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)
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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] 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
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(2) Aggregate number of securities to which transaction applies:
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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):
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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.
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<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 Friday, April 23, 1999 at
11:00 A.M. CDT, for the following purposes.
1. To elect nine directors.
2. To ratify or reject the selection of PricewaterhouseCoopers LLP
(formerly Coopers & Lybrand, L.L.P.), as independent auditors for the
fiscal year ending December 31, 1999.
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 26, 1999 are
entitled to vote at the meeting.
By order of the Board of Directors,
Cynthia A. Rose
Secretary
March 16, 1999
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 23, 1999
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 23, 1999 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 Delaware Service
Company, 1818 Market Street, Philadelphia, Pennsylvania, 19103, 1-800-523-1918.
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 26, 1999 will
be entitled to vote at the meeting or any adjournment thereof. On that date, the
Fund had 7,078,007 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 16, 1999. 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, Equiserve,
First Chicago Division. 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
$7,000 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.
<PAGE>
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, except Jeffrey Nick, 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
Owned at
Name, Age, Position with the Fund, Business Experience December 31,
During the Past Five Years and Directorships 1998a*
------------------------------------------------------ ------------
<S> <C>
Directors to be Elected by Holders of Common Stock and Preferred Stock
THOMAS L. BINDLEY (55), Director (since 1998) of the Fund; President of Bindley 4,100
Capital Corporation (May 1998 -- present); Executive Vice President and Chief
Financial Officer (April 1992 -- April 1998) of Whitman Corporation; Director
(since January 1998) of Midas, Inc.; Director of Junior Achievement of
Chicago; Director (since April 1998) of Lincoln National Convertible
Securities Fund, Inc.
ADELA CEPEDA (40), Director (since 1992) of the Fund; President, A.C. Advisory, 1,423
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); Commissioner of Chicago Public Building
Commission (since March 1992); Director of Lincoln National Convertible
Securities Fund, Inc.
ROGER J. DESHAIES (49), Director (since 1992) of the Fund; Senior Vice President 2,328
of Finance (1998 -- present) of Brigham and Women's Hospital; Corporate
Director (1998 -- present) of Partners Health System in Boston, Senior Vice
President--Finance (1990 -- 1998) of Parkview Health System, Fort Wayne,
Indiana; Director of Hospital Laundry Services, Inc. (1995 -- 1998);
President and Chairman of Hospital Laundry Services, Inc. (February 1993 --
February 1995); Director of Signature Care, Inc. (1992 -- 1998); Director and
Treasurer of Pine Valley Country Club (1993 -- 1998); Director of Lincoln
National Convertible Securities Fund, Inc.
CHARLES G. FREUND (75), Director (since 1972) of the Fund; Chairman Emeritus of 24,433
the Board of Directors, Success Bancshares, Inc. (since 1991); Director of
Lincoln National Convertible Securities Fund, Inc. and Mathers Fund, Inc.
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
Shares of
Common
Stock
Beneficially
Owned at
Name, Age, Position with the Fund, Business Experience December 31,
During the Past Five Years and Directorships 1998a*
------------------------------------------------------ ------------
<S> <C>
H. THOMAS McMEEKIN** (45), President (since May 1994) and Director (since 1990) 2,780
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 (June 1995 -- November 1996) and
Director (June 1995 -- present) of Lincoln National Investment Companies,
Inc.; President (since May 1994) 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 (June 1994-1997) and Director (June 1992-1997) of Lincoln
National Mezzanine Corporation; 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. (June
1995 -- November 1996) and Vantage Investment Advisors, Inc.
JEFFREY NICK** (45), Chief Executive Officer, President and Director (since 0
October 1996) of Lincoln National Investment Companies, Inc. and Lincoln
National Investments Inc.; President and Chief Executive Officer (since
October 1997) of the Delaware Group of Funds and President (since 1997) and
Chief Executive Officer (since 1999) of Delaware Management Holdings, Inc.;
Managing Director (October 1992-October 1996) of Lincoln National (UK) PLC,
Director (since June 1998) of the Opera Company of Philadelphia, (since
October 1998) of the Philadelphia Museum of Art, (since November 1997) of the
Roman Catholic High School in Philadelphia, (since May 1998) of World Affairs
Counsel and (since February 1999) of LaSalle University.
DANIEL R. TOLL (71), Director (since 1986) of the Fund; Corporate and Civic 4,685
Director of Brown Group Inc. and Director (until 1998) of A.P. Green
Industries, Inc., Mallinckrodt Inc., Kemper National Insurance Companies and
NICOR, Inc.; Director of Lincoln National Convertible Securities Fund, Inc.
