<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
LINCOLN NATIONAL INCOME FUND, INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
N/A
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(2) Aggregate number of securities to which transaction applies:
N/A
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
N/A
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(4) Proposed maximum aggregate value of transaction:
N/A
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(5) Total fee paid:
N/A
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
N/A
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(2) Form, Schedule or Registration Statement No.:
N/A
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(3) Filing Party:
N/A
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(4) Date Filed:
N/A
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Notes:
<PAGE>
LINCOLN NATIONAL INCOME FUND, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO THE STOCKHOLDERS:
The Annual Meeting of Stockholders of LINCOLN NATIONAL INCOME FUND, INC. (the
"Fund") will be held at The Chicago Club, 81 East Van Buren Street, Second
Floor, Rooms D, E and F, Chicago, Illinois 60605 on Monday, April 15, 1996 at
10:00 A.M. CDT, for the following purposes.
1. To elect nine directors.
2. To ratify or reject the selection of Coopers & Lybrand, L.L.P., as
independent auditors for the fiscal year ending December 31, 1996.
3. To transact such other business as may properly come before the meeting
or any adjournments.
Stockholders of record at the close of business on February 29, 1996 are
entitled to vote at the meeting.
By order of the Board of Directors,
/s/ C. Suzanne Womack
C. Suzanne Womack
Secretary
March 12, 1996
YOUR VOTE IS IMPORTANT
TO SECURE THE LARGEST POSSIBLE REPRESENTATION AND AVOID THE ADDITIONAL
EXPENSE TO THE FUND OF FURTHER SOLICITATION, PLEASE MARK PREFERENCES, SIGN AND
RETURN THE PROXY CARD IN THE ENCLOSED ENVELOPE.
<PAGE>
LINCOLN NATIONAL INCOME FUND, INC.
200 EAST BERRY STREET
FORT WAYNE, INDIANA 46802
PROXY STATEMENT
For Annual Meeting of Stockholders to be held April 15, 1996
The Board of Directors of Lincoln National Income Fund, Inc. (the "Fund") is
soliciting proxies for use at the Annual Meeting of Stockholders to be held on
April 15, 1996 at 10:00 A.M. CDT, at The Chicago Club, 81 East Van Buren
Street, Second Floor, Rooms D, E and F, Chicago, Illinois 60605, or at any
adjournment of that meeting. THE FUND WILL FURNISH, WITHOUT CHARGE, A COPY OF
THE ANNUAL REPORT TO A STOCKHOLDER UPON REQUEST MADE TO MR. SCOTT SCHILLING,
200 EAST BERRY STREET, FORT WAYNE, INDIANA 46802, 1-800-454-6265.
A proxy may be revoked at any time before it is voted by submission to the
Fund of a later dated proxy, by notice in writing to the Fund, or by the
stockholder's attendance and vote at the Annual Meeting, but if not so revoked
the shares represented by such proxy will be voted according to the instruction
on the proxy card. Pursuant to Maryland law, only votes cast "for" a matter
constitute affirmative votes. Votes "withheld" or abstaining from voting are
counted for quorum purposes, but since they are not cast "for" a particular
matter, they will have the same effect as negative votes or votes against a
particular matter. On the other hand, broker non-votes, if any, while counted
for quorum purposes, are not deemed to be present for any matter for which a
broker does not have authority to vote. Accordingly, broker non-votes will not
have an effect on the outcome of the matters to be considered at the meeting.
Stockholders of record at the close of business on February 29, 1996 will be
entitled to vote at the meeting or any adjournment thereof. On that date, the
Fund had 6,832,195 shares of Common Stock and 40,000 shares of Variable Term
Preferred Stock ("Preferred Stock") outstanding and entitled to vote. Each
share of Common Stock and Preferred Stock will be entitled to one vote at the
meeting.
This proxy statement and accompanying proxy card are being mailed on or about
March 11, 1996. The solicitation of proxies will be largely by mail but may
include telephonic, telegraphic or personal contacts by officers of the Fund or
regular employees of Lincoln Investment Management, Inc. (formerly named
Lincoln National Investment Management Company), the Fund's investment advisor
(the "Advisor"), and/or employees of the Fund's stock transfer agent, Boston
EquiServe (formerly named The First National Bank of Boston). In addition, the
Board of Directors of the Fund has authorized management to retain Corporate
Investors Communications, Inc., a proxy solicitation firm, to assist in the
solicitation of proxies for this meeting. This cost, including specified
expenses, is not expected to exceed $6,000 and will be borne by the Fund. Any
other expenses of solicitation will also be borne by the Fund, except for the
services provided by the Advisor's employees which will be borne by the
Advisor.
