EXHIBIT 1.2
PRICING AGREEMENT
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Chase Securities Inc.
Lehman Brothers Inc.
Morgan Stanley & Co. Incorporated
PaineWebber Incorporated
As representatives of the Underwriters named in
Schedule I to the Underwriting Agreement
c/o Merrill Lynch, Pierce, Fenner & Smith Incorporated
Sears Tower, Suite 5500
Chicago, Illinois 60606
Dear Sirs:
Lincoln National Capital III, 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 July
17, 1998 (the "Underwriting Agreement"), between the Guarantor 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"). 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, 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 Designated Securities set forth
opposite the name of such Underwriter in Schedule I hereto shall have been
exercised.
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 Designated Trust and the Guarantor. 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
Chief Financial Officer
LINCOLN NATIONAL CAPITAL III
By: Lincoln National Corporation, as Depositor
By: /s/ Janet C. Chrzan
Name: Janet C. Chrzan
Title: Administrative Trustee
Accepted as of the date hereof:
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Chase Securities Inc.
Lehman Brothers Inc.
Morgan Stanley & Co. Incorporated
PaineWebber Incorporated
As Representatives of the Underwriters Named in Schedule I hereto
/s/ John P. Tullsen Jr.
- --------------------------------
On behalf of each of the Underwriters named on Schedule I hereto
SCHEDULE I
Number of
Designated
Securities to be
Underwriters Purchased
- ------------ ----------------
Merrill Lynch, Pierce, Fenner & Smith
Incorporated 1,080,000
Chase Securities Inc. 1,080,000
Lehman Brothers Inc. 1,080,000
Morgan Stanley & Co. Incorporated 1,080,000
PaineWebber Incorporated 1,080,000
BT Alex. Brown Incorporated 80,000
Robert W. Baird & Co. Incorporated 80,000
Bear, Stearns & Co. Inc. 80,000
ABN AMRO Incorporated 80,000
CIBC Oppenheimer Corp. 80,000
Cowen & Company 80,000
Dain Rauscher Wessels 80,000
A.G. Edwards & Sons, Inc. 80,000
EVEREN Securities, Inc. 80,000
Interstate/Johnson Lane Corporation 80,000
Janney Montgomery Scott Inc. 80,000
Legg Mason Wood Walker, Incorporated 80,000
Olde & Co., Incorporated 80,000
Piper Jaffray Inc. 80,000
Raymond James & Associates, Inc. 80,000
Tucker Anthony Incorporated 80,000
Wheat First Securities, Inc. 80,000
J.C. Bradford & Co. 40,000
Conning & Company 40,000
Craigie Incorporated 40,000
Crowell, Weedon & Co. 40,000
Fahnestock & Co. Inc. 40,000
Fidelity Capital Markets, a division of Nat'l Fin'l Svs Corp. 40,000
First Albany Corporation 40,000
First of Michigan Corporation 40,000
Gibraltar Securities Co. 40,000
Gruntal & Co., L.L.C. 40,000
Hilliard Lyons Inc. 40,000
Wayne Hummer Investments Inc. 40,000
Kirkpatrick, Pettis, Smith, Polian Inc. 40,000
McDonald & Company Securities, Inc. 40,000
McGinn, Smith & Co., Inc. 40,000
Mesirow Financial Inc. 40,000
Morgan Keegan & Company, Inc. 40,000
The Ohio Company 40,000
Ormes Capital Markets, Inc. 40,000
Parker/Hunter Incorporated 40,000
Pryor, McClendon, Counts & Co., Inc. 40,000
The Robinson-Humphrey Company, LLC 40,000
Roney Capital Markets, a division of First Chicago
Capital Markets, Inc. 40,000
Sands Brothers & Co., Ltd. 40,000
Scott & Stringfellow, Inc. 40,000
Stephens Inc. 40,000
Stifel, Nicolaus & Company, Incorporated 40,000
Stone & Youngberg 40,000
TD Securities (USA) Inc. 40,000
Trilion International Inc. 40,000
Utendahl Capital Partners, L.P. 40,000
---------
Total 8,000,000
---------
SCHEDULE II
DESIGNATED TRUST:
Lincoln National Capital III
TITLE OF DESIGNATED SECURITIES:
7.40% Trust Originated Preferred Securities, Series C ("TOPrS")
AGGREGATE PRINCIPAL AMOUNT:
Aggregate principal amount of Firm Designated Securities: $200,000,000
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:
$.7875 per Designated 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.
TRUST AGREEMENT:
Amended and Restated Trust Agreement, dated July 24, 1998, 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 July 24, 1998, between Guarantor and
Guarantee Trustee
MATURITY:
September 30, 2028, which date may be extended to a date not later than
September 30, 2047 if certain conditions are met.
INTEREST RATE:
7.40%
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.
FIRST TIME OF DELIVERY:
10:00 a.m., New York City time July 24, 1998
CLOSING LOCATION:
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
NAMES AND ADDRESSES OF REPRESENTATIVES:
Merrill Lynch, Pierce, Fenner & Smith Incorporated
c/o Merrill Lynch & Co.
Sears Tower, Suite 5500
Chicago, IL 60606