Directors to be Elected by Holders of Preferred Stock
RICHARD M. BURRIDGE (69), Director (since 1972) of the Fund; Chairman (since 21,276
September 1996), prior thereto President (March 1986 -- September 1996) of
The Burridge Group, Inc. (investment management); Director of Cincinnati
Financial Corporation and Lincoln National Convertible Securities Fund, Inc.;
Chairman of the Board of Fort Dearborn Income Securities, Inc.
THOMAS N. MATHERS (84), Director (since 1973) of the Fund; self-employed 3,333
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.
3
<PAGE>
* Each director has sole voting and investment authority over the shares
shown, except as otherwise indicated below. The shares listed for Ms.
Cepeda include 517 shares held on behalf of her daughter. 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. Deshaies include 1,066 shares held in trust. The shares
listed for Mr. Bindley include 4,100 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. Mr. Nick is an
executive officer of Delaware Management Holdings, Inc., a wholly
owned subsidiary of Lincoln National Corporation, the Advisor's parent
corporation. Both Mr. McMeekin and Mr. Nick acquired shares of common
stock of Lincoln National Corporation in the ordinary course during
1998, but those transactions involved substantially less than 1.0% of
the outstanding shares of the common stock of Lincoln National
Corporation.
As of December 31, 1998, the directors and officers of the Fund as a group
(12 persons) beneficially owned 66,188 shares, representing less than 1.0% of
the shares of Common Stock outstanding. No directors or officers held any shares
of Preferred Stock.
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, 1998. In addition, the joint transactions
committee met three times and the nominating committee met three times.
During the year ended December 31, 1998, 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 (53), Vice President since 1992; David C. Fischer (41), Vice President
since February 1995; and David G. Humes (42), Vice President since 1993,
Controller since 1993 and Treasurer since 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 1992. Mr. Humes has been Director of Regulated
Investment Companies since August 1993. The executive officers of the Fund are
elected annually by the Board of Directors.
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 and at each audit committee or nominating
4
<PAGE>
committee meeting which occurs separately from a 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, 1998:
Year Ended December 31, 1998
------------------------------
Total
Compensation
From Fund
Aggregate and Fund
Compensation Complex
From the Paid to
Name Fund(1) Directors(2)
- ---- ------------ ------------
Thomas L. Bindley ......................... $7,750 $14,500
Richard M. Burridge ....................... 13,750 25,500
Adela Cepeda .............................. 13,750 25,500
Roger J. Deshaies ......................... 13,750 25,500
Charles G. Freund ......................... 13,500 25,250
Thomas N. Mathers ......................... 13,750 25,500
Daniel R. Toll ............................ 13,250 24,500
- ----------
(1) Includes a director's fee of $8,000 per year, a $500 fee for attendance at
each Board meeting and at each audit committee or nominating committee
meeting which occurs separately from a Board Meeting and a $250 fee for
attendance at each joint transactions committee meeting.
(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
PricewaterhouseCoopers LLP (formerly Coopers & Lybrand, L.L.P.)
("PricewaterhouseCoopers") as auditors for the Fund for the fiscal year ending
December 31, 1999, and the stockholders are asked to ratify this selection.
Coopers & Lybrand, L.L.P. served as independent auditors of the Fund since 1993.
A representative of PricewaterhouseCoopers 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 fiscal 1998 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 of the Fund must be in
proper form and must be received on or before November 17, 1999. Any stockholder
proposals intended to be presented at the next annual meeting, but not to be
included in the proxy statement and proxy of the Fund, must be in proper form
and must be received on or before January 31, 2000. All such proposals should be
sent to the Secretary of the Fund, 200 East Berry Street, Fort Wayne, Indiana
46802. The inclusion and/or presentation 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.
Cynthia A. Rose
Secretary
Dated: March 16, 1999
YOU ARE URGED TO SEND IN YOUR 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 David Humes, H. Thomas McMeekin and Cynthia A. Rose 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 Friday, April 23, 1999, 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 and with respect to which the Fund did not receive proper
notice on or prior to February 7, 1999.
If your address differs from that appearing hereon, please advise
Equiserve, First Chicago Division, P.O. Box 2500, Jersey City, New Jersey,
07303-2500, 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: T. Bindley, A. Cepeda, R. Deshaies, C. Freund, T. McMeekin,
J. Nick and D. Toll.
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 David Humes, H. Thomas McMeekin and Cynthia A. Rose 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 April 23, 1999, 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 and with respect to which the Fund did not receive proper
notice on or prior to February 1, 1999.
If your address differs from that appearing hereon, please advise Equiserve,
First Chicago Division, P.O. Box 2500, Jersey City, New Jersey, 07303-2500, 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: T. Bindley, R. Burridge, A. Cepeda, R. Deshaies, C. Freund,
T. Mathers, T. McMeekin, J. Nick and D. Toll.
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______________________
