, or in connection with, the obligations;
(b) any failure, omission, delay or lack of diligence on the part of the
Beneficiaries to enforce, assert or exercise any right, privilege, power or
remedy conferred on the Beneficiaries with respect to the Obligations or
any action on the part of the Trust granting indulgence or extension of any
kind; or
(c) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangement, composition or
readjustment of debt or, or other similar proceedings affecting, the Trust
or any of the assets of the Trust.
There shall be no obligation of the Beneficiaries to give notice to, or obtain
the consent of, Lincoln with respect to the happening of any of the foregoing.
Section 1.5. Enforcement.
A Beneficiary may enforce this Agreement directly against Lincoln and
Lincoln waives any right or remedy to require that any action be brought
against the Trust or any other person or entity before proceeding against
Lincoln.
Section 1.6. Subrogation.
Lincoln shall be subrogated to all (if any) rights of the Trust in respect
of any amounts paid to the Beneficiaries by Lincoln under this Agreement;
provided, however, that Lincoln shall not (except to the extent required by
mandatory provisions of law) be entitled to enforce or exercise any rights
which it may acquire by way of subrogation or any indemnity, reimbursement or
other agreement, in all cases as a result of payment under this Agreement, if,
at the time of any such payment, any amounts are due and unpaid under this
Agreement.
ARTICLE II
Section 2.1. Binding Effect.
All guarantees and agreements contained in this Agreement shall bind the
successors, assigns, receivers, trustees and representatives of Lincoln and
shall inure to the benefit of the Beneficiaries.
Section 2.2. Amendment.
So long as there remains any Beneficiary or any Preferred Securities of any
series are outstanding, this Agreement shall not be modified or amended in any
manner adverse to such Beneficiary or to the holders of the Preferred
Securities.
Section 2.3. Notices.
Any notice, request or other communication required or permitted to be given
hereunder shall be given in writing by delivering the same against receipt
therefor by facsimile transmission (confirmed by
D-2
<PAGE>
mail), telex or by registered or certified mail, addressed as follows (and if
so given, shall be deemed given when mailed or upon receipt of an answer-back,
if sent by telex):
Lincoln National Capital I
Wilmington, Delaware
Facsimile No.: (302) 651-8882
Attention: Corporate Trust Department
Lincoln National Corporation
200 East Berry Street
Fort Wayne, Indiana 46802
Facsimile No.: ( ) -
Attention:
Section 2.4. This agreement shall be governed by and construed and
interpreted in accordance with the laws of the State of New York.
This Agreement is executed as of the day and year first above written.
Lincoln National Corporation
By:
Name:
Title:
Lincoln National Capital I
By:
Name:
Administrative Trustee
D-3
<PAGE>
EXHIBIT E
If the Preferred Security is to be a Global Certificate Insert--This
Preferred Security is a Global Certificate within the meaning of the Trust
Agreement hereinafter referred to and is registered in the name of The
Depository Trust Company (the "Depository") or a nominee of the Depository.
This Preferred Security is exchangeable for Preferred Securities registered in
the name of a person other than the Depository or its nominee only in the
limited circumstances described in the Trust Agreement and no transfer of this
Preferred Security (other than a transfer of this Preferred Security as a
whole by the Depository to a nominee of the Depository or by a nominee of the
Depository to the Depository or another nominee of the Depository) may be
registered except in limited circumstances.
Unless this Preferred Security is presented by an authorized representative
of The Depository Trust Company (55 Water Street, New York) to Lincoln
National Capital I or its agent for registration of transfer, exchange or
payment, and any Preferred Security issued is registered in the name of Cede &
Co. or such other name as requested by an authorized representative of The
Depository Trust Company and any payment hereon is made to Cede & Co., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
CERTIFICATE NUMBER NUMBER OF PREFERRED SECURITIES
P-
CUSIP NO.
CERTIFICATE EVIDENCING PREFERRED SECURITIES
OF
LINCOLN NATIONAL CAPITAL I
% CUMULATIVE [QUARTERLY] INCOME PREFERRED SECURITIES,
SERIES
(LIQUIDATION AMOUNT $25 PER PREFERRED SECURITY)
Lincoln National Capital I, a statutory business trust formed under the laws
of the State of Delaware (the "Trust"), hereby certifies that
(the "Holder") is the registered owner of
( ) preferred securities of the Trust representing an undivided beneficial
interest in the assets of the Trust and designated the Lincoln National
Capital I % Cumulative [Quarterly] Income Preferred Securities, Series
(liquidation amount $25 per Preferred Security) (the "Preferred
Securities"). The Preferred Securities are transferable on the books and
records of the Trust, in person or by a duly authorized attorney, upon
surrender of this certificate duly endorsed and in proper form for transfer as
provided in Section 5.4 of the Trust Agreement (as defined below). The
designations, rights, privileges, restrictions, preferences and other terms
and provisions of the Preferred Securities are set forth in, and this
certificate and the Preferred Securities represented hereby are issued and
shall in all respects be subject to the terms and provisions of, the Amended
and Restated Trust Agreement of the Trust dated as of , , as
the same may be amended from time to time (the "Trust Agreement") including
the designation of the terms of Preferred Securities as set forth therein. The
Holder is entitled to the benefits of the Guarantee Agreement entered into by
Lincoln National Corporation, an Indiana corporation, and The First National
Bank of Chicago, as guarantee trustee, dated as of May 1, 1996, (the
"Guarantee"), to the extent provided therein. The Trust will furnish a copy of
the Trust Agreement and the Guarantee to the Holder without charge upon
written request to the Trust at its principal place of business or registered
office.
E-1
<PAGE>
Upon receipt of this certificate, the Holder is bound by the Trust Agreement
and is entitled to the benefits thereunder.
In Wtness Wereof, one of the Administrative Trustees of the Trust has
executed this certificate this day of , .
Lincoln National Capital I
By: _________________________________
Name:
Administrative Trustee
E-2
<PAGE>
ASSIGNMENT
For Value Received, the undersigned assigns and transfers this Preferred
Security to:
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(Insert assignee's social security or tax identification number)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(Insert address and zip code of assignee)
and irrevocably appoints
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
agent to transfer this Preferred Security Certificate on the books of the
Trust. The agent may substitute another to act for him or her.
Date: _______________________________
Signature: ____________________________________________________________________
(Sign exactly as your name appears on the other side of this Preferred
Security Certificate)
- -------------------------------------------------------------------------------
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
S.E.C. Rule 17Ad-15.
E-3
<PAGE>
- --------------------------------------------------------------------------------
GUARANTEE AGREEMENT
BETWEEN
LINCOLN NATIONAL CORPORATION
(AS GUARANTOR)
AND
THE FIRST NATIONAL BANK OF CHICAGO
(AS TRUSTEE)
DATED AS OF
MAY 1, 1996
- --------------------------------------------------------------------------------
<PAGE>
CROSS-REFERENCE TABLE*
<TABLE>
<CAPTION>
SECTION OF
TRUST INDENTURE ACT SECTION OF
OF 1939, AS AMENDED GUARANTEE AGREEMENT
- ------------------- -------------------
<S> <C>
310(a)...................................................... 4.1(a)
310(b)...................................................... 4.1(c), 2.8
310(c)...................................................... Inapplicable
311(a)...................................................... 2.2(b)
311(b)...................................................... 2.2(b)
311(c)...................................................... Inapplicable
312(a)...................................................... 2.2(a)
312(b)...................................................... 2.2(b)
313......................................................... 2.3
314(a)...................................................... 2.4
314(b)...................................................... Inapplicable
314(c)...................................................... 2.5
314(d)...................................................... Inapplicable
314(e)...................................................... 1.1, 2.5, 3.2
314(f)...................................................... 2.1, 3.2
315(a)...................................................... 3.1(d)
315(b)...................................................... 2.7
315(c)...................................................... 3.1
315(d)...................................................... 3.1(d)
316(a)...................................................... 1.1, 2.6, 5.4
316(b)...................................................... 5.3
316(c)...................................................... 8.2
317(a)...................................................... Inapplicable
317(b)...................................................... Inapplicable
318(a)...................................................... 2.1(b)
318(b)...................................................... 2.1
318(c)...................................................... 2.1(a)
</TABLE>
- --------
* This Cross-Reference Table does not constitute part of the Guarantee
Agreement and shall not affect the interpretation of any of its terms or
provisions.
i
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE I. DEFINITIONS ................................................... 1
Section 1.1. Definitions ............................................... 1
ARTICLE II. TRUST INDENTURE ACT .......................................... 3
Section 2.1. Trust Indenture Act; Application .......................... 3
Section 2.2. List of Holders ........................................... 3
Section 2.3. Reports by the Guarantee Trustee .......................... 4
Section 2.4. Periodic Reports to Guarantee Trustee ..................... 4
Section 2.5. Evidence of Compliance with Conditions Precedent .......... 4
Section 2.6. Events of Default; Waiver ................................. 4
Section 2.7. Event of Default; Notice .................................. 4
Section 2.8. Conflicting Interests ..................................... 4
ARTICLE III. POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE .......... 5
Section 3.1. Powers and Duties of the Guarantee Trustee ................ 5
Section 3.2. Certain Rights of Guarantee Trustee ....................... 6
Section 3.3. Indemnity ................................................. 7
ARTICLE IV. GUARANTEE TRUSTEE ............................................ 7
Section 4.1. Guarantee Trustee; Eligibility ............................ 7
Section 4.2. Appointment, Removal and Resignation of the Guarantee
Trustee ............................................................... 7
ARTICLE V. GUARANTEE ..................................................... 8
Section 5.1. Guarantee ................................................. 8
Section 5.2. Waiver of Notice and Demand ............................... 8
Section 5.3. Obligations Not Affected .................................. 8
Section 5.4. Rights of Holders ......................................... 8
Section 5.5. Guarantee of Payment ...................................... 9
Section 5.6. Subrogation ............................................... 9
Section 5.7. Independent Obligations ................................... 9
ARTICLE VI. COVENANTS AND SUBORDINATION .................................. 9
Section 6.1. Subordination ............................................. 9
Section 6.2. Pari Passu Guarantees ..................................... 9
ARTICLE VII. TERMINATION ................................................. 9
Section 7.1. Termination ............................................... 9
ARTICLE VIII. MISCELLANEOUS .............................................. 10
Section 8.1. Successors and Assigns .................................... 10
Section 8.2. Amendments ................................................ 10
Section 8.3. Notices ................................................... 10
Section 8.4. Benefit ................................................... 11
Section 8.5. Interpretation ............................................ 11
Section 8.6. Governing Law ............................................. 11
</TABLE>
ii
<PAGE>
GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT, dated as of May 1, 1996, is executed and delivered
by LINCOLN NATIONAL CORPORATION, an Indiana corporation (the "Guarantor")
having its principal office at 200 East Berry Street, Fort Wayne, Indiana
46802-2706, and THE FIRST NATIONAL BANK OF CHICAGO, a national banking
corporation, as trustee (the "Guarantee Trustee"), for the benefit of the
Holders (as defined herein) from time to time of the Preferred Securities (as
defined herein) of Lincoln Capital I, a Delaware statutory business trust (the
"Issuer").
WHEREAS, pursuant to an Amended and Restated Trust Agreement (the "Trust
Agreement"), dated as of , 1996 among the Issuer Trustees named therein,
the Guarantor, as Depositor, and the Holders from time to time of undivided
beneficial interests in the assets of the Issuer, the Issuer is issuing up to
$ aggregate liquidation preference of its % Preferred Securities, Series
liquidation preference $25 per preferred security) (the "Preferred
Securities") representing preferred undivided beneficial interests in the
assets of the Issuer and having the terms set forth in the Trust Agreement;
WHEREAS, the Preferred Securities will be issued by the Issuer and the
proceeds thereof, together with the proceeds from the issuance of the Issuer's
Common Securities (as defined below), will be used to purchase the Debentures
(as defined in the Trust Agreement) of the Guarantor which will be deposited
with The First National Bank of Chicago, as Property Trustee under the Trust
Agreement, as trust assets; and
WHEREAS, as incentive for the Holders to purchase Preferred Securities the
Guarantor desires irrevocably and unconditionally to agree, to the extent set
forth herein, to pay to the Holders of the Preferred Securities the Guarantee
Payments (as defined herein) and to make certain other payments on the terms
and conditions set forth herein.
NOW, THEREFORE, in consideration of the purchase by each Holder of Preferred
Securities, which purchase the Guarantor hereby agrees shall benefit the
Guarantor, the Guarantor executes and delivers this Guarantee Agreement for
the benefit of the Holders from time to time of the Preferred Securities.
ARTICLE I. DEFINITIONS
Section 1.1. Definitions.
As used in this Guarantee Agreement, the terms set forth below shall, unless
the context otherwise requires, have the following meanings. Capitalized or
otherwise defined terms used but not otherwise defined herein shall have the
meanings assigned to such terms in the Trust Agreement as in effect on the
date hereof.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person, provided, however, that an Affiliate of
the Guarantor shall not be deemed to include the Issuer. For the purposes of
this definition, "control" when used with respect to any specified Person
means the power to direct the management and policies of such Person, directly
or indirectly, whether through the ownership of voting securities, by contract
or otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Common Securities" means the securities representing common undivided
beneficial interests in the assets of the Issuer.
"Debt" means, with respect to any Person, whether recourse is to all or a
portion of the assets of such Person and whether or not contingent, (i) every
obligation of such Person for money borrowed; (ii) every obligation of such
Person evidenced by bonds, debentures, notes or other similar instruments,
including obligations incurred in connection with the acquisition of property,
assets or businesses; (iii) every reimbursement obligation of such Person with
respect to letters of credit, bankers' acceptances or similar
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facilities issued for the account of such Person; (iv) every obligation of
such Person issued or assumed as the deferred purchase price of property or
services (but excluding trade accounts payable or accrued liabilities arising
in the ordinary course of business); (v) every capital lease obligation of
such Person; and (vi) every obligation of the type referred to in clauses (i)
through (v) of another Person and all dividends of another Person the payment
of which, in either case, such Person has guaranteed or is responsible or
liable for, directly or indirectly, as obligor or otherwise.
"Event of Default" means a default by the Guarantor on any of its payment or
other obligations under this Guarantee Agreement; provided, however, that,
except with respect to a default in payment of any Guarantee Payments, the
Guarantor shall have received notice of default and shall not have cured such
default within 60 days after receipt of such notice.
