Lincoln S-3
As
filed
with the Securities and Exchange Commission on April 6, 2006.
File
No.
333-
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
_______________________
FORM
S-3
REGISTRATION
STATEMENT
UNDER
THE
SECURITIES ACT OF 1933
Lincoln
National Corporation
(Exact
Name of Registrant as Specified in Its Charter)
Indiana
(State
or
Other Jurisdiction of Incorporation or Organization)
35-1140070
(I.R.S.
Employer Identification No.)
Centre
Square West Tower
1500
Market Street, Suite 3900
Philadelphia,
PA 19102
(215)
448-1400
(Address,
Including Zip Code, and Telephone Number, Including
Area
Code, of Registrant's Principal Executive Offices)
Jefferson-Pilot
Corporation
Long
Term Stock Incentive Plan
(Full
Title of Plan)
Dennis
L. Schoff
Senior
Vice President & General Counsel
Lincoln
National Corporation
Centre
Square West Tower
1500
Market Street, Suite 3900
Philadelphia,
PA 19102
(215)
448-1400
(Name,
Address, Including Zip Code, and Telephone Number, Including
Area
Code, of Agent for Service)
Approximate
date of commencement of proposed sale to the public:
From
time to time after the effective date of this registration
statement.
_________________________
If
the
only securities being registered on this Form are being offered pursuant to
dividend or interest
reinvestment
plans, please check the following box. [ ]
If
any of
the securities being registered on this Form are to be offered on a delayed
or
continuous basis pursuant to Rule 415 under the Securities Act of 1933, other
than securities offered only in connection with dividend or interest
reinvestment, check the following box. [X]
If
this
Form is filed to register additional securities for an offering pursuant
to Rule
462(b) under the Securities Act, please check the following box and list
the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If
this
Form is a post-effective amendment filed pursuant to Rule 462(c) under the
Securities Act, check the following box and list the Securities Act registration
number of the earlier effective registration statement for the same
offering. [ ]
If
this
Form is a registration statement pursuant to General Instruction I.D. or
a
post-effective amendment thereto that shall become effective upon filing
with
the Commission pursuant to Rule 462(e) under the Securities Act, check the
following box. [X]
If
this
Form is a post-effective amendment to a registration statement filed pursuant
to
General Instruction I.D. filed to register additional securities or additional
classes of securities pursuant to Rule 413(b) under the Securities Act, check
the following box. [ ]
CALCULATION
OF REGISTRATION FEE
| |
|
|
|
|
|
Title
of Securities to be registered(3)
|
Amount
to be registered
|
Proposed
Maximum offering price per share
|
Proposed
maximum aggregate offering
price
|
Amount
of registration
fee
|
|
Common
Stock
(no
par value)
|
9,475,000(1)
|
$54.20(2)
|
$513,545,000
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$54,949
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(1)
Pursuant to Rule 416 under the Securities Act of 1933, as amended (the
“Securities Act”), there are being registered such additional shares as may be
issuable pursuant to the anti-dilution provisions of the Jefferson-Pilot
Corporation Long Term Stock Compensation Plan (the “Plan”), by
reason
of stock splits, stock dividends or similar transactions.
The
shares of common stock to which this Registration Statement relates are to
be
issued upon exercise of options and in connection with certain other
stock-related awards, all of which will be granted or awarded under the Plan
for
no consideration.
(2)
Estimated
solely for purposes of calculating the registration fee pursuant to Rules 457(c)
and 457(h)(1) under the Securities Act based upon the average of the high and
low sale prices of LNC’s Common Stock on March 31, 2006 as reported on the New
York Stock Exchange composite transactions tape.
(3)
Each
share of Common Stock includes common share purchase rights. Prior to the
occurrence of certain events, the rights will not be exercisable or evidenced
separately from the Common Stock.
PROSPECTUS
9,475,000
Shares
LINCOLN
NATIONAL CORPORATION
COMMON
STOCK
(No
Par
Value)
Offered
as set forth in this Prospectus pursuant to the
JEFFERSON-PILOT
CORPORATION
LONG
TERM
STOCK INCENTIVE PLAN
This
Prospectus relates to shares of our Common Stock to be issued under the Plan
to
former employees and agents of Jefferson-Pilot Corporation or its subsidiaries
(“JP”).
Our
Common Stock is listed on The New York Stock Exchange, the Pacific Stock
Exchange and the Chicago Stock Exchange under the symbol “LNC.” The last
reported sale price on March 31, 2006 was $54.59 per share.
Investing
in our Common Stock involves risks. See “Risk Factors” beginning on page 3 of
this prospectus.
Neither
the Securities and Exchange Commission nor any state securities commission
has
approved or disapproved of these securities or passed upon the adequacy or
accuracy of this prospectus supplement and the accompanying prospectus. Any
representation to the contrary is a criminal offense.
You
should rely only on the information contained in or incorporated by reference
in
this prospectus. We have not authorized anyone to provide you with information
that is different. We are not making an offer of these securities in any state
or jurisdiction where the offer is not permitted. The information contained
or
incorporated by reference in this prospectus is accurate only as of the
respective dates of such information. Our business, financial condition, results
of operations and prospects may have changed since those dates.
The
date
of this Prospectus is April 6, 2006.
TABLE
OF CONTENTS
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Page |
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The
Company
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1
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Forward-Looking
Statements - Cautionary Language
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1
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Risk
Factors
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3
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Summary
of the Plan
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13
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1.
Purpose of the Plan
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13
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2.
Types of Awards
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13
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3.
Shares Subject to the Plan;
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Annual Per Person Limitations
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13
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4.
Eligibility
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15
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5.
Administration
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15
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6.
Stock Options and SARS
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15
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7.
Stock
Grants Including LTIP Payouts
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16
|
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8.
Tax
Withholding
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16
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9.
Non-Transferability
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17
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10.
Change in Control
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17
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11.
Amendment and Termination of the Plan
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17
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12.
Federal Income Tax Implications of the Plan
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17
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13.
Miscellaneous
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19
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Where
You Can Find More Information
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19
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Documents
Incorporated by Reference
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20
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Experts
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21
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Legal
Matters
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21
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It
is
important for you to read and consider all information contained in this
prospectus in making your investment decision. You should also read and consider
the additional information under the caption “Where You Can Find More
Information”.
Unless
otherwise indicated, all references in this prospectus to “LNC,” “we,” “our,”
“us,” or similar terms refer to Lincoln National Corporation together with its
subsidiaries.
REQUIRED
DISCLOSURE FOR NORTH CAROLINA RESIDENTS
THE
COMMISSIONER OF INSURANCE OF THE STATE OF NORTH CAROLINA HAS NOT APPROVED OR
DISAPPROVED OF THIS OFFERING NOR HAS THE COMMISSIONER PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS.
THE
COMPANY
We
are a
holding company that operates multiple insurance and investment management
businesses through subsidiary companies. LNC was organized under the laws of
the
State of Indiana in 1968. At December 31, 2005, we had consolidated assets
of
$125 billion and consolidated shareholders’ equity of $6.4 billion. Our
principal executive office is located at 1500 Market Street, Suite 3900, Centre
Square West Tower, Philadelphia, PA 19102. Our telephone number is (215)
448-1400.
FORWARD-LOOKING
STATEMENTS—CAUTIONARY LANGUAGE
This
prospectus and the accompanying prospectus supplement may contain or incorporate
by reference information that includes or is based upon forward-looking
statements within the meaning of the Private Securities Litigation Reform Act
of
1995. Forward-looking statements give expectations or forecasts of future
events. You can identify these statements by the fact that they do not relate
strictly to historical or current facts. They use words such as “anticipate,”
“estimate,” “expect,” “project,” “intend,” “plan,” “believe,” and other words
and terms of similar meaning in connection with a discussion of future operating
or financial performance. In particular, these include statements relating
to
future actions, prospective services or products, future performance or results
of current and anticipated services or products, sales efforts, expenses, the
outcome of contingencies such as legal proceedings, trends in operations and
financial results.
Any
or
all forward-looking statements may turn out to be wrong. They can be affected
by
inaccurate assumptions or by known or unknown risks and uncertainties. Many
such
factors will be important in determining LNC’s actual future results. These
statements are based on current expectations and the current economic
environment. They involve a number of risks and uncertainties that are difficult
to predict. These statements are not guarantees of future performance, and
there
are no guarantees about the performance of any securities offered by this
prospectus. Actual results could differ materially from those expressed or
implied in the forward-looking statements. Among factors that could cause actual
results to differ materially are:
| · |
Problems
arising with the ability to successfully integrate our and
Jefferson-Pilot’s businesses, which may affect our ability to operate as
effectively and efficiently as expected or to achieve the expected
synergies from the merger or to achieve such synergies within our
expected
timeframe;
|
| · |
Legislative,
regulatory or tax changes, both domestic and foreign, that affect
the cost
of, or demand for, LNC’s products, the required amount of reserves and/or
surplus, or otherwise affect our ability to conduct business, including
changes to statutory reserves and/or risk-based capital requirements
related to secondary guarantees under universal life and variable
annuity
products such as Actuarial Guideline 38; restrictions on revenue
sharing
and 12b-1 payments; and the potential for U.S. Federal tax reform;
|
| · |
The
initiation of legal or regulatory proceedings against LNC or its
subsidiaries and the outcome of any legal or regulatory proceedings,
such
as: (a) adverse actions related to present or past business practices
common in businesses in which LNC and
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its subsidiaries compete; (b) adverse
decisions in significant actions including, but not limited to, actions
brought by federal and state authorities, and extra-contractual and
class
action damage cases; (c) new decisions that result in changes in
law; and
(d) unexpected trial court rulings;
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Ineffectiveness
of LNC’s various hedging strategies used to offset the impact of declines
in the equity markets;
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A
deviation in actual experience regarding future persistency, mortality,
morbidity, interest rates or equity market returns from LNC’s assumptions
used in pricing its products, in establishing related insurance reserves,
and in the amortization of intangibles that may result in an increase
in
reserves and a decrease in net income;
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| · |
Changes
in accounting principles generally accepted in the U.S. (“GAAP”) that may
result in unanticipated changes to LNC’s net income;
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Lowering
of one or more of LNC’s debt ratings issued by nationally recognized
statistical rating organizations, and the adverse impact such action
may
have on LNC’s ability to raise capital and on its liquidity and financial
condition;
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| · |
Lowering
of one or more of the insurer financial strength ratings of LNC’s
insurance subsidiaries, and the adverse impact such action may have
on the
premium writings, policy retention, and profitability of its insurance
subsidiaries;
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| · |
Significant
credit, accounting, fraud or corporate governance issues that may
adversely affect the value of certain investments in the portfolios
of
LNC’s companies requiring that LNC realize losses on such investments;
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The
impact of acquisitions and divestitures, restructurings, product
withdrawals and other unusual items, including LNC’s ability to integrate
acquisitions and to obtain the anticipated results and synergies
from
acquisitions;
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| · |
The
adequacy and collectibility of reinsurance that LNC has purchased;
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Acts
of terrorism or war that may adversely affect LNC’s businesses and the
cost and availability of reinsurance;
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Competitive
conditions, including pricing pressures, new product offerings and
the
emergence of new competitors, that may affect the level of premiums
and
fees that LNC can charge for its products;
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The
unknown impact on LNC’s business resulting from changes in the
demographics of LNC’s client base, as aging baby-boomers move from the
asset-accumulation stage to the asset-distribution stage of life;
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Loss
of key management, portfolio managers in the Investment Management
segment, financial advisors or wholesalers; and
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| · |
Changes
in general economic or business conditions, both domestic and foreign,
that may be less favorable than expected and may affect foreign exchange
rates, premium levels, claims experience, the level of pension benefit
costs and funding, and investment results.
