<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.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (check the appropriate box):
[X] No fee required.
[_] 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
(2) Aggregate number of securities to which transaction applies: N/A
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:* N/A
(4) Proposed maximum aggregate value of transaction: N/A
(5) Total fee paid: N/A
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*Set forth the amount on which the filing is calculated and state how it was
determined.
[_] 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
(2) Form, Schedule or Registration Statement No.: N/A
(3) Filing Party: N/A
(4) Date Filed: N/A
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 Tuesday, April 22,
1997 at 11:00 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, 1997.
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 28, 1997 are
entitled to vote at the meeting.
By order of the Board of Directors,
LOGO
C. Suzanne Womack
Secretary
March 18, 1997
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 22, 1997
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 22, 1997 at 11:00 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, 1-800-254-6265.
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 28, 1997 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 18, 1997. 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.
The Fund's investment advisor is Lincoln Investment Management, Inc., 200
East Berry Street, Fort Wayne, Indiana 46802.
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
<PAGE>
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 as the Board of Directors may select.
<TABLE>
<CAPTION>
SHARES OF
COMMON STOCK
BENEFICIALLY
NAME, AGE, POSITION WITH THE FUND, OWNED AT
BUSINESS EXPERIENCE DURING THE PAST DECEMBER 31,
FIVE YEARS AND DIRECTORSHIPS 1996(A)*
----------------------------------- ------------
<S> <C>
DIRECTORS TO BE ELECTED BY HOLDERS OF COMMON STOCK AND PREFERRED
STOCK
ADELA CEPEDA (38), Director (since 1992) of the Fund; President, 1,132
A.C. Advisory, Inc. (May 1995-present); Managing Director and
co-founder of Abacus Financial Group, Inc. (July 1991-May 1995);
Director and Vice President of Harvard Club of Chicago (since
1986); Director of Lincoln National Convertible Securities Fund,
Inc.
ROGER J. DESHAIES (47), Director (since 1992) of the Fund; Senior 2,328
Vice President--Finance (1990-present) of Parkview Health
System, 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.
CHARLES G. FREUND (73), Director (since 1972) of the Fund; 24,433
Chairman Emeritus of the Board of Directors, Success National
Bank at Lincolnshire (since 1991); Director of Lincoln National
Convertible Securities Fund, Inc. and Mathers Fund, Inc.
H. THOMAS McMEEKIN** (43), President (since May 1994) and 2,281
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; President and Director (June 1995-November 1996) of
Lincoln National Investment Companies, Inc.; President (since
May 1994), prior thereto Executive Vice President (February
1992-November 1992) and Director (since May 1991) of Lincoln
Investment Management Inc. (formerly called Lincoln National
Investment Management Company); President (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 National
Mezzanine Corporation; Vice President (January 1990-November
1992) and Director (since November 1994) of The Lincoln National
Life Insurance Company; Director of Delaware Management
Holdings, Inc., Lincoln National Investment Companies, Inc.,
Lynch & Mayer, Inc. and Vantage Global Advisors, Inc.
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
SHARES OF
COMMON STOCK
BENEFICIALLY
NAME, AGE, POSITION WITH THE FUND, OWNED AT
BUSINESS EXPERIENCE DURING THE PAST DECEMBER 31,
FIVE YEARS AND DIRECTORSHIPS 1996(A)*
----------------------------------- ------------
<S> <C>
DANIEL R. TOLL (69), Director (since 1976) of the Fund; Corporate 4,685
and Civic Director of Brown Group Inc., A.P. Green Industries,
Inc., Mallinckrodt Inc., Lincoln National Convertible Securities
Fund, Inc., Kemper National Insurance Companies and NICOR, Inc.
FRED J. YOUNG (82), Director (since 1979) of the Fund; author, 18,000
lecturer and investor; Director of Lincoln National Convertible
Securities Fund, Inc.; President of United Wealth Watchers of
America.
ANN L. WARNER** (45), Vice President (since 1988) and Director 200
(since 1995) of the Fund; Senior Vice President and Director of
Portfolio Management (since May 1994), prior thereto Vice
President and Portfolio Manager (March 1991-May 1994) of Lincoln
Investment Management, Inc.; Director, Lincoln National
Convertible Securities Fund, Inc.
DIRECTORS TO BE ELECTED BY HOLDERS OF PREFERRED STOCK
RICHARD M. BURRIDGE (67), Director (since 1972) of the Fund; 17,281
Chairman (since September 1996), prior thereto President (March
1986-September 1996) of The Burridge Group, Inc. (investment
management); Director of Computer Access International,
Cincinnati Financial Corporation, Lincoln National Convertible
Securities Fund, Inc., and St. Joseph Light and Power Company;
Chairman of the Board of Fort Dearborn Income Securities, Inc.
