LINCOLN NATIONAL CORPORATION
1500 Market Street, Suite 3900, West Tower
Philadelphia, PA 19102
November 13, 2000
The Dai-ichi Mutual Life Insurance Company
1-13-1 Yuraku-Cho
Chiyoda-ku
Tokyo, Japan 100-84-11
Ladies and Gentlemen:
This letter agreement sets forth the terms and conditions for the
purchase by Lincoln National Corporation, an Indiana corporation (the
"Company"), of one million (1,000,000) shares of Common Stock of the Company
(the "Shares") currently held by The Dai-ichi Mutual Life Insurance Company, a
mutual life insurance company organized under the laws of Japan (the "Seller").
You had contacted the Company and indicated that you desired to dispose of the
Shares. The Company agrees to purchase those Shares on the terms and subject to
the provisions set forth in this letter agreement.
1. ACQUISITION OF SHARES; PAYMENT. On November 20, 2000, or such other
date on which the parties may mutually agree (the "Closing Date"), the Seller
will sell, assign, convey, transfer and deliver to the Company and the Company
shall purchase and acquire from the Seller the Shares. On the Closing Date, the
Seller shall transfer to the Company the Shares, free and clear of any and all
liens, pledges, restrictions, encumbrances or interests of third persons of any
nature whatsoever and the Company shall pay to the Seller an amount equal to the
Purchase Price, as defined below, by wire transfer of immediately available
funds to an account designated by the Seller (such account to be designated no
later than 48 hours prior to the Closing Date). The Purchase Price shall be
equal to the number of Shares sold by the Seller to the Company hereunder
multiplied by ninety-seven percent (97%) of the average Quoted Price for all
trading days during the five (5) trading day period ending on November 10, 2000.
"Quoted Price" means the last sale regular way or, in case no such sale takes
place on such day, the average of the closing bid and asked prices regular way,
in either case as reported on the New York Stock Exchange - Composite Tape.
2. REPRESENTATIONS AND WARRANTIES OF THE SELLER. The Seller hereby
represents and warrants to the Company that:
2.1 TITLE TO SHARES. The Seller is the record and beneficial
owner of the Shares sold by it. The Shares are and on the Closing Date will be
owned by the Seller free and clear of any and all liens, pledges, restrictions,
encumbrances, or interests of any third persons whatsoever (except as may be set
forth in the Investment Agreement, dated as of June 25, 1990, by and between the
Company and the Seller), and the Seller has good and marketable title to and
right to sell the Shares as herein provided.
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The Dai-Ichi Mutual Life Insurance Company
November 13, 2000
Page 2
2.2 AUTHORIZATION AND EFFECT. The execution, delivery and
performance of this letter agreement and any other documents contemplated hereby
to be executed by the Seller (including the stock power effecting the transfer
of the Shares to the Company) and the consummation of the transaction
contemplated by this letter agreement have been duly and validly authorized and
approved by all necessary action of the Seller prior to the Seller's execution
of this letter agreement. This agreement constitutes a valid and binding
obligation of the Seller, enforceable in accordance with its terms subject to
the effect of bankruptcy, insolvency, reorganization or other similar laws and
to general principles of equity (whether considered in proceedings at law or in
equity).
2.3 NO VIOLATION OR BREACH. The execution, delivery and
performance of this letter agreement by the Seller and any other documents
contemplated hereby to be executed by the Seller (including the stock power
effecting the transfer of the Shares to the Company) and the consummation of the
transaction contemplated, do not and will not violate the articles of
incorporation or bylaws or comparable organizational documents of the Seller;
nor will such actions result in any violation of any statute or any rule, order
or regulation of any court or governmental agency or body having jurisdiction
over the Seller or any of its properties and no consent, approval,
authorization, order, registration or qualification of or with any such court or
governmental agency or body is required for the sale of the Shares by the
Seller.
2.4 ACCURACY OF INFORMATION, REPRESENTATIONS, AND WARRANTIES. No
representation or warranty by the Seller in this letter agreement, nor any
statement or certificate furnished or to be furnished by the Seller pursuant to
this letter agreement, nor any document or certificate delivered by the Seller
to the Company, contains or shall contain any untrue or misleading statement of
material fact.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
3.1 GOOD STANDING AND AUTHORIZATION. The Company is a
corporation, duly organized and validly existing under the laws of the State of
Indiana. The execution, delivery and performance of this letter agreement and
any other documents contemplated hereby have been duly and validly authorized
and approved by all necessary action of the Company prior to the Company's
execution of this letter agreement. This agreement constitutes a valid and
binding obligation of the Company, enforceable in accordance with its terms
subject to the effect of bankruptcy, insolvency, reorganization or other similar
laws and to general principles of equity (whether considered in proceedings at
law or in equity).
3.2 NO VIOLATION OR BREACH. The execution, delivery and
performance of this letter agreement and the consummation of the transaction
contemplated hereby, do not and will not violate the articles of incorporation
or bylaws of the Company or result in a breach of or constitute a default under,
or give any third parties any rights, including but not limited to rights of
termination, cancellation, or acceleration, under, any of the terms, provisions
or conditions of any court or administrative order or process, or any agreement,
contract, or instrument to which the Company is a party or by which it is bound;
nor will such actions result in any violation of any statute or any rule, order
or regulation of any court or governmental agency or body having
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The Dai-Ichi Mutual Life Insurance Company
November 13, 2000
Page 3
jurisdiction over the Company or any of its properties and no consent, approval,
authorization, order, registration or qualification of or with any such court or
governmental agency or body is required for the purchase of the Shares by the
Company.