|
The
risks
included here are not exhaustive. We describe these risks and uncertainties
in
greater detail under the caption “Risk Factors” below and in LNC’s recent Forms
10-K and 8-K and other documents filed with the Securities and Exchange
Commission (the “SEC”). Moreover, we operate in a rapidly changing and
competitive environment. New risk factors emerge from time to time and it is
not
possible for management to predict all such risk factors.
Further,
it is not possible to assess the impact of all risk factors on LNC’s business or
the extent to which any factor, or combination of factors, may cause actual
results to differ materially from those contained in any forward-looking
statements. Given these risks and uncertainties, investors should not place
undo
reliance on forward-looking statements as a prediction of actual results. In
addition, we disclaim any current intention to update any forward-looking
statements to reflect events or circumstances that occur after the date of
this
prospectus.
RISK
FACTORS
You
should carefully consider the risks described below and those incorporated
by
reference into this prospectus before making an investment decision. The risks
and uncertainties described below and incorporated by reference into this
prospectus are not the only ones facing our company. Additional risks and
uncertainties not presently known to us or that we currently deem immaterial
may
also impair our business operations. If any of these risks actually occur,
our
business, financial condition and results of operations could be materially
affected. In that case, the value of our Common Stock could decline
substantially.
Our
reserves for future policy benefits and claims related to our current and
future business as well as businesses we may acquire in the future may
prove to be inadequate.
Our
reserves for future policy benefits and claims may prove to be inadequate.
We
establish and carry, as a liability, reserves based on estimates of how much
we
will need to pay for future benefits and claims. For our life insurance and
annuity products, we calculate these reserves based on many assumptions and
estimates, including estimated premiums we will receive over the assumed life
of
the policy, the timing of the event covered by the insurance policy, the amount
of benefits or claims to be paid and the investment returns on the assets we
purchase
with
the
premiums we receive. The assumptions and estimates we use in connection with
establishing and carrying our reserves are inherently uncertain. Accordingly,
we
cannot determine with precision the ultimate amounts that we will pay for,
or
the timing of payment of, actual benefits and claims or whether the assets
supporting the policy liabilities will grow to the level we assume prior to
payment of benefits or claims. If our actual experience is different from our
assumptions or estimates, our reserves may prove to be inadequate in relation to
our estimated future benefits and claims. As a result, we would incur a charge
to our earnings in the quarter in which we increase our reserves.
Because
the equity markets and interest rates impact our profitability, changes in
equity markets and interest rates may also negatively affect our business and
profitability.
The
fee
revenue that we earn on equity-based variable annuities, unit-linked accounts,
variable universal life insurance policies and investment advisory business,
is
based upon account values. Because strong equity markets result in higher
account values, strong equity markets positively affect our net income through
increased fee revenue. In addition, the increased fee revenue resulting from
strong equity markets increases the expected gross profits (“EGPs”) from
variable insurance products. As a result, the higher EGPs may result in lower
net amortized costs related to DAC, DSI, VOBA, and DFEL associated with those
products. For more information on DAC, DSI, VOBA (reported as present value
of
in-force business) and DFEL amortization, see “Critical Accounting Policies” in
the MD&A of our Annual Report on Form 10-K for the year ended December 31,
2005. Finally, the amount of reserves related to the Guaranteed Minimum Death
Benefits (“GMDB”) for variable annuities is tied to the difference between the
value of the underlying accounts and the guaranteed death benefit, which is
a
benefit ratio (present value of total expected GMDB payments over the life
of
the contract divided by the present value of total expected assessments over
the
life of the contract). Both the level of expected GMDB payments and expected
total assessments used in calculating this benefit ratio are affected by the
equity markets. Accordingly, strong equity markets will decrease the amount
of
GMDB reserves that we must carry.
Conversely,
a weakening of the equity markets results in lower fee income and, depending
upon the significance of the drop in the equity markets, may result in higher
net expenses associated with DAC, DSI, VOBA and DFEL. Both lower fee income
and
higher net expenses may have a material adverse effect on our results of
operations and capital resources. Furthermore, a decrease in the equity markets
will increase the net amount at risk under the GMDB benefits we offer as part
of
our variable annuity products, which has the effect of increasing the amount
of
GMDB reserves that we must carry. As a result, if such reserves are not
reasonable in relation to our expected liabilities for GMDB, would likely result
in an increase GMDB payments and would result in a decrease in the present
value
of total expected assessments over the life of the contract. The result would
be
an increase the level of the GMDB reserves. Such an increase in reserves would
result in and a charge to our earnings in the quarter in which we increase
our
reserves to bring them within a reasonable range of our estimated future
liabilities related to the GMDB guarantees.
Because
the profitability of our fixed annuity and interest-sensitive whole life,
universal life and fixed portion of variable universal life insurance business
depends in part on interest rate spreads, interest rate fluctuations could
negatively affect our profitability. Jefferson-Pilot also offered products
the
profitability of which depends in part on interest rate spreads. Accordingly,
our merger with Jefferson-Pilot may exacerbate this risk.
Changes
in interest rates may reduce both our profitability from spread businesses
and
our
return
on
invested capital. Some of our products, principally fixed annuities and
interest-sensitive whole life, universal life and the fixed portion of variable
universal life insurance, expose us to the risk that changes in interest rates
will reduce our “spread,” or the difference between the amounts that we are
required to pay under the contracts and the amounts we are able to earn on
our
general account investments intended to support our obligations under the
contracts. Declines in our spread from these products could have a material
adverse effect on our businesses or results of operations.
In
periods of increasing interest rates, we may not be able to replace the assets
in our general account with higher yielding assets needed to fund the higher
crediting rates necessary to keep our interest sensitive products competitive.
We therefore may have to accept a lower spread and thus lower profitability
or
face a decline in sales and greater loss of existing contracts and related
assets. In periods of declining interest rates, we have to reinvest the cash
we
receive as interest or return of principal on our investments in lower yielding
instruments then available. Moreover, borrowers may prepay fixed-income
securities, commercial mortgages and mortgage-backed securities in our general
account in order to borrow at lower market rates, which exacerbates this risk.
Because we are entitled to reset the interest rates on our fixed rate annuities
only at limited, pre-established intervals, and since many of our policies
have
guaranteed minimum interest or crediting rates, our spreads could decrease
and
potentially become negative.
Increases
in interest rates may cause increased surrenders and withdrawals of insurance
products. In periods of increasing interest rates, policy loans and surrenders
and withdrawals of life insurance policies and annuity contracts may increase
as
policyholders seek to buy products with perceived higher returns. This process
may lead to a flow of cash out of our businesses. These outflows may require
investment assets to be sold at a time when the prices of those assets are
lower
because of the increase in market interest rates, which may result in realized
investment losses. A sudden demand among consumers to change product types
or
withdraw funds could lead us to sell assets at a loss to meet the demand for
funds. In addition, unanticipated withdrawals and terminations also may require
us to accelerate DAC, DSI, VOBA and DFEL amortization. This would increase
our
current expenses.
A
downgrade in our claims-paying or credit ratings could limit our ability to
market products, increase the number or value of policies being surrendered
and/or hurt our relationships with creditors.
Nationally
recognized rating agencies rate the financial strength of our principal
insurance subsidiaries and rate our debt. Ratings are not recommendations to
buy
our securities. Please see “Ratings” beginning on page 17 of our Annual Report
on Form 10-K for the year ended December 31, 2005 for a complete description
of
our ratings.
Our
claims-paying ratings, which are intended to measure our ability to meet
policyholder obligations, are an important factor affecting public confidence
in
most of our products and, as a result, our competitiveness. The interest rates
we pay on our borrowings are largely dependent on our credit ratings. Each
of
the rating agencies reviews its ratings periodically, and our current ratings
may not be maintained in the future. A downgrade of the financial strength
rating of one of our principal insurance subsidiaries could affect our
competitive position in the insurance industry and make it more difficult for
us
to market our products as potential customers may select companies with higher
financial strength ratings. This could lead to a decrease in fees as outflows
of
assets increase, and therefore, result in lower fee income. Furthermore, sales
of assets to meet customer withdrawal demands could also result in losses,
depending on market conditions. A downgrade of our debt ratings could affect
our
ability to raise additional debt with terms and conditions similar to our
current debt, and accordingly, likely increase our cost of
capital.
In addition, a downgrade of these ratings could make it more difficult to raise
capital to refinance any maturing debt obligations, to support business growth
at our insurance subsidiaries and to maintain or improve the current financial
strength ratings of our principal insurance subsidiaries described above.
A
drop in the rankings of the mutual funds that we manage as well as a loss of
key
portfolio managers could result in lower advisory fees.