BENEFICIAL OWNERSHIP OF SHARES
The Fund has received information indicating that as of December 31, 1995,
Deep Discount Advisors, One West Park Square, Suite 777, Asheville, North
Carolina 28801, beneficially owned 747,905 shares of the Fund's Common Stock,
representing approximately 10.9% of the outstanding shares of Common Stock as
of
<PAGE>
that date. Information concerning the beneficial ownership of shares by the
Fund's directors and officers is set forth under "ELECTION OF DIRECTORS."
ELECTION OF DIRECTORS
(PROPOSAL NO. 1)
At the Annual Meeting, nine directors will be elected to hold office until
their successors are elected and qualified. Pursuant to the Fund's Articles of
Incorporation, seven of the directors will be elected by the holders of the
outstanding shares of the Common Stock and Preferred Stock, voting as a single
class. Two directors will be elected solely by the holders of the shares of
Preferred Stock. Under Maryland law, the nominees receiving a plurality of the
votes cast at the meeting will be elected.
Except as otherwise directed on the proxy card, the persons named as proxies
will vote for the election of the nominees for directors listed below.
Each of the nominees is currently a director of the Fund. Each of the
nominees has consented to be a nominee and to serve as a director if elected.
In the event that any of the nominees should become unavailable for election
as a director, the persons named in the accompanying form of proxy intend to
vote for such substitute to become a director as the Board of Directors may
select.
<TABLE>
<CAPTION>
NAME, AGE, POSITION WITH THE FUND, SHARES OF COMMON STOCK
BUSINESS EXPERIENCE DURING THE PAST BENEFICIALLY OWNED AT
FIVE YEARS AND DIRECTORSHIPS DECEMBER 31, 1995*
----------------------------------- ----------------------
<S> <C>
DIRECTORS TO BE ELECTED BY HOLDERS OF COMMON STOCK AND
PREFERRED STOCK
ADELA CEPEDA (37), Director (since 1992) of the Fund; 1,100
President, A.C. Advisory, Inc. (May 1995-present);
Managing Director and co-founder of Abacus Financial
Group, Inc. (July 1991-May 1995); Vice President of
Smith Barney, Harris Upham & Co. Incorporated (July
1980-June 1991); Director and Vice President of Har-
vard Club of Chicago (since 1986); Commissioner of
Chicago Public Building Commission (since March 1992);
Director of Lincoln National Convertible Securities
Fund, Inc. and Lincoln Advisor Funds, Inc.
ROGER J. DESHAIES (46), Director (since 1992) of the 2,328
Fund; Senior Vice President--Finance (1990-present) of
Parkview Memorial Hospital, Fort Wayne, Indiana;
Director of Hospital Laundry Services, Inc. (since
1995); President and Chairman of Hospital Laundry
Services, Inc. (February 1993-February 1995); Director
of Signature Care, Inc. (since 1992); Director and
Treasurer of Pine Valley Country Club (since 1993);
Director of Lincoln National Convertible Securities
Fund, Inc. and Lincoln Advisor Funds, Inc.
CHARLES G. FREUND (72), Director (since 1972) of the 24,433
Fund; Chairman Emeritus of the Board of Directors,
Success National Bank at Lincolnshire (since 1991);
Chairman of the Board (July 1987-April 1989 and since
July 1989) (previously, Chairman of the Executive Com-
mittee (July 1987-July 1989)) of First National Bank
of Lincolnshire; Director of Lincoln National Convert-
ible Securities Fund, Inc., Lincoln Advisor Funds,
Inc. and Mathers Fund, Inc.
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
NAME, AGE, POSITION WITH THE FUND, SHARES OF COMMON STOCK
BUSINESS EXPERIENCE DURING THE PAST BENEFICIALLY OWNED AT
FIVE YEARS AND DIRECTORSHIPS DECEMBER 31, 1995*
----------------------------------- ----------------------
<S> <C>
H. THOMAS McMEEKIN** (42), President (since May 1994) 2,087
and Director (since 1990) of the Fund; Executive Vice
President and Chief Investment Officer (since May
1994), prior thereto Senior Vice President (November
1992-May 1994) of Lincoln National Corporation; Presi-
dent and Director (since June 1995) of Lincoln Na-
tional Investment Companies, Inc. (a holding company
established in 1995); President (since May 1994),
prior thereto Executive Vice President (February 1992-
November 1992) and Director (since May 1991) of Lin-
coln Investment Management Inc. (formerly called Lin-
coln National Investment Management Company); Presi-
dent (since May 1994) and Director (since 1990) of
Lincoln National Convertible Securities Fund, Inc.;
President and Chief Executive Officer (since June
1994) and Director (since June 1992) of Lincoln Na-
tional Mezzanine Corporation; Vice President (January
1990-November 1992) and Director (since November 1994)
of The Lincoln National Life Insurance Company; Direc-
tor of Delaware Management Holdings, Inc., Lincoln Ad-
visor Funds, Inc., Lynch & Mayer, Inc. and Vantage
Global Advisors, Inc.