"Guarantee Payments" means the following payments or distributions, without
duplication, with respect to the Preferred Securities, to the extent not paid
or made by or on behalf of the Issuer; (i) any accrued and unpaid
Distributions (as defined in the Trust Agreement) required to be paid on the
Preferred Securities, to the extent the Issuer shall have funds on hand
available therefor at such time, (ii) the redemption price, including all
accrued and unpaid Distributions to the date of redemption (the "Redemption
Price"), with respect to the Preferred Securities called for redemption by the
Issuer to the extent the Issuer shall have funds on hand available therefor at
such time, and (iii) upon a voluntary or involuntary termination, winding-up
or liquidation of the Issuer, unless Debentures are distributed to the
Holders, the lesser of (a) the aggregate of the liquidation preference of $25
per Preferred Security plus accrued and unpaid Distributions on the Preferred
Securities to the date of payment to the extent the Issuer shall have funds on
hand available to make such payment at such time and (b) the amount of assets
of the Issuer remaining available for distribution to Holders in liquidation
of the Issuer (in either case, the "Liquidation Distribution").
"Guarantee Trustee" means The First National Bank of Chicago, until a
Successor Guarantee Trustee has been appointed and has accepted such
appointment pursuant to the terms of this Guarantee Agreement and thereafter
means each such Successor Guarantee Trustee.
"Holder" means any holder, as registered on the books and records of the
Issuer, of any Preferred Securities; provided, however, that in determining
whether the holders of the requisite percentage of Preferred Securities have
given any request, notice, consent or waiver hereunder, "Holder" shall not
include the Guarantor, the Guarantee Trustee, or any Affiliate of the
Guarantor or the Guarantee Trustee.
"Indenture" means the Junior Subordinated Indenture dated as of May 1, 1996,
as supplemented and amended between the Guarantor and The First National Bank
of Chicago, as trustee.
"List of Holders" has the meaning specified in Section 2.2(a).
"Majority in liquidation preference of the Securities" means, except as
provided by the Trust Indenture Act, a vote by the Holder(s), voting
separately as a class, of more than 50% of the liquidation preference of all
then outstanding Preferred Securities issued by the Issuer.
"Officers' Certificate" means, with respect to any Person, a certificate
signed by the Chairman and Chief Executive Officer, President or a Vice
President, and by the Treasurer, and Associate Treasurer, an Assistant
Treasurer, the Controller, the Secretary or an Assistant Secretary of such
Person, and delivered to the Guarantee Trustee. Any Officers' Certificate
delivered with respect to compliance with a condition or covenant provided for
in this Guarantee Agreement shall include:
(a) a statement that each officer signing the Officers' Certificate has
read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers'
Certificate;
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(c) a statement that each officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(d) a statement as to whether, in the opinion of each officer, such
condition or covenant has been complied with.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever
nature.
"Responsible Officer" means, with respect to the Guarantee Trustee, any
Senior Vice President, any Vice President, any Assistant Vice President, the
Secretary, any Assistant Secretary, the Treasurer, any Assistant Treasurer,
any Trust Officer or Assistant Trust Officer or any other officer of the
Corporate Trust Department of the above-designated officers and also means,
with respect to a particular corporate trust matter, any other officer to whom
such matter is referred because of that officer's knowledge of and familiarity
with the particular subject.
"Senior Debt" means the principal of (and premium, if any) and interest, if
any (including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to the Guarantor whether or not such
claim for post-petition interest is allowed in such proceeding), on Debt,
whether incurred on or prior to the date of this Guarantee or thereafter
incurred, unless, in the instrument creating or evidencing the same or
pursuant to which the same is outstanding, it is provided that such
obligations are not superior in right of payment to the Guarantee or to other
Debt which is pari passu with, or subordinated to, the Guarantee; provided,
however, that Senior Debt shall not be deemed to include (a) any Debt of the
Guarantor which when incurred and without respect to any election under
Section 1111(b) of the Bankruptcy Reform Act of 1978, was without recourse to
the Guarantor, (b) any Debt of the Guarantor to any of its Subsidiaries, (c)
Debt to any employee of the Guarantor, (d) any liability for taxes, (e) Debt
or other monetary obligations to trade creditors created or assumed by the
Guarantor or any of its Subsidiaries in the ordinary course of business in
connection with the obtaining of goods, materials or services and (f) Debt
issued under the Indenture and (g) the Guarantee.
"Successor Guarantee Trustee" means a successor Guarantee Trustee possessing
the qualifications to act as Guarantee Trustee under Section 4.1.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended.
ARTICLE II. TRUST INDENTURE ACT
Section 2.1. Trust Indenture Act; Application.
(a) This Guarantee Agreement is subject to the provisions of the Trust
Indenture Act that are required to be part of this Guarantee Agreement and
shall, to the extent applicable, be governed by such provisions.
(b) If and to the extent that any provision of this Guarantee Agreement
limits, qualifies or conflicts with the duties imposed by Sections 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
Section 2.2. List of Holders.
(a) The Guarantor shall furnish or cause to be furnished to the Guarantee
Trustee (a) semiannually, on or before January 15 and July 15 of each year, a
list, in such form as the Guarantee Trustee may reasonably require, of the
names and addresses of the Holders ("List of Holders") as of a date not more
than 15 days prior to the delivery thereof, and (b) at such other times as the
Guarantee Trustee may request in writing, within 30 days after the receipt by
the Guarantor of any such request, a List of Holders as of a date not more
than 15 days prior to the time such list is furnished, in each case to the
extent such information is in the possession or control of the Guarantor and
is not identical to a previously supplied list of Holders or has not otherwise
been received by the
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Guarantee Trustee in its capacity as such. The Guarantee Trustee may destroy
any List of Holders previously given to it on receipt of a new List of
Holders.
(b) The Guarantee Trustee shall comply with its obligations under Section
311(a), Section 311(b) and Section 312(b) of the Trust Indenture Act.
Section 2.3. Reports by the Guarantee Trustee.
Not later than July 15 of each year, commencing July 15, 1997, the Guarantee
Trustee shall provide to the Holders such reports as are required by Section
313 of the Trust Indenture Act, if any, in the form and in the manner provided
by Section 313 of the Trust Indenture Act. The Guarantee Trustee shall also
comply with the requirements of Section 313(d) of the Trust Indenture Act.
Section 2.4. Periodic Reports to the Guarantee Trustee.
The Guarantor shall provide to the Guarantee Trustee, the Securities and
Exchange Commission and the Holders such documents, reports and information,
if any, as required by Section 314 of the Trust Indenture Act and the
compliance certificate required by Section 314 of the Trust Indenture Act, in
the form, in the manner and at the times required by Section 314 of the Trust
Indenture Act.
Section 2.5. Evidence of Compliance with Conditions Precedent.
The Guarantor shall provide to the Guarantee Trustee such evidence of
compliance with such conditions precedent, if any, provided for in this
Guarantee Agreement that relate to any of the matters set forth in Section
314(c) of the Trust Indenture Act. Any certificate or opinion required to be
given by an officer pursuant to Section 314(c)(1) may be given in the form of
an Officers' Certificate.
Section 2.6. Events of Default; Waiver.
The Holders of a Majority in liquidation preference of the Preferred
Securities may, by vote, on behalf of the Holders, waive any past Event of
Default and its consequences. Upon such waiver, any such Event of Default
shall cease to exist, and any Event of Default arising therefrom shall be
deemed to have been cured, for every purpose of this Guarantee Agreement, but
no such waiver shall extend to any subsequent or other default or Event of
Default or impair any right consequent therefrom.
Section 2.7. Event of Default; Notice.
(a) The Guarantee Trustee shall, within 90 days after the occurrence of an
Event of Default, transmit by mail, first class postage prepaid, to the
Holders, notices of all Events of Default known to the Guarantee Trustee,
unless such defaults have been cured before the giving of such notice,
provided, that, except in the case of a default in the payment of a Guarantee
Payment, the Guarantee Trustee shall be protected in withholding such notice
if and so long as the Board of Directors, the executive committee or a trust
committee of directors and/or Responsible Officers of the Guarantee Trustee in
good faith determines that the withholding of such notice is in the interests
of the Holders.
(b) The Guarantee Trustee shall not be deemed to have knowledge of any Event
of Default unless the Guarantee Trustee shall have received written notice, or
a Responsible Officer charged with the administration of the Trust Agreement
shall have obtained written notice, of such Event of Default.
Section 2.8. Conflicting Interests.
The Trust Agreement shall be deemed to be specifically described in this
Guarantee Agreement for the purposes of clause (i) of the first proviso
contained in Section 310(b) of the Trust Indenture Act.
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ARTICLE III. POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE
Section 3.1. Powers and Duties of the Guarantee Trustee.
(a) This Guarantee Agreement shall be held by the Guarantee Trustee for the
benefit of the Holders, and the Guarantee Trustee shall not transfer this
Guarantee Agreement to any Person except a Holder exercising his or her rights
pursuant to Section 5.4(iv) or to a Successor Guarantee Trustee on acceptance
by such Successor Guarantee Trustee of its appointment to act as Successor
Guarantee Trustee. The right, title and interest of the Guarantee Trustee
shall automatically vest in any Successor Guarantee Trustee, upon acceptance
by such Successor Guarantee Trustee of its appointment hereunder, and such
vesting and cessation of title shall be effective whether or not conveyancing
documents have been executed and delivered pursuant to the appointment of such
Successor Guarantee Trustee.
(b) If an Event of Default has occurred and is continuing, the Guarantee
Trustee shall enforce this Guarantee Agreement for the benefit of the Holders.
(c) The Guarantee Trustee, before the occurrence of any Event of Default and
after the curing of all Events of Default that may have occurred, shall
undertake to perform only such duties as are specifically set forth in this
Guarantee Agreement, and no implied covenants shall be read into this
Guarantee Agreement against the Guarantee Trustee. In case an Event of Default
has occurred (that has not been cured or waived pursuant to Section 2.6), the
Guarantee Trustee shall exercise such of the rights and powers vested in it by
this Guarantee Agreement, and use the same degree of care and skill in its
exercise thereof, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(d) No provision of this Guarantee Agreement shall be construed to relieve
the Guarantee Trustee from liability for its own negligent action, its own
negligent failure to act or its own willful misconduct, except that:
(i) prior to the occurrence of any Event of Default and after the curing
or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Guarantee Trustee shall be
determined solely by the express provisions of this Guarantee
Agreement, and the Guarantee Trustee shall not be liable except for the
performance of such duties and obligations as are specifically set
forth in this Guarantee Agreement; and
(B) in the absence of bad faith on the part of the Guarantee Trustee,
the Guarantee Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon
any certificates or opinions furnished to the Guarantee Trustee and
conforming to the requirements of this Guarantee Agreement; but in the
case of any such certificates or opinions that by any provision hereof
or of the Trust Indenture Act are specifically required to be furnished
to the Guarantee Trustee, the Guarantee Trustee shall be under a duty
to examine the same to determine whether or not they conform to the
requirements of this Guarantee Agreement;
(ii) the Guarantee Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer of the Guarantee Trustee,
unless it shall be proved that the Guarantee Trustee was negligent in
ascertaining the pertinent facts upon which such judgment was made;
(iii) the Guarantee Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance with
the direction of the Holders of not less than a Majority in liquidation
preference of the Preferred Securities relating to the time, method and
place of conducting any proceeding for any remedy available to the
Guarantee Trustee, or exercising any trust or power conferred upon the
Guarantee Trustee under this Guarantee Agreement; and
(iv) no provision of this Guarantee Agreement shall require the Guarantee
Trustee to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties or in the
exercise of any of its rights or powers, if the Guarantee Trustee shall
have reasonable grounds for believing that the repayment of such funds or
liability is not reasonably assured to it under the terms of this Guarantee
Agreement or adequate indemnity against such risk or liability is not
reasonably assured to it.
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Section 3.2. Certain Rights of Guarantee Trustee.
(a) Subject to the provisions of Section 3.1:
(i) The Guarantee Trustee may rely and shall be fully protected in acting
or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document reasonably believed by it to be genuine and to have been signed,
sent or presented by the proper party or parties.
(ii) Any direction or act of the Guarantor contemplated by this Guarantee
Agreement shall be sufficiently evidenced by an Officer's Certificate
unless otherwise prescribed herein.
(iii) Whenever, in the administration of this Guarantee Agreement, the
Guarantee Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting to take any action
hereunder, the Guarantee Trustee (unless other evidence is herein
specifically prescribed) may, in the absence of bad faith on its part,
request and rely upon an Officers' Certificate which, upon receipt of such
request from the Guarantee Trustee, shall be promptly delivered by the
Guarantor.
(iv) The Guarantee Trustee may consult with legal counsel, and the
written advice or opinion of such legal counsel with respect to legal
matters shall be full and complete authorization and protection in respect
of any action taken, suffered or omitted to be taken by it hereunder in
good faith and in accordance with such advice or opinion. Such legal
counsel may be legal counsel to the Guarantor or any of its Affiliates and
may be one of its employees. The Guarantee Trustee shall have the right at
any time to seek instructions concerning the administration of this
Guarantee Agreement from any court of competent jurisdiction.
(v) The Guarantee Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Guarantee Agreement at the
request or direction of any Holder, unless such Holder shall have provided
to the Guarantee Trustee such adequate security and indemnity as would
satisfy a reasonable person in the position of the Guarantee Trustee,
against the costs, expenses (including attorneys' fees and expenses) and
liabilities that might be incurred by it in complying with such request or
direction, including such reasonable advances as may be requested by the
Guarantee Trustee; provided that, nothing contained in this Section
3.2(a)(v) shall be taken to relieve the Guarantee Trustee, upon the
occurrence of an Event of Default, of its obligation to exercise the rights
and powers vested in it by this Guarantee Agreement.
(vi) The Guarantee Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Guarantee Trustee, in its discretion, may make such
further inquiry or investigation into such facts or matters as it may see
fit.
(vii) The Guarantee Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
its agents or attorneys, and the Guarantee Trustee shall not be responsible
for any misconduct or negligence on the part of any such agent or attorney
appointed with due care by it hereunder.