While
mutual funds are not rated, per se, many industry periodicals and services,
such
as Lipper, provide rankings of mutual fund performance. These rankings often
have an impact on the decisions of customers regarding which mutual funds to
invest in. If the rankings of the mutual funds for which we provide advisory
services decrease materially, the funds’ assets may decrease as customers leave
for funds with higher performance rankings. Similarly, a loss of our key
portfolio managers who manage mutual fund investments could result in poorer
fund performance, as well as customers leaving these mutual funds for new mutual
funds managed by the portfolio managers. Any loss of fund assets would decrease
the advisory fees that we earn from such mutual funds, which are generally
tied
to the amount of fund assets and performance. This would have an adverse effect
on our results of operations.
Our
businesses are heavily regulated and changes in regulation may reduce our
profitability.
Our
insurance subsidiaries are subject to extensive supervision and regulation
in
the states in which we do business. The supervision and regulation relate to
numerous aspects of our business and financial condition. The primary purpose
of
the supervision and regulation is the protection of our insurance policyholders,
and not our investors. The extent of regulation varies, but generally is
governed by state statutes. These statutes delegate regulatory, supervisory
and
administrative authority to state insurance departments. This system of
supervision and regulation covers, among other things:
| · |
standards
of minimum capital requirements and solvency, including risk-based
capital
measurements;
|
| · |
restrictions
of certain transactions between our insurance subsidiaries and their
affiliates;
|
| · |
restrictions
on the nature, quality and concentration of investments;
|
| · |
restrictions
on the types of terms and conditions that we can include in the insurance
policies offered by our primary insurance operations;
|
| · |
limitations
on the amount of dividends that insurance subsidiaries can pay;
|
| · |
the
existence and licensing status of the company under circumstances
where it
is not writing new or renewal business;
|
| · |
certain
required methods of accounting;
|
| · |
reserves
for unearned premiums, losses and other purposes; and
|
| · |
assignment
of residual market business and potential assessments for the provision
of
funds necessary for the settlement of covered claims under certain
policies provided by impaired, insolvent or failed insurance companies.
|
The
regulations of the state insurance departments may affect the cost or demand
for
our products and may impede us from taking actions we might wish to take to
increase our profitability. For example, in July 2005, a committee of the NAIC
adopted a change to Actuarial Guideline 38 (also known as “AXXX”), the statutory
reserve requirements for universal life (“UL”) products with secondary
guarantees, such as Lincoln National Life Insurance Company’s Lapse Protection
Rider product. This proposal was formally adopted by the NAIC in 2005 with
an
effective date of July 1, 2005.
The
proposal does not affect business written prior to the effective date of July
1,
2005. We continue to evaluate potential modifications to our universal life
products with secondary guarantees that may be made in response to the revised
regulation. Although the impact of this proposal on future sales of guaranteed
no-lapse UL cannot be predicted, it may result in a price increase for such
products, and therefore, may lower sales of such products.
Further,
we may be unable to maintain all required licenses and approvals and our
business may not fully comply with the wide variety of applicable laws and
regulations or the relevant authority’s interpretation of the laws and
regulations, which may change from time to time. Also, regulatory authorities
have relatively broad discretion to grant, renew or revoke licenses and
approvals. If we do not have the requisite licenses and approvals or do not
comply with applicable regulatory requirements, the insurance regulatory
authorities could preclude or temporarily suspend us from carrying on some
or
all of our activities or impose substantial fines. Further, insurance regulatory
authorities have relatively broad discretion to issue orders of supervision,
which permit such authorities to supervise the business and operations of an
insurance company. As of December 31, 2005, no state insurance regulatory
authority had imposed on us any substantial fines or revoked or suspended any
of
our licenses to conduct insurance business in any state or issued an order
of
supervision with respect to our insurance subsidiaries, which would have a
material adverse effect on our results of operations or financial condition.
In
addition, Lincoln Financial Advisors Corporation (“LFA”) and Lincoln Financial
Distributors (“LFD”), as well as our variable annuities and variable life
insurance products, are subject to regulation and supervision by the SEC and
the
NASD. Our Investment Management segment, like other investment management
groups, is subject to regulation and supervision by the SEC, NASD, MSRB, the
Pennsylvania Department of Banking and jurisdictions of the states, territories
and foreign countries in which they are licensed to do business. Lincoln UK
is
subject to regulation by the Financial Services Authority in the U.K. These
laws
and regulations generally grant supervisory agencies and self-regulatory
organizations broad administrative powers, including the power to limit or
restrict the subsidiaries from carrying on their businesses in the event that
they fail to comply with such laws and regulations.
Many
of
the foregoing regulatory or governmental bodies have the authority to review
our
products and business practices and those of our agents and employees. In recent
years, there has been increased scrutiny of our businesses by these bodies,
which has included more extensive examinations, regular “sweep” inquiries and
more detailed review of disclosure documents. These regulatory or governmental
bodies may bring regulatory or other legal actions against us if, in their
view,
our practices, or those of our agents or employees, are improper. These actions
can result in substantial fines, penalties or prohibitions or restrictions
on
our
business
activities and could have a material adverse effect on our business, results
of
operations or financial condition.
For
further information on regulatory matters relating to us, see “Regulatory
Matters” in our Annual Report on Form 10-K for the year ended December 31, 2005.
Legal
and regulatory actions are inherent in our businesses and could result in
financial losses or harm our businesses.
There
continues to be a significant amount of federal and state regulatory activity
in
the industry relating to numerous issues including, but not limited to, market
timing and late trading of mutual fund and variable insurance products and
broker-dealer access arrangements. Like others in the industry, we have received
inquiries including requests for information and/or subpoenas from various
authorities including the SEC, the National Association of Securities Dealers
(“NASD”) and the New York Attorney General, as well as notices of potential
proceedings from the SEC and NASD. We are in the process of responding to,
and
in some cases have settled or are in the process of settling, certain of these
inquiries and potential proceedings. We continue to cooperate fully with such
authorities. In addition, we are, and in the future may be, subject to legal
actions in the ordinary course of our insurance and investment management
operations, both domestically and internationally. Pending legal actions include
proceedings relating to aspects of our businesses and operations that are
specific to us and proceedings that are typical of the businesses in which
we
operate. Some of these proceedings have been brought on behalf of various
alleged classes of complainants. In certain of these matters, the plaintiffs
are
seeking large and/or indeterminate amounts, including punitive or exemplary
damages. Substantial legal liability in these or future legal or regulatory
actions could have a material financial effect or cause significant harm to
our
reputation, which in turn could materially harm our business prospects.
Changes
in U.S.
federal income tax law could make some of our products less attractive to
consumers and increase our tax costs.
The
Economic Growth and Tax Relief Reconciliation Act of 2001 (“EGTRRA”) as well as
the Jobs and Growth Tax Relief Reconciliation Act of 2003 (the “2003 Act”)
contain provisions that will, over time, significantly lower individual tax
rates. This will have the effect of reducing the benefits of deferral on the
build-up of value of annuities and life insurance products. EGTRRA also includes
provisions that will eliminate, over time, the estate, gift and
generation-skipping taxes and partially eliminate the step-up in basis rule
applicable to property held in a decedent’s estate. Many of these provisions
expire in 2008 and 2010, unless extended. The Bush Administration continues
to
propose that many of the foregoing rate reductions be made permanent, as well
as
several tax-favored savings initiatives, such as the elimination of the estate
tax, that, if enacted by Congress, could also adversely affect the sale of
our
annuity, life and tax-qualified retirement products and increase the surrender
of such products. Although we cannot predict the overall effect on the sales
of
our products of the tax law changes included in these Acts, some of these
changes might hinder our sales and result in the increased surrender of
insurance products.
Our
risk management policies and procedures may leave us exposed to unidentified
or
unanticipated risk, which could negatively affect our businesses or result
in
losses.
We
have
devoted significant resources to develop our risk management policies and
procedures and expect to continue to do so in the future. Nonetheless, our
policies and procedures to identify, monitor and manage risks may not be fully
effective. Many of our
methods
of managing risk and exposures are based upon our use of observed historical
market behavior or statistics based on historical models. As a result, these
methods may not predict future exposures, which could be significantly greater
than the historical measures indicate, such as the risk of pandemics causing
a
large number of deaths. Other risk management methods depend upon the evaluation
of information regarding markets, clients, catastrophe occurrence or other
matters that is publicly available or otherwise accessible to us, which may
not
always be accurate, complete, up-to-date or properly evaluated. Management
of
operational, legal and regulatory risks requires, among other things, policies
and procedures to record properly and verify a large number of transactions
and
events, and these policies and procedures may not be fully effective.
Because
we are a holding company with no direct operations, the inability of our
subsidiaries to pay dividends to us in sufficient amounts would harm our ability
to meet our obligations.
We
are a
holding company, and we have no direct operations. Our principal asset is the
capital stock of our insurance, investment management and communication company
subsidiaries.
Our
ability to meet our obligations for payment of interest and principal on
outstanding debt obligations and to pay dividends to shareholders and corporate
expenses depends upon the surplus and earnings of our subsidiaries and the
ability of our subsidiaries to pay dividends or to advance or repay funds
to us.
Payments of dividends and advances or repayment of funds to us by our
subsidiaries are restricted by the applicable laws of their respective
jurisdictions, including laws establishing minimum solvency and liquidity
thresholds. Changes in these laws, such as New York State amendments to its
statutory reserve requirements, can constrain the ability of our subsidiaries
to
pay dividends or to advance or repay funds to us in sufficient amounts and
at
times necessary to meet our debt obligations and corporate
expenses.
We
face a risk of non-collectibility of reinsurance, which could materially affect
our results of operations.