4. CONDITIONS PRECEDENT TO THE COMPANY'S OBLIGATIONS. The obligations
of the Company under this Agreement are subject to the satisfaction, at or
before the closing, of each of the following conditions:
4.1 All representations and warranties of the Seller made
herein shall be true in all respects at and as of the Closing Date, as
though made thereat.
4.2.The Seller shall have transferred to the Company the
Shares in a manner satisfactory to counsel for the Company.
4.3.The Seller shall not have taken or caused any other party
to take any actions to affect improperly the price of the Shares during
the five (5) trading day period ending on November 10, 2000.
4.4 The Seller shall deliver such other documents,
certificates or instrument as may be reasonably requested by the
Company to effect the transaction contemplated by this letter
agreement.
5. CONDITIONS PRECEDENT TO THE SELLER'S OBLIGATIONS. The obligations of
the Seller under this Agreement are subject to the satisfaction, at or before
the closing, of each of the following conditions:
5.1 BRING-DOWN OF REPRESENTATIONS, WARRANTIES AND COVENANTS.
All representations and warranties of the Company made herein shall be
true in all respects at and as of the Closing Date, as though made
thereat.
5.2 PAYMENT OF PURCHASE PRICE. The Seller shall have received
the Purchase Price as set forth in this letter agreement.
5.3 The Company shall not have taken or caused any other party
to take any actions to affect improperly the price of the Shares during
the five (5) trading day period ending on November 10, 2000.
5.4 OTHER DOCUMENTS. The Company shall deliver such other
documents, certificates or instrument as may be reasonably requested by
the Seller to effect the transaction contemplated by this letter
agreement.
6. MISCELLANEOUS PROVISIONS.
6.1 (a) BROKERAGE. The Seller and the Company shall mutually
indemnify and hold each other harmless from and against any claim against or
liability of the other to any third
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The Dai-Ichi Mutual Life Insurance Company
November 13, 2000
Page 4
party for or on account of any commission, brokerage fee, finder's fee or the
like, due or alleged to be due from such party to any such third party.
(b) SELLER INDEMNITY. The Seller agrees unconditionally to
indemnify, defend and hold harmless the Company, from and against any and all
losses, damages, claims, demands, deficiencies, costs, and expenses (including
reasonable attorneys' fees) of every kind, nature or description which arise out
of or result from or as a consequence of (i) any and all federal, state, local
or foreign taxes that arise or may arise in connection with the purchase by the
Company of the Shares from the Seller; and (ii) any breach of any
representation, warranty or undertaking made by the Seller in this letter
agreement or in any other document, exhibit, certificate or instrument delivered
in connection herewith.
(c) COMPANY INDEMNITY. The Company agrees unconditionally to
indemnify, defend and hold harmless the Seller, from and against any and all
losses, damages, claims, demands, deficiencies, costs, and expenses (including
reasonable attorneys' fees) of every kind, nature or description which arise out
of or result from or as a consequence of any breach of any representation,
warranty or undertaking made by the Company in this letter agreement or in any
other document, exhibit, certificate or instrument delivered in connection
herewith.
6.2 EXPENSES. The costs and expenses incurred by each of the
parties hereto relating to the purchase and sale of the Shares, including but
not limited to, any federal, state or local taxes, transfer taxes and expenses
incurred in the negotiation, preparation, and consummation of this letter
agreement and the transaction hereby contemplated, shall be borne by each
individually and shall not in any manner affect the price paid hereunder.
6.3 PUBLIC ANNOUNCEMENT. The Company shall determine when and the
extent to which it is desirable or necessary to issue any press release or other
public statements with respect to the transaction contemplated by this letter
agreement. The Company will not issue any press release or make any such press
release or public statement without consulting with the Seller and providing the
Seller with a copy of any such written press release, except as may otherwise be
required by applicable law or by obligations pursuant to a listing agreement
with any securities exchange upon which the Company's Common Stock is listed.
6.4 COUNTERPARTS. This letter agreement may be executed
simultaneously in two or more counterparts, each of which shall in such event be
deemed an original but all of which together shall constitute one and the same
instrument.
6.5 GOVERNING LAW. The interpretation, enforcement, validity and
effect shall be governed by the laws of the State of Indiana.
6.6 SURVIVAL OF PROVISIONS. Except with respect to Sections 2.1,
2.2 and 3.1 hereof (which shall survive for the applicable statute of
limitations) and Sections 6.1(b) and 6.1(c) insofar as they relate to a
violation or breach of such Sections 2.1, 2.2 or 3.1, the respective
indemnities, agreements, representations, warranties and other statements of the
Seller and the
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The Dai-Ichi Mutual Life Insurance Company
November 13, 2000
Page 5
Company, as set forth in this letter agreement or made on their behalf pursuant
to this letter agreement shall survive delivery and payment for the Shares for a
period of 18 months.
If you agree with the terms, conditions and provisions set forth
herein, please acknowledge your acceptance and approval of the letter agreement
by signing below and returning a copy to the Company.
LINCOLN NATIONAL CORPORATION
By: /s/ Richard C. Vaughan
-----------------------------------------
Name: Richard C. Vaughan
Title: Executive Vice President
and Chief Financial Officer
Accepted, approved and agreed to on November 13, 2000
THE DAI-ICHI MUTUAL LIFE INSURANCE COMPANY
By: /s/ T. Saito
----------------------------------
Name: Takashi Saito
Title: Director