(viii) Whenever in the administration of this Guarantee Agreement the
Guarantee Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other action
hereunder, the Guarantee Trustee (A) may request instructions from the
Holders, (B) may refrain from enforcing such remedy or right or taking such
other action until such instructions are received, and (C) shall be
protected in acting in accordance with such instructions.
(b) No provision of this Guarantee Agreement shall be deemed to impose any
duty or obligation on the Guarantee Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it in
any jurisdiction in which it shall be illegal, or in which the Guarantee
Trustee shall be unqualified or incompetent in accordance with applicable law,
to perform any such act or acts or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Guarantee
Trustee shall be construed to be a duty to act in accordance with such power
and authority.
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Section 3.3. Indemnity.
The Guarantor agrees to indemnify the Guarantee Trustee for, and to hold it
harmless against, any loss, liability or expense incurred without negligence
or bad faith on the part of the Guarantee Trustee, arising out of or in
connection with the acceptance or administration of this Guarantee Agreement,
including the costs and expenses of defending itself against any claim or
liability in connection with the exercise or performance of any of its powers
or duties hereunder. The Guarantee Trustee will not claim or exact any lien or
charge on any Guarantee Payments as a result of any amount due to it under
this Guarantee Agreement.
ARTICLE IV. GUARANTEE TRUSTEE
Section 4.1. Guarantee Trustee: Eligibility.
(a) There shall at all times be a Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a Person that is eligible pursuant to the Trust Indenture Act to
act as such and has a combined capital and surplus of at least $50,000,000,
and shall be a corporation meeting the requirements of Section 310(c) of
the Trust Indenture Act. If such corporation publishes reports of condition
at least annually, pursuant to law or to the requirements of the
supervising or examining authority, then, for the purposes of this Section
and to the extent permitted by the Trust Indenture Act, the combined
capital and surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published.
(b) If at any time the Guarantee Trustee shall cease to be eligible to so
act under Section 4.1(a), the Guarantee Trustee shall immediately resign in
the manner and with the effect set out in Section 4.2(c).
(c) If the Guarantee Trustee has or shall acquire any "conflicting interest"
within the meaning of Section 310(b) of the Trust Indenture Act, the Guarantee
Trustee and Guarantor shall in all respects comply with the provisions of
Section 310(b) of the Trust Indenture Act.
Section 4.2. Appointment, Removal and Resignation of the Guarantee Trustee.
(a) Subject to Section 4.2(b), the Guarantee Trustee may be appointed or
removed without cause at any time by the Guarantor.
(b) The Guarantee Trustee shall not be removed until a Successor Guarantee
Trustee has been appointed and has accepted such appointment by written
instrument executed by such Successor Guarantee Trustee and delivered to the
Guarantor.
(c) The Guarantee Trustee appointed hereunder shall hold office until a
Successor Guarantee Trustee shall have been appointed or until its removal or
resignation. The Guarantee Trustee may resign from office (without need for
prior or subsequent accounting) by an instrument in writing executed by the
Guarantee Trustee and delivered to the Guarantor, which resignation shall not
take effect until a Successor Guarantee Trustee has been appointed and has
accepted such appointment by instrument in writing executed by such Successor
Guarantee trustee and delivered to the Guarantor and the resigning Guarantee
Trustee.
(d) If no Successor Guarantee Trustee shall have been appointed and accepted
appointment as provided in this Section 4.2 within 60 days after delivery to
the Guarantor of an instrument of resignation, the resigning Guarantee Trustee
may petition, at the expense of the Guarantor, any court of competent
jurisdiction for appointment of a Successor Guarantee Trustee. Such court may
thereupon, after prescribing such notice, if any, as it may deem proper,
appoint a Successor Guarantee Trustee.
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ARTICLE V. GUARANTEE
Section 5.1. Guarantee.
The Guarantor irrevocably and unconditionally agrees to pay in full to the
Holders the Guarantee Payments (without duplication of amounts theretofore
paid by or on behalf of the Issuer), as and when due, regardless of any
defense, right of set-off or counterclaim which the Issuer may have or assert.
The Guarantor's obligation to make a Guarantee Payment may be satisfied by
direct payment of the required amounts by the Guarantor to the Holders or by
causing the Issuer to pay such amounts to the Holders.
Section 5.2. Waiver of Notice and Demand.
The Guarantor hereby waives notice of acceptance of the Guarantee Agreement
and of any liability to which it applies or may apply, presentment, demand for
payment, any right to require a proceeding first against the Guarantee
Trustee, Issuer or any other Person before proceeding against the Guarantor,
protest, notice of nonpayment, notice of dishonor, notice of redemption and
all other notices and demands.
Section 5.3. Obligations Not Affected.
The obligations, covenants, agreements and duties of the Guarantor under
this Guarantee Agreement shall in no way be affected or impaired by reason of
the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied
agreement, covenant, term or condition relating to the Preferred Securities
to be performed or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all or any
portion of the Distributions (other than an extension of time for payment
of Distributions that results from the extension of any interest payment
period on the Debentures as so provided in the Indenture), Redemption
Price, Liquidation Distribution or any other sums payable under the terms
of the Preferred Securities or the extension of time for the performance of
any other obligation under, arising out of, or in connection with, the
Preferred Securities;
(c) any failure, omission, delay or lack of diligence on the part of the
Holders to enforce, assert or exercise any right, privilege, power or
remedy conferred on the Holders pursuant to the terms of the Preferred
Securities, or any action on the part of the Issuer granting indulgence or
extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangement, composition or
readjustment of debt of, or other similar proceedings affecting, the Issuer
or any of the assets of the Issuer;
(e) any invalidity of, or defect or deficiency in, the Preferred
Securities;
(f) the settlement or compromise of any obligation guaranteed hereby or
hereby incurred; or
(g) any other circumstance whatsoever that might otherwise constitute a
legal or equitable discharge or defense of a guarantor, it being the intent
of this Section 5.3 that the obligations of the Guarantor hereunder shall
be absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or obtain the
consent of, the Guarantor with respect to the happening of any of the
foregoing.
Section 5.4. Rights of Holders.
The Guarantor expressly acknowledges that: (i) this Guarantee Agreement will
be deposited with the Guarantee Trustee to be held for the benefit of the
Holders; (ii) the Guarantee Trustee has the right to enforce this Guarantee
Agreement on behalf of the Holders; (iii) the Holders of a Majority in
liquidation preference of the Preferred Securities have the right to direct
the time, method and place of conducting any proceeding for any remedy
available to the Guarantee Trustee in respect of this Guarantee Agreement or
exercising any trust or
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power conferred upon the Guarantee Trustee under this Guarantee Agreement; and
(iv) any Holder may institute a legal proceeding directly against the
Guarantor to enforce its rights under this Guarantee Agreement, without first
instituting a legal proceeding against the Guarantee Trustee, the Issuer or
any other Person.
Section 5.5. Guarantee of Payment
This Guarantee Agreement creates a guarantee of payment and not of
collection. This Guarantee Agreement will not be discharged except by payment
of the Guarantee Payments in full (without duplication of amounts theretofore
paid by the Issuer) or upon distribution of Debentures to Holders as provided
in the Trust Agreement.
Section 5.6. Subrogation.
The Guarantor shall be subrogated to all (if any) rights of the Holders
against the Issuer in respect of any amounts paid to the Holders by the
Guarantor under this Guarantee Agreement and shall have the right to waive
payment by the Issuer pursuant to Section 5.1; provided, however, that the
Guarantor shall not (except to the extent required by mandatory provisions of
law) be entitled to enforce or exercise any rights which it may acquire by way
of subrogation or any indemnity, reimbursement or other agreement, in all
cases as a result of payment under this Guarantee Agreement, at the time of
any such payment, ant amunts are due and unpaid under this Guarantee
Agreement. If any amount shall be paid to the Guarantor in violation of the
preceding sentence, the Guarantor agrees to hold such amount in trust for the
Holders and to pay over such amount to the Holders.
Section 5.7. Independent Obligations.
The Guarantor acknowledges that its obligations hereunder are independent of
the obligations of the Issuer with respect to the Preferred Securities and
that the Guarantor shall be liable as principal and as debtor hereunder to
make Guarantee Payments pursuant to the terms of this Guarantee Agreement
notwithstanding the occurrence of any event referred to in subsections (a)
through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI. COVENANTS AND SUBORDINATION
Section 6.1. Subordination.
This Guarantee Agreement will constitute an unsecured obligation of the
Guarantor and will rank subordinate and junior in right of payment to all
Senior Debt of the Guarantor.
Section 6.2. Pari Passu Guarantees.
This Guarantee Agreement shall rank pari passu with any similar Guarantee
Agreements issued by the Guarantor on behalf of the holders of Preferred
Securities issued by [Lincoln Capital II and Lincoln Capital III].
ARTICLE VII. TERMINATION
Section 7.1. Termination.
This Guarantee Agreement shall terminate and be of no further force and
effect upon (i) full payment of the Redemption Price of all Preferred
Securities, (ii) the distribution of Debentures to the Holders in exchange for
all of the Preferred Securities or (iii) full payment of the amounts payable
in accordance with the Trust Agreement upon liquidation of the Issuer.
Notwithstanding the foregoing, this Guarantee Agreement will continue to be
effective or will be reinstated, as the case may be, if at any time any Holder
must restore payment of any sums paid with respect to Preferred Securities or
this Guarantee Agreement.
9
<PAGE>
ARTICLE VIII. MISCELLANEOUS
Section 8.1. Successors and Assigns.
All guarantees and agreements contained in this Guarantee Agreement shall
bind the successors, assigns, receivers, trustees and representatives of the
Guarantor and shall inure to the benefit of the Holders of the Preferred
Securities then outstanding. Except in connection with a consolidation, merger
or sale involving the Guarantor that is permitted under Article Eight of the
Indenture and pursuant to which the assignee agrees in writing to perform the
Guarantor's obligations hereunder, the Guarantor shall not assign its
obligations hereunder.
Section 8.2. Amendments.
Except with respect to any changes which do not adversely affect the rights
of the Holders in any material respect (in which case no consent of the
Holders will be required), this Guarantee Agreement may only be amended with
the prior approval of the Holders of not less than a Majority in liquidation
preference of all the outstanding Preferred Securities. The provisions of
Article VI of the Trust Agreement concerning meetings of the Holders shall
apply to the giving of such approval.
Section 8.3. Notices.
Any notice, request or other communication required or permitted to be given
hereunder shall be in writing, duly signed by the party giving such notice,
and delivered, telecopied or mailed by first class mail as follows:
(a) if given to the Guarantor, to the address set forth below or such
other address as the Guarantor may give notice to the Holders:
Lincoln National Corporation
_____________________________________
_____________________________________
_____________________________________
Facsimile No.: ______________________
Attention: __________________________
(b) if given to the Issuer, in care of the Guarantee Trustee, at the
Issuer's (and the Guarantee Trustee's) address set forth below or such
other address as the Guarantee Trustee on behalf of the Issuer may give
notice to the Holders:
Lincoln Capital I
c/o _________________________________
_____________________________________
_____________________________________
Facsimile No.: ______________________
Attention: __________________________
with a copy to:
The First National Bank of Chicago
_____________________________________
_____________________________________
_____________________________________
Facsimile No.: ______________________
Attention: Corporate Trust
Department __________________________
(c) if given to any Holder, at the address set forth on the books and
records of the Issuer.
10
<PAGE>
All notices hereunder shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid, except that if a notice or other document is refused delivery
or cannot be delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been delivered on
the date of such refusal or inability to deliver.
Section 8.4. Benefit.
This Guarantee Agreement is solely for the benefit of the Holders and is not
separately transferable from the Preferred Securities.
Section 8.5. Interpretation.
In this Guarantee Agreement, unless the context otherwise requires:
(a) capitalized terms used in this Guarantee Agreement but not defined in
the preamble hereto have the respective meanings assigned to them in
Section 1.1;
(b) a term defined anywhere in this Guarantee Agreement has the same
meaning throughout;
(c) all references to "the Guarantee Agreement" or "this Guarantee
Agreement" are to this Guarantee Agreement as modified, supplemented or
amended from time to time;
(d) all references in this Guarantee Agreement to Articles and Sections
are to Articles and Sections of this Guarantee Agreement unless otherwise
specified;
(e) a term defined in the Trust Indenture Act has the same meaning when
used in this Guarantee Agreement unless otherwise defined in this Guarantee
Agreement or unless the context otherwise requires;
(f) a reference to the singular includes the plural and vice versa; and
(g) the masculine, feminine or neuter genders used herein shall include
the masculine, feminine and neuter genders.
Section 8.6. Governing Law.
THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE
CONFLICT OF LAW PRINCIPLES THEREOF.
This instrument may be executed in any number of counterparts, each of which
so executed shall be deemed to be an original, but all such counterparts shall
together constitute but one and the same instrument.
THIS GUARANTEE AGREEMENT is executed as of the day and year first above
written.
Lincoln National Corporation
By: _________________________________
Name:
Title:
The First National Bank of Chicago
____________________________________
as Guarantee Trustee
By: _________________________________
Name:
Title:
11
<PAGE>
EXHIBIT 23
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) of Lincoln National Corporation for the
registration of up to $500,000,000 of quarterly income preferred securities
and to the incorporation by reference therein of our report dated February 7,
1996, 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, 1995, filed with the Securities and Exchange
Commission.
Fort Wayne, Indiana
May 16, 1996
<PAGE>
EXH 25(A)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(B)(2)
----------------
THE FIRST NATIONAL BANK OF CHICAGO
(EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER)
A NATIONAL BANKING ASSOCIATION 36-0899825
(I.R.S. EMPLOYER
IDENTIFICATION NUMBER)
ONE FIRST NATIONAL PLAZA, CHICAGO, 60670-0126
ILLINOIS
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
THE FIRST NATIONAL BANK OF CHICAGO
ONE FIRST NATIONAL PLAZA, SUITE 0286
CHICAGO, ILLINOIS 60670-0286
ATTN: LYNN A. GOLDSTEIN, LAW DEPARTMENT (312) 732-6919
(NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE)
----------------
LINCOLN NATIONAL CORPORATION
(EXACT NAME OF OBLIGOR AS SPECIFIED IN ITS CHARTER)
INDIANA 35-1140070
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
200 EAST BERRY STREET 46802-2706
FORT WAYNE, INDIANA (ZIP CODE)
(ADDRESS OF PRINCIPAL EXECUTIVE
OFFICES)
DEBT SECURITIES
(TITLE OF INDENTURE SECURITIES)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
Item 1. General Information. Furnish the following information as to the
trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
Comptroller of Currency, Washington, D.C., Federal Deposit Insurance
Corporation, Washington, D.C., The Board of Governors of the Federal
Reserve System, Washington D.C.