We
follow
the insurance practice of reinsuring with other insurance and reinsurance
companies a portion of the risks under the policies written by our insurance
subsidiaries (known as ceding). At the end of 2005, we have ceded approximately
$320.1 billion on a pro forma basis of life insurance in-force to reinsurers
for
reinsurance protection. Although reinsurance does not discharge our subsidiaries
from their primary obligation to pay policyholders for losses insured under
the
policies we issue, reinsurance does make the assuming reinsurer liable to the
insurance subsidiaries for the reinsured portion of the risk. As of December
31,
2005, we had $8.1 billion on a pro forma basis of reinsurance receivables from
reinsurers for paid and unpaid losses, for which they are obligated to reimburse
us under our reinsurance contracts. Of this amount, $4.1 billion relates to
the
sale of our reinsurance business to Swiss Re in 2001 through an indemnity
reinsurance agreement. During 2004, Swiss Re funded a trust to support this
business. The balance in the trust changes as a result of ongoing reinsurance
activity and was $1.7 billion at December 31, 2005. In addition, should Swiss
Re
Life & Health America Inc. financial strength ratings drop below either
S&P AA- or AM Best A or their NAIC risk based capital ratio fall below 250%,
assets equal to the reserves supporting business reinsured must be placed into
a
trust according to pre-established asset quality guidelines. Furthermore,
approximately $2.0 billion of the Swiss Re treaties are funds-withheld
structures where we have a right of offset on assets backing the reinsurance
receivables. The balance of the reinsurance is due from a diverse group of
reinsurers. The collectibility of reinsurance is largely a function of the
solvency of the individual reinsurers. We perform annual credit reviews on
our
reinsurers, focusing on, among other things, financial capacity, stability,
trends and commitment to the reinsurance business. We also require assets in
trust, letters of credit or other acceptable collateral to support balances
due
from
reinsurers not authorized to transact business in the applicable jurisdictions.
Despite these measures, a reinsurer’s insolvency, inability or unwillingness to
make payments under the terms of a reinsurance contract, especially Swiss Re,
could have a material adverse effect on our results of operations and financial
condition.
Significant
adverse mortality experience may result in the loss of, or higher prices for,
reinsurance.
We
reinsure significant portion of our mortality risk on fully underwritten newly
issued life insurance contracts. We review our retention limits regularly for
continued appropriateness and may be changed in the future. If we were to
experience adverse mortality experience, a significant portion of that would
be
reimbursed by our reinsurers. Prolonged or severe adverse mortality experience
could result in increased reinsurance costs and ultimately, reinsurers not
willing to offer coverage. If we are unable to maintain our current level of
reinsurance or purchase new reinsurance protection in amounts that we consider
sufficient, we would either have to be willing to accept an increase in our
net
exposures or revise our pricing to reflect higher reinsurance premiums. If
this
were to occur, we may be exposed to reduced profitability and cash flow strain
or we may not be able to price new business at competitive rates.
We
may be unable to attract and retain sales representatives and other employees,
particularly financial advisors.
We
compete to attract and retain financial advisors, portfolio managers and other
employees, as well as independent distributors of our products. Intense
competition exists for persons and independent distributors with demonstrated
ability. We compete with other financial institutions primarily on the basis
of
our products, compensation, support services and financial position. Sales
in
our businesses and our results of operations and financial condition could
be
materially adversely affected if we are unsuccessful in attracting and retaining
financial advisors, portfolio managers and other employees, as well as
independent distributors of our products. For example, in 2005, we changed
the
compensation structure for LFA’s financial advisors. Although we believe the new
compensation structure will benefit us, our policyholders and our planners,
if a
significant number of financial advisors terminate their affiliation with us,
it
could have a negative impact on our sales and ability to retain existing
in-force business. During 2005, the number of new planners recruited to
LFA was down relative to prior years, which is partially a result of LFA
focusing more on recruiting experienced planners than in it had
in prior years.
Our
sales representatives are not captive and may sell products of our competitors.
We
sell
our annuity and life insurance products through independent sales
representatives. These representatives are not captive, which means they may
also sell our competitors’ products. If our competitors offer products that are
more attractive than ours, or pay higher commission rates to the sales
representatives than we do, these representatives may concentrate their efforts
in selling our competitors’ products instead of ours.
Intense
competition could negatively affect our ability to maintain or increase our
profitability.
Our
businesses are intensely competitive. We compete based on a number of factors
including name recognition, service, the quality of investment advice,
investment performance, product features, price, perceived financial strength,
and claims-paying and credit ratings. Our competitors include insurers,
broker-dealers, financial advisors, asset managers and other financial
institutions. A number of our business units face competitors that have greater
market share, offer a broader range of products or have higher claims-paying
or
credit ratings than we do.
In
recent
years, there has been substantial consolidation and convergence among companies
in the financial services industry resulting in increased competition from
large, well-capitalized financial services firms. Many of these firms also
have
been able to increase their distribution systems through mergers or contractual
arrangements. Furthermore, larger competitors may have lower operating costs
and
an ability to absorb greater risk while maintaining their financial strength
ratings, thereby allowing them to price their products more competitively.
We
expect consolidation to continue and perhaps accelerate in the future, thereby
increasing competitive pressure on us.
Losses
due to defaults by others could reduce our profitability or negatively affect
the value of our investments.
Third
parties that owe us money, securities or other assets may not pay or perform
their obligations. These parties include the issuers whose securities we hold,
borrowers under the mortgage loans we make, customers, trading counterparties,
counterparties under swaps and other derivative contracts, reinsurers and other
financial intermediaries. These parties may default on their obligations to
us
due to bankruptcy, lack of liquidity, downturns in the economy or real estate
values, operational failure, corporate governance issues or other reasons.
A
downturn in the U.S. and other economies could result in increased impairments.
Our
communications business faces a variety of risks that could adversely affect
its
results.
Our
communications business relies on advertising revenues, and therefore is
sensitive to cyclical changes in both the general economy and in the economic
strength of local markets. Also, our stations derived 21.4%, 21.4%, and 23.5%
of
their 2005, 2004 and 2003 advertising revenues from the automotive industry.
If
automobile advertising is severely curtailed, it could have a negative impact
on
broadcasting revenues.
For
2005, 7.1% of television revenues came from a network agreement with two
CBS-affiliated stations that expires in 2011. The trend in the industry is
away
from the networks compensating affiliates for carrying their programming and
there is a possibility those revenues will be eliminated when the contract
is
renewed.
Technological
media changes, such as satellite radio and the Internet, and consolidation
in
the broadcast and advertising industries, may increase competition for audiences
and advertisers.
Our
communications business has commitments for purchases of syndicated television
programming and commitments for other contracts and future sports programming
rights, payable through 2011. These commitments are not reflected as an asset
or
liability in our balance sheet because the programs are not currently available
for use. If sports programming advertising revenue decreases in the future,
the
commitments may have a material adverse effect on our financial position and
earnings.
Risk
Factors in Connection with the Jefferson-Pilot Merger
The
merger with Jefferson-Pilot may cause disruptions in our business, which could
have an adverse effect on our business and financial
results.
The
recently completed merger could cause disruptions in our business.
Specifically:
| · |
current
employees and agents may experience uncertainty about their future
roles
with the new company, which might adversely affect our ability to
retain
key managers and other employees and
agents; and
|
| · |
the
attention of our management may be directed toward the recently completed
merger and not their ongoing business.
|
The
anticipated benefits of combining Jefferson-Pilot and us may not be
realized.
We
merged
with Jefferson-Pilot with the expectation that the merger would result in
various benefits including, among other things, benefits relating to enhanced
revenues, a strengthened market position for the resulting company in its
businesses, cross-selling opportunities, cost savings and operating
efficiencies. Achieving the anticipated benefits of the merger is subject to
a
number of uncertainties, including whether we and Jefferson-Pilot are integrated
in an efficient and effective manner, and general competitive factors in the
marketplace. Failure to achieve these anticipated benefits could result in
increased costs, decreases in the amount of expected revenues and diversion
of
management’s time and energy and could materially impact the resulting company’s
business, financial condition and operating results.
We
may have difficulty integrating Jefferson-Pilot and may incur substantial costs
in connection with the integration.
We
may
experience material unanticipated difficulties or expenses in connection with
integrating Jefferson-Pilot, especially given the relatively large size of
the
merger. Integrating Jefferson-Pilot with us will be a complex, time-consuming
and expensive process. Before the merger, we and Jefferson-Pilot operated
independently, each with its own business, products, customers, employees,
culture and systems.
We
may
face substantial difficulties, costs and delays in integrating Jefferson-Pilot.
These factors may include:
| · |
perceived
adverse changes in product offerings available to clients or client
service standards, whether or not these changes do, in fact,
occur;
|
| · |
conditions
imposed by regulators in connection with their decisions whether
to
approve the merger;
|
| · |
potential
charges to earnings resulting from the application of purchase accounting
to the transaction;
|
| · |
the
retention of existing clients, key portfolio managers, sales
representatives and wholesalers of each company;
and
|
| · |
retaining
and integrating management and other key employees of the resulting
company.
|
We
may
seek to combine certain operations and functions using common information and
communication systems, operating procedures, financial controls and human
resource practices, including training, professional development and benefit
programs. We may be unsuccessful or delayed in implementing the integration
of
these systems and processes.
Any
one
or all of these factors may cause increased operating costs, worse than
anticipated
financial
performance or the loss of clients, employees and agents. Many of these factors
are outside our control.
SUMMARY
OF THE PLAN
The
Jefferson-Pilot Corporation Long Term Stock Incentive Plan (the "Plan"), as
established and amended by the Jefferson-Pilot Corporation (“JP”) Board of
Directors, last was approved by JP’s shareholders on May 3, 1999.
JP
merged
into an acquisition subsidiary of Lincoln National Corporation (“LNC”) on April
3, 2006. JP stock options were automatically converted into options to purchase
LNC Common Stock (the “Common Stock”), with the number of JP shares multiplied
by 1.0906 and rounded down to the nearest whole share, and the JP price divided
by 1.0906 and rounded up to the sixth decimal place. The other terms and
conditions of the options remained unchanged.
Described
below are the major features of the Plan. The statements contained in this
prospectus concerning the Plan are brief summaries, qualified in their entirety
by reference to the terms of the Plan itself. Eligible participants and their
beneficiaries may obtain another copy of the Plan upon request by contacting
Karen Kanjian at: kfkanjian@lfg.com.
1. Purpose
of the
Plan.
The
purpose of the Plan is to provide further incentive to, and to encourage stock
ownership by, any officer, employee, or agent of the former JP or its continuing
subsidiaries who is eligible to participate in the Plan (see Paragraph 4 for
a
definition of “Participants”). The Plan is intended to benefit LNC and its
subsidiaries (the “Company”) and its shareholders by continuing to retain and
motivate highly qualified Participants after consummation of the merger and
by
providing increased incentive to such Participants while also helping to align
their interests more closely with those of shareholders.
2.
Types
of Awards.
The
terms of the Plan provide for grants of stock options, stock appreciation rights
(“SARs”) and stock grants (together, “Awards”).
3.
