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EXHIBIT 1.2
PRICING AGREEMENT
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇ INCORPORATED
BT ALEX. ▇▇▇▇▇ INCORPORATED
CIBC OPPENHEIMER CORP.
▇/▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
▇▇▇▇▇▇▇ ▇▇▇▇▇ World Headquarters
World Financial Center - North Tower
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
August 10, 1998
Dear Sirs:
Lincoln National Capital IV, a statutory business trust formed
under the laws of the State of Delaware (the "Trust"), and Lincoln National
Corporation, an Indiana corporation (the "Company"), propose, subject to the
terms and conditions stated herein and in the Underwriting Agreement, dated
August 10, 1998 (the "Underwriting Agreement"), between the Company and the
Trust on the one hand and the Underwriters named in Schedule I to the
Underwriting Agreement, on the other hand, to issue and sell to the Underwriters
named in Schedule I hereto (the "Underwriters") the Securities specified in
Schedule II hereto (the "Designated Securities" consisting of Firm Designated
Securities and any Optional Designated Securities the Underwriters may elect to
purchase). Each of the provisions of the Underwriting Agreement is incorporated
herein by reference in its entirety, and shall be deemed to be a part of this
Agreement to the same extent as if such provisions had been set forth in full
herein; and each of the representations and warranties set forth therein shall
be deemed to have been made at and as of the date of this Pricing Agreement,
except that each representation and warranty which refers to the Prospectus in
Section 2 of the Underwriting Agreement shall be deemed to be a representation
or warranty as of the date of the Underwriting Agreement in relation to the
Prospectus (as therein defined), and also a representation and warranty as of
the date of this Pricing Agreement in relation to the Prospectus as amended or
supplemented relating to the Designated Securities which are the subject of this
Pricing Agreement.
Unless otherwise defined herein, terms defined in the
Underwriting Agreement are used herein as therein defined. The Underwriters of
the Designated Securities and their addresses are set forth at the end of
Schedule II hereto.
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An amendment to the Registration Statement, or a supplement to
the Prospectus, as the case may be, relating to the Designated Securities, in
the form heretofore delivered to you is now proposed to be filed with the
Commission.
Subject to the terms and conditions set forth herein and in
the Underwriting Agreement incorporated herein by reference, (a) the Company and
the Trust agree to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Company and
the Trust, at the time and place and at the purchase price to the Underwriters
set forth in Schedule II hereto, the number of Firm Designated Securities set
forth opposite the name of such Underwriter in Schedule I hereto, and (b) in the
event and to the extent that the Underwriters shall exercise the election to
purchase Optional Designated Securities, as provided below, the Trust agrees to
issue and sell to each of the Underwriters, and each of the Underwriters agrees,
severally and not jointly, to purchase from the Trust at the purchase price to
the Underwriters set out in Schedule II hereto that portion of the number of
Optional Designated Securities as to which such election shall have been
exercised.
The Company and the Trust hereby grants to each of the
Underwriters the right to purchase at their election up to the number of
Optional Designated Securities set forth opposite the name of such Underwriter
in Schedule I hereto on the terms referred to in the paragraph above for the
sole purpose of covering over-allotments in the sale of the Firm Designated
Securities. Any such election to purchase Optional Designated Securities may be
exercised by written notice from the Underwriters to the Trust and the Company
given within a period of 30 calendar days after the date of this Pricing
Agreement, setting forth the aggregate number of Optional Designated Securities
to be purchased and the date on which such Optional Designated Securities are to
be delivered, as determined by the Underwriters, but in no event earlier than
the First Time of Delivery or, unless the Underwriters, the Company and the
Trust otherwise agree in writing, no earlier than two or later than ten business
days after the date of such notice.
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If the foregoing is in accordance with your understanding,
please sign and return to us eight counterparts hereof, and upon acceptance
hereof by you, on behalf of each of the Underwriters, this letter and such
acceptance hereof, including the provisions of the Underwriting Agreement
incorporated herein by reference, shall constitute a binding agreement between
each of the Underwriters, the Trust and the Company. It is understood that your
acceptance of this letter on behalf of each of the Underwriters is or will be
pursuant to the authority set forth in a form of Agreement among Underwriters,
the form of which shall be submitted to the Company for examination upon
request, but without warranty on the part of the Underwriters as to the
authority of the signers thereof.
Very truly yours,
LINCOLN NATIONAL CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President
LINCOLN NATIONAL CAPITAL IV
By: Lincoln National Corporation, as Depositor
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Administrative Trustee
Accepted as of the date hereof:
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇.
--------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇.
Title: Vice President
BT Alex. ▇▇▇▇▇ Incorporated
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Managing Director
CIBC ▇▇▇▇▇▇▇▇▇▇▇ Corp.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Managing Director
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SCHEDULE I
Number of Firm
Number of Firm Number of Firm Preferred
Income PRIDES Growth PRIDES Securities
Underwriters to be Purchased to be Purchased to be Purchased
------------ --------------- --------------- ---------------
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇ 4,200,000 600,000 600,000
Incorporated...............................