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust powers.
Item 2. Affiliations With the Obligor. If the obligor is an affiliate of the
trustee, describe each such affiliation.
No such affiliation exists with the trustee.
Item 16. List of exhibits. List below all exhibits filed as a part of this
Statement of Eligibility.
1. A copy of the articles of association of the trustee now in effect.*
2. A copy of the certificates of authority of the trustee to commence
business.*
3. A copy of the authorization of the trustee to exercise corporate trust
powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not Applicable.
6. The consent of the trustee required by Section 321(b) of the Act.
7. A copy of the latest report of condition of the trustee published
pursuant to law or the requirements of its supervising or examining
authority.
8. Not Applicable.
9. Not Applicable.
Pursuant to the requirements of the Trust Indenture Act of 1939, as amended,
the trustee, The First National Bank of Chicago, a national banking
association organized and existing under the laws of the United States of
America, has duly caused this Statement of Eligibility to be signed on its
behalf by the undersigned, thereunto duly authorized, all in the City of
Chicago and State of Illinois, on the 16th day of May, 1996.
The First National Bank of Chicago,
Trustee
/s/ R. D. Manella
By __________________________________
R. D. Manella
Vice President
- --------
*Exhibit 1, 2, 3 and 4 are herein incorporated by reference to Exhibits
bearing identical numbers in Item 12 of the Form T-1 of The First National
Bank of Chicago, filed as Exhibit 26 to the Registration Statement on Form
S-3 of The CIT Group Holdings, Inc., filed with the Securities and Exchange
Commission on February 16, 1993 (Registration No. 33-58418).
2
<PAGE>
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(B) OF THE ACT
MAY 16, 1996
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
In connection with the qualification of an indenture between Lincoln
National Corporation and the First National Bank of Chicago, the undersigned,
in accordance with Section 321(b) of the Trust Indenture Act of 1939, as
amended, hereby consents that the reports of examinations of the undersigned,
made by Federal or State authorities authorized to make such examinations, may
be furnished by such authorities to the Securities and Exchange Commission
upon its request therefor.
Very truly yours,
The First National Bank of Chicago
/s/ R. D. Manella
By: _________________________________
R. D. Manella
Vice President
<PAGE>
EXHIBIT 7
Legal Title of Bank: The First National Bank of Chicago Call Date: 12/31/95
Address: One First National Plaza, Suite 0460
ST-BK: 17-1630 FFIEC 031
City, State Zip: Chicago, IL 60670-0460 Page RC-1
FDIC Certificate No.:0/3/6/1/8
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL
AND STATE-CHARTERED SAVINGS BANKS FOR DECEMBER 31, 1995
ALL SCHEDULES ARE TO BE REPORTED IN THOUSANDS OF DOLLARS. UNLESS OTHERWISE
INDICATED, REPORT THE AMOUNT
OUTSTANDING OF THE LAST BUSINESS DAY OF THE QUARTER.
SCHEDULE RC--BALANCE SHEET
<TABLE>
<CAPTION>
C400
DOLLAR AMOUNTS IN ------------
THOUSANDS RCFD BIL MIL THOU <-
-------------------- ---- ------------ -----
<C> <S> <C> <C> <C> <C>
ASSETS
1. Cash and balances due from
depository institutions
(from Schedule RC-A):
a. Noninterest-bearing
balances and currency
and coin(1)............. 0081 4,003,995 1.a.
b. Interest-bearing
balances(2)............. 0071 9,240,284 1.b.
2. Securities
a. Held-to-maturity
securities (from
Schedule RC-B, column
A)...................... 1754 0 2.a.
b. Available-for-sale
securities (from
Schedule RC-B, column
D)...................... 1773 827,134 2.b.
3. Federal funds sold and
securities purchased under
agreements to resell in
domestic offices of the
bank and its Edge and
Agreement subsidiaries,
and in IBFs:
a. Federal Funds sold...... 0276 3,287,844 3.a.
b. Securities purchased
under agreements to
resell.................. 0277 612,400 3.b.
4. Loans and lease financing
receivables:
a. Loans and leases, net of
unearned income (from
Schedule RC-C).......... RCFD 2122 16,463,126 4.a.
b. LESS: Allowance for loan
and lease losses........ RCFD 3123 353,777 4.b.
c. LESS: Allocated transfer
risk reserve............ RCFD 3128 0 4.c.
d. Loans and leases, net of
unearned income,
allowance, and reserve
(item 4.a minus 4.b and
4.c).................... 2125 16,109,349 4.d.
5. Assets held in trading
accounts.................. 3545 12,379,396 5.
6. Premises and fixed assets
(including capitalized
leases)................... 2145 591,753 6.
7. Other real estate owned
(from Schedule RC-M)...... 2150 8,796 7.
8. Investments in
unconsolidated
subsidiaries and
associated companies (from
Schedule RC-M)............ 2130 40,560 8.
9. Customers' liability to
this bank on acceptances
outstanding............... 2155 524,918 9.
10. Intangible assets (from
Schedule RC-M)............ 2143 101,011 10.
11. Other assets (from Schedule
RC-F)..................... 2160 1,633,056 11.
12. Total assets (sum of items
1 through 11)............. 2170 49,360,496 12.
</TABLE>
- --------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held in trading accounts.
<PAGE>
<TABLE>
<CAPTION>
DOLLAR AMOUNTS IN BIL MIL
THOUSANDS THOU
-------------------- ----------
<C> <S> <C> <C> <C> <C>
LIABILITIES
13. Deposits:
a. In domestic offices
(sum of totals of
columns A and C from
Schedule RC-E, part
1)................... RCON 2200 15,174,243 13.a.
(1) Noninterest-
bearing(1)............. RCON 6631 6,217,164 13.a.(1)
(2) Interest-bearing... RCON 6636 8,957,079 13.a.(2)
b. In foreign offices,
Edge and Agreement
subsidiaries, and
IBFs (from Schedule
RC-E, part II)....... RCFN 2200 14,435,503 13.b.
(1) Noninterest
bearing................ RCFN 6631 625,206 13.b.(1)
(2) Interest-bearing... RCFN 6636 13,810,297 13.b.(2)
14. Federal funds purchased
and securities sold
under agreements to
repurchase in domestic
offices of the bank and
of its Edge and
Agreement subsidiaries,
and in IBFs:
a. Federal funds
purchased............ RCFD 0278 2,449,282 14.a.
b. Securities sold under
agreements to
repurchase........... RCFD 0279 880,215 14.b.
15. a. Demand notes issued
to the U.S. Treasury. RCON 2840 93,942 15.a.
b. Trading Liabilities.. RCFD 3548 7,523,265 15.b.
16. Other borrowed money:
a. With original
maturity of one year
or less.............. RCFD 2332 1,897,370 16.a.
b. With original
maturity of more than
one year............. RCFD 2333 383,807 16.b.
17. Mortgage indebtedness
and obligations under
capitalized leases..... RCFD 2910 280,522 17.
18. Bank's liability on
acceptance executed and
outstanding............ RCFD 2920 524,918 18.
19. Subordinated notes and
debentures............. RCFD 3200 1,225,000 19.
20. Other liabilities (from
Schedule RC-G)......... RCFD 2930 1,444,364 20.
21. Total liabilities (sum
of items 13 through
20).................... RCFD 2948 46,312,431 21.
22. Limited-Life preferred
stock and related
surplus................ RCFD 3282 0 22.
EQUITY CAPITAL
23. Perpetual preferred
stock and related
surplus................ RCFD 3838 0 23.
24. Common stock............ RCFD 3230 200,858 24.
25. Surplus (exclude all
surplus related to
preferred stock)....... RCFD 3839 2,320,126 25.
26. a. Undivided profits and
capital reserves..... RCFD 3632 519,849 26.a.
b. Net unrealized
holding gains
(losses) on
available-for-sale
securities........... RCFD 8434 7,315 26.b.
27. Cumulative foreign
currency translation
adjustments............ RCFD 3284 (83) 27.
28. Total equity capital
(sum of items 23
through 27)............ RCFD 3210 3,048,065 28.
29. Total liabilities,
limited-life preferred
stock, and equity
capital (sum of items
21, 22, and 28)........ RCFD 3300 49,360,496 29.
</TABLE>
Memorandum
To be reported only with the March Report of Condition. Number
1. Indicate in the box at the right the number of the
statement below that best describes the most RCFD 6724 N/A M.1.
comprehensive level of auditing work performed for
the bank by independent external auditors as of any
date during 1993......................................
1=Independent audit of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm which
submits a report on the bank
2=Independent audit of the bank's parent holding company conducted in
accordance with generally accepted auditing standards by a certified public
accounting firm which submits a report on the consolidated holding company
(but not on the bank separately)
3=Directors' examination of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm (may be
required by state chartering authority)
4=Directors' examination of the bank performed by other external auditors (may
be required by state chartering authority)
5=Review of the bank's financial statements by external auditors
6=Compilation of the bank's financial statements by external auditors
7=Other audit procedures (excluding tax preparation work)
8=No external audit work
- -------
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
<PAGE>
EX 25(B)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(B)(2)
----
----------------
THE FIRST NATIONAL BANK OF CHICAGO
(EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER)
A NATIONAL BANKING ASSOCIATION 36-0899825
(I.R.S. EMPLOYER
IDENTIFICATION NUMBER)
ONE FIRST NATIONAL PLAZA, CHICAGO, 60670-0126
ILLINOIS
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
THE FIRST NATIONAL BANK OF CHICAGO
ONE FIRST NATIONAL PLAZA, SUITE 0286
CHICAGO, ILLINOIS 60670-0286
ATTN: LYNN A. GOLDSTEIN, LAW DEPARTMENT (312) 732-6919
(NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE)
----------------
LINCOLN NATIONAL CAPITAL I
(EXACT NAME OF OBLIGOR AS SPECIFIED IN ITS CHARTER)
DELAWARE TO BE APPLIED FOR
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
C/O LINCOLN NATIONAL CORPORATION 46802-2706
200 EAST BERRY STREET (ZIP CODE)
FORT WAYNE, INDIANA
(ADDRESS OF PRINCIPAL EXECUTIVE
OFFICES)
PREFERRED SECURITIES
(TITLE OF INDENTURE SECURITIES)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
Item 1. General Information. Furnish the following information as to the
trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
Comptroller of Currency, Washington, D.C., Federal Deposit Insurance
Corporation, Washington, D.C., The Board of Governors of the Federal
Reserve System, Washington D.C.
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust powers.
Item 2. Affiliations With the Obligor. If the obligor is an affiliate of the
trustee, describe each such affiliation.
No such affiliation exists with the trustee.
Item 16. List of exhibits. List below all exhibits filed as a part of this
Statement of Eligibility.
1. A copy of the articles of association of the trustee now in effect.*
2. A copy of the certificates of authority of the trustee to commence
business.*
3. A copy of the authorization of the trustee to exercise corporate trust
powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not Applicable.
6. The consent of the trustee required by Section 321(b) of the Act.
7. A copy of the latest report of condition of the trustee published
pursuant to law or the requirements of its supervising or examining
authority.
8. Not Applicable.
9. Not Applicable.
Pursuant to the requirements of the Trust Indenture Act of 1939, as amended,
the trustee, The First National Bank of Chicago, a national banking
association organized and existing under the laws of the United States of
America, has duly caused this Statement of Eligibility to be signed on its
behalf by the undersigned, thereunto duly authorized, all in the City of
Chicago and State of Illinois, on the 16th day of May, 1996.
The First National Bank of Chicago,
Trustee
By: /s/ R. D. Manella
----------------------------------
R. D. Manella
Vice President
- --------
*Exhibit 1, 2, 3 and 4 are herein incorporated by reference to Exhibits
bearing identical numbers in Item 12 of the Form T-1 of The First National
Bank of Chicago, filed as Exhibit 26 to the Registration Statement on Form
S-3 of The CIT Group Holdings, Inc., filed with the Securities and Exchange
Commission on February 16, 1993 (Registration No. 33-58418).
2
<PAGE>
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(B) OF THE ACT
MAY 16, 1996
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
In connection with the qualification of a Declaration of Trust of Lincoln
National Capital I, the undersigned, in accordance with Section 321(b) of the
Trust Indenture Act of 1939, as amended, hereby consents that the reports of
examinations of the undersigned, made by Federal or State authorities
authorized to make such examinations, may be furnished by such authorities to
the Securities and Exchange Commission upon its request therefor.
Very truly yours,
The First National Bank of Chicago
By: /s/ R. D. Manella
----------------------------------
R. D. Manella
Vice President
<PAGE>
EXHIBIT 7
Legal Title of Bank: The First National Bank of Chicago Call Date: 12/31/95
Address: One First National Plaza, Suite 0460
ST-BK: 17-1630 FFIEC 031
City, State Zip: Chicago, IL 60670-0460 Page RC-1
FDIC Certificate No.:0/3/6/1/8
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL
AND STATE-CHARTERED SAVINGS BANKS FOR DECEMBER 31, 1995
ALL SCHEDULES ARE TO BE REPORTED IN THOUSANDS OF DOLLARS. UNLESS OTHERWISE
INDICATED, REPORT THE AMOUNT
OUTSTANDING OF THE LAST BUSINESS DAY OF THE QUARTER.
SCHEDULE RC--BALANCE SHEET
<TABLE>
<CAPTION>
C400
DOLLAR AMOUNTS IN ------------
THOUSANDS RCFD BIL MIL THOU <-
-------------------- ---- ------------ -----
<C> <S> <C> <C> <C> <C>
ASSETS
1. Cash and balances due from
depository institutions
(from Schedule RC-A):
a. Noninterest-bearing
balances and currency
and coin(1)............. 0081 4,003,995 1.a.
b. Interest-bearing
balances(2)............. 0071 9,240,284 1.b.
2. Securities
a. Held-to-maturity
securities (from
Schedule RC-B, column
A)...................... 1754 0 2.a.
b. Available-for-sale
securities (from
Schedule RC-B, column
D)...................... 1773 827,134 2.b.