Shares
Subject to the Plan; Annual Per-Person Limitations.
Under
the Plan, the total number of shares of Common Stock reserved and available
for
delivery to Participants in connection with Awards is 9,474,929.
Any
shares subject to an option or other award under the Plan which for any reason
expires or is terminated unexercised or unvested as to such shares, any
previously acquired Common Stock that is tendered as payment for an option
being
exercised and any shares withheld for taxes is available for further use under
the Plan, to the extent not restricted by Rule 16b-3. With respect to stock
settled SARs, the full issuance of shares necessary to settle such Awards will
count against shares available under the Plan.
In
addition, the Plan imposes individual limitations on the amount of certain
Awards in order to comply with Section 162(m) of the Code. Under these
limitations, during any calendar year the number of shares covered by options
granted to any one individual shall not exceed 750,000, subject to adjustment
in
certain circumstances. The total aggregate value of LTIP payout to a Participant
during any calendar year shall not exceed $800,000.
No
stock
option, SAR or stock grant may be granted to any Participant who, immediately
after the time of the Award, owns 10 percent or more of the Common Stock of
JP
or one of its subsidiaries. For this purpose, all outstanding options and SARs
to a Participant shall be considered stock owned by such
individual.
Restricted
and unrestricted stock grants shall be limited to 10% of the total shares
reserved for the Plan, subject to certain adjustments.
In
the
event of any change in the outstanding shares of the Common Stock by reason
of
any stock split, stock dividend, reorganization, recapitalization, merger,
consolidation, combination or exchange of shares, the sale, lease or conveyance
of all or substantially all of the assets of the Company, or other relevant
corporate change, such equitable adjustments shall be made in the Plan, in
the
number of shares reserved for the Plan and in the awards hereunder including
the
exercise price and number of shares under outstanding options, as the Committee
determines are necessary or appropriate. Adjustments for stock splits and stock
dividends shall be automatic.
Except
as
described under “Restricted Stock” below, the Plan does not impose any
restriction on the resale of shares of our Common Stock acquired pursuant to
an
Award under the Plan. However, any of our “affiliates” (defined in Rule 405
under the Securities Act of 1933, as amended (the “1933 Act”) to include persons
who directly or indirectly, through one or more intermediaries, control, or
are
controlled by, or are under common control with, us) may not use this Prospectus
to offer and sell shares of Common Stock they acquire under the Plan. They
may,
however, sell such shares:
| (1) |
pursuant
to an effective registration statement under the 1933
Act;
|
| (2) |
in
compliance with Rule 144 under the 1933 Act;
or
|
| (3) |
in
a transaction otherwise exempt from the registration requirements
of that
1933 Act.
|
Each
Participant who is the beneficial owner of at least 10% of the outstanding
shares of our Common Stock and each Participant who is one of our directors
or
policy-making officers may be subject to Section 16(b) of the Securities
Exchange Act of 1934, as amended (the “1934 Act”), which requires such persons
to disgorge to us any “profits” resulting from a certain non-exempt sales and
purchases (or purchases and sales) of shares of the Common Stock within a
six-month period. For such Participants, sales of shares of Common Stock
occurring within six months of the grant of an option, SAR or stock grant may
result in such Section 16(b) liability, unless one or both of those transactions
are exempt, as described below in more detail.
Pursuant
to Rule 16b-3 of the 1934 Act, provided the Committee (as defined in Paragraph
5
below) that administers the Plan consists solely of at least two “Non-Employee
Directors” (as defined in rules promulgated under Section 16), the grant of an
option, SAR or stock grant to an individual subject to Section 16(b) will not
be
deemed, for purposes of Section 16(b), to be a purchase of the shares that
underlie the option or other Award for purposes of determining whether the
Participant is liable to the us for any profits derived from the purchase and
sale of Common Stock.
In
addition, if at least six months have elapsed between the award of an option,
SAR or stock grant, and the disposition of the underlying Common Stock, no
purchase would be deemed to have
occurred
under Section 16(b) for purposes of determining whether the Participant is
liable to us for any profits derived from the purchase and sale of Common
Stock.
We
intend
that the grant of any Awards to or other transaction by a participant who is
subject to Section 16 of the Exchange Act shall be exempt under Rule 16b-3
(except for transactions acknowledged in writing to be non-exempt by such
participant). Accordingly, if any provision of the Plan or any Award agreement
does not comply with the requirements of Rule 16b-3 as then applicable to any
such transaction, unless the participant shall have acknowledged in writing
that
a transaction pursuant to such provision is to be non-exempt, such provision
shall be construed or deemed amended to the extent necessary to conform to
the
applicable requirements of Rule 16b-3 so that such participant shall avoid
liability under Section 16(b) of the Exchange Act.
However,
even if a transaction is exempt under Section 16(b), the general prohibition
of
federal and state securities laws on trading securities while in possession
of
material non-public information concerning the issuer continues to
apply.
4. Eligibility.
Only
former, current and future agents, employees and officers of the former JP
and
its subsidiaries are eligible to participate in the Plan and receive awards
under the Plan (“Participants”). Individuals who were employed, immediately
before the merger, by LNC or entities that were its subsidiaries immediately
before the merger, are not eligible to participate in the Plan. The Committee
may designate one or more classes of Participants under the Plan. The Term
“agents” includes insurance agents who represent one or more of the former JP’s
continuing life insurance subsidiaries. The term "Employee" includes full-time
life insurance agents who are employees for Social Security tax
purposes.
5.
Administration.
The
Plan
will be administered by the Compensation Committee of the LNC Board of Directors
(the “Committee”). Subject to the terms and conditions of the Plan, the
Committee has exclusive authority to interpret the Plan, to establish and revise
rules and regulations relating to the Plan and its administration and to make
any other determination which it believes necessary or advisable for the
administration of the Plan. Decisions of the Committee shall be final and
binding upon all persons having an interest in the Plan.
Subject
to the terms and conditions of the Plan, the Committee shall have the exclusive
authority to identify Participants eligible to receive Awards under the Plan
and
to make awards of stock options, SARs and stock grants which may include Long
Term Incentive Program ("LTIP") awards. Consistent with the provisions of the
Plan, the Committee shall establish the terms, conditions and duration of each
Award made under the Plan.
6.
Stock
Options and SARs.
The
Committee is authorized to grant stock options, including both incentive stock
options (“ISOs”) that can result in potentially favorable tax treatment to the
participant and non-qualified stock options (i.e.,
options
not qualifying as ISOs). The Committee determines the exercise price per share
with respect to an option, which in no event may be less than the fair market
value of a share of Common Stock on the date of grant. Under the Plan, unless
otherwise determined by the Committee, the fair market value of the Common
Stock
is the closing price of a share of Common Stock, as quoted on the composite
transactions tape on the NYSE, on the date on which the determination of fair
market value is being made, or if the stock does not trade on that date, on
the
next preceding trading day.
ISO
means
any option intended to be and designated as an incentive stock option within
the
meaning
of Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”) or
any successor provision thereto. The terms of any ISO granted under the Plan
is
intended to comply in all respects with the provisions of Code Section 422.
The
aggregate fair market value (determined at the time an ISO is granted) of the
stock with respect to which incentive stock options are exercisable for the
first time by a participant during any calendar year may not exceed $100,000.
For purposes of this $100,000 limitation, all of our plans will be taken into
account.
The
Committee may grant SARs to eligible Participants, either separately or in
tandem with stock options. The Committee shall determine the time and conditions
of exercisability and whether the stock appreciation shall be payable in Common
Stock, cash or a combination of both. The grant, exercise or lapse of a SAR
shall not increase, decrease or otherwise affect the terms or conditions
attached to the grant, exercise or lapse of an ISO.
Each
option or SAR shall be exercisable for such period as the Committee shall
determine, including a period after termination of employment or expiration
of
an agent's contract, but for not more than ten years after the date of grant.
The
option price for the shares purchased on any exercise date shall be paid in
full
in cash or by the surrender of shares of Common Stock valued at fair market
value on the exercise date, or by any combination of cash and such shares.
Payment shall be made no later than the normal settlement date for ordinary
brokerage trades on the exercise date, or such earlier date as the Committee
may
specify. The Committee determines the methods of exercise and settlement and
other terms of SARs.
7. Stock
Grants including LTIP Payouts. The
Committee may make stock grants to selected Participants of the Company to
enable such persons to acquire stock on such terms and conditions as the
Committee determines are in the best interests of the Company. Stock grants
may
be either restricted stock which vests over time or subject to other conditions,
or restricted or unrestricted stock paid out upon the achievement of performance
goals established by the Committee. Discretionary, unrestricted stock grants
are
not permitted.
The
Committee may make LTIP awards payable in whole or part in Common Stock. Until
LTIP is revised by the Committee, LTIP payouts shall be based on cumulative
growth in JP's operating earnings per share (EPS). Eligible Participants
selected by the Committee shall be eligible for a payment each year, contingent
upon JP's achieving levels, specified by the Committee, of compound growth
rate
in cumulative operating earnings per share ("CGR") during the prior three years
and continued service to the end of the three year period. Payouts shall be
expressed as a percentage (which may vary according to the participant and
the
level of CGR achieved, as specified by the Committee) of each eligible
Participant's salary during the last year of the three year measurement period.
The target amount shall be paid if the targeted CGR is achieved. The threshold
amount shall be paid if 50% of the targeted CGR is achieved; below 50% no payout
shall be made. The maximum amount shall be paid if 150% or more of the targeted
CGR is achieved. Payouts, if any, shall be made in a 50/50 ratio of cash and
Common Stock valued at the fair market value on the payment date.
8. Tax
Withholding. The
Committee may condition any payment relating to an Award on the withholding
of
taxes and may provide that a portion of any shares or other property to be
distributed will be withheld (or previously acquired shares or other property
surrendered by the participant) to satisfy withholding and other tax
obligations.
9. Non-Transferability.
Awards
generally may not be assigned or transferred except by will or by the laws
of
descent and distribution, to a designated beneficiary upon the Participant’s
death, or pursuant to a qualified domestic relations order. During an optionee's
lifetime, options shall be exercisable only by the optionee or a duly appointed
guardian or legal representative of the optionee. However, the Committee may
specify as to one or more optionees, that limited transfers shall be permitted
because of special circumstances.