DANIEL R. TOLL (68), Director (since 1976) of the Fund; 4,685
Corporate Director and Advisor of Brown Group Inc.,
A.P. Green Industries, Inc., Mallinckrodt Group, Inc.,
Lincoln National Convertible Securities Fund, Inc.,
Kemper National Insurance Company and NICOR Inc.
FRED J. YOUNG (81), Director (since 1979) of the Fund; 18,000
author, lecturer and investor; Director of Lincoln Na-
tional Convertible Securities Fund, Inc.; President of
United Wealth Watchers of America.
ANN L. WARNER** (44), Vice President (since 1988) and 200
Director (since 1995) of the Fund; Senior Vice Presi-
dent and Director of Portfolio Management (since May
1994), prior thereto Vice President and Portfolio Man-
ager (March 1991-May 1994), prior thereto Portfolio
Manager (June 1985-March 1991) of Lincoln National In-
vestment Management Company; Director, Lincoln Na-
tional Convertible Securities Fund, Inc.; and Vice
President, Lincoln Advisor Funds, Inc.
DIRECTORS TO BE ELECTED BY HOLDERS OF PREFERRED STOCK
RICHARD M. BURRIDGE (66), Director (since 1972) of the 15,167
Fund; President (since March 1986) of The Burridge
Group, Inc. (investment management); Director of Com-
puter Access International, Cincinnati Financial Cor-
poration, Lincoln National Convertible Securities
Fund, Inc., Lincoln Advisor Funds, Inc. and St. Joseph
Light and Power Company; Chairman of the Board of Fort
Dearborn Income Securities, Inc.
THOMAS N. MATHERS (81), Director (since 1973) of the 3,333
Fund; Vice President and Director of OFC Meadowood Re-
tirement Community (since 1989); Vice Chairman (Octo-
ber 1986-January 1991) and Director (January 1965-Jan-
uary 1991) of Mathers Fund, Inc.; Vice Chairman (Octo-
ber 1986-January 1991) of Mathers and Company, Inc.
(investment counselors); Director of Lincoln National
Convertible Securities Fund, Inc.
</TABLE>
3
<PAGE>
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* Each director has sole voting and investment authority over the shares
shown, except as otherwise indicated below. The shares listed for Ms. Cepeda
include 400 shares held in trust. The shares listed for Mr. Freund include
988 shares held by his wife. The shares listed for Mr. McMeekin include 200
shares held in trust. The shares listed for Mr. Young include 10,000 shares
held in trust. No director owns any shares of Preferred Stock.
** These directors are "interested persons" of the Fund (as defined in the
Investment Company Act of 1940, as amended (the "1940 Act")). Mr. McMeekin
is an executive officer of Lincoln National Corporation, of which the
Advisor is a wholly-owned subsidiary, and Ms. Warner is an executive officer
of the Advisor.
As of December 31, 1995, the directors and officers of the Fund as a group
(14 persons) beneficially owned 72,659 shares, representing approximately 1.1%
of the shares of Common Stock outstanding.
The members of the nominating and audit committees consist of all directors
except those who may be deemed to be "interested persons" as indicated above.
The nominating committee recommends nominees for directors and officers for
consideration by the full Board. The nominating committee does not solicit
suggestions for nominees for the Board of Directors, but suggestions
accompanied by biographical data will be considered if sent to the Secretary of
the Fund. The audit committee makes recommendations to the full Board with
respect to the engagement of independent auditors and reviews with the
independent auditors the plan and results of the audit engagement and matters
having a material effect upon the Fund's financial operations. The Board of
Directors met six times, the Nominating Committee met twice and the Audit
Committee met twice during the year ended December 31, 1995.
During the year ended December 31, 1995, all of the directors attended 75% or
more of the aggregate meetings of the Board of Directors and the board
committees of which such directors were members and were eligible to attend.