BT Alex. ▇▇▇▇▇ Incorporated................... 1,400,000 200,000 200,000
CIBC ▇▇▇▇▇▇▇▇▇▇▇ Corp......................... 1,400,000 200,000 200,000
--------- --------- ---------
Total...................................... 7,000,000 1,000,000 1,000,000
========= ========= =========
Maximum
Number of
Optional
Income PRIDES
Underwriters to be Purchased
------------ ---------------
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇ 720,000
Incorporated...............................
BT Alex. ▇▇▇▇▇ Incorporated................... 240,000
CIBC ▇▇▇▇▇▇▇▇▇▇▇ Corp......................... 240,000
---------
Total...................................... 1,200,000
=========
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SCHEDULE II
OFFERORS:
Lincoln National Corporation
Lincoln National Capital IV
TITLE OF DESIGNATED SECURITIES:
FELINE PRIDES, consisting of Income PRIDES and Growth PRIDES, Stated
Amount $25 per Security
6.40% Preferred Securities, Series D
AGGREGATE PRINCIPAL AMOUNT:
Aggregate principal amount of Firm Designated Securities:
7,000,000 Income PRIDES with an aggregate Stated Amount of $175,000,000;
1,000,000 Growth PRIDES with an aggregate Stated Amount of $25,000,000;
1,000,000 Preferred Securities with an aggregate liquidation value of
$25,000,000.
Maximum aggregate principal amount of Optional Designated Securities:
1,200,000 Income PRIDES ($30 million)
PRICE TO PUBLIC:
$25.00 per Income PRIDES
$21.34 per Growth PRIDES
$25.00 per Preferred Security
UNDERWRITERS' COMPENSATION:
$0.75 per Income PRIDES (Gross Spread)
$0.1875 per Growth PRIDES (Gross Spread)
$0.5625 per Preferred Security (Gross Spread)
PURCHASE PRICE BY UNDERWRITERS (REFLECTING UNDERWRITERS' COMPENSATION):
$24.25 per Income PRIDES
$20.7775 per Growth PRIDES
$24.8125 per Preferred Security
SPECIFIED FUNDS FOR PAYMENT OF PURCHASE PRICE:
New York Clearing House same-day funds
ACCOUNTANTS' LETTER TO BE DELIVERED ON DATE OF PRICING AGREEMENT:
Yes.
PURCHASE CONTRACT AGREEMENT:
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Purchase Contract Agreement dated as of August 14, 1998, between the
Purchase Contract Agent and the Company
TRUST AGREEMENT:
Amended and Restated Trust Agreement dated as of August 14, 1998, between
the Company and the Trustees named therein
INDENTURE:
Junior Subordinated Indenture dated as of May 1, 1996, between the Company
and The First National Bank of Chicago as Subordinated Debenture Trustee
(the "Indenture"), as supplemented by the First Supplemental Indenture
dated as of August 14, 1998
GUARANTEE:
Guarantee Agreement, dated as of August 14, 1998, between the Company and
Guarantee Trustee with respect to the Preferred Securities
PLEDGE AGREEMENT:
Pledge Agreement dated as of August 14, 1998 between The Chase Manhattan
Bank, as Collateral Agent, and the Company with respect to Preferred
Securities underlying the Income PRIDES and Treasury Securities underlying
the Growth PRIDES
REMARKETING DATE FOR PREFERRED SECURITIES:
August 13, 2001
MATURITY:
Purchase Contracts underlying Income PRIDES and Growth PRIDES: August 16,
2001
Preferred Securities comprising part of the Income PRIDES: August 15, 2003
Treasury Securities comprising part of the Growth PRIDES: August 15, 2001
Subordinated Debentures underlying Preferred Securities: August 15, 2003
INTEREST/DISTRIBUTION RATE:
Income PRIDES: 7.75% per annum (6.40% Distribution from Preferred Security
and 1.35% Contract Adjustment Payments)
Growth PRIDES: 1.85% per annum - Contact Adjustment Payments
Preferred Securities: 6.40% per annum - Distributions
INTEREST PAYMENT DATES:
February 16, May 16, August 16 and November 16, commencing November 16,
1998
INTEREST DEFERRAL:
Not to exceed August 15, 2003 (maturity date for Subordinated Debentures)
REDEMPTION PROVISIONS:
The redemption provisions set forth in Section 4.2 of the Trust Agreement
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shall apply to the Preferred Securities and the underlying Subordinated
Debentures and the Common Securities.
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SINKING FUND PROVISIONS:
No sinking fund provisions.
FIRST TIME OF DELIVERY:
9:00 a.m., New York City time, August 14, 1998
OVER-ALLOTMENT OPTION:
Exercisable for 30 days, for 1,200,000 Income PRIDES
CLOSING LOCATION:
LeBoeuf, Lamb, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, L.L.P.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
NAMES AND ADDRESSES OF UNDERWRITERS:
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
World Financial Center - North Tower
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ Mass, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
BT Alex. ▇▇▇▇▇ Incorporated
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
CIBC Oppenheimer Corp.
One World Financial Center
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
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