Awards
under the Plan are generally granted without a requirement that the Participant
pay consideration in the form of cash or property for the grant (as
distinguished from the exercise), except to the extent required by
law.
10.
Change
in Control.
In the
event of a Change in Control, options and SARs may become immediately
exercisable and may remain exercisable for such periods not exceeding the
original terms thereof, restricted stock awards may immediately vest, and long
term incentive awards providing for restricted or unrestricted stock payouts
may
be immediately settled, and any options or other awards may be settled in cash,
all as the Committee shall determine either at or after the time of granting
the
options or making the respective other awards. "Change in Control" as defined
by
the Committee includes the acquisition by certain persons or groups of twenty
percent or more of our outstanding Common Stock, significant changes in our
board of directors, and certain reorganizations, mergers, consolidations, and
sales or dispositions of all or substantially all of our consolidated
assets.
11.
Amendment
and Termination of the Plan.
The LNC
Board of Directors may amend, suspend or terminate the Plan at any time and
from
time to time, provided however that without approval of the shareholders, no
revision or amendment shall increase the number of shares reserved for the
Plan
(except as provided in the Plan’s anti-dilution provisions), reduce the minimum
exercise price specified in the Plan, extend the duration of the Plan, change
the designation of the class of employees eligible to receive options or other
awards (except as permitted by Rule 16b-3), or materially increase the benefits
accruing to participants under the Plan. Further, no amendment or termination
of
the Plan may alter or impair any rights or obligations of any award previously
made without the consent of the awardee. Shareholder approval will not
necessarily be required for amendments that might increase the cost of the
Plan
or broaden eligibility. Unless earlier terminated by the Board, the Plan (but
not any awards theretofore made) shall in any event terminate on, and no awards
shall be made after, May 3, 2009.
12.
Federal
Income Tax Implications of the Plan. The
following is a brief description of the federal income tax consequences
generally arising with respect to Awards under the Plan. In view of the
individual nature of tax consequences, each participant should consult his
or
her tax advisor for more specific information, including the effect of
applicable federal, state and other tax laws.
Under
present law, the federal income tax consequences of grants and other Awards
under the Plan are generally as described below.
Non-Qualified
Stock Options.
The
grant of a non-qualified stock option should not result in taxable income to
the
participant at the time of grant. On exercise of a non-qualified stock option,
the participant will normally realize taxable ordinary income equal to any
excess of the fair market value of the shares at the time of exercise over
the
option price of the shares. At the time this ordinary income is recognized
by
the participant, we will be entitled to a corresponding deduction.
Upon
the
disposition of the shares acquired upon exercise of a non-qualified stock
option, the difference between the amount received for the shares and the basis
(i.e., fair market value of the shares on exercise of the option) will be
treated as long-term or short-term capital gain or loss, depending on the
holding period.
ISOs. The
tax
treatment of ISOs is complex. We have not granted any ISOs in over 10 years.
Should we grant ISOs, we will provide affected optionees with a summary of
the
federal tax implications.
SARs.
The
grant of a SAR should not result in taxable income to the participant at the
time of grant. On exercise of a SAR, the participant will realize taxable
ordinary income equal to the cash and fair market value of any shares received.
At the time the participant recognizes ordinary income on the exercise of a
SAR,
we will be entitled to a corresponding deduction. Upon the disposition of any
shares acquired under a SAR, the difference between the amount received for
the
shares and the fair market value of the shares as of the date of exercise of
the
SAR will be treated as long-term or short-term capital gain or loss, depending
on the holding period.
Restricted
Stock.
The
grant of restricted stock should not automatically result in taxable income
to
the participant. Instead, the participant will normally realize taxable ordinary
income when the restrictions on the shares lapse in an amount equal to the
fair
market value of the shares on that date. Notwithstanding the foregoing, a
participant may elect (pursuant to Section 83(b) of the Code), within 30 days
of
the date of a restricted stock grant, to be taxed on the value of the shares
as
of the date of grant. If the participant subsequently forfeits the shares,
the
participant will not be entitled to a deduction. At the time the participant
recognizes ordinary income with respect to restricted stock, we will be entitled
to a corresponding deduction. Upon disposition of the shares after restrictions
lapse, the difference between the amount received and the fair market value
of
the shares on the vesting date (or on the date of grant if the participant
made
the election described above) will be treated as long-term or short-term capital
gain or loss, depending on the holding period.
Dividends
paid on restricted stock received by the participant prior to the lapse of
restrictions will be taxable as ordinary income to the participant, and we
will
be allowed a corresponding deduction unless the participant made the Section
83(b) election described above. If the election was made, dividends actually
paid on restricted stock will be taxable as dividends and we will not be allowed
a corresponding deduction.
Unrestricted
Stock Grants including LTIP Payouts.
Generally, a participant will be subject to tax, and we will receive a
corresponding deduction, with respect to a distribution of an unrestricted
stock
grant or LTIP payout when the Common Stock and any cash are paid to the
participant. The amount of taxable income a participant recognizes and our
deduction will equal the amount of cash and the fair market value of the Common
Stock paid out.
Code
Section 409A.
To the
extent that any Award under the Plan is considered a deferral of compensation
subject to Code section 409A, the Plan shall be construed and administered
in
accordance with Code section 409A and in reasonable good faith compliance with
applicable IRS guidance.
13. Miscellaneous.
The Plan
is not qualified under Section 401(a) of the Internal Revenue Code and is not
subject to any of the provisions of the Employee Retirement Income Security
Act
of 1974, as amended.
Neither
the Plan, nor the granting of an option, stock appreciation right or stock
grant
or any other action taken pursuant to the Plan, shall confer upon an individual
any right to remain an employee or agent or restrict the Company's right to
take
any personnel or other action with respect to such individual.
The
Plan
and the awarding and exercise of options hereunder shall be subject to all
applicable Federal and state laws and all rules and regulations issued
thereunder, including registration and private placement restrictions, and
the
Board in its discretion may, subject to the provisions of Section 16 hereof,
make such changes in the Plan (except such changes which by law must be approved
by the shareholders) or impose restrictions upon the exercise of options as
may
be required to conform the Plan to such applicable laws, rules and
regulations.
We
intend that the Plan comply in all respects with Rule 16b-3 and any related
regulations and interpretations. If any provision of the Plan is later found
not
to be in compliance with such Rule and regulations, the provision shall be
limited in application to persons not affected by Rule 16b-3 if Rule 16b-3
so
permits, and otherwise shall be deemed null and void.
We
intend
that the Plan comply fully with and meet all the requirements of section 162(m)
of the Code so that options, SARs and stock grants including LTIP awards and,
if
determined by the Committee, restricted stock awards shall constitute
"performance-based" compensation within the meaning of such section. If any
provision of the Plan would disqualify the Plan or would not otherwise permit
the Plan to comply with section 162(m) as so intended, such provision shall
be
construed or deemed amended to conform to the requirements or provisions of
section 162(m); provided that no such construction or amendment shall have
an
adverse effect on the economic value to a holder of any option or other Award
previously granted under the Plan.
WHERE
YOU CAN FIND MORE INFORMATION
We
file
annual, quarterly and current reports, proxy statements and other information
and documents with the Securities and Exchange Commission, or SEC. You may
read
and copy any document we file with the SEC at:
| · |
public
reference room maintained by the SEC in: Washington, D.C. (450 Fifth
Street, N.W., Room 1024, Washington, D.C. 20549). Copies of such
materials
can be obtained from the SEC’s public reference section at prescribed
rates. You may obtain information on the operation of the public
reference
rooms by calling the SEC at (800) SEC-0330,
or
|
| · |
the
SEC website located at www.sec.gov.
|
This
Prospectus is one part of a Registration Statement filed on Form S-3 with the
SEC under the Securities Act. This Prospectus does not contain all of the
information set forth in the Registration Statement and the exhibits and
schedules to the Registration Statement. For further
information
concerning us and the securities, you should read the entire Registration
Statement and the additional information described under “Documents Incorporated
By Reference” below. The registration statement has been filed electronically
and may be obtained in any manner listed above. Any statements contained herein
concerning the provisions of any document are not necessarily complete, and,
in
each instance, reference is made to the copy of such document filed as an
exhibit to the Registration Statement or otherwise filed with the SEC. Each
such
statement is qualified in its entirety by such reference.
Information
about us is also available on our web site at www.lfg.com. This URL and the
SEC’s URL above are intended to be inactive textual references only. Such
information on our or the SEC’s web site is not a part of this Prospectus.
DOCUMENTS
INCORPORATED BY REFERENCE
We
hereby
incorporate, or will be deemed to have incorporated, herein by reference the
following documents filed (File No. 1-6028) with the Securities and Exchange
Commission (the “SEC”) in accordance with the Securities Exchange Act of 1934
(the “Exchange Act”):
| · |
Our
Annual Report on Form 10-K for the fiscal year ended December 31,
2005;
|
| · |
Our
Current Reports on Form 8-K filed with the SEC on January 13, January
20,
January 31, February 13, February 14 (one report), February 28, March
15
(two reports) and April 3, 2006;
|
| · |
The
description of our common stock contained in Form 10 filed with the
SEC on
April 28, 1969, including any amendments or reports filed for the
purpose
of updating that description; and
|
| · |
The
description of our common stock purchase rights contained in our
Registration Statement on Form 8-A/A, Amendment No. 1, filed with
the SEC
on December 2, 1996, including any amendments or reports filed for
the
purpose of updating that
description.
|
Each
document filed subsequent to the date of this Registration Statement pursuant
to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing
of
a post-effective amendment which indicates that all securities offered have
been
sold or which deregisters all securities then remaining unsold, shall be deemed
to be incorporated by reference in this Registration Statement and to be a
part
hereof from the date of the filing of such documents. Any statement contained
in
a document incorporated or deemed to be incorporated herein by reference shall
be deemed to be modified or superseded for purposes of this Registration
Statement to the extent that a statement contained herein (or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein) modifies or supersedes such statement. Any such statement
so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute part of this Registration Statement.
We
will
provide without charge to each person to whom this prospectus is delivered,
upon
the written
or
oral
request of such person, a copy of the documents incorporated by reference as
described above (other than exhibits to such documents unless such exhibits
are
specifically incorporated by reference into such documents), copies of all
documents constituting part of the prospectus for the Plan, and copies of the
Plan. Please direct your oral or written request to:
C.