THOMAS N. MATHERS (82), Director (since 1973) of the Fund; self- 3,333
employed financial consultant; Vice President and Director of
OFC Meadowood Retirement Community (since 1989); Director of
Lincoln National Convertible Securities Fund, Inc.
</TABLE>
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(a) The shares beneficially owned by each of the directors do not exceed 1.0%
of the outstanding shares of Common Stock of the Fund.
*Each director has sole voting and investment authority over the shares
shown, except as otherwise indicated below. The shares listed for Ms.
Cepeda include 411 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. The shares listed for Mr. Deshaies include
1,066 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. Both Mr. McMeekin and Ms. Warner acquired shares of
common stock of Lincoln National Corporation in the ordinary course during
1996, but those transactions involved substantially less than 1.0% of the
outstanding shares of the common stock of Lincoln National Corporation.
3
<PAGE>
As of December 31, 1996, the directors and officers of the Fund as a group
(14 persons) beneficially owned 76,325 shares, representing approximately 1.1%
of the shares of Common Stock outstanding.
The members of the nominating, audit and joint transactions 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. Pursuant to an exemptive order granted by the
Securities and Exchange Commission, the joint transactions committee is
responsible for reviewing any investments in private placement securities by
the Fund in which affiliates of the Fund's investment advisor are also
investing. The Board of Directors met five times during the year ended
December 31, 1996. In addition, the joint transactions committee met five
times, the nominating committee met twice and the audit committee met twice.
During the year ended December 31, 1996, 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 (39), Vice President
since February 1995; David G. Humes (40), Vice President since 1993 and
Controller since 1993; and Harold F. McElraft (52), Vice President and
Treasurer from April 1996 to February 1997. 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. Prior thereto, he was an
Assistant Vice President of the Advisor (1988-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. McElraft was a Senior Vice President and Chief Financial Officer of the
Advisor from December 1995 to February 1997. Prior thereto, he was President
of Rightwaters Association (August 1994-December 1995), Senior Vice President,
GNA Corporation (March 1994-July 1994) and Executive Vice President, Templeton
Funds Management, Inc. (July 1991-March 1994). The executive officers of the
Fund are elected annually by the Board of Directors.
4
<PAGE>
COMPENSATION OF DIRECTORS AND OFFICERS
The Fund pays directors' fees to those directors who are not affiliated with
the Advisor at the rate of $8,000 per year, a $500 fee for attendance at each
Board meeting, a $250 fee for attendance at each joint transactions committee
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.
The following table shows compensation for the independent directors for the
year ended December 31, 1996:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1996
---------------------------------
AGGREGATE TOTAL COMPENSATION
COMPENSATION FROM FUND AND FUND
FROM THE COMPLEX
NAME FUND(1) PAID TO DIRECTORS(2)
---- ------------ --------------------
<S> <C> <C>
Adela Cepeda............................ $11,500 $21,000
Roger J. Deshaies....................... 11,750 21,250
Charles G. Freund....................... 11,750 21,250
Daniel R. Toll.......................... 11,750 21,250
Fred J. Young........................... 11,750 21,250
Richard M. Burridge..................... 11,000 20,500
Thomas N. Mathers....................... 11,250 20,250
</TABLE>
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(1) Includes the director's fee of $8,000 per year, a $500 fee for attendance
at each Board Meeting and a $250 fee for each joint transactions committee
meeting attended.
(2) Each of the independent directors is also a director of Lincoln National
Convertible Securities Fund, Inc. This information represents the
aggregate directors' fees paid to the individual by both 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, 1997, 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
5
<PAGE>
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The Fund's executive officers, directors and 10% stockholders and certain
persons who are directors, officers or affiliated persons of the Advisor are
required under the Securities Exchange Act of 1934 to file reports of
ownership and changes in ownership with the Securities and Exchange Commission
and 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 1996 the filing
requirements applicable to the above-mentioned persons were met.
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 18, 1997. 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.
LOGO
C. Suzanne Womack
Secretary
Dated: March 18, 1997
YOU ARE URGED TO SEND IN YOUR EXECUTED PROXY PROMPTLY.
6
<PAGE>
PROXY
LINCOLN NATIONAL INCOME FUND, INC.
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 Tuesday, April 22, 1997, 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: 45-02-62, P.O. Box 8200, Boston, MA 02102-8200, of your correct address.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY,
USING THE ENCLOSED ENVELOPE.
-------------------
SEE REVERSE
SIDE
-------------------
<PAGE>
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______________________
<PAGE>
PROXY
LINCOLN NATIONAL INCOME FUND, INC.
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 Tuesday, April 22, 1997, 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: 45-02-62, P.O. Box 8200, Boston, MA 02102-8200, of your correct address.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY,
USING THE ENCLOSED ENVELOPE.
-----------
SEE REVERSE
SIDE
------------
<PAGE>
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______________________
2132176.7
