About EDGAR Online | Login
 
Enter your Email for a Free Trial:
The following is an excerpt from a DEF 14A SEC Filing, filed by LINCOLN NATIONAL CORP on 4/8/1999.
Next Section Next Section Previous Section Previous Section
LINCOLN NATIONAL CORP - DEF 14A - 19990408 - STOCKHOLDER_PROPOSALS

SHAREHOLDER PROPOSAL RELATING TO TOBACCO INVESTMENTS

Catholic Healthcare West of 1700 Montgomery Street, Suite 300, San Francisco, California, is the holder of 39,100 shares of Common Stock and has caused the following proposal to be included in this Proxy Statement. The Corporation is not responsible for any of the contents of the language of the shareholder's proposal which is set out below between the quotation marks. The Board of Directors unanimously opposes this proposal for the reasons set forth in Management's Statement in Opposition of the Shareholder Proposal which follows the shareholder's proposal.

"WHEREAS a July 7-9, 1995 editorial in USA Today declared:

Here's a grubby little health-care new [sic] item: According to a commentary in the upcoming edition of the British medical journal Lancet, major U.S. health insurers are large investors in major U.S. tobacco companies. In other words, the nation's merchants of care are partners with the nation's merchants of death. . . . These investments grate and gall. Every year, tobacco use is fatal for thousands of Americans. For insurers to provide health care for those suffering smokers on the one hand while investing in the source of their misery on the other is unconscionable. And hypocritical.

- As shareholders, we are concerned about the ethical implications of investments in the tobacco industry by companies that sell life insurance, especially when they


are paying out hundreds of millions of dollars to patients who are sick and dying as a result of tobacco use. - In 1994, the Centers of Disease Control and Prevention released an article entitled, `Medical-Care Expenditures Attributable to Cigarette Smoking, United States - 1993.' The study found that smoking-related disease in the U.S.A. has an enormous economic impact. In 1993, it is estimated that the direct medical costs associated with smoking totaled $30 billion. Such findings have led the State of Louisiana to add insurers to its Medicaid reimbursement litigation against the tobacco industry. - In 1996 the AMA called for mutual funds and health-conscious investors to refuse to own stock in tobacco companies, and for those same investors to divest from stocks and bonds in tobacco companies. -We believe it is inconsistent for an insurance company that sells life insurance to invest in tobacco equities and yet give preferential rates to non-smokers. Therefore we believe that the company should seriously review its stand related to these apparently contradictory positions on tobacco.

RESOLVED: that shareholders request the Board to initiate a policy mandating no further purchases of tobacco equities in any of our portfolios unless it can be proven that tobacco use does not cause the illnesses and deaths that have been attributed to it. Furthermore, the company shall divest itself of all tobacco stocks by January 1, 2000.

Supporting Statement

Our Company exists to help people keep healthy. We support people not using tobacco, yet have no policy against investing in companies producing its products. Allstate, Chubb, UNUM, and other companies that sell life insurance have policies and/or practices that have resulted in prohibitions or limitations on their various investments in tobacco companies. Institutions like Harvard and Johns Hopkins, as well as The Maryland Retirement and Pension Systems have divested from all tobacco stocks. As the editorial noted above concludes: `Insurers have a responsibility to maximize returns. But they have a responsibility to hold down costs too.' Investing in tobacco while charging premiums based in part on the cost of treating tobacco-related illness mocks that obligation. If you agree that our Company should not contribute to peoples' illness and death by investing in tobacco, please vote YES for this resolution."

THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE "AGAINST" THE SHAREHOLDER PROPOSAL RELATING TO TOBACCO INVESTMENTS.

MANAGEMENT'S STATEMENT IN OPPOSITION TO THE SHAREHOLDER PROPOSAL

The Corporation's investment operations and policies are fundamental to the Corporation's business and subject to the supervision of the Board of Directors of the relevant subsidiary and various investment committees. The Corporation's investment operations are focused upon providing customers with competitive products and shareholders with an attractive investment. In managing the Corporation's investments, management considers many factors that may affect the current and future values of portfolio investments. Social policy considerations are one of the many considerations that are taken into account in managing the portfolios.