Suzanne Womack
2nd
Vice
President & Secretary
1500
Market Street, Ste. 3900
Philadelphia,
PA 19102
215-448-1400
EXPERTS
The
consolidated financial statements of Lincoln National Corporation appearing
in
Lincoln National Corporation's Annual Report (Form 10-K) for the year ended
December 31, 2005 (including schedules appearing therein), and Lincoln National
Corporation management's assessment of the effectiveness of internal control
over financial reporting as of December 31, 2005 included therein, have been
audited by Ernst & Young LLP, independent registered public accounting firm,
as set forth in their reports thereon, included therein, and incorporated herein
by reference. Such consolidated financial statements and management's assessment
are incorporated herein by reference in reliance upon such reports given on
the
authority of such firm as experts in accounting and auditing.
The
consolidated financial statements of Jefferson-Pilot Corporation appearing
in
Jefferson-Pilot Corporation's Annual Report (Form 10-K) for the year ended
December 31, 2005 (including schedules appearing therein), and Jefferson-Pilot
Corporation management's assessment of the effectiveness of internal control
over financial reporting as of December 31, 2005 included therein, have been
audited by Ernst & Young LLP, independent registered public accounting firm,
as set forth in their reports thereon, included therein, and incorporated herein
by reference. Such consolidated financial statements and management's assessment
are incorporated herein by reference in reliance upon such reports given on
the
authority of such firm as experts in accounting and auditing.
LEGAL
MATTERS
The
validity of the securities offered hereby will be passed upon for us by Dennis
L. Schoff, Esq., Senior Vice President and General Counsel of Lincoln National
Corporation. As of the date of this Registration Statement, Mr. Schoff
beneficially owns approximately 96,260 shares of our Common Stock including
options exercisable within sixty (60) days of the date of the Registration
Statement.
PART
II
INFORMATION
NOT REQUIRED IN PROSPECTUS
Item
14. Other Expenses of Issuance and Distribution
Set
forth
below are estimates of all expenses incurred or to be incurred by us in
connection with the issuance and distribution of our Common Stock to be
registered, other than underwriting discounts and commissions of which there
are
none.
|
Registration
fees
|
|
$
|
54,924
|
|
|
Photocopying
and Printing
|
|
|
5,000
|
|
|
Accounting
fees
|
|
|
10,000
|
|
|
State
blue sky fees and expenses
|
|
|
-0-
|
|
|
TOTAL
|
|
$
|
69,924
|
|
Item
15. Indemnification of Directors and Officers
Our
bylaws, pursuant to authority contained in the IBCL and the Indiana Insurance
Law, respectively, provide for the indemnification of our officers, directors
and employees against the following:
| · |
reasonable
expenses (including attorneys’ fees) incurred by them in connection with
the defense of any action, suit or proceeding to which they are made
or
threatened to be made parties (including those brought
by, or on behalf of us) if they are successful on the merits or otherwise
in the defense of such proceeding except with respect to matters
as to
which they are adjudged liable for negligence or misconduct in the
performance of duties to their respective
corporations.
|
| · |
reasonable
costs of judgments, settlements, penalties, fines and reasonable
expenses
(including attorneys’ fees) incurred with respect to, any action, suit or
proceeding, if the person’s conduct was in good faith and the person
reasonably believed that his/her conduct was in our best interest.
In the
case of a criminal proceeding, the person must also have reasonable
cause
to believe his/her conduct was
lawful.
|
Indiana
Law requires that a corporation, unless limited by its articles of
incorporation, indemnify its directors and officers against reasonable expenses
incurred in the successful defense of any proceeding arising out of their
serving as a director or officer of the corporation.
No
indemnification or reimbursement will be made to an individual judged liable
to
us, unless a court determines that in spite of a judgment of liability to the
corporation, the individual is reasonably entitled to indemnification, but
only
to the extent that the court deems proper. Additionally, if an officer, director
or employee does not meet the standards of conduct described above, such
individual will be required to repay us for any advancement of expenses it
had
previously made.
In
the
case of directors, a determination as to whether indemnification or
reimbursement is proper will be made by a majority of the disinterested
directors or, if it is not possible to obtain a
quorum
of
directors not party to or interested in the proceeding, then by a committee
thereof or by special legal counsel. In the case of individuals who are not
directors, such determination will be made by the chief executive officer of
the
respective corporation, or, if the chief executive officer so directs, in the
manner it would be made if the individual were a director of the
corporation.
Such
indemnification may apply to claims arising under the Securities Act of 1933,
as
amended. Insofar as indemnification for liabilities arising under the Securities
Act may be permitted for our directors, officers or controlling persons pursuant
to the foregoing provisions, we have been informed that in the opinion of the
SEC such indemnification is against public policy as expressed in the Securities
Act and therefore unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by us of expenses incurred
or
paid by one of our directors, officers or controlling persons in the successful
defense of any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being registered, we
will, unless in the opinion of our counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by us is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of the issue by the court.
We
maintain a program of insurance under which our directors and officers are
insured, subject to specified exclusions and deductible and maximum amounts,
against actual or alleged errors, misstatements, misleading statements, acts
or
omissions, or neglect or breach of duty while acting in their respective
capacities for us.
The
indemnification and advancement of expenses provided for in our bylaws does
not
exclude or limit any other rights to indemnification and advancement of expenses
that a person may be entitled to other agreements, shareholders’ and board
resolutions and our articles of incorporation.
Item
16. Exhibits.
The
exhibits filed with this Registration Statement are listed in the Exhibit Index
beginning on page E-1, which is incorporated herein by reference.
Item
17. Undertakings.
The
undersigned Registrant hereby undertakes:
(a) To
file,
during any period in which offers or sales are being made, a post-effective
amendment to this registration statement:
| (i) |
to
include any prospectus required by Section 10(a)(3) of the Securities
Act
of 1933;
|
| (ii) |
to
reflect in the prospectus any facts or events arising after the effective
date of the registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent
a
fundamental change in the information set forth in the registration
statement.
|
|
|
|
Notwithstanding the foregoing, any
increase
or decrease in volume of securities offered (if the total dollar
value of
securities offered would not exceed that which was registered) and
any
deviation from the low or high end of the estimate maximum offering
range
may be reflected in the form of prospectus filed with the SEC pursuant
to
Rule 424(b) if, in the aggregate, the changes in volume and price
represent no more than 20 percent change in maximum aggregate offering
price set forth in the “Calculation of Registration Fee” table in the
effective registration statement;
and
|
| (iii) |
To
include any material information with respect to the plan of distribution
not previously disclosed in the registration statement or any material
change to such information in the registration
statement;
|
Provide,
however,
that
paragraphs (a)(i),(a) (ii) and (a)(iii) do not apply if the information required
to be included in a post-effective amendment by those paragraphs is contained
in
reports filed with or furnished to the SEC by the Registrant pursuant to Section
13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated
by reference in the registration statement, or is contained in a form of
prospectus filed pursuant to Rule 424(b) that is part of the registration
statement.
(b) That,
for
the purpose of determining any liability under the Securities Act of 1933,
each
such post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time be deemed to be the initial bona
fide
offering
thereof.
(c) To
remove
from registration by means of a post-effective amendment any of the securities
being registered which remain unsold at the termination of the offering.
(d) That,
for
the purpose of determining liability under the Securities Act of 1933 to any
purchaser:
| i. |
Each
prospectus filed by the Registrant pursuant to Rule 424(b)(3) shall
be
deemed to be part of the registration statement as of the date the
filed
prospectus was deemed part of and included in the registration statement;
and
|
| ii. |
Each
prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5)
or
(b)(7) as part of a registration statement in reliance on Rule 430B
relating to an offering made pursuant to Rule 415(a)(1)(i), (vii)
or (x)
for the purpose of providing the information required by Section
10(a) of
the Securities Act of 1933 shall be deemed to be part of and included
in
the registration statement as of the earlier of the date such form
of
prospectus is first used after effectiveness or the date of the first
contract of sale of securities in the offering described in the
prospectus. As provided in Rule 430B, for liability purposes of the
issuer
and any person that is at that date an underwriter, such date shall
be
deemed to be a new effective date of the registration statement relating
to the securities in the registration statement to which the prospectus
relates, and the offering of such securities at that time shall be
deemed
to be the initial bona
fide
offering thereof. Provided,
however, that
no statement made in a registration statement or prospectus that
is part
of the registration statement or made in a document incorporated
or deemed
incorporated by reference into the registration statement or prospectus
that is part of the registration statement will, as to a purchaser
with a
time of contract of sale prior to such effective date, supersede
or modify
any statement that was made in the registration statement or prospectus
that was part of the registration statement or made in any such document
immediately prior to such effective
date.
|
(e) That,
for
the purpose of determining liability of a Registrant under the Securities Act
of
1933 to any purchaser in the initial distribution of the securities, each
undersigned Registrant undertakes that in a primary offering of securities
of an
undersigned Registrant pursuant to this registration statement, regardless
of
the underwriting method used to sell the securities to the purchaser, if the
securities are offered or sold to such purchaser by means of any of the
following communications, the undersigned Registrant will be a seller to the
purchaser and will be considered to offer or sell such securities to such
purchaser:
| (i) |
Any
preliminary prospectus or prospectus of an undersigned Registrant
relating
to the offering required to be filed pursuant to Rule
424;
|
| (ii) |
Any
free writing prospectus relating to the offering prepared by or on
behalf
o an undersigned Registrant or used or referred to by an undersigned
Registrant;
|
| (iii) |
The
portion of any other free writing prospectus relating to the offering
containing material information about an undersigned Registrant or
its
securities provided by or on behalf of an undersigned Registrant;
and
|
| (iv) |
Any
other communication that is an offer in the offering made by an
undersigned Registrant to the
purchaser.
|
(f) That,
for
purposes of determining any liability under the Securities Act of 1933, each
filing of Registrant’s annual report pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of and
employee benefit plan’s annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
(g) To
file
an application for the purpose of determining the eligibility of the trustee
under the act under subsection (a) of Section 310 of the Trust Indenture Act
in
accordance with the rules and regulations prescribed by the SEC under Section
305(b)(2) or the Trust Indenture Act.
