EXHIBIT 1.2
PRICING AGREEMENT
November 9, 2001
Salomon Smith Barney Inc.
A.G. Edwards & Sons, Inc.
First Union Securities, Inc.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Morgan Stanley & Co. Incorporated
UBS Warburg LLC
As representatives of the Underwriters named in
Schedule I hereto
c/o Salomon Smith Barney Inc.
388 Greenwich Street
New York, New York 10013
Ladies and Gentlemen:
Lincoln National Capital V, a statutory business trust formed under the
laws of the State of Delaware (the "Designated Trust") and Lincoln National
Corporation, an Indiana corporation (the "Guarantor"), propose, subject to the
terms and conditions stated herein and in the Underwriting Agreement, dated
November 9, 2001 (the "Underwriting Agreement"), between the Guarantor on the
one hand and the Underwriters named in Schedule I hereto, 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. Each
reference to the Representatives herein and in the provisions of the
Underwriting Agreement so incorporated by reference shall be deemed to refer to
you.
Unless otherwise defined herein, terms defined in the Underwriting
Agreement are used herein as therein defined. The Representatives designated to
act on behalf of the Representatives and on behalf of each of the Underwriters
of the Designated Securities pursuant to Section 12 of the Underwriting
Agreement and the address of the Representatives referred to in such Section 12
are set forth at the end of Schedule II hereto.
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 Designated
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 Designated
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 Designated 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 Designated Trust at the
purchase price to the Underwriters set forth in Schedule II hereto that portion
of the number of Optional Designated Securities as to which such election shall
have been exercised.
The Designated 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 Representatives to the Guarantor and the Designated Trust 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 Representatives, but in no event earlier than the First Time
of Delivery or, unless the Representatives and the Guarantor and the Designated
Trust otherwise agree in writing, no earlier than two or later than ten business
days after the date of such notice.
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
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Underwriting Agreement incorporated herein by reference, shall constitute a
binding agreement between each of the Underwriters, the Designated Trust and the
Guarantor.
[SIGNATURE PAGE FOLLOWS]
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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
Guarantor for examination upon request, but without warranty on the part of the
Representatives as to the authority of the signers thereof.
Very truly yours,
LINCOLN NATIONAL CORPORATION
By: /s/ Richard C. Vaughan
---------------------------------------------
Name: Richard C. Vaughan
Title: Executive Vice President and CFO
LINCOLN NATIONAL CAPITAL V
By: Lincoln National Corporation, as Depositor
By: /s/ Frederick J. Crawford
--------------------------------------------
Name: Frederick J. Crawford
Title: Vice President and Treasurer
Accepted as of the date hereof:
Salomon Smith Barney Inc.
A.G. Edwards & Sons, Inc.
First Union Securities, Inc.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Morgan Stanley & Co. Incorporated
UBS Warburg LLC
As Representatives of the Underwriters Named in Schedule I hereto
/s/ William Oliva
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Name: William Oliva
Title: Managing Director
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On behalf of each of the Underwriters named on Schedule I hereto
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SCHEDULE I
Number of Firm Maximum Number of
Designated Optional Designated
Securities to be Securities Which May
Underwriters Purchased be Purchased
------------ --------- ------------
Salomon Smith Barney, Inc. 935,000 140,250
A.G. Edwards & Sons, Inc.................................... 885,000 132,750
First Union Securities, Inc................................. 885,000 132,750
Merrill Lynch, Pierce, Fenner & Smith 885,000 132,750
Incorporated...............................
Morgan Stanley & Co. Incorporated........................... 885,000 132,750
UBS Warburg LLC............................................. 885,000 132,750
ABN AMRO Incorporated....................................... 40,000 6,000
Banc One Capital Markets, Inc............................... 40,000 6,000
Bear, Stearns & Co., Inc.................................... 40,000 6,000
Charles Schwab & Co., Inc................................... 40,000 6,000
Dain Rauscher Incorporated.................................. 40,000 6,000
H&R BLOCK Financial Advisors, Inc........................... 40,000 6,000
Janney Montgomery Scott Inc................................. 40,000 6,000
Legg Mason Wood Walker, Inc................................. 40,000 6,000
NatCity Investments, Inc.................................... 40,000 6,000
Quick & Reilly, Inc......................................... 40,000 6,000
Raymond James & Associates, Inc............................. 40,000 6,000
Robert W. Baird & Co. Incorporated.......................... 40,000 6,000
TD Securities (USA) Inc..................................... 40,000 6,000
Tucker Anthony Incorporated................................. 40,000 6,000
US Bancorp Piper Jaffray Inc................................ 40,000 6,000
Wells Fargo Van Kasper, LLC................................. 40,000 6,000
--------- -------
Total....................................................... 6,000,000 900,000
========= =======
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SCHEDULE II
DESIGNATED TRUST:
Lincoln National Capital V
TITLE OF DESIGNATED SECURITIES:
7.65% Trust Originated Preferred Securities, Series E ("TRUPS")
AGGREGATE PRINCIPAL AMOUNT:
Aggregate principal amount of Firm Designated Securities: $150,000,000
(aggregate stated liquidation amount)
PRICE TO PUBLIC
100% of the principal amount of the Designated Securities
PURCHASE PRICE BY UNDERWRITERS:
100% of the principal amount of the Designated Securities
UNDERWRITERS' COMPENSATION:
$0.7875 per Designated Security. Such compensation shall be paid
either: (i) by netting such amount against the payment by the Underwriters for
such Designated Securities at the applicable Time of Delivery or (ii) in the
form of a commission to be paid by or on behalf of the Guarantor by wire
transfer of same-day funds at or prior to the applicable Time of Delivery to the
account specified in writing to the Guarantor by Salomon Smith Barney, Inc. no
later than 24 hours prior to such Time of Delivery.
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.
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TRUST AGREEMENT:
Amended and Restated Trust Agreement, dated November 19, 2001, between
the Guarantor and the Trustees named therein.
INDENTURE:
Junior Subordinated Indenture dated as of May 1, 1996, between the
Guarantor and First Chicago National Bank, as Debenture Trustee (the
"Indenture")
GUARANTEE:
Guarantee Agreement, dated as of November 19, 2001, between Guarantor
and Guarantee Trustee
MATURITY:
November 19, 2050.
INTEREST RATE:
7.65%.
INTEREST PAYMENT DATES:
March 31, June 30, September 30 and December 31.
EXTENSION PERIOD:
20 quarters
REDEMPTION PROVISIONS:
The redemption provisions set forth in Section 402 of the Trust
Agreement shall apply to the Designated Securities.
SINKING FUND PROVISIONS:
No sinking fund provisions.
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FIRST TIME OF DELIVERY:
10:00 a.m., New York City time November 19, 2001
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CLOSING LOCATION:
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
NAMES AND ADDRESSES OF REPRESENTATIVES:
Salomon Smith Barney Inc.
A.G. Edwards & Sons, Inc.
First Union Securities, Inc.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Morgan Stanley & Co. Incorporated
UBS Warburg LLC
c/o Salomon Smith Barney Inc.
388 Greenwich Street
New York, New York 10013
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