The executive officers of the Fund, other than as shown above, are: David A.
Berry (51), Vice President since 1992; David C. Fischer (38), Vice President
since February 1995; David G. Humes (40), Vice President since 1993 and
Controller since 1993; and Steve Brody (46), Treasurer since 1995. Mr. Berry
has been a Vice President of the Advisor since January 1987. Mr. Fischer has
been a Vice President of the Advisor since December 1993. Mr. Humes has been
Director of Regulated Investment Companies since August 1993. Prior thereto, he
was Director of Strategic Planning and Auditing for the Annuities Division of
The Lincoln National Life Insurance Company (1986-August 1993). Mr. Brody has
been a Senior Vice President of the Advisor since August 1989. Since June 1994,
he has been Senior Vice President and Director of Private Placements and Credit
Research of the Advisor. The executive officers of the Fund are elected
annually by the Board of Directors.
COMPENSATION OF DIRECTORS
The Fund pays directors' fees to those directors who are not affiliated with
the Advisor at the rate of $8,000 per year and a $500 fee for attendance at
each Board meeting and reimburses directors for any reasonable travel expenses
incurred to attend each meeting. The Fund pays no other remuneration to its
directors and officers. In addition, the Fund provides no pension or retirement
benefits to its directors and officers.
4
<PAGE>
The following table shows compensation for the independent directors for the
year ended December 31, 1995:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1995
-------------------------------------
TOTAL COMPENSATION
AGGREGATE FROM FUND AND
COMPENSATION FUND COMPLEX
NAME FROM THE FUND(1) PAID TO DIRECTORS(2)
---- ---------------- --------------------
<S> <C> <C>
Adela Cepeda........................ $10,500 $29,000
Roger J. DeShaies................... 11,000 32,000
Charles G. Freund................... 11,000 32,000
Daniel R. Toll...................... 11,000 21,000
Fred J. Young....................... 11,000 21,000
Richard M. Burridge................. 10,500 31,000
Thomas N. Mathers................... 11,000 21,000
</TABLE>
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(1) Includes the director's fee of $8,000 per year and a $500 fee for
attendance at each Board Meeting.
(2) Each of the independent directors are also directors of Lincoln National
Convertible Securities Fund, Inc. and, with the exception of Messrs. Toll,
Young and Mathers, of Lincoln Advisor Funds, Inc., an "open-end" management
investment company, in the case of Lincoln Advisor Funds, Inc. This
information represents the aggregate directors' fees paid to the individual
by the Fund and each of the other funds.
SELECTION OF INDEPENDENT AUDITORS
(PROPOSAL NO. 2)
The Board of Directors by the unanimous vote of the directors (including
those directors who are not "interested persons") has selected Coopers &
Lybrand, L.L.P. ("Coopers & Lybrand") as auditors for the Fund for the fiscal
year ending December 31, 1996, and the stockholders are asked to ratify this
selection. Coopers & Lybrand has served as independent auditors of the Fund
since 1993.
A representative of Coopers & Lybrand will attend the annual meeting, will be
given an opportunity to make a statement, and will be available to answer
appropriate questions.
Required Approval. The affirmative vote of a majority of the shares present,
in person or by proxy, at the meeting is required for ratification.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU
VOTE "FOR" THIS PROPOSAL NO. 2
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
The Fund's executive officers, directors and 10% stockholders are required
under the Securities Exchange Act of 1934 to file reports of ownership and
changes in ownership with the Securities and Exchange Commission of the New
York Stock Exchange. Copies of these reports must also be furnished to the
Fund. Based solely on a review of copies of such reports furnished to the Fund
through the date hereof, or written representations that no reports were
required, the Fund believes that during fiscal 1995 the filing requirements
applicable to its executive officers, directors and 10% holders were met with
the exception of certain filings by Lincoln National Corporation (on behalf of
itself and subsidiaries, including the investment adviser), Dennis A. Blume and
Steven R. Brody, which were filed late.
5
<PAGE>
DATE FOR STOCKHOLDER PROPOSALS
Any stockholder proposals intended to be presented at the next annual meeting
and be included in the proxy statement and proxy must be in proper form and
must be received on or before November 20, 1996. All such proposals should be
sent to the Secretary of the Fund, 200 East Berry Street, Fort Wayne, Indiana
46802. The inclusion of any such proposal is subject to the applicable
requirements of the proxy rules under the Securities Exchange Act of 1934.