3. Federal funds sold and
securities purchased under
agreements to resell in
domestic offices of the
bank and its Edge and
Agreement subsidiaries,
and in IBFs:
a. Federal Funds sold...... 0276 3,287,844 3.a.
b. Securities purchased
under agreements to
resell.................. 0277 612,400 3.b.
4. Loans and lease financing
receivables:
a. Loans and leases, net of
unearned income (from
Schedule RC-C).......... RCFD 2122 16,463,126 4.a.
b. LESS: Allowance for loan
and lease losses........ RCFD 3123 353,777 4.b.
c. LESS: Allocated transfer
risk reserve............ RCFD 3128 0 4.c.
d. Loans and leases, net of
unearned income,
allowance, and reserve
(item 4.a minus 4.b and
4.c).................... 2125 16,109,349 4.d.
5. Assets held in trading
accounts.................. 3545 12,379,396 5.
6. Premises and fixed assets
(including capitalized
leases)................... 2145 591,753 6.
7. Other real estate owned
(from Schedule RC-M)...... 2150 8,796 7.
8. Investments in
unconsolidated
subsidiaries and
associated companies (from
Schedule RC-M)............ 2130 40,560 8.
9. Customers' liability to
this bank on acceptances
outstanding............... 2155 524,918 9.
10. Intangible assets (from
Schedule RC-M)............ 2143 101,011 10.
11. Other assets (from Schedule
RC-F)..................... 2160 1,633,056 11.
12. Total assets (sum of items
1 through 11)............. 2170 49,360,496 12.
</TABLE>
- --------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held in trading accounts.
<PAGE>
<TABLE>
<CAPTION>
DOLLAR AMOUNTS IN BIL MIL
THOUSANDS THOU
-------------------- ----------
<C> <S> <C> <C> <C> <C>
LIABILITIES
13. Deposits:
a. In domestic offices
(sum of totals of
columns A and C from
Schedule RC-E, part
1)................... RCON 2200 15,174,243 13.a.
(1) Noninterest-
bearing(1)............. RCON 6631 6,217,164 13.a.(1)
(2) Interest-bearing... RCON 6636 8,957,079 13.a.(2)
b. In foreign offices,
Edge and Agreement
subsidiaries, and
IBFs (from Schedule
RC-E, part II)....... RCFN 2200 14,435,503 13.b.
(1) Noninterest
bearing................ RCFN 6631 625,206 13.b.(1)
(2) Interest-bearing... RCFN 6636 13,810,297 13.b.(2)
14. Federal funds purchased
and securities sold
under agreements to
repurchase in domestic
offices of the bank and
of its Edge and
Agreement subsidiaries,
and in IBFs:
a. Federal funds
purchased............ RCFD 0278 2,449,282 14.a.
b. Securities sold under
agreements to
repurchase........... RCFD 0279 880,215 14.b.
15. a. Demand notes issued
to the U.S. Treasury. RCON 2840 93,942 15.a.
b. Trading Liabilities.. RCFD 3548 7,523,265 15.b.
16. Other borrowed money:
a. With original
maturity of one year
or less.............. RCFD 2332 1,897,370 16.a.
b. With original
maturity of more than
one year............. RCFD 2333 383,807 16.b.
17. Mortgage indebtedness
and obligations under
capitalized leases..... RCFD 2910 280,522 17.
18. Bank's liability on
acceptance executed and
outstanding............ RCFD 2920 524,918 18.
19. Subordinated notes and
debentures............. RCFD 3200 1,225,000 19.
20. Other liabilities (from
Schedule RC-G)......... RCFD 2930 1,444,364 20.
21. Total liabilities (sum
of items 13 through
20).................... RCFD 2948 46,312,431 21.
22. Limited-Life preferred
stock and related
surplus................ RCFD 3282 0 22.
EQUITY CAPITAL
23. Perpetual preferred
stock and related
surplus................ RCFD 3838 0 23.
24. Common stock............ RCFD 3230 200,858 24.
25. Surplus (exclude all
surplus related to
preferred stock)....... RCFD 3839 2,320,126 25.
26. a. Undivided profits and
capital reserves..... RCFD 3632 519,849 26.a.
b. Net unrealized
holding gains
(losses) on
available-for-sale
securities........... RCFD 8434 7,315 26.b.
27. Cumulative foreign
currency translation
adjustments............ RCFD 3284 (83) 27.
28. Total equity capital
(sum of items 23
through 27)............ RCFD 3210 3,048,065 28.
29. Total liabilities,
limited-life preferred
stock, and equity
capital (sum of items
21, 22, and 28)........ RCFD 3300 49,360,496 29.
</TABLE>
Memorandum
To be reported only with the March Report of Condition. Number
1. Indicate in the box at the right the number of the
statement below that best describes the most RCFD 6724 N/A M.1.
comprehensive level of auditing work performed for
the bank by independent external auditors as of any
date during 1993......................................
1=Independent audit of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm which
submits a report on the bank
2=Independent audit of the bank's parent holding company conducted in
accordance with generally accepted auditing standards by a certified public
accounting firm which submits a report on the consolidated holding company
(but not on the bank separately)
3=Directors' examination of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm (may be
required by state chartering authority)
4=Directors' examination of the bank performed by other external auditors (may
be required by state chartering authority)
5=Review of the bank's financial statements by external auditors
6=Compilation of the bank's financial statements by external auditors
7=Other audit procedures (excluding tax preparation work)
8=No external audit work
- -------
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
<PAGE>
EX 25(C)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(B)(2)
----
----------------
THE FIRST NATIONAL BANK OF CHICAGO
(EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER)
A NATIONAL BANKING ASSOCIATION 36-0899825
(I.R.S. EMPLOYER
IDENTIFICATION NUMBER)
ONE FIRST NATIONAL PLAZA, CHICAGO, 60670-0126
ILLINOIS
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
THE FIRST NATIONAL BANK OF CHICAGO
ONE FIRST NATIONAL PLAZA, SUITE 0286
CHICAGO, ILLINOIS 60670-0286
ATTN: LYNN A. GOLDSTEIN, LAW DEPARTMENT (312) 732-6919
(NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE)
----------------
LINCOLN NATIONAL CAPITAL II
(EXACT NAME OF OBLIGOR AS SPECIFIED IN ITS CHARTER)
DELAWARE TO BE APPLIED FOR
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
C/O LINCOLN NATIONAL CORPORATION 46802-2706
200 EAST BERRY STREET (ZIP CODE)
FORT WAYNE, INDIANA
(ADDRESS OF PRINCIPAL EXECUTIVE
OFFICES)
PREFERRED SECURITIES
(TITLE OF INDENTURE SECURITIES)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
Item 1. General Information. Furnish the following information as to the
trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
Comptroller of Currency, Washington, D.C., Federal Deposit Insurance
Corporation, Washington, D.C., The Board of Governors of the Federal
Reserve System, Washington D.C.
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust powers.
Item 2. Affiliations With the Obligor. If the obligor is an affiliate of the
trustee, describe each such affiliation.
No such affiliation exists with the trustee.
Item 16. List of exhibits. List below all exhibits filed as a part of this
Statement of Eligibility.
1. A copy of the articles of association of the trustee now in effect.*
2. A copy of the certificates of authority of the trustee to commence
business.*
3. A copy of the authorization of the trustee to exercise corporate trust
powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not Applicable.
6. The consent of the trustee required by Section 321(b) of the Act.
7. A copy of the latest report of condition of the trustee published
pursuant to law or the requirements of its supervising or examining
authority.
8. Not Applicable.
9. Not Applicable.
Pursuant to the requirements of the Trust Indenture Act of 1939, as amended,
the trustee, The First National Bank of Chicago, a national banking
association organized and existing under the laws of the United States of
America, has duly caused this Statement of Eligibility to be signed on its
behalf by the undersigned, thereunto duly authorized, all in the City of
Chicago and State of Illinois, on the 16th day of May, 1996.
The First National Bank of Chicago,
Trustee
By: /s/ R. D. Manella
----------------------------------
R. D. Manella
Vice President
- --------
*Exhibit 1, 2, 3 and 4 are herein incorporated by reference to Exhibits
bearing identical numbers in Item 12 of the Form T-1 of The First National
Bank of Chicago, filed as Exhibit 26 to the Registration Statement on Form
S-3 of The CIT Group Holdings, Inc., filed with the Securities and Exchange
Commission on February 16, 1993 (Registration No. 33-58418).
2
<PAGE>
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(B) OF THE ACT
MAY 16, 1996
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
In connection with the qualification of a Declaration of Trust of Lincoln
National Capital II, the undersigned, in accordance with Section 321(b) of the
Trust Indenture Act of 1939, as amended, hereby consents that the reports of
examinations of the undersigned, made by Federal or State authorities
authorized to make such examinations, may be furnished by such authorities to
the Securities and Exchange Commission upon its request therefor.
Very truly yours,
The First National Bank of Chicago
By: /s/ R. D. Manella
----------------------------------
R. D. Manella
Vice President
<PAGE>
EXHIBIT 7
Legal Title of Bank: The First National Bank of Chicago Call Date: 12/31/95
Address: One First National Plaza, Suite 0460
ST-BK: 17-1630 FFIEC 031
City, State Zip: Chicago, IL 60670-0460 Page RC-1
FDIC Certificate No.:0/3/6/1/8
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL
AND STATE-CHARTERED SAVINGS BANKS FOR DECEMBER 31, 1995
ALL SCHEDULES ARE TO BE REPORTED IN THOUSANDS OF DOLLARS. UNLESS OTHERWISE
INDICATED, REPORT THE AMOUNT
OUTSTANDING OF THE LAST BUSINESS DAY OF THE QUARTER.
SCHEDULE RC--BALANCE SHEET
<TABLE>
<CAPTION>
C400
DOLLAR AMOUNTS IN ------------
THOUSANDS RCFD BIL MIL THOU <-
-------------------- ---- ------------ -----
<C> <S> <C> <C> <C> <C>
ASSETS
1. Cash and balances due from
depository institutions
(from Schedule RC-A):
a. Noninterest-bearing
balances and currency
and coin(1)............. 0081 4,003,995 1.a.
b. Interest-bearing
balances(2)............. 0071 9,240,284 1.b.
2. Securities
a. Held-to-maturity
securities (from
Schedule RC-B, column
A)...................... 1754 0 2.a.
b. Available-for-sale
securities (from
Schedule RC-B, column
D)...................... 1773 827,134 2.b.
3. Federal funds sold and
securities purchased under
agreements to resell in
domestic offices of the
bank and its Edge and
Agreement subsidiaries,
and in IBFs:
a. Federal Funds sold...... 0276 3,287,844 3.a.
b. Securities purchased
under agreements to
resell.................. 0277 612,400 3.b.
4. Loans and lease financing
receivables:
a. Loans and leases, net of
unearned income (from
Schedule RC-C).......... RCFD 2122 16,463,126 4.a.
b. LESS: Allowance for loan
and lease losses........ RCFD 3123 353,777 4.b.
c. LESS: Allocated transfer
risk reserve............ RCFD 3128 0 4.c.
d. Loans and leases, net of
unearned income,
allowance, and reserve
(item 4.a minus 4.b and
4.c).................... 2125 16,109,349 4.d.
5. Assets held in trading
accounts.................. 3545 12,379,396 5.
6. Premises and fixed assets
(including capitalized
leases)................... 2145 591,753 6.
7. Other real estate owned
(from Schedule RC-M)...... 2150 8,796 7.
8. Investments in
unconsolidated
subsidiaries and
associated companies (from
Schedule RC-M)............ 2130 40,560 8.
9. Customers' liability to
this bank on acceptances
outstanding............... 2155 524,918 9.
10. Intangible assets (from
Schedule RC-M)............ 2143 101,011 10.
11. Other assets (from Schedule
RC-F)..................... 2160 1,633,056 11.
12. Total assets (sum of items
1 through 11)............. 2170 49,360,496 12.
</TABLE>
- --------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held in trading accounts.
<PAGE>
<TABLE>
<CAPTION>
DOLLAR AMOUNTS IN BIL MIL
THOUSANDS THOU
-------------------- ----------
<C> <S> <C> <C> <C> <C>
LIABILITIES
13. Deposits:
a. In domestic offices
(sum of totals of
columns A and C from
Schedule RC-E, part
1)................... RCON 2200 15,174,243 13.a.
(1) Noninterest-
bearing(1)............. RCON 6631 6,217,164 13.a.(1)
(2) Interest-bearing... RCON 6636 8,957,079 13.a.(2)
b. In foreign offices,
Edge and Agreement
subsidiaries, and
IBFs (from Schedule
RC-E, part II)....... RCFN 2200 14,435,503 13.b.
(1) Noninterest
bearing................ RCFN 6631 625,206 13.b.(1)
(2) Interest-bearing... RCFN 6636 13,810,297 13.b.(2)
14. Federal funds purchased
and securities sold
under agreements to
repurchase in domestic
offices of the bank and
of its Edge and
Agreement subsidiaries,
and in IBFs:
a. Federal funds
purchased............ RCFD 0278 2,449,282 14.a.
b. Securities sold under
agreements to
repurchase........... RCFD 0279 880,215 14.b.
15. a. Demand notes issued
to the U.S. Treasury. RCON 2840 93,942 15.a.
b. Trading Liabilities.. RCFD 3548 7,523,265 15.b.
16. Other borrowed money:
a. With original
maturity of one year
or less.............. RCFD 2332 1,897,370 16.a.
b. With original
maturity of more than
one year............. RCFD 2333 383,807 16.b.
17. Mortgage indebtedness
and obligations under
capitalized leases..... RCFD 2910 280,522 17.
18. Bank's liability on
acceptance executed and
outstanding............ RCFD 2920 524,918 18.
19. Subordinated notes and
debentures............. RCFD 3200 1,225,000 19.
20. Other liabilities (from
Schedule RC-G)......... RCFD 2930 1,444,364 20.
21. Total liabilities (sum
of items 13 through
20).................... RCFD 2948 46,312,431 21.
22. Limited-Life preferred
stock and related
surplus................ RCFD 3282 0 22.
EQUITY CAPITAL
23. Perpetual preferred
stock and related
surplus................ RCFD 3838 0 23.
24. Common stock............ RCFD 3230 200,858 24.
25. Surplus (exclude all
surplus related to
preferred stock)....... RCFD 3839 2,320,126 25.