(h) Insofar
as indemnification for liabilities arising under the Securities Act of 1933
may
be permitted to directors, officers and controlling persons of each Registrant
pursuant to the foregoing provisions, or otherwise, each Registrant has been
advised that in the opinion of the SEC such indemnification is against public
policy as expressed in the Securities Act of 1933 and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by a Registrant of expenses incurred or
paid
by a director, officer or controlling person of a Registrant in the successful
defense of any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being registered, that
Registrant will, unless in the opinion of its counsel that has been settled
by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Securities Act of 1933 and will be governed by the final
jurisdiction of such issue.
SIGNATURES
Pursuant
to the requirements of the Securities Act of 1933, the Registrant certifies
that
it has reasonable grounds to believe that it meets all of the requirements
for
filing on Form S-3, and has duly caused this Registration Statement on Form
S-3
to be signed on its behalf by the undersigned, thereunto duly authorized, in
the
City of Philadelphia, Commonwealth of Pennsylvania, on the 4h day of April,
2006.
| |
|
|
|
LINCOLN
NATIONAL CORPORATION
|
| |
|
| |
|
| |
By:
/s/
Frederick J. Crawford
|
| |
Frederick
J. Crawford, Senior Vice
|
| |
President
and Chief Financial Officer
|
Pursuant
to the requirements of the Securities Act of 1933, this Registration Statement
has been signed below by the following persons in the capacities and on the
dates indicated.
|
Signature
|
Title
|
Date
|
|
Jon
A. Boscia*
Jon
A. Boscia
|
Chairman
and Chief
Executive
Officer (Principal Executive Officer) and a Director
|
April
4, 2006
|
|
/s/
Frederick J. Crawford
Frederick
J. Crawford
|
Senior
Vice President and
Chief
Financial Officer
(Principal
Financial Officer)
|
April
4, 2006
|
|
/s/
Douglas N. Miller
Douglas
N. Miller
|
Vice
President and Chief Accounting Officer (Principal Accounting
Officer)
|
April
4, 2006
|
|
_____________
William
J. Avery
|
Director
|
April
, 2006
|
|
J.
Patrick Barrett*
|
Director
|
April
4, 2006
|
|
William
H. Cunningham*
|
Director
|
April
4, 2006
|
|
Dennis
R. Glass*
|
Director
|
April
4, 2006
|
|
George
W. Henderson, III*
|
Director
|
April
4, 2006
|
|
Eric
G. Johnson*
|
Director
|
April
4, 2006
|
|
M.
Leanne Lachman*
|
Director
|
April
4 , 2006
|
|
Michael
F. Mee*
|
Director
|
April
4, 2006
|
|
William
Porter Payne*
.
|
Director
|
April
4, 2006
|
|
_______________
Patrick
S. Pittard
|
Director
|
April
, 2006
|
|
Jill
S. Ruckelshaus*
|
Director
|
April
4, 2006
|
|
_________________
David
A. Stonecipher
|
Director
|
April
, 2006
|
|
Isaiah
Tidwell*
|
Director
|
April
4, 2006
|
|
Glenn
F. Tilton*
|
Director
|
April
4, 2006
|
*By:
/s/
Dennis L. Schoff
Dennis
L.
Schoff, Attorney-in-Fact
(Pursuant
to Powers of Attorney)
INDEX
TO EXHIBITS
|
2.1
|
Agreement
and Plan of Merger, dated October 9, 2005, among LNC, Quartz Corporation
and Jefferson-Pilot Corporation is incorporated by reference to Exhibit
2.1 of LNC’s Form 8-K (File No 1-6028) filed with the SEC on October 11,
2005.
|
|
2.2
|
Amendment
No. 1 to the Agreement and Plan of Merger dated as of January 26,
2006
among LNC, Lincoln JP Holding, L.P., Quartz Corporation and Jefferson
Pilot Corporation filed as Exhibit 2.1 to LNC’s Form 8-K (file No. 1-6028)
filed with the SEC on January 31, 2006.
|
|
4.1
|
The
Articles of Incorporation of LNC as last amended effective May 12,
1994
are incorporated by reference to Exhibit 3(a) of LNC’s Form 10-K (File No.
1-6028) for the year ended December 31, 2001.
|
|
4.2
|
Amended
and Restated Bylaws of LNC (as of April 3, 2006) are incorporated
by
reference to Exhibit 3.1 of LNC’s Form 8-K (File No. 1-6028) riled with
the SEC on April 3, 2006.
|
|
4.3
|
Indenture
of LNC dated as of January 15, 1987, between LNC and Morgan Guaranty
Trust
Company of New York is incorporated by reference to Exhibit 4(a)
of LNC’s
Form 10-K (File No. 1-6028) for the year ended December 31,
1994.
|
|
4.4
|
First
Supplemental Indenture dated as of July 1, 1992, to Indenture dated
as of
January 15, 1987 is incorporated by reference to Exhibit 4(b) of
LNC’s
Form 10-K (File No. 1-6028) for the year ended December 31,
2001.
|
|
4.5
|
Rights
Agreement of LNC as last amended November 14, 1996 is incorporated
by
reference to LNC’s Form 8-K (File No. 1-6028) filed with the SEC on
November 22, 1996.
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|
4.6
|
Indenture
of LNC dated as of September 15, 1994, between LNC and The Bank of
New
York, as Trustee, is incorporated by reference to Exhibit 4(e) of
LNC’s
Form 10-K (File No. 1-6028) for the year ended December 31,
1998.
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4.7
|
Form
of Note dated as of September 15, 1994 is incorporated by reference
to
Exhibit 4(d) of LNC’s Registration Statement on Form S-3/A (File No.
33-55379) filed with the SEC on September 15, 1994.
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4.8
|
Form
of Zero Coupon Security dated as of September 15, 1994 is incorporated
by
reference to Exhibit 4(f) of LNC’s Registration Statement on Form S-3/A
(File No. 33-55379) filed with the SEC on September 15,
1994.
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4.9
|
Junior
Subordinated Indenture dated as of May 1, 1996 between LNC and J.P.
Morgan
Trust Company, National Association (successor in interest to The
First
National Bank of Chicago) is incorporated by reference to Exhibit
4(j) of
LNC’s Form 10-K (File No. 1-6028) for the year ended December 31,
2001.
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4.10
|
First
Supplemental Indenture dated as of August 14, 1998, to Junior Subordinated
Indenture dated as of May 1, 1996 is incorporated by reference to
Exhibit
4.4 of LNC’s Form 8-K (File No. 1-6028) filed with the SEC on August 27,
1998.
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4.11
|
Specimen
of 6 1/2%
Notes due March 15, 2008 incorporated by reference to Exhibit 4.1
LNC’s
Form 8-K (File No. 1-6028) filed with the SEC on March 24,
1998.
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4.12
|
Specimen
of 7% Notes due March 15, 2018 incorporated by reference to Exhibit
4.2 of
LNC’s Form 8-K (File No. 1-6028) filed with the SEC on March 24,
1998.
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4.13
|
Amended
and Restated Trust Agreement dated November 19, 2001, among LNC,
as
Depositor, Bank One Trust Company, National Association, as Property
Trustee, Bank One Delaware, Inc., as Delaware Trustee, and the
Administrative Trustee named therein is incorporated by reference
to
Exhibit 4.1 of LNC’s Form 8-K (File No. 1-6028) filed with the SEC on
November 21, 2001.
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4.14
|
Form
of 7.65% Trust Preferred Security Certificate is incorporated by
reference
to Exhibit 4.2 of LNC’s Form 8-K (File No. 1-6028) filed with the SEC on
November 21, 2001.
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4.15
|
Guarantee
Agreement dated November 19, 2001 between LNC, as Guarantor, and
Bank One
Trust Company, National Association, as Guarantee Trustee, is incorporated
by reference to Exhibit 4.4 of LNC’s Form 8-K (File No. 1-6028) filed with
the SEC on November 21, 2001.
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4.16
|
Form
of 6.20% Note dated December 7, 2001 is incorporated by reference
to
Exhibit 4.1 of LNC’s Form 8-K (File No. 1-6028) filed with the SEC on
December 11, 2001.
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4.17
|
Form
of Note dated June 3, 2002 is incorporated by reference to Exhibit
4.1 of
LNC’s Form 8-K (File No. 1-6028) filed with the SEC on June 6,
2002.
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4.18
|
Amended
and Restated Trust Agreement dated September 11, 2003, among LNC,
as
Depositor, Bank One Trust Company, National Association, as Property
Trustee, Bank One Delaware, Inc., as Delaware Trustee, and the
Administrative Trustees named therein is incorporated by reference
to
Exhibit 4.1 of Form 8-K (File No. 1-6028) filed with the SEC on September
16, 2003.
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4.19
|
Form
of 6.75% Trust Preferred Security certificate is incorporated by
reference
to Exhibit 4.2 of LNC’s Form 8-K (File No. 1-6028) filed with the SEC on
September 16, 2003.
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4.20
|
Form
of 6.75% Junior Subordinated Deferrable Interest Debentures, Series
F is
incorporated by reference to Exhibit 4.3 of LNC’s Form 8-K (File No.
1-6028) filed with the SEC on September 16, 2003.
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4.21
|
Guarantee
Agreement dated September 11, 2003 between LNC, as Guarantor, and
Bank One
Trust Company, National Association, as Guarantee Trustee is incorporated
by reference to Exhibit 4.4 of LNC’s Form 8-K (File No. 1-6028) filed with
the SEC on September 16, 2003.
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4.22
|
Form
of 4.75% Note due February 15, 2014 is incorporated by reference
to
Exhibit 4.1 of LNC’s Form 8-K (File No. 1-6028) filed with the SEC on
February 4, 2004.
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4.23
|
Jefferson-Pilot
Corporation Long Term Stock Incentive Plan is incorporated by reference
to
Exhibit 10(iii) of Jefferson-Pilot Form 10-K (File No. 1-5955) for
the
year ended December 31, 2005.
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5
|
Opinion
of Dennis L. Schoff, Esq., as to the legality of the securities being
registered.
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23.1
|
Consent
of Ernst & Young LLP, Independent Registered Public Accounting
Firm.
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23.2
|
Consent
of Ernst & Young LLP, Independent Registered Public Accounting
Firm.
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23.3
|
Consent of
Dennis L Schoff, Esq., is contained in Exhibit 5.
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24
|
Powers
of Attorney.
|