OTHER MATTERS
The Board of Directors does not know of any other matter or business that may
be brought before the meeting. However, if any such matter or business properly
comes before the meeting, it is intended that the persons named as proxies in
the enclosed proxy card will vote in accordance with their best judgment.
/s/ C. Suzanne Womack
C. Suzanne Womack
Secretary
Dated: March 12, 1996
YOU ARE URGED TO SEND IN YOUR EXECUTED PROXY PROMPTLY.
6
<PAGE>
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PROXY
Proxy Solicitation on behalf of the Board of Directors
COMMON STOCK
The undersigned, hereby acknowledges receipt of the Proxy Statement and
appoints Ann L. Warner, H. Thomas McMeekin and C. Suzanne Womack and each of
them as proxies with full power of substitution to act for the undersigned at
the Fund's Annual Meeting to be held Monday, April 15, 1996, and to vote all the
Fund's common stock which the undersigned is entitled to vote at said meeting
and at any adjournment thereof as follows:
This proxy will be voted as specified herein. If no specification is made,
it will be voted FOR all nominees for director, FOR Proposal 2, and in their
discretion, the Proxies may vote upon any other business that properly comes
before the meeting.
If your address differs from that appearing hereon, please advise The First
National Bank of Boston, c/o Boston EquiServe, L.P., Investor Relations, Mail
Stop: 45-02-64, P.O. Box 644, Boston, MA 02102, of your correct address.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY,
USING THE ENCLOSED ENVELOPE.
-------------
SEE REVERSE
SIDE
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- --------------------------------------------------------------------------------
1. ELECTION OF DIRECTORS.
Nominees: A. Cepeda, R. Deshaies, C. Freund, T. McMeekin, D. Toll, A. Warner,
F. Young
FOR ALL NOMINEES WITHHELD FROM ALL NOMINEES
[_] [_]
[_] _______________________________________________________________________
For all nominees except as noted above
The Board of Directors recommends a vote FOR the following proposal:
2. RATIFICATION OF THE SELECTION OF AUDITORS.
FOR AGAINST ABSTAIN
[_] [_] [_]
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [_]
MARK HERE IF YOU PLAN TO ATTEND THE MEETING [_]
IMPORTANT: Please sign exactly as your name or names appear hereon and when
signing as attorney, executor, administrator, trustee or guardian, please give
full title as such. If the signature is by a corporation, sign the full
corporate name by a duly authorized officer.
Signature: _________________________________________ Date______________________
Signature: _________________________________________ Date______________________
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<PAGE>
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PROXY
Proxy Solicitation on behalf of the Board of Directors
VARIABLE TERM PREFERRED STOCK
The undersigned, hereby acknowledges receipt of the Proxy Statement and
appoints Ann L. Warner, H. Thomas McMeekin and C. Suzanne Womack and each of
them as proxies with full power of substitution to act for the undersigned at
the Fund's Annual Meeting to be held Monday, April 15, 1996, and to vote all the
Fund's variable term preferred stock which the undersigned is entitled to vote
at said meeting and at any adjournment thereof as follows:
This proxy will be voted as specified herein. If no specification is made,
it will be voted FOR all nominees for director, FOR Proposal 2, and in their
discretion, the Proxies may vote upon any other business that properly comes
before the meeting.
If your address differs from that appearing hereon, please advise The First
National Bank of Boston, c/o Boston EquiServe, L.P., Investor Relations, Mail
Stop: 45-02-64, P.O. Box 644, Boston, MA 02102, of your correct address.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY,
USING THE ENCLOSED ENVELOPE.
-------------
SEE REVERSE
SIDE
-------------
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- --------------------------------------------------------------------------------
1. ELECTION OF DIRECTORS.
Nominees: R. Burridge, A. Cepeda, R. Deshaies, C. Freund, T. Mathers,
T. McMeekin, D. Toll, A. Warner, F. Young
FOR ALL NOMINEES WITHHELD FROM ALL NOMINEES
[_] [_]
[_] _______________________________________________________________________
For all nominees except as noted above
The Board of Directors recommends a vote FOR the following proposal:
2. RATIFICATION OF THE SELECTION OF AUDITORS.
FOR AGAINST ABSTAIN
[_] [_] [_]
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [_]
MARK HERE IF YOU PLAN TO ATTEND THE MEETING [_]
IMPORTANT: Please sign exactly as your name or names appear hereon and when
signing as attorney, executor, administrator, trustee or guardian, please give
full title as such. If the signature is by a corporation, sign the full
corporate name by a duly authorized officer.
Signature: _________________________________________ Date______________________
Signature: _________________________________________ Date______________________
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