26. a. Undivided profits and
capital reserves..... RCFD 3632 519,849 26.a.
b. Net unrealized
holding gains
(losses) on
available-for-sale
securities........... RCFD 8434 7,315 26.b.
27. Cumulative foreign
currency translation
adjustments............ RCFD 3284 (83) 27.
28. Total equity capital
(sum of items 23
through 27)............ RCFD 3210 3,048,065 28.
29. Total liabilities,
limited-life preferred
stock, and equity
capital (sum of items
21, 22, and 28)........ RCFD 3300 49,360,496 29.
</TABLE>
Memorandum
To be reported only with the March Report of Condition. Number
1. Indicate in the box at the right the number of the
statement below that best describes the most RCFD 6724 N/A M.1.
comprehensive level of auditing work performed for
the bank by independent external auditors as of any
date during 1993......................................
1=Independent audit of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm which
submits a report on the bank
2=Independent audit of the bank's parent holding company conducted in
accordance with generally accepted auditing standards by a certified public
accounting firm which submits a report on the consolidated holding company
(but not on the bank separately)
3=Directors' examination of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm (may be
required by state chartering authority)
4=Directors' examination of the bank performed by other external auditors (may
be required by state chartering authority)
5=Review of the bank's financial statements by external auditors
6=Compilation of the bank's financial statements by external auditors
7=Other audit procedures (excluding tax preparation work)
8=No external audit work
- -------
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
<PAGE>
EX 25(D)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(B)(2)
----
----------------
THE FIRST NATIONAL BANK OF CHICAGO
(EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER)
A NATIONAL BANKING ASSOCIATION 36-0899825
(I.R.S. EMPLOYER
IDENTIFICATION NUMBER)
ONE FIRST NATIONAL PLAZA, CHICAGO, 60670-0126
ILLINOIS
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
THE FIRST NATIONAL BANK OF CHICAGO
ONE FIRST NATIONAL PLAZA, SUITE 0286
CHICAGO, ILLINOIS 60670-0286
ATTN: LYNN A. GOLDSTEIN, LAW DEPARTMENT (312) 732-6919
(NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE)
----------------
LINCOLN NATIONAL CAPITAL III
(EXACT NAME OF OBLIGOR AS SPECIFIED IN ITS CHARTER)
DELAWARE TO BE APPLIED FOR
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
C/O LINCOLN NATIONAL CORPORATION 46802-2706
200 EAST BERRY STREET (ZIP CODE)
FORT WAYNE, INDIANA
(ADDRESS OF PRINCIPAL EXECUTIVE
OFFICES)
PREFERRED SECURITIES
(TITLE OF INDENTURE SECURITIES)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
Item 1. General Information. Furnish the following information as to the
trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
Comptroller of Currency, Washington, D.C., Federal Deposit Insurance
Corporation, Washington, D.C., The Board of Governors of the Federal
Reserve System, Washington D.C.
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust powers.
Item 2. Affiliations With the Obligor. If the obligor is an affiliate of the
trustee, describe each such affiliation.
No such affiliation exists with the trustee.
Item 16. List of exhibits. List below all exhibits filed as a part of this
Statement of Eligibility.
1. A copy of the articles of association of the trustee now in effect.*
2. A copy of the certificates of authority of the trustee to commence
business.*
3. A copy of the authorization of the trustee to exercise corporate trust
powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not Applicable.
6. The consent of the trustee required by Section 321(b) of the Act.
7. A copy of the latest report of condition of the trustee published
pursuant to law or the requirements of its supervising or examining
authority.
8. Not Applicable.
9. Not Applicable.
Pursuant to the requirements of the Trust Indenture Act of 1939, as amended,
the trustee, The First National Bank of Chicago, a national banking
association organized and existing under the laws of the United States of
America, has duly caused this Statement of Eligibility to be signed on its
behalf by the undersigned, thereunto duly authorized, all in the City of
Chicago and State of Illinois, on the 16th day of May, 1996.
The First National Bank of Chicago,
Trustee
By: /s/ R. D. Manella
----------------------------------
R. D. Manella
Vice President
- --------
*Exhibit 1, 2, 3 and 4 are herein incorporated by reference to Exhibits
bearing identical numbers in Item 12 of the Form T-1 of The First National
Bank of Chicago, filed as Exhibit 26 to the Registration Statement on Form
S-3 of The CIT Group Holdings, Inc., filed with the Securities and Exchange
Commission on February 16, 1993 (Registration No. 33-58418).
2
<PAGE>
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(B) OF THE ACT
MAY 16, 1996
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
In connection with the qualification of a Declaration of Trust of Lincoln
National Capital III, the undersigned, in accordance with Section 321(b) of
the Trust Indenture Act of 1939, as amended, hereby consents that the reports
of examinations of the undersigned, made by Federal or State authorities
authorized to make such examinations, may be furnished by such authorities to
the Securities and Exchange Commission upon its request therefor.
Very truly yours,
The First National Bank of Chicago
By: /s/ R. D. Manella
----------------------------------
R. D. Manella
Vice President
<PAGE>
EXHIBIT 7
Legal Title of Bank: The First National Bank of Chicago Call Date: 12/31/95
Address: One First National Plaza, Suite 0460
ST-BK: 17-1630 FFIEC 031
City, State Zip: Chicago, IL 60670-0460 Page RC-1
FDIC Certificate No.:0/3/6/1/8
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL
AND STATE-CHARTERED SAVINGS BANKS FOR DECEMBER 31, 1995
ALL SCHEDULES ARE TO BE REPORTED IN THOUSANDS OF DOLLARS. UNLESS OTHERWISE
INDICATED, REPORT THE AMOUNT
OUTSTANDING OF THE LAST BUSINESS DAY OF THE QUARTER.
SCHEDULE RC--BALANCE SHEET
<TABLE>
<CAPTION>
C400
DOLLAR AMOUNTS IN ------------
THOUSANDS RCFD BIL MIL THOU <-
-------------------- ---- ------------ -----
<C> <S> <C> <C> <C> <C>
ASSETS
1. Cash and balances due from
depository institutions
(from Schedule RC-A):
a. Noninterest-bearing
balances and currency
and coin(1)............. 0081 4,003,995 1.a.
b. Interest-bearing
balances(2)............. 0071 9,240,284 1.b.
2. Securities
a. Held-to-maturity
securities (from
Schedule RC-B, column
A)...................... 1754 0 2.a.
b. Available-for-sale
securities (from
Schedule RC-B, column
D)...................... 1773 827,134 2.b.
3. Federal funds sold and
securities purchased under
agreements to resell in
domestic offices of the
bank and its Edge and
Agreement subsidiaries,
and in IBFs:
a. Federal Funds sold...... 0276 3,287,844 3.a.
b. Securities purchased
under agreements to
resell.................. 0277 612,400 3.b.
4. Loans and lease financing
receivables:
a. Loans and leases, net of
unearned income (from
Schedule RC-C).......... RCFD 2122 16,463,126 4.a.
b. LESS: Allowance for loan
and lease losses........ RCFD 3123 353,777 4.b.
c. LESS: Allocated transfer
risk reserve............ RCFD 3128 0 4.c.
d. Loans and leases, net of
unearned income,
allowance, and reserve
(item 4.a minus 4.b and
4.c).................... 2125 16,109,349 4.d.
5. Assets held in trading
accounts.................. 3545 12,379,396 5.
6. Premises and fixed assets
(including capitalized
leases)................... 2145 591,753 6.
7. Other real estate owned
(from Schedule RC-M)...... 2150 8,796 7.
8. Investments in
unconsolidated
subsidiaries and
associated companies (from
Schedule RC-M)............ 2130 40,560 8.
9. Customers' liability to
this bank on acceptances
outstanding............... 2155 524,918 9.
10. Intangible assets (from
Schedule RC-M)............ 2143 101,011 10.
11. Other assets (from Schedule
RC-F)..................... 2160 1,633,056 11.
12. Total assets (sum of items
1 through 11)............. 2170 49,360,496 12.
</TABLE>
- --------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held in trading accounts.
<PAGE>
<TABLE>
<CAPTION>
DOLLAR AMOUNTS IN BIL MIL
THOUSANDS THOU
-------------------- ----------
<C> <S> <C> <C> <C> <C>
LIABILITIES
13. Deposits:
a. In domestic offices
(sum of totals of
columns A and C from
Schedule RC-E, part
1)................... RCON 2200 15,174,243 13.a.
(1) Noninterest-
bearing(1)............. RCON 6631 6,217,164 13.a.(1)
(2) Interest-bearing... RCON 6636 8,957,079 13.a.(2)
b. In foreign offices,
Edge and Agreement
subsidiaries, and
IBFs (from Schedule
RC-E, part II)....... RCFN 2200 14,435,503 13.b.
(1) Noninterest
bearing................ RCFN 6631 625,206 13.b.(1)
(2) Interest-bearing... RCFN 6636 13,810,297 13.b.(2)
14. Federal funds purchased
and securities sold
under agreements to
repurchase in domestic
offices of the bank and
of its Edge and
Agreement subsidiaries,
and in IBFs:
a. Federal funds
purchased............ RCFD 0278 2,449,282 14.a.
b. Securities sold under
agreements to
repurchase........... RCFD 0279 880,215 14.b.
15. a. Demand notes issued
to the U.S. Treasury. RCON 2840 93,942 15.a.
b. Trading Liabilities.. RCFD 3548 7,523,265 15.b.
16. Other borrowed money:
a. With original
maturity of one year
or less.............. RCFD 2332 1,897,370 16.a.
b. With original
maturity of more than
one year............. RCFD 2333 383,807 16.b.
17. Mortgage indebtedness
and obligations under
capitalized leases..... RCFD 2910 280,522 17.
18. Bank's liability on
acceptance executed and
outstanding............ RCFD 2920 524,918 18.
19. Subordinated notes and
debentures............. RCFD 3200 1,225,000 19.
20. Other liabilities (from
Schedule RC-G)......... RCFD 2930 1,444,364 20.
21. Total liabilities (sum
of items 13 through
20).................... RCFD 2948 46,312,431 21.
22. Limited-Life preferred
stock and related
surplus................ RCFD 3282 0 22.
EQUITY CAPITAL
23. Perpetual preferred
stock and related
surplus................ RCFD 3838 0 23.
24. Common stock............ RCFD 3230 200,858 24.
25. Surplus (exclude all
surplus related to
preferred stock)....... RCFD 3839 2,320,126 25.
26. a. Undivided profits and
capital reserves..... RCFD 3632 519,849 26.a.
b. Net unrealized
holding gains
(losses) on
available-for-sale
securities........... RCFD 8434 7,315 26.b.
27. Cumulative foreign
currency translation
adjustments............ RCFD 3284 (83) 27.
28. Total equity capital
(sum of items 23
through 27)............ RCFD 3210 3,048,065 28.
29. Total liabilities,
limited-life preferred
stock, and equity
capital (sum of items
21, 22, and 28)........ RCFD 3300 49,360,496 29.
</TABLE>
Memorandum
To be reported only with the March Report of Condition. Number
1. Indicate in the box at the right the number of the
statement below that best describes the most RCFD 6724 N/A M.1.
comprehensive level of auditing work performed for
the bank by independent external auditors as of any
date during 1993......................................
1=Independent audit of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm which
submits a report on the bank
2=Independent audit of the bank's parent holding company conducted in
accordance with generally accepted auditing standards by a certified public
accounting firm which submits a report on the consolidated holding company
(but not on the bank separately)
3=Directors' examination of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm (may be
required by state chartering authority)
4=Directors' examination of the bank performed by other external auditors (may
be required by state chartering authority)
5=Review of the bank's financial statements by external auditors
6=Compilation of the bank's financial statements by external auditors
7=Other audit procedures (excluding tax preparation work)
8=No external audit work
- -------
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
<PAGE>
EX 25(E)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(B)(2)
----------------
THE FIRST NATIONAL BANK OF CHICAGO
(EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER)
A NATIONAL BANKING ASSOCIATION 36-0899825
(I.R.S. EMPLOYER
IDENTIFICATION NUMBER)
ONE FIRST NATIONAL PLAZA, CHICAGO, 60670-0126
ILLINOIS
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
THE FIRST NATIONAL BANK OF CHICAGO
ONE FIRST NATIONAL PLAZA, SUITE 0286
CHICAGO, ILLINOIS 60670-0286
ATTN: LYNN A. GOLDSTEIN, LAW DEPARTMENT (312) 732-6919
(NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE)
----------------
LINCOLN NATIONAL CORPORATION
(EXACT NAME OF OBLIGOR AS SPECIFIED IN ITS CHARTER)
INDIANA 35-1140070
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
200 EAST BERRY STREET 46802-2706
FORT WAYNE, INDIANA (ZIP CODE)
(ADDRESS OF PRINCIPAL EXECUTIVE
OFFICES)
GUARANTEE OF PREFERRED SECURITIES OF LINCOLN NATIONAL CAPITAL I
(TITLE OF INDENTURE SECURITIES)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
Item 1. General Information. Furnish the following information as to the
trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
Comptroller of Currency, Washington, D.C., Federal Deposit Insurance
Corporation, Washington, D.C., The Board of Governors of the Federal
Reserve System, Washington D.C.
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust powers.
Item 2. Affiliations With the Obligor. If the obligor is an affiliate of the
trustee, describe each such affiliation.
No such affiliation exists with the trustee.
Item 16. List of exhibits. List below all exhibits filed as a part of this
Statement of Eligibility.
1. A copy of the articles of association of the trustee now in effect.*
2. A copy of the certificates of authority of the trustee to commence
business.*
3. A copy of the authorization of the trustee to exercise corporate trust
powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not Applicable.
6. The consent of the trustee required by Section 321(b) of the Act.
7. A copy of the latest report of condition of the trustee published
pursuant to law or the requirements of its supervising or examining
authority.
8. Not Applicable.
9. Not Applicable.
Pursuant to the requirements of the Trust Indenture Act of 1939, as amended,
the trustee, The First National Bank of Chicago, a national banking
association organized and existing under the laws of the United States of
America, has duly caused this Statement of Eligibility to be signed on its
behalf by the undersigned, thereunto duly authorized, all in the City of
Chicago and State of Illinois, on the 16th day of May, 1996.