The shareholder proposal suggests that certain social policies should be the principal factors considered in the Corporation's investment policies, limiting the role that other investment and social factors play in the Corporation's policies. The Board of Directors believes that such an approach is inconsistent with sound investment practices. In that regard, the Corporation believes that the shareholder proposal is inconsistent with the interests of the Corporation's shareholders and customers.

For these reasons, the Board recommends a vote AGAINST the Proposal and your proxy will be so voted unless you indicate otherwise on the proxy.

GENERAL

RELATIONSHIP WITH INDEPENDENT AUDITORS

Ernst & Young LLP has been selected by the Board to be the independent auditors to audit the consolidated financial statements of the Corporation for fiscal year 1999. This firm has been employed by the Corporation in that capacity continuously since January 17, 1968. Representatives of Ernst & Young LLP will be present at the annual meeting of shareholders, will be given an opportunity to make a statement if they so desire, and will be available to respond to appropriate questions relating to the audit of the Corporation's 1998 consolidated financial statements.

SHAREHOLDER PROPOSALS

To Be Included in the Corporation's Proxy Materials

Any shareholder proposals intended to be considered for inclusion in the proxy materials for the Corporation's 2000 annual meeting of shareholders must be received by the Corporation no later than December 11, 1999. All such proposals should be sent to the Secretary of the Corporation.

To Be Presented In-Person at Shareholder Meetings

Shareholders wishing to propose matters for consideration at a meeting of shareholders or to propose nominees for election as directors must follow the procedures contained in the Corporation's Bylaws. Such procedures include giving notice to the Secretary of the Corporation at least 90 and not more than 120 days prior to the meeting. However, in the event that less than 60 days' notice of the date of the meeting is given to shareholders, notice by the shareholder to be timely must be received not later than the close of business on the 10th day following the day on which notice of the date of the meeting was given. That notice must include:

o the name and address of the proposing shareholder (as it appears on the Corporation's stock records)
o a brief description of the business desired to be brought before the meeting
o the class and number of shares of the Corporation which are beneficially owned by the proposing shareholder
o a description of any interest of such proposing shareholder in the business proposed

In the case of a shareholder-proposed nominee for director, the required notice must also contain as to each person whom the shareholder proposes to nominate for election or re-election as a director:

o the name, age, business address and residence address of such person
o the principal occupation or employment of such person
o the class and number of shares of the Corporation which are beneficially owned by such person


o any other information relating to such person that is required to be disclosed in solicitation of proxies for election of directors, or is otherwise required, in each case pursuant to Regulation 14A under the Exchange Act (including without limitation such person's written consent to being named in the proxy statement as a nominee and to serving as a director if elected)
o the qualifications of the nominee to serve as a director of the Corporation

In the event any such matter is not timely received, the individuals identified on the proxy card may vote the shares represented by proxies in their discretion in the manner they perceive to be in the best interests of the Corporation. The person presiding at a meeting of shareholders is authorized by the Bylaws, if the facts warrant, to determine that the proposed business was not properly brought before the meeting, or was not lawful or appropriate for consideration at the meeting or that a nomination for director was not properly made. Upon a declaration of such determination by the chairman, the proposed business shall not be transacted or the defective nomination shall be disregarded, as the case may be.

1999 Shareholder Proposals

Other than the shareholder proposal discussed in this Proxy Statement (see Item
2), no shareholder has raised an issue which is proper for consideration at the Annual Meeting. To the extent permissible, your proxy will be voted in the discretion of the proxy holders with respect to each matter properly brought before the meeting that has not been enumerated in this Proxy Statement or for which no specific direction was given on the proxy card.

BROKERAGE PARTNERS