The First National Bank of Chicago,
Trustee
/s/ R. D. Manella
By __________________________________
R. D. Manella
Vice President
- --------
*Exhibit 1, 2, 3 and 4 are herein incorporated by reference to Exhibits
bearing identical numbers in Item 12 of the Form T-1 of The First National
Bank of Chicago, filed as Exhibit 26 to the Registration Statement on Form
S-3 of The CIT Group Holdings, Inc., filed with the Securities and Exchange
Commission on February 16, 1993 (Registration No. 33-58418).
2
<PAGE>
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(B) OF THE ACT
MAY 16, 1996
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
In connection with the qualification of an indenture between Lincoln
National Corporation and the First National Bank of Chicago, the undersigned,
in accordance with Section 321(b) of the Trust Indenture Act of 1939, as
amended, hereby consents that the reports of examinations of the undersigned,
made by Federal or State authorities authorized to make such examinations, may
be furnished by such authorities to the Securities and Exchange Commission
upon its request therefor.
Very truly yours,
The First National Bank of Chicago
/s/ R. D. Manella
By: _________________________________
R. D. Manella
Vice President
<PAGE>
EXHIBIT 7
Legal Title of Bank: The First National Bank of Chicago Call Date: 12/31/95
Address: One First National Plaza, Suite 0460
ST-BK: 17-1630 FFIEC 031
City, State Zip: Chicago, IL 60670-0460 Page RC-1
FDIC Certificate No.:0/3/6/1/8
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL
AND STATE-CHARTERED SAVINGS BANKS FOR DECEMBER 31, 1995
ALL SCHEDULES ARE TO BE REPORTED IN THOUSANDS OF DOLLARS. UNLESS OTHERWISE
INDICATED, REPORT THE AMOUNT
OUTSTANDING OF THE LAST BUSINESS DAY OF THE QUARTER.
SCHEDULE RC--BALANCE SHEET
<TABLE>
<CAPTION>
C400
DOLLAR AMOUNTS IN ------------
THOUSANDS RCFD BIL MIL THOU <-
-------------------- ---- ------------ -----
<C> <S> <C> <C> <C> <C>
ASSETS
1. Cash and balances due from
depository institutions
(from Schedule RC-A):
a. Noninterest-bearing
balances and currency
and coin(1)............. 0081 4,003,995 1.a.
b. Interest-bearing
balances(2)............. 0071 9,240,284 1.b.
2. Securities
a. Held-to-maturity
securities (from
Schedule RC-B, column
A)...................... 1754 0 2.a.
b. Available-for-sale
securities (from
Schedule RC-B, column
D)...................... 1773 827,134 2.b.
3. Federal funds sold and
securities purchased under
agreements to resell in
domestic offices of the
bank and its Edge and
Agreement subsidiaries,
and in IBFs:
a. Federal Funds sold...... 0276 3,287,844 3.a.
b. Securities purchased
under agreements to
resell.................. 0277 612,400 3.b.
4. Loans and lease financing
receivables:
a. Loans and leases, net of
unearned income (from
Schedule RC-C).......... RCFD 2122 16,463,126 4.a.
b. LESS: Allowance for loan
and lease losses........ RCFD 3123 353,777 4.b.
c. LESS: Allocated transfer
risk reserve............ RCFD 3128 0 4.c.
d. Loans and leases, net of
unearned income,
allowance, and reserve
(item 4.a minus 4.b and
4.c).................... 2125 16,109,349 4.d.
5. Assets held in trading
accounts.................. 3545 12,379,396 5.
6. Premises and fixed assets
(including capitalized
leases)................... 2145 591,753 6.
7. Other real estate owned
(from Schedule RC-M)...... 2150 8,796 7.
8. Investments in
unconsolidated
subsidiaries and
associated companies (from
Schedule RC-M)............ 2130 40,560 8.
9. Customers' liability to
this bank on acceptances
outstanding............... 2155 524,918 9.
10. Intangible assets (from
Schedule RC-M)............ 2143 101,011 10.
11. Other assets (from Schedule
RC-F)..................... 2160 1,633,056 11.
12. Total assets (sum of items
1 through 11)............. 2170 49,360,496 12.
</TABLE>
- --------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held in trading accounts.
<PAGE>
<TABLE>
<CAPTION>
DOLLAR AMOUNTS IN BIL MIL
THOUSANDS THOU
-------------------- ----------
<C> <S> <C> <C> <C> <C>
LIABILITIES
13. Deposits:
a. In domestic offices
(sum of totals of
columns A and C from
Schedule RC-E, part
1)................... RCON 2200 15,174,243 13.a.
(1) Noninterest-
bearing(1)............. RCON 6631 6,217,164 13.a.(1)
(2) Interest-bearing... RCON 6636 8,957,079 13.a.(2)
b. In foreign offices,
Edge and Agreement
subsidiaries, and
IBFs (from Schedule
RC-E, part II)....... RCFN 2200 14,435,503 13.b.
(1) Noninterest
bearing................ RCFN 6631 625,206 13.b.(1)
(2) Interest-bearing... RCFN 6636 13,810,297 13.b.(2)
14. Federal funds purchased
and securities sold
under agreements to
repurchase in domestic
offices of the bank and
of its Edge and
Agreement subsidiaries,
and in IBFs:
a. Federal funds
purchased............ RCFD 0278 2,449,282 14.a.
b. Securities sold under
agreements to
repurchase........... RCFD 0279 880,215 14.b.
15. a. Demand notes issued
to the U.S. Treasury. RCON 2840 93,942 15.a.
b. Trading Liabilities.. RCFD 3548 7,523,265 15.b.
16. Other borrowed money:
a. With original
maturity of one year
or less.............. RCFD 2332 1,897,370 16.a.
b. With original
maturity of more than
one year............. RCFD 2333 383,807 16.b.
17. Mortgage indebtedness
and obligations under
capitalized leases..... RCFD 2910 280,522 17.
18. Bank's liability on
acceptance executed and
outstanding............ RCFD 2920 524,918 18.
19. Subordinated notes and
debentures............. RCFD 3200 1,225,000 19.
20. Other liabilities (from
Schedule RC-G)......... RCFD 2930 1,444,364 20.
21. Total liabilities (sum
of items 13 through
20).................... RCFD 2948 46,312,431 21.
22. Limited-Life preferred
stock and related
surplus................ RCFD 3282 0 22.
EQUITY CAPITAL
23. Perpetual preferred
stock and related
surplus................ RCFD 3838 0 23.
24. Common stock............ RCFD 3230 200,858 24.
25. Surplus (exclude all
surplus related to
preferred stock)....... RCFD 3839 2,320,126 25.
26. a. Undivided profits and
capital reserves..... RCFD 3632 519,849 26.a.
b. Net unrealized
holding gains
(losses) on
available-for-sale
securities........... RCFD 8434 7,315 26.b.
27. Cumulative foreign
currency translation
adjustments............ RCFD 3284 (83) 27.
28. Total equity capital
(sum of items 23
through 27)............ RCFD 3210 3,048,065 28.
29. Total liabilities,
limited-life preferred
stock, and equity
capital (sum of items
21, 22, and 28)........ RCFD 3300 49,360,496 29.
</TABLE>
Memorandum
To be reported only with the March Report of Condition. Number
1. Indicate in the box at the right the number of the
statement below that best describes the most RCFD 6724 N/A M.1.
comprehensive level of auditing work performed for
the bank by independent external auditors as of any
date during 1993......................................
1=Independent audit of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm which
submits a report on the bank
2=Independent audit of the bank's parent holding company conducted in
accordance with generally accepted auditing standards by a certified public
accounting firm which submits a report on the consolidated holding company
(but not on the bank separately)
3=Directors' examination of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm (may be
required by state chartering authority)
4=Directors' examination of the bank performed by other external auditors (may
be required by state chartering authority)
5=Review of the bank's financial statements by external auditors
6=Compilation of the bank's financial statements by external auditors
7=Other audit procedures (excluding tax preparation work)
8=No external audit work
- -------
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
<PAGE>
EX 25(F)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(B)(2)
----------------
THE FIRST NATIONAL BANK OF CHICAGO
(EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER)
A NATIONAL BANKING ASSOCIATION 36-0899825
(I.R.S. EMPLOYER
IDENTIFICATION NUMBER)
ONE FIRST NATIONAL PLAZA, CHICAGO, 60670-0126
ILLINOIS
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
THE FIRST NATIONAL BANK OF CHICAGO
ONE FIRST NATIONAL PLAZA, SUITE 0286
CHICAGO, ILLINOIS 60670-0286
ATTN: LYNN A. GOLDSTEIN, LAW DEPARTMENT (312) 732-6919
(NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE)
----------------
LINCOLN NATIONAL CORPORATION
(EXACT NAME OF OBLIGOR AS SPECIFIED IN ITS CHARTER)
INDIANA 35-1140070
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
200 EAST BERRY STREET 46802-2706
FORT WAYNE, INDIANA (ZIP CODE)
(ADDRESS OF PRINCIPAL EXECUTIVE
OFFICES)
GUARANTEE OF PREFERRED SECURITIES OF LINCOLN NATIONAL CAPITAL II
(TITLE OF INDENTURE SECURITIES)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
Item 1. General Information. Furnish the following information as to the
trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
Comptroller of Currency, Washington, D.C., Federal Deposit Insurance
Corporation, Washington, D.C., The Board of Governors of the Federal
Reserve System, Washington D.C.
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust powers.
Item 2. Affiliations With the Obligor. If the obligor is an affiliate of the
trustee, describe each such affiliation.
No such affiliation exists with the trustee.
Item 16. List of exhibits. List below all exhibits filed as a part of this
Statement of Eligibility.
1. A copy of the articles of association of the trustee now in effect.*
2. A copy of the certificates of authority of the trustee to commence
business.*
3. A copy of the authorization of the trustee to exercise corporate trust
powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not Applicable.
6. The consent of the trustee required by Section 321(b) of the Act.
7. A copy of the latest report of condition of the trustee published
pursuant to law or the requirements of its supervising or examining
authority.
8. Not Applicable.
9. Not Applicable.
Pursuant to the requirements of the Trust Indenture Act of 1939, as amended,
the trustee, The First National Bank of Chicago, a national banking
association organized and existing under the laws of the United States of
America, has duly caused this Statement of Eligibility to be signed on its
behalf by the undersigned, thereunto duly authorized, all in the City of
Chicago and State of Illinois, on the 16th day of May, 1996.
The First National Bank of Chicago,
Trustee
/s/ R. D. Manella
By __________________________________
R. D. Manella
Vice President
- --------
*Exhibit 1, 2, 3 and 4 are herein incorporated by reference to Exhibits
bearing identical numbers in Item 12 of the Form T-1 of The First National
Bank of Chicago, filed as Exhibit 26 to the Registration Statement on Form
S-3 of The CIT Group Holdings, Inc., filed with the Securities and Exchange
Commission on February 16, 1993 (Registration No. 33-58418).
2
<PAGE>
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(B) OF THE ACT
MAY 16, 1996
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
In connection with the qualification of an indenture between Lincoln
National Corporation and the First National Bank of Chicago, the undersigned,
in accordance with Section 321(b) of the Trust Indenture Act of 1939, as
amended, hereby consents that the reports of examinations of the undersigned,
made by Federal or State authorities authorized to make such examinations, may
be furnished by such authorities to the Securities and Exchange Commission
upon its request therefor.
Very truly yours,
The First National Bank of Chicago
/s/ R. D. Manella
By: _________________________________
R. D. Manella
Vice President
<PAGE>
EXHIBIT 7
Legal Title of Bank: The First National Bank of Chicago Call Date: 12/31/95
Address: One First National Plaza, Suite 0460
ST-BK: 17-1630 FFIEC 031
City, State Zip: Chicago, IL 60670-0460 Page RC-1
FDIC Certificate No.:0/3/6/1/8
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL
AND STATE-CHARTERED SAVINGS BANKS FOR DECEMBER 31, 1995
ALL SCHEDULES ARE TO BE REPORTED IN THOUSANDS OF DOLLARS. UNLESS OTHERWISE
INDICATED, REPORT THE AMOUNT
OUTSTANDING OF THE LAST BUSINESS DAY OF THE QUARTER.
SCHEDULE RC--BALANCE SHEET
<TABLE>
<CAPTION>
C400
DOLLAR AMOUNTS IN ------------
THOUSANDS RCFD BIL MIL THOU <-
-------------------- ---- ------------ -----
<C> <S> <C> <C> <C> <C>
ASSETS
1. Cash and balances due from
depository institutions
(from Schedule RC-A):
a. Noninterest-bearing
balances and currency
and coin(1)............. 0081 4,003,995 1.a.
b. Interest-bearing
balances(2)............. 0071 9,240,284 1.b.
2. Securities
a. Held-to-maturity
securities (from
Schedule RC-B, column
A)...................... 1754 0 2.a.
b. Available-for-sale
securities (from
Schedule RC-B, column
D)...................... 1773 827,134 2.b.
3. Federal funds sold and
securities purchased under
agreements to resell in
domestic offices of the
bank and its Edge and
Agreement subsidiaries,
and in IBFs:
a. Federal Funds sold...... 0276 3,287,844 3.a.
b. Securities purchased
under agreements to
resell.................. 0277 612,400 3.b.
4. Loans and lease financing
receivables:
a. Loans and leases, net of
unearned income (from
Schedule RC-C).......... RCFD 2122 16,463,126 4.a.
b. LESS: Allowance for loan
and lease losses........ RCFD 3123 353,777 4.b.
c. LESS: Allocated transfer
risk reserve............ RCFD 3128 0 4.c.
d. Loans and leases, net of
unearned income,
allowance, and reserve
(item 4.a minus 4.b and
4.c).................... 2125 16,109,349 4.d.
5. Assets held in trading
accounts.................. 3545 12,379,396 5.
6. Premises and fixed assets
(including capitalized
leases)................... 2145 591,753 6.
7. Other real estate owned
(from Schedule RC-M)...... 2150 8,796 7.
8. Investments in
unconsolidated
subsidiaries and
associated companies (from
Schedule RC-M)............ 2130 40,560 8.
9. Customers' liability to
this bank on acceptances
outstanding............... 2155 524,918 9.
10. Intangible assets (from
Schedule RC-M)............ 2143 101,011 10.
11. Other assets (from Schedule
RC-F)..................... 2160 1,633,056 11.
12. Total assets (sum of items
1 through 11)............. 2170 49,360,496 12.
</TABLE>
- --------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held in trading accounts.
<PAGE>
<TABLE>
<CAPTION>
DOLLAR AMOUNTS IN BIL MIL
THOUSANDS THOU
-------------------- ----------
<C> <S> <C> <C> <C> <C>
LIABILITIES
13. Deposits:
a. In domestic offices
(sum of totals of
columns A and C from
Schedule RC-E, part
1)................... RCON 2200 15,174,243 13.a.
(1) Noninterest-
bearing(1)............. RCON 6631 6,217,164 13.a.(1)
(2) Interest-bearing... RCON 6636 8,957,079 13.a.(2)
b. In foreign offices,
Edge and Agreement
subsidiaries, and
IBFs (from Schedule
RC-E, part II)....... RCFN 2200 14,435,503 13.b.
(1) Noninterest
bearing................ RCFN 6631 625,206 13.b.(1)
(2) Interest-bearing... RCFN 6636 13,810,297 13.b.(2)
14. Federal funds purchased
and securities sold
under agreements to
repurchase in domestic
offices of the bank and
of its Edge and
Agreement subsidiaries,
and in IBFs:
a. Federal funds
purchased............ RCFD 0278 2,449,282 14.a.
b. Securities sold under
agreements to
repurchase........... RCFD 0279 880,215 14.b.
15. a. Demand notes issued
to the U.S. Treasury. RCON 2840 93,942 15.a.
b. Trading Liabilities.. RCFD 3548 7,523,265 15.b.
16. Other borrowed money:
a. With original
maturity of one year
or less.............. RCFD 2332 1,897,370 16.a.
b. With original
maturity of more than
one year............. RCFD 2333 383,807 16.b.
17. Mortgage indebtedness
and obligations under
capitalized leases..... RCFD 2910 280,522 17.
18. Bank's liability on
acceptance executed and
outstanding............ RCFD 2920 524,918 18.
19. Subordinated notes and
debentures............. RCFD 3200 1,225,000 19.
20. Other liabilities (from
Schedule RC-G)......... RCFD 2930 1,444,364 20.
21. Total liabilities (sum
of items 13 through
20).................... RCFD 2948 46,312,431 21.
22. Limited-Life preferred
stock and related
surplus................ RCFD 3282 0 22.
EQUITY CAPITAL
23. Perpetual preferred
stock and related
surplus................ RCFD 3838 0 23.
24. Common stock............ RCFD 3230 200,858 24.
25. Surplus (exclude all
surplus related to
preferred stock)....... RCFD 3839 2,320,126 25.
26. a. Undivided profits and
capital reserves..... RCFD 3632 519,849 26.a.
b. Net unrealized
holding gains
(losses) on
available-for-sale
securities........... RCFD 8434 7,315 26.b.
27. Cumulative foreign
currency translation
adjustments............ RCFD 3284 (83) 27.
28. Total equity capital
(sum of items 23
through 27)............ RCFD 3210 3,048,065 28.
29. Total liabilities,
limited-life preferred
stock, and equity
capital (sum of items
21, 22, and 28)........ RCFD 3300 49,360,496 29.
</TABLE>
Memorandum
To be reported only with the March Report of Condition. Number
1. Indicate in the box at the right the number of the
statement below that best describes the most RCFD 6724 N/A M.1.
comprehensive level of auditing work performed for
the bank by independent external auditors as of any
date during 1993......................................
1=Independent audit of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm which
submits a report on the bank
2=Independent audit of the bank's parent holding company conducted in
accordance with generally accepted auditing standards by a certified public
accounting firm which submits a report on the consolidated holding company
(but not on the bank separately)
3=Directors' examination of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm (may be
required by state chartering authority)
4=Directors' examination of the bank performed by other external auditors (may
be required by state chartering authority)
5=Review of the bank's financial statements by external auditors
6=Compilation of the bank's financial statements by external auditors
7=Other audit procedures (excluding tax preparation work)
8=No external audit work
- -------
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
<PAGE>
Ex 25(g)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(B)(2)
----------------
THE FIRST NATIONAL BANK OF CHICAGO
(EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER)
A NATIONAL BANKING ASSOCIATION 36-0899825
(I.R.S. EMPLOYER
IDENTIFICATION NUMBER)
ONE FIRST NATIONAL PLAZA, CHICAGO, 60670-0126
ILLINOIS
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
THE FIRST NATIONAL BANK OF CHICAGO
ONE FIRST NATIONAL PLAZA, SUITE 0286
CHICAGO, ILLINOIS 60670-0286
ATTN: LYNN A. GOLDSTEIN, LAW DEPARTMENT (312) 732-6919
(NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE)
----------------
LINCOLN NATIONAL CORPORATION
(EXACT NAME OF OBLIGOR AS SPECIFIED IN ITS CHARTER)
INDIANA 35-1140070
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
200 EAST BERRY STREET 46802-2706
FORT WAYNE, INDIANA (ZIP CODE)
(ADDRESS OF PRINCIPAL EXECUTIVE
OFFICES)
GUARANTEE OF PREFERRED SECURITIES OF LINCOLN NATIONAL CAPITAL III
(TITLE OF INDENTURE SECURITIES)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
Item 1. General Information. Furnish the following information as to the
trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
Comptroller of Currency, Washington, D.C., Federal Deposit Insurance
Corporation, Washington, D.C., The Board of Governors of the Federal
Reserve System, Washington D.C.
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust powers.
Item 2. Affiliations With the Obligor. If the obligor is an affiliate of the
trustee, describe each such affiliation.
No such affiliation exists with the trustee.
Item 16. List of exhibits. List below all exhibits filed as a part of this
Statement of Eligibility.
1. A copy of the articles of association of the trustee now in effect.*
2. A copy of the certificates of authority of the trustee to commence
business.*
3. A copy of the authorization of the trustee to exercise corporate trust
powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not Applicable.
6. The consent of the trustee required by Section 321(b) of the Act.
7. A copy of the latest report of condition of the trustee published
pursuant to law or the requirements of its supervising or examining
authority.
8. Not Applicable.
9. Not Applicable.
Pursuant to the requirements of the Trust Indenture Act of 1939, as amended,
the trustee, The First National Bank of Chicago, a national banking
association organized and existing under the laws of the United States of
America, has duly caused this Statement of Eligibility to be signed on its
behalf by the undersigned, thereunto duly authorized, all in the City of
Chicago and State of Illinois, on the 16th day of May, 1996.
The First National Bank of Chicago,
Trustee
/s/ R. D. Manella
By __________________________________
R. D. Manella
Vice President
- --------
*Exhibit 1, 2, 3 and 4 are herein incorporated by reference to Exhibits
bearing identical numbers in Item 12 of the Form T-1 of The First National
Bank of Chicago, filed as Exhibit 26 to the Registration Statement on Form
S-3 of The CIT Group Holdings, Inc., filed with the Securities and Exchange
Commission on February 16, 1993 (Registration No. 33-58418).
2
<PAGE>
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(B) OF THE ACT
MAY 16, 1996
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
In connection with the qualification of an indenture between Lincoln
National Corporation and the First National Bank of Chicago, the undersigned,
in accordance with Section 321(b) of the Trust Indenture Act of 1939, as
amended, hereby consents that the reports of examinations of the undersigned,
made by Federal or State authorities authorized to make such examinations, may
be furnished by such authorities to the Securities and Exchange Commission
upon its request therefor.
Very truly yours,
The First National Bank of Chicago
/s/ R. D. Manella
By: _________________________________
R. D. Manella
Vice President
<PAGE>
EXHIBIT 7
Legal Title of Bank: The First National Bank of Chicago Call Date: 12/31/95
Address: One First National Plaza, Suite 0460
ST-BK: 17-1630 FFIEC 031
City, State Zip: Chicago, IL 60670-0460 Page RC-1
FDIC Certificate No.:0/3/6/1/8
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL
AND STATE-CHARTERED SAVINGS BANKS FOR DECEMBER 31, 1995
ALL SCHEDULES ARE TO BE REPORTED IN THOUSANDS OF DOLLARS. UNLESS OTHERWISE
INDICATED, REPORT THE AMOUNT
OUTSTANDING OF THE LAST BUSINESS DAY OF THE QUARTER.
SCHEDULE RC--BALANCE SHEET
<TABLE>
<CAPTION>
C400
DOLLAR AMOUNTS IN ------------
THOUSANDS RCFD BIL MIL THOU <-
-------------------- ---- ------------ -----
<C> <S> <C> <C> <C> <C>
ASSETS
1. Cash and balances due from
depository institutions
(from Schedule RC-A):
a. Noninterest-bearing
balances and currency
and coin(1)............. 0081 4,003,995 1.a.
b. Interest-bearing
balances(2)............. 0071 9,240,284 1.b.
2. Securities
a. Held-to-maturity
securities (from
Schedule RC-B, column
A)...................... 1754 0 2.a.
b. Available-for-sale
securities (from
Schedule RC-B, column
D)...................... 1773 827,134 2.b.
3. Federal funds sold and
securities purchased under
agreements to resell in
domestic offices of the
bank and its Edge and
Agreement subsidiaries,
and in IBFs:
a. Federal Funds sold...... 0276 3,287,844 3.a.
b. Securities purchased
under agreements to
resell.................. 0277 612,400 3.b.
4. Loans and lease financing
receivables:
a. Loans and leases, net of
unearned income (from
Schedule RC-C).......... RCFD 2122 16,463,126 4.a.
b. LESS: Allowance for loan
and lease losses........ RCFD 3123 353,777 4.b.
c. LESS: Allocated transfer
risk reserve............ RCFD 3128 0 4.c.
d. Loans and leases, net of
unearned income,
allowance, and reserve
(item 4.a minus 4.b and
4.c).................... 2125 16,109,349 4.d.
5. Assets held in trading
accounts.................. 3545 12,379,396 5.
6. Premises and fixed assets
(including capitalized
leases)................... 2145 591,753 6.
7. Other real estate owned
(from Schedule RC-M)...... 2150 8,796 7.
8. Investments in
unconsolidated
subsidiaries and
associated companies (from
Schedule RC-M)............ 2130 40,560 8.
9. Customers' liability to
this bank on acceptances
outstanding............... 2155 524,918 9.
10. Intangible assets (from
Schedule RC-M)............ 2143 101,011 10.
11. Other assets (from Schedule
RC-F)..................... 2160 1,633,056 11.
12. Total assets (sum of items
1 through 11)............. 2170 49,360,496 12.
</TABLE>
- --------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held in trading accounts.
<PAGE>
<TABLE>
<CAPTION>
DOLLAR AMOUNTS IN BIL MIL
THOUSANDS THOU
-------------------- ----------
<C> <S> <C> <C> <C> <C>
LIABILITIES
13. Deposits:
a. In domestic offices
(sum of totals of
columns A and C from
Schedule RC-E, part
1)................... RCON 2200 15,174,243 13.a.
(1) Noninterest-
bearing(1)............. RCON 6631 6,217,164 13.a.(1)
(2) Interest-bearing... RCON 6636 8,957,079 13.a.(2)
b. In foreign offices,
Edge and Agreement
subsidiaries, and
IBFs (from Schedule
RC-E, part II)....... RCFN 2200 14,435,503 13.b.
(1) Noninterest
bearing................ RCFN 6631 625,206 13.b.(1)
(2) Interest-bearing... RCFN 6636 13,810,297 13.b.(2)
14. Federal funds purchased
and securities sold
under agreements to
repurchase in domestic
offices of the bank and
of its Edge and
Agreement subsidiaries,
and in IBFs:
a. Federal funds
purchased............ RCFD 0278 2,449,282 14.a.
b. Securities sold under
agreements to
repurchase........... RCFD 0279 880,215 14.b.
15. a. Demand notes issued
to the U.S. Treasury. RCON 2840 93,942 15.a.
b. Trading Liabilities.. RCFD 3548 7,523,265 15.b.
16. Other borrowed money:
a. With original
maturity of one year
or less.............. RCFD 2332 1,897,370 16.a.
b. With original
maturity of more than
one year............. RCFD 2333 383,807 16.b.
17. Mortgage indebtedness
and obligations under
capitalized leases..... RCFD 2910 280,522 17.
18. Bank's liability on
acceptance executed and
outstanding............ RCFD 2920 524,918 18.
19. Subordinated notes and
debentures............. RCFD 3200 1,225,000 19.
20. Other liabilities (from
Schedule RC-G)......... RCFD 2930 1,444,364 20.
21. Total liabilities (sum
of items 13 through
20).................... RCFD 2948 46,312,431 21.
22. Limited-Life preferred
stock and related
surplus................ RCFD 3282 0 22.
EQUITY CAPITAL
23. Perpetual preferred
stock and related
surplus................ RCFD 3838 0 23.
24. Common stock............ RCFD 3230 200,858 24.
25. Surplus (exclude all
surplus related to
preferred stock)....... RCFD 3839 2,320,126 25.
26. a. Undivided profits and
capital reserves..... RCFD 3632 519,849 26.a.
b. Net unrealized
holding gains
(losses) on
available-for-sale
securities........... RCFD 8434 7,315 26.b.
27. Cumulative foreign
currency translation
adjustments............ RCFD 3284 (83) 27.
28. Total equity capital
(sum of items 23
through 27)............ RCFD 3210 3,048,065 28.
29. Total liabilities,
limited-life preferred
stock, and equity
capital (sum of items
21, 22, and 28)........ RCFD 3300 49,360,496 29.
</TABLE>
Memorandum
To be reported only with the March Report of Condition. Number
1. Indicate in the box at the right the number of the
statement below that best describes the most RCFD 6724 N/A M.1.
comprehensive level of auditing work performed for
the bank by independent external auditors as of any
date during 1993......................................
1=Independent audit of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm which
submits a report on the bank
2=Independent audit of the bank's parent holding company conducted in
accordance with generally accepted auditing standards by a certified public
accounting firm which submits a report on the consolidated holding company
(but not on the bank separately)
3=Directors' examination of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm (may be
required by state chartering authority)
4=Directors' examination of the bank performed by other external auditors (may
be required by state chartering authority)
5=Review of the bank's financial statements by external auditors
6=Compilation of the bank's financial statements by external auditors
7=Other audit procedures (excluding tax preparation work)
8=No external audit work
